Intercontinental Exchange(US:ICE)2025-10-30 12:26Financial Performance - Operating income from the Mortgage Technology segment was $6 million for the nine months ended September 30, 2025, compared to a loss of $134 million for the same period in 2024[168]. - Revenues, less transaction-based expenses, increased by $471 million (7%) for the nine months ended September 30, 2025, compared to the same period in 2024[170]. - Recurring revenues for the nine months ended September 30, 2025, were $3,767 million, a 4% increase from $3,614 million in 2024[170]. - Operating income rose to $3,692 million for the nine months ended September 30, 2025, reflecting a 14% increase from $3,232 million in 2024[170]. - Net income attributable to ICE increased by 20% to $2,464 million for the nine months ended September 30, 2025, compared to $2,056 million in 2024[170]. - Adjusted diluted earnings per share attributable to ICE common stockholders increased by 15% to $5.24 for the nine months ended September 30, 2025, from $4.55 in 2024[170]. - Cash flows from operating activities were $3,387 million for the nine months ended September 30, 2025, a 9% increase from $3,103 million in 2024[170]. - Free cash flow for the nine months ended September 30, 2025, was $2,862 million, up 9% from $2,627 million in 2024[170]. - Total revenues for the nine months ended September 30, 2025, reached $7,427 million, up from $6,956 million in the same period of 2024, representing a growth of 6.8%[303]. - Adjusted operating income for the nine months ended September 30, 2025, was $4,499 million, compared to $4,119 million in 2024, reflecting an increase of 9.2%[303]. - The operating margin for the nine months ended September 30, 2025, was 50%, an improvement from 46% in 2024[303]. - Net income attributable to ICE for the nine months ended September 30, 2025, was $2,464 million, compared to $2,056 million in 2024, marking a 19.8% increase[303]. - Adjusted diluted earnings per share for the nine months ended September 30, 2025, was $5.24, up from $4.55 in 2024, indicating a growth of 15.2%[303]. Segment Performance - The company operates in three reportable segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology, leveraging collective expertise across platforms[154]. - Operating income for the Exchanges Segment increased by 9% to $2,983 million for the nine months ended September 30, 2025, compared to $2,734 million in 2024[202]. - Adjusted operating income for the Fixed Income and Data Services segment rose by 5% to $816 million for the nine months ended September 30, 2025, from $776 million in 2024[215]. - Total revenues for the Fixed Income and Data Services segment grew by 5% to $1,811 million for the nine months ended September 30, 2025, compared to $1,719 million in 2024[207]. - Revenues from the Mortgage Technology segment increased by 4% to $1,569 million for the nine months ended September 30, 2025, compared to $1,514 million in 2024[220]. - Transaction and clearing revenues for the Exchanges segment increased by 13% to $4,983 million for the nine months ended September 30, 2025, compared to $4,415 million in 2024[178]. - Data and connectivity services revenues increased by 7% for the nine months ended September 30, 2025, attributed to strong customer retention and new customer additions[190]. Market Conditions - The company has seen increased trading across products such as interest rate and equity futures, credit default swaps, and bonds due to market and interest rate volatility[158]. - The macroeconomic environment is expected to remain dynamic, with ongoing monitoring of interest rates, inflation, and geopolitical events impacting business operations[160]. - Increased mortgage interest rates have reduced consumer demand for mortgages, adversely impacting transaction-based revenues in the Mortgage Technology segment[158]. - The company continues to monitor the impact of sanctions against Russia, which may affect specific contracts traded at ICE Futures Europe[166]. - The EU Benchmarks Regulation will be effective on January 1, 2026, impacting the company's benchmark offerings in the EU[165]. Regulatory and Taxation - The enactment of the OBBBA on July 4, 2025, did not result in material changes to the total effective tax rate, but it did affect current and deferred income tax expenses[161]. - The company is subject to various regulatory frameworks across multiple jurisdictions, which can influence operational strategies and market activities[162]. - Consolidated income tax expense increased to $772 million for the nine months ended September 30, 2025, from $630 million in 2024, with an effective tax rate of 24% compared to 23% in the previous year[263][264]. - The company plans to continue evaluating the impact of the OBBBA tax provisions, which did not result in material changes to the total effective tax rate for the nine months ended September 30, 2025[266]. Cash Flow and Capital Management - Cash used in investing activities increased by $1.2 billion during the nine months ended September 30, 2025, compared to the same period in 2024[281]. - Outstanding debt as of September 30, 2025, was $19.0 billion, consisting of $18.6 billion in unsecured senior notes and $417 million under the Commercial Paper Program[281]. - The company has a $3.9 billion Credit Facility, with $3.3 billion available for working capital and general corporate purposes as of September 30, 2025[282]. - During the nine months ended September 30, 2025, the company repurchased $894 million of shares, resuming share repurchases after no activity in the same period of 2024[290]. - Cash dividends per share increased to $1.44 for the nine months ended September 30, 2025, compared to $1.35 in 2024, resulting in an aggregate payout of $831 million[292]. - The remaining balance for future stock repurchases as of September 30, 2025, was $1.6 billion[296]. - A quarterly dividend of $0.48 per share was announced for the fourth quarter of 2025, payable on December 31, 2025[297]. Expenses and Cost Management - Total operating expenses for the nine months ended September 30, 2025, were $3,735 million, a slight increase from $3,724 million in 2024[232]. - Compensation and benefits expenses increased by $41 million for the nine months ended September 30, 2025, primarily due to merit-related pay increases and increased medical claim activity[236]. - Acquisition-related transaction and integration costs were $51 million for the nine months ended September 30, 2025, down from $88 million in 2024, primarily due to integration costs related to Black Knight[240]. - Technology and communication expenses increased by $16 million for the nine months ended September 30, 2025, primarily due to increases in hosting, security, and customer network costs[244]. - Rent and occupancy expenses decreased by $25 million for the nine months ended September 30, 2025, primarily due to duplicate rent during the consolidation of certain leased offices[246]. Investment and Development - The company expects to incur capital expenditures and software development costs between $730 million and $780 million in 2025 to support technology enhancements and business growth[295]. - Capital expenditures decreased slightly to $207 million in 2025 from $212 million in 2024[311]. - Capitalized software development costs increased to $318 million in 2025 from $264 million in 2024, showing a rise of 20.5%[311]. Other Financial Metrics - The notional value of CDS cleared reached $19.7 trillion for the nine months ended September 30, 2025, compared to $15.7 trillion in 2024[211]. - The company recognized $75 million in equity method investment income for the nine months ended September 30, 2025, compared to $63 million in losses for the same period in 2024[256][257]. - Fair value gains on equity investments were recorded at $35 million and $33 million for the nine and three months ended September 30, 2025, respectively, contrasting with a $1 million loss in the prior year[258]. - Interest income decreased by 12% to $92 million for the nine months ended September 30, 2025, compared to $105 million in 2024, primarily due to lower interest rates[252]. - Total other income/(expense), net was $(412) million for the nine months ended September 30, 2025, a 19% improvement from $(509) million in 2024[252].