10-Q/APeriod: Q1 FY2019

Intercontinental Exchange, Inc. Quarterly Report (Amendment) for Q1 Ended Mar 31, 2019

Filed May 2, 2019For Securities:ICE

Summary

Intercontinental Exchange, Inc. (ICE) reported a solid first quarter for 2019, with revenues holding steady at $1.583 billion, 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 billion, 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 million, 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.

Financial Highlights

52 data points
Beta

Revenue

$1.58B

Net Income

$484.00M

30.6% Net Margin

EPS (Diluted)

$0.85

Total Assets

$93.86B

Cash & Equivalents

$653.00M

Free Cash Flow

$628.00M

Financial Statements
Beta
Revenue$1.58B
SG&A Expenses$42.00M
Operating Expenses$605.00M
Operating Income$665.00M
Interest Expense$71.00M
Net Income$484.00M
EPS (Basic)$0.85
EPS (Diluted)$0.85
Shares Outstanding (Basic)568.00M
Shares Outstanding (Diluted)570.00M

Key Highlights

  • 1Total 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.
  • 2Operating income increased by 2% to $665 million, demonstrating continued operational leverage.
  • 3Net income attributable to ICE grew by 4% to $484 million, with diluted EPS rising 8% to $0.85.
  • 4The Data and Listings segment showed healthy revenue growth of 4% to $657 million, driven by pricing and analytics and exchange data services.
  • 5Trading and Clearing segment revenues saw a slight decrease of 3% to $926 million, influenced by reduced volumes in certain futures and options categories.
  • 6The company actively returned capital to shareholders, repurchasing $440 million of its common stock and paying $157 million in dividends during the quarter.
  • 7ICE 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.

Frequently Asked Questions

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.

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.

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.

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.