Intercontinental Beats on Q4 Earnings & Revenues, Raises Dividend

Core Insights - Intercontinental Exchange (ICE) reported fourth-quarter 2024 adjusted earnings per share of $1.52, exceeding the Zacks Consensus Estimate by 2% and reflecting a year-over-year increase of 14.3% [1][2] Financial Performance - Net revenues reached a record $2.3 billion, down 12.9% year over year, but exchange net revenues increased by 6% to $1.2 billion, beating the Zacks Consensus Estimate by 0.2% [3] - Total operating expenses decreased by 2.3% year over year to $1.2 billion, attributed to lower compensation, acquisition-related costs, and rent [3] - Adjusted operating income rose 8.1% year over year to $1.4 billion, with an adjusted operating margin expanding by 100 basis points to 58% [4] Segment Performance - Exchanges' net revenues were $1.2 billion, up 9% year over year, with adjusted operating income increasing by 13.3% to $923 million and an adjusted operating margin of 75% [5] - Fixed Income and Data Services revenues were $579 million, a 3% increase year over year, with adjusted operating income rising 3.7% to $250 million [6] - Mortgage Technology revenues increased by 1% to $508 million, but adjusted operating income declined by 8.3% to $177 million, with an adjusted operating margin contracting to 35% [7] Full-Year Highlights - For the full year, adjusted earnings per share were $6.07, an 8% increase year over year, with total revenues of $9.3 billion, also a 16% increase [8] Financial Update - As of December 31, 2024, cash and cash equivalents were approximately $2 billion, up 38.8% from the previous year, while long-term debt decreased by 16% to $17.3 billion [9] - Operating cash flow for 2024 was $4.6 billion, a 26.3% increase year over year, and adjusted free cash flow was $3.6 billion, up 13.2% [9] Dividend and Share Repurchase - Intercontinental paid out $1 billion in dividends in 2024 and plans to resume share repurchases in the first quarter of 2025 [10] Guidance - For the first quarter of 2025, GAAP operating expenses are expected to be between $1.22 billion and $1.23 billion, with adjusted operating expenses projected between $965 million and $975 million [11] - For the full year 2025, exchange recurring revenues are expected to grow in low single digits, while Fixed Income & Data Services recurring revenues are projected to grow in mid-single digits [12]