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Intercontinental Exchange, Inc. (ICE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid results: consolidated net revenues of $2.323B (+6% YoY), GAAP EPS $1.21 and adjusted EPS $1.52, with operating margin 46% and adjusted margin 58% . Exchange net revenues rose 9% YoY to $1.236B on strength in energy and rates; FIDS grew 3% and Mortgage Technology rose 1% with a 35% adjusted margin .
  • 2025 outlook: non-GAAP opex $3.915–$3.965B, CapEx $730–$780M, tax rate 24–26%, 1Q25 non-op expense $175–$180M; segment growth guides: Exchange recurring low-single digits, FIDS recurring mid-single digits, Mortgage Technology revenue low-to-mid single digits .
  • Capital return: Board raised the quarterly dividend 7% to $0.48 (Q1 2025), and management expects to resume share repurchases in Q1 2025, supporting total return and EPS compounding .
  • Potential catalysts: continued energy and rates momentum (management cited January volumes +21% YoY and OI +11%), execution on Black Knight synergies (target raised to $230M), and stabilization in mortgage recurring revenues as large wins go live across 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Robust Exchange performance: Q4 segment revenues +9% YoY to $1.236B; energy +16%, interest-rate “Financials” +30% YoY; adjusted margin 75% .
    • Structural energy tailwinds: “TTF… positioned as the Brent of natural gas,” with record participation and revenues; management highlighted strong oil and LNG-linked contracts, and record energy volumes in 2024 .
    • Index/data growth: Fixed Income Data & Analytics posted 5% Q4 growth to a record $301M; management noted ETF AUM benchmarked to ICE indices reached $648B at year-end 2024, supporting double‑digit index revenue growth .

  • What Went Wrong

    • Exchange data/recurring soft patch: sequential decline in Exchange data services due to a one-time NYSE tape revenue true-up; management expects a rebound to $240–$245M in 1Q25 .
    • FIDS transactional softness: Q4 FIDS transaction revenues fell 8% YoY to $108M, with CDS clearing and execution lower YoY; FIDS total Q4 revenue grew modestly (+3% YoY) .
    • Mortgage recurring still pressured YoY: Q4 recurring revenue -2% YoY with some renewals at lower minimums; 2025 growth guide balances new implementations with headwinds (e.g., expected Flagstar attrition ~0.5 pt impact) .

Financial Results

Consolidated summary (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024
Net Revenues ($B)$2.317 $2.349 $2.323
GAAP EPS ($)$1.10 $1.14 $1.21
Adjusted EPS ($)$1.52 $1.55 $1.52
Operating Margin (%)46% 47% 46%
Adjusted Operating Margin (%)59% 59% 58%

Q4 YoY comparison:

MetricQ4 2023Q4 2024
Net Revenues ($B)$2.201 $2.323
GAAP EPS ($)$0.65 $1.21
Adjusted EPS ($)$1.33 $1.52
Operating Margin (%)42% 46%
Adjusted Operating Margin (%)57% 58%

Segment net revenues and margins:

SegmentQ2 2024 Net Rev ($M)Q2 Adj Op Margin (%)Q3 2024 Net Rev ($M)Q3 Adj Op Margin (%)Q4 2024 Net Rev ($M)Q4 Adj Op Margin (%)
Exchanges$1,246 75% $1,254 75% $1,236 75%
FIDS$565 45% $586 45% $579 43%
Mortgage Tech$506 36% $509 35% $508 35%

Recurring vs Transaction revenue:

Revenue mixQ2 2024 ($M)Q3 2024 ($M)Q4 2024 ($M)
Recurring$1,206 $1,212 $1,215
Transaction (net)$1,111 $1,137 $1,108

Exchange detail by product:

Exchange sub-categoryQ2 2024 ($M)Q3 2024 ($M)Q4 2024 ($M)
Energy$469 $473 $477
Ags & Metals71 60 54
Financials (rates/other)132 141 151
Cash Equities & Equity Options (net)111 107 114
OTC & Other101 109 87
Data & Connectivity240 242 230
Listings122 122 123

FIDS detail:

FIDS sub-categoryQ2 2024 ($M)Q3 2024 ($M)Q4 2024 ($M)
Fixed Income Execution30 28 33
CDS Clearing78 97 75
Fixed Income Data & Analytics293 295 301
Other Data & Network Services164 166 170

Mortgage Technology detail:

MT sub-categoryQ2 2024 ($M)Q3 2024 ($M)Q4 2024 ($M)
Origination Technology180 182 177
Closing Solutions52 54 52
Servicing Software212 209 213
Data & Analytics62 64 66

