10-QPeriod: Q1 FY2017

Intercontinental Exchange, Inc. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 3, 2017For Securities:ICE

Summary

Intercontinental Exchange, Inc. (ICE) reported solid financial results for the first quarter ended March 31, 2017. Total revenues, less transaction-based expenses, saw a modest 1% increase year-over-year, reaching $1.164 billion. This growth was primarily driven by a strong performance in the Data and Listings segment, which experienced an 8% increase in revenues to $626 million, notably from pricing and analytics services. While the Trading and Clearing segment's revenues, less transaction-based expenses, saw a 6% decline, this was partially offset by increased trading volumes in key energy and interest rate futures. The company also highlighted a significant one-time gain of $176 million from the divestiture of its Cetip investment, contributing to a substantial 36% increase in Net income attributable to ICE, reaching $502 million. Despite a slight increase in operating expenses, the company maintained a strong operating margin of 50%. Financially, ICE demonstrated robust cash flow from operations ($611 million) and continued to return capital to shareholders through dividends and share repurchases, underscoring its financial stability and commitment to shareholder value.

Financial Highlights

52 data points
Beta

Revenue

$1.47B

Net Income

$503.00M

34.2% Net Margin

EPS (Diluted)

$0.84

Total Assets

$79.46B

Cash & Equivalents

$360.00M

Free Cash Flow

$579.00M

Financial Statements
Beta
Revenue$1.47B
SG&A Expenses$41.00M
Operating Expenses$584.00M
Operating Income$582.00M
Interest Expense$45.00M
Net Income$503.00M
EPS (Basic)$0.85
EPS (Diluted)$0.84
Shares Outstanding (Basic)594.00M
Shares Outstanding (Diluted)599.00M

Key Highlights

  • 1Total revenues, less transaction-based expenses, increased by 1% to $1.164 billion for the three months ended March 31, 2017, compared to the same period in 2016.
  • 2The Data and Listings segment revenue grew by 8% to $626 million, driven by strong performance in pricing and analytics services.
  • 3A significant $176 million realized investment gain from the Cetip merger boosted net income attributable to ICE by 36% to $502 million.
  • 4Operating income remained stable at $582 million, with an operating margin of 50%, demonstrating continued operational efficiency.
  • 5Cash flow from operating activities was robust at $611 million, highlighting the company's strong cash generation capabilities.
  • 6The company returned capital to shareholders through $120 million in dividends and $229 million in share repurchases during the quarter.

Frequently Asked Questions

The primary driver of revenue growth was the Data and Listings segment, which saw an 8% increase to $626 million. This growth was largely attributed to strong performance in pricing and analytics services.

The merger of Cetip with BM&FBOVESPA S.A. resulted in a significant $176 million realized investment gain for ICE. This one-time gain substantially increased net income attributable to ICE by 36% to $502 million for the quarter.

ICE continues to prioritize returning capital to shareholders. In the first quarter, the company paid $120 million in dividends and repurchased $229 million of its common stock. A significant portion of the proceeds from the Cetip transaction is planned for further debt reduction and share repurchases.

ICE maintains a strong liquidity position with $611 million in cash flow from operations. The company has a $3.4 billion revolving credit facility and is planning to use proceeds from the Cetip sale to pay down outstanding commercial paper. The company plans to redeem its $850 million NYSE Notes maturing in October 2017 with new senior term notes or available credit facilities.