01—Abstract
Summary
Summary of the 10-Q/A filed May 2, 2019. Cited figures are marked; the original filing is the authoritative source.
Intercontinental Exchange, Inc. (ICE) reported a solid first quarter for 2019, with revenues holding steady at $1.583 billiona, matching the prior year's first quarter.
The company demonstrated strong operational efficiency, with a slight increase in revenue less transaction-based expenses to $1.270 billionb, up 4% year-over-year, alongside a 5% rise in operating expenses. This resulted in a modest 2% increase in operating income to $665 million. Net income attributable to ICE also grew by 4% to $484 million, and diluted earnings per share increased by 8% to $0.85.
The Data and Listings segment showed robust growth, with revenues increasing by 4% to $657 millionc, driven by strong performance in pricing and analytics, and exchange data and feeds. The Trading and Clearing segment saw a slight revenue decrease of 3% to $926 million, primarily due to lower volumes in energy and financial futures and options, although fixed income and credit revenues saw a significant increase. The company also highlighted its active capital return program, repurchasing $440 million in common stock and paying $157 million in dividends during the quarter.
02—Key points
Key Highlights
- Total revenues remained stable at $1.583 billion for the three months ended March 31, 2019, compared to $1.580 billion in the prior year period.
- Operating income increased by 2% to $665 million, demonstrating continued operational leverage.
- Net income attributable to ICE grew by 4% to $484 million, with diluted EPS rising 8% to $0.85.
- The Data and Listings segment showed healthy revenue growth of 4% to $657 million, driven by pricing and analytics and exchange data services.
- Trading and Clearing segment revenues saw a slight decrease of 3% to $926 million, influenced by reduced volumes in certain futures and options categories.
- The company actively returned capital to shareholders, repurchasing $440 million of its common stock and paying $157 million in dividends during the quarter.
- ICE adopted new lease accounting standards (ASU 2016-02), resulting in the recognition of operating lease liabilities and right-of-use assets on the balance sheet.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-Q/AQ1 FY2019filed May 2, 2019Financial Statements
Q1 FY2019 against Q1 FY2018
| Line item | Q1 FY2019Q1 FY2018 | Change |
|---|---|---|
| Revenue | $1.58B$1.58B | +0.2% |
| SG&A Expenses | $42.00M$33.00M | +27.3% |
| Operating Expenses | $605.00M$575.00M | +5.2% |
| Operating Income | $665.00M$650.00M | +2.3% |
| Interest Expense | $71.00M$52.00M | +36.5% |
| Net Income | $484.00M$464.00M | +4.3% |
| EPS (Basic) | $0.85$0.80 | +6.2% |
| EPS (Diluted) | $0.85$0.79 | +7.6% |
| Shares Outstanding (Basic) | 568.00M582.00M | −2.4% |
| Shares Outstanding (Diluted) | 570.00M586.00M | −2.7% |
05—Questions
Frequently Asked Questions
What was the company's revenue performance in the first quarter of 2019, and what were the key drivers?
ICE reported total revenues of $1.583 billion for the three months ended March 31, 2019, which was virtually flat compared to $1.580 billion in the same period of 2018. The Data and Listings segment saw a 4% increase in revenue to $657 million, primarily driven by growth in pricing and analytics, and exchange data and feeds. The Trading and Clearing segment experienced a slight 3% decrease in revenue to $926 million, influenced by lower volumes in energy and financial futures and options, though fixed income and credit revenues saw a significant increase.
How did the company manage its expenses and profitability in the quarter?
Operating expenses increased by 5% to $605 million year-over-year. However, revenue less transaction-based expenses grew by 4%, leading to a 2% increase in operating income to $665 million. The operating margin was 52%, slightly down from 53% in the prior year. The company's ability to maintain stable revenues while facing increased operating expenses highlights effective cost management and operational efficiency.
What is the company's capital return strategy, and how was it executed in Q1 2019?
ICE continued its commitment to returning capital to shareholders. During the first quarter of 2019, the company repurchased $440 million of its common stock and paid $157 million in dividends. As of March 31, 2019, approximately $1.6 billion remained authorized for future share repurchases under its existing program.
Were there any significant accounting standard changes adopted in this period?
Yes, ICE adopted ASU 2016-02, 'Leases,' effective January 1, 2019. This standard requires the recognition of right-of-use assets and lease liabilities for operating leases on the balance sheet. The adoption resulted in the recognition of $357 million in operating lease liabilities and $308 million in operating lease ROU assets.
06—Continue