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Exchange Recurring Revenue growthFY2025n/aLow-single digits New
FIDS Recurring Revenue growthFY2025n/aMid-single digits New
Mortgage Technology Revenue growthFY2025n/aLow-to-mid single digits New
Operating Expenses (GAAP)FY2025n/a$4.915–$4.965B New
Operating Expenses (Non-GAAP)FY2025n/a$3.915–$3.965B New
Operating Expenses (GAAP)1Q25n/a$1.220–$1.230B New
Operating Expenses (Non-GAAP)1Q25n/a$965–$975M New
Non-Operating Expense1Q25n/a$175–$180M New
Effective Tax RateFY2025n/a24–26% New
Capital ExpendituresFY2025n/a$730–$780M New
Weighted Avg Shares1Q25n/a575–581M New
Dividend per ShareQ1 2025$0.45 (2024 quarterly)$0.48 (+7%) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3 2024)Current Period (Q4 2024)Trend
Energy platform (oil, gas, environment)Record energy revenues; OI up strongly; LNG globalization driving TTF/JKM; options growth; power demand tailwinds from AI/data centers Management: 2024 record energy revenues; TTF “Brent of gas”; January volumes +21% YoY and OI +11%; strong interest rate and energy momentum into 2025 Positive, sustained
Interest rate derivativesStrong growth in Euribor/SONIA/SARON; Q3 rates volume +50% YoY Record 2024 rate revenues +30% YoY; Q4 rates +38% YoY; positioning for ongoing volatility Positive
Mortgage Technology stabilizationRecurring stabilized vs Q2; mix of higher/lower minimum renewals; large bank wins (JPM) and cross-sells Q4 recurring improved sequentially; 2025 growth tied to large implementations; headwinds include Flagstar attrition (~0.5pt); guides low-to-mid single-digit revenue growth Improving but mixed
FIDS recurring and indexASV acceleration; index rev double-digit, ETF AUM record $674B (Q3) FI Data & Analytics +5% to record $301M; ETF AUM tracking ICE indices $648B at YE; mid-single-digit recurring growth expected in 2025 Steady growth
Macro/policy (sanctions, tariffs)Expect volatility; EU/UK policy shifts; treasury clearing launch opportunity New admin policies (sanctions/tariffs) may alter supply chains; supportive for WTI HOU and Murban; continued demand for risk mgmt tools Neutral to positive

Management Commentary

  • “We are pleased to report our 19th consecutive year of record revenues and continued earnings per share growth… our ‘all-weather’ business model… continues to deliver compounding growth” — Jeffrey C. Sprecher, CEO .
  • “We have achieved run rate expense synergies of $175 million and now expect to reach our full synergy target of $200 million by the end of 2025… raising our Black Knight expense synergy target to $230 million” — Warren Gardiner, CFO .
  • “TTF… we have positioned as the Brent of natural gas… market participation and volumes both setting new highs in 2024” — Ben Jackson, President .
  • “We now expect to begin repurchasing shares in the first quarter… and will balance share repurchases with continued deleveraging” — Warren Gardiner, CFO .
  • “January [2025] volumes increasing 21% year-over-year and total open interest up 11%” — Warren Gardiner, CFO .

Q&A Highlights

  • Mortgage implementations: Multiple large MSP/Encompass wins go live across 2025 after 12–18 month implementations; recurring improved in Q4; headwinds include expected Flagstar attrition (~0.5pt) and some lower-minimum renewals .
  • WTI ecosystem: Market share supported by Midland WTI HOU; physical underpinnings strong with higher deliveries vs peer; ability to package Brent/HOU/WTI trades aids growth .
  • Mortgage guide sensitivity: High-end growth implies low-teens originations (industry-like), refi outlook uncertain; purchase fundamentals (inventory, price appreciation) improved .
  • Synergy timing: Incremental expense synergy run-rate benefit (~$25M) skews to late 2025; expanded $230M target driven by systems/real estate in later years (to 2028) .
  • FIDS demand trends: Clients consolidating vendors for robust catalogs and predictable costs; ASV exit +5.4%; 2025 mid-single-digit recurring growth expected .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to request limits at the time of analysis; therefore, we cannot provide a beat/miss assessment versus consensus. Values retrieved from S&P Global were unavailable due to access limits.

Key Takeaways for Investors

  • Exchange momentum remains a key earnings driver: energy (TTF/JKM, oil HOU/Brent) and European rates continue to compound, with early 2025 OI/volumes supportive of a strong start to the year .
  • Capital returns accelerating: a 7% dividend hike to $0.48 and expected resumption of buybacks in Q1 2025 should support EPS and total return while leverage trends toward ~3x EBITDA .
  • Mortgage Technology turning the corner: sequential recurring improvement and the 2025 go‑live cohort of large wins point to better trends, though near-term headwinds (attrition, renewal mix) temper the slope .
  • FIDS resilience: recurring engines (pricing/reference, index, network services) continue mid-single-digit growth; ETF AUM tied to ICE indices and enterprise data sales underpin durable revenue .
  • Operating discipline: 2025 non-GAAP opex guide implies modest growth (~3% at midpoint) as synergies and reinvestment balance; CapEx elevated to support mortgage integration and data center capacity growth .
  • Macro optionality: Policies (sanctions/tariffs), AI-driven power demand, and energy supply chain shifts favor ICE’s multi-asset risk management network and can sustain elevated hedging demand .