10-QPeriod: Q3 FY2017

Intercontinental Exchange, Inc. Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 2, 2017For Securities:ICE

Summary

Intercontinental Exchange, Inc. (ICE) reported solid financial results for the nine months and third quarter ended September 30, 2017. Total revenues, less transaction-based expenses, saw an increase, driven by growth in both the Trading and Clearing and Data and Listings segments. The company demonstrated strong operating income and profitability, with diluted earnings per share rising significantly compared to the prior year. Strategically, ICE continued its acquisition activity, notably the pending acquisition of Virtu BondPoint and the investment in Euroclear, while also completing several divestitures, including Trayport. The company also maintained a strong commitment to returning capital to shareholders through dividends and share repurchases, supported by healthy operating cash flows.

Financial Highlights

54 data points
Beta

Revenue

$1.43B

Net Income

$371.00M

25.9% Net Margin

EPS (Diluted)

$0.63

Total Assets

$79.12B

Cash & Equivalents

$419.00M

Free Cash Flow

$256.00M

Financial Statements
Beta
Revenue$1.43B
SG&A Expenses$38.00M
Operating Expenses$550.00M
Operating Income$596.00M
Interest Expense$47.00M
Net Income$371.00M
EPS (Basic)$0.63
EPS (Diluted)$0.63
Shares Outstanding (Basic)588.00M
Shares Outstanding (Diluted)592.00M

Key Highlights

  • 1Revenues, less transaction-based expenses, increased by 4% for the nine months and 6% for the three months ended September 30, 2017, compared to the prior year periods, reflecting growth across key business segments.
  • 2Operating income saw a substantial increase of 11% for the nine months and 26% for the three months ended September 30, 2017, demonstrating improved operational efficiency and profitability.
  • 3Net income attributable to ICE increased by 21% for the nine months and 7% for the three months, leading to a significant rise in diluted earnings per share to $2.17 and $0.62, respectively.
  • 4The company completed several strategic acquisitions and divestitures during the period, including the acquisition of TMX Atrium and NYSE National, and the pending sale of Trayport, along with an investment in Euroclear.
  • 5ICE actively returned capital to shareholders, with dividends paid totaling $358 million for the nine months and $119 million for the third quarter, alongside ongoing share repurchases.
  • 6The company's liquidity position remains strong, with $419 million in cash and cash equivalents and ample availability under its Amended Credit Facility to support operations and strategic initiatives.

Frequently Asked Questions

Revenue growth in the third quarter of 2017 was driven by increases in both the Trading and Clearing segment and the Data and Listings segment. Specifically, revenues less transaction-based expenses increased by 6% overall. This growth was supported by stronger performance in commodities markets such as oil futures, as well as continued strength in data services like pricing and analytics.

ICE maintains a healthy liquidity position with $419 million in cash and cash equivalents as of September 30, 2017. The company has a $3.4 billion Amended Credit Facility, of which $2.2 billion was available for general corporate purposes. Debt management includes strategic issuance of senior notes and repayments of commercial paper, supported by strong operating cash flows, indicating robust financial management.

During the period, ICE completed the acquisition of TMX Atrium and NYSE National. Notably, the company entered into a definitive agreement to sell Trayport to TMX Group and acquired a stake in Euroclear. Additionally, the company announced the pending acquisition of Virtu BondPoint. These strategic moves reflect ICE's active portfolio management to optimize its business operations.

Profitability saw significant improvement. Operating income increased by 26% for the three months and 11% for the nine months ended September 30, 2017, compared to the prior year. Net income attributable to ICE rose by 7% for the quarter and 21% for the nine months, leading to an increase in diluted earnings per share. This improvement was driven by revenue growth and effective cost management.