01—Abstract
Summary
Summary of the 10-Q filed August 1, 2019. Cited figures are marked; the original filing is the authoritative source.
Intercontinental Exchange, Inc. (ICE) reported solid financial results for the second quarter of 2019, demonstrating continued revenue growth and profitability.
Total revenues, less transaction-based expenses, increased by 4% year-over-year for both the three and six-month periods ending June 30, 2019. This growth was driven by a combination of its Trading and Clearing segment and its Data and Listings segment, with Data and Listings showing particular strength, up 5% for the six-month period. The company also continued its commitment to returning capital to shareholders through share repurchases and dividends, with $1.2 billiona remaining under its authorized repurchase program at the end of the quarter.
02—Key points
Key Highlights
- Revenue growth of 4% year-over-year for both the three and six-month periods ending June 30, 2019, driven by both operating segments.
- Data and Listings segment revenue increased by 5% for the six-month period, showcasing the strength of its subscription-based offerings.
- Net income attributable to ICE increased by 4% to $956 million for the six-month period and by 4% to $472 million for the three-month period.
- Diluted earnings per share increased by 6% to $1.68 for the six-month period and by 8% to $0.84 for the three-month period.
- The company repurchased approximately $780 million of its common stock during the six months ended June 30, 2019, with $1.2 billion remaining authorization.
- Operating income for the Trading and Clearing segment saw a slight decrease of 1% for the six months, but the Data and Listings segment's operating income grew by 9%, indicating a shift in relative performance.
- ICE successfully acquired Simplifile for $338 million in June 2019, expanding its mortgage services portfolio.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2019filed August 1, 2019Financial Statements
Q2 FY2019 against Q2 FY2018
| Line item | Q2 FY2019Q2 FY2018 | Change |
|---|---|---|
| Revenue | $1.63B$1.56B | +5.0% |
| SG&A Expenses | $41.00M$39.00M | +5.1% |
| Operating Expenses | $618.00M$591.00M | +4.6% |
| Operating Income | $680.00M$655.00M | +3.8% |
| Interest Expense | $71.00M$55.00M | +29.1% |
| Net Income | $472.00M$455.00M | +3.7% |
| EPS (Basic) | $0.84$0.79 | +6.3% |
| EPS (Diluted) | $0.84$0.78 | +7.7% |
| Shares Outstanding (Basic) | 563.00M578.00M | −2.6% |
| Shares Outstanding (Diluted) | 566.00M581.00M | −2.6% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in the second quarter of 2019?
Revenue growth was primarily driven by increases in both the Trading and Clearing segment and the Data and Listings segment. The Data and Listings segment showed robust growth, particularly in pricing and analytics, exchange data and feeds, and desktops and connectivity services. The Trading and Clearing segment benefited from increases in cash equities and fixed income and credit revenues.
How did ICE manage its capital during the quarter?
ICE continued to return capital to shareholders through significant share repurchases totaling