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Intercontinental Exchange, Inc. (ICE)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: Net revenues rose to $2.543B (+10% y/y), adjusted EPS $1.81 (+19% y/y), driven by broad-based strength across Exchanges and Fixed Income & Data; GAAP operating margin expanded to 51% and adjusted margin to 61% .
  • Beat vs S&P Global consensus: Adjusted EPS beat by ~$0.04 ($1.81 vs $1.77*), and revenue beat by ~$4M ($2.543B vs $2.539B*) on strong energy/interest rate volumes and resilient data subscriptions (S&P Global) .
  • Guidance: Exchange recurring revenue growth raised to 4–5% for FY25 (from “low single-digit” earlier); Q3 OpEx guided higher on IPO-related customer acquisition costs and data center buildout; Q3 non-op expense guided to $170–175M .
  • Capital return and balance sheet: Leverage target (~3x EBITDA) achieved ahead of plan; H1 operating cash flow $2.47B and adjusted FCF $2.02B supported $496M of buybacks and $555M of dividends in H1; Q3 dividend declared at $0.48 (+7% y/y) .
  • Stock narrative catalysts: Sustained record energy revenues (9th consecutive record), building open interest (+12% y/y), and index/feeds momentum support estimate revisions; near-term OpEx step-up is a counterweight .

What Went Well and What Went Wrong

  • What Went Well

    • “All-weather” model delivered record revenues and double-digit EPS growth; CEO: “another quarter of record revenues and double-digit earnings per share growth... all-weather nature of our business model” .
    • Exchanges: Ninth consecutive record energy revenues; energy revenues +24% YTD and global gas complex strength (TTF leadership), with open interest +12% y/y supporting future activity .
    • Balance sheet and capital returns: Reached 3.0x EBITDA leverage target ahead of plan; stepped up repurchases expected in H2 per CFO commentary .

  • What Went Wrong

    • Mortgage Technology GAAP segment margin remains low (2%) despite strong adjusted margin (42%); recurring revenue growth tempered by inactive loan roll-offs (Q3), M&A-related attrition (Flagstar), and Encompass minimum resets (partly offset by higher transaction fees) .
    • Exchange mix softness: Ags & Metals -10% y/y; OTC & Other -4% y/y; Listings nearly flat (+1% y/y), modestly offset by strength in Energy and Financials .
    • Fixed Income Data & Analytics growth moderated (~4% y/y) partly due to earlier-quarter market pullback affecting index AUM-linked revenue; exiting quarter, ASD improved to ~5% .

Financial Results

  • Quarterly performance (Net Revenues and EPS)
MetricQ4 2024Q1 2025Q2 2025
Net Revenues ($B)$2.3 $2.473 $2.543
GAAP Diluted EPS ($)—$1.38 $1.48
Adjusted Diluted EPS ($)$1.52 $1.72 $1.81
  • Margins
MetricQ1 2025Q2 2025
GAAP Operating Margin (%)49% 51%
Adjusted Operating Margin (%)61% 61%
  • Segment net revenues and margins
Segment ($MM)Q2 2024Q1 2025Q2 2025
Exchanges – Net Revenues$1,246 $1,367 $1,415
Fixed Income & Data Services – Revenues$565 $596 $597
Mortgage Technology – Revenues$506 $510 $531
Exchanges – Op Margin (%)71% 74% 75%
FIDS – Op Margin (%)37% 39% 37%
Mortgage Tech – Op Margin (%)(6%) (5%) 2%
Exchanges – Adj Op Margin (%)75% 76% 76%
FIDS – Adj Op Margin (%)45% 46% 44%
Mortgage Tech – Adj Op Margin (%)36% 40% 42%
  • Revenue mix and KPIs
KPI ($MM unless noted)Q2 2024Q1 2025Q2 2025
Recurring Revenues$1,206 $1,236 $1,256
Transaction Revenues (net)$1,111 $1,237 $1,287
Cash Flow and Balance SheetH1 2024H1 2025
Operating Cash Flow ($MM)$2,205 $2,472
Adjusted Free Cash Flow ($MM)$1,771 $2,023
Unrestricted Cash ($B, period-end)—$1.0
Outstanding Debt ($B, period-end)—$19.2
H1 Buybacks ($MM)—$496
H1 Dividends ($MM)—$555
  • Q2 vs S&P Global consensus (beats/misses)
MetricConsensus*ActualDelta
Net Revenues ($B)$2.5386*$2.543 +$0.0044
Adjusted Diluted EPS ($)$1.7701*$1.81 +$0.0399

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Exchanges Recurring Revenue GrowthFY 2025Low single-digit growth 4%–5% growth Raised
GAAP OpExQ3 2025—$1.245B–$1.255B New
Adjusted OpExQ3 2025—$995MM–$1,005MM New
GAAP & Adjusted Non-Op ExpenseQ3 2025—$170MM–$175MM New
Diluted Share Count (WASO)Q3 2025—572–578MM New
Tax RateFY 202524%–26% 24%–26% (no update) Maintained
CapExFY 2025$730MM–$780MM $730MM–$780MM (no update) Maintained
Dividend/ShareQ3 2025$0.45 in Q3’24 base $0.48 declared (+7% y/y) Raised y/y

Management noted Q3 OpEx step-up reflects higher NYSE customer acquisition costs amid IPO rebound and data center investments .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Energy complex (Brent, TTF, JKM)Record energy revenues, TTF “Brent of gas,” OI strength; energy +25–30% in 2024; strong April volume surge 9th straight record energy quarter; oil/gas records; OI +12% y/y; TTF volumes +; JKM-TTF linkage robust Improving
Interest rate derivativesRecord volumes; multicurrency franchise; OI +21% y/y (Q1) Rates ADV +24% in July; sustained demand on policy uncertainty Improving
Fixed income data/indicesMid-single-digit recurring growth; index AUM to $684B (Q1) Index ETF AUM reached $743B; ASD exited at ~5% in FI data & analytics Improving
Mortgage tech digitization & AIEnd-to-end platform progress; AI in QC/audit; large client wins and implementations ramp in 2025 AI-enabled underwriting audit and call center; 43 new Encompass H1 wins; MSP cross-sell; upcoming whole-loan trading Improving, gradual
Tariffs/macro/geopoliticsPolicy shifts underpin demand for rates/energy hedging LNG purchase commitments (SK/Japan/EU) seen as tailwinds for JKM/TTF; evolving supply chains Supportive
Data centers/ICE CloudInvestments in data center capacity and IGN underpin growth Capacity build-out continues; revenue opportunities across network/feeds; runway into 2030s Investing

Management Commentary

  • CEO Jeffrey Sprecher: “another quarter of record revenues and double-digit earnings per share growth... ‘all-weather’ nature of our business model... ICE's diverse platform is well positioned” .
  • CFO Warren Gardiner: “Adjusted EPS were a record $1.81... adjusted operating expenses totaled $983 million, towards the low end of our guidance... leverage ended the quarter at our target of three times EBITDA” .
  • President Ben Jackson on energy: “ninth consecutive quarter of record energy revenues… record oil volumes… TTF has emerged as the global reference point for gas pricing” .
  • CFO on Q3 outlook: “Adjusted non-operating expenses are expected to be between $170 million and $175 million… adjusted operating expenses $995M–$1,005M… driven by higher NYSE customer acquisition and data center spend” .

Q&A Highlights

  • AI in Mortgage Tech: ICE is leveraging AI for credit/income/collateral verification, real-time underwriting audit, servicing package audit, and call-center analytics; “Ask Reggie” on AllRegs uses natural language models to query millions of pages .
  • Capital allocation/M&A: Having hit 3x leverage, ICE expects to tick up buybacks while continuing to chip away at CP; disciplined on M&A; “we don't really comment on rumors” .
  • Mortgage revenue drivers: Transaction growth aided by higher PCL and clients going over lowered minimums; implementations from large banks ramp in 2025; recurring headwinds from inactive loan roll-off (Q3) and Flagstar attrition (early Q4) .
  • Data centers: Continued buildout of proprietary network and capacity with client demand visibility; long runway into early 2030s .
  • Fixed income data trajectory: FI data & analytics exited Q2 at ~5% ASD; index growth tempered earlier in quarter by market pullback, but trends strengthened into H2 .

Estimates Context

  • Q2 outcome vs S&P Global consensus: Adjusted EPS $1.81 vs $1.7701* (beat ~$0.04); Net revenues $2.543B vs $2.5386B* (beat ~$4M). Beats were driven by record Exchanges (energy, rates) and steady FI data subscriptions; Mortgage Tech improved sequentially on transactions and cost control (S&P Global).
  • Forward estimates setup: Management raised Exchange recurring revenue growth to 4–5% for FY25 and guided Q3 non-op expense to $170–175M, with OpEx higher on IPO costs and data center investments—supportive for top-line estimates but with near-term expense headwinds (S&P Global for future quarters) .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat with record results and raised Exchange recurring guidance; narrative remains “all-weather” with compounding subscription plus pro-cyclical transactions .
  • Energy (Brent/TTF/JKM) and rates franchises are the core upside drivers with growing open interest—a constructive setup for H2 activity and estimate revisions .
  • Mortgage Tech executing the integration playbook: sequential improvement and strong adjusted margins, but near-term recurring headwinds (inactive loan roll-off, Flagstar) and timing of large implementations temper acceleration .
  • Expense cadence matters near term: Q3 OpEx step-up (IPO/customer acquisition, data center) and $170–175M non-op expense could cap EPS upside in the quarter despite healthy top-line trends .
  • Balance sheet and capital returns: leverage at target enables stepped-up buybacks while maintaining dividend growth (+7% y/y to $0.48) .
  • Watch list for H2: IPO pipeline conversion at NYSE, energy/rates OI trajectory, FI data ASD sustainment, and pace of mortgage client go-lives—these are likely stock catalysts on prints and updates .
  • Medium-term thesis: Diversified, scaled market infrastructure with secular tailwinds (electronification, passive growth, energy transition, mortgage digitization) supports durable revenue compounding and margin resilience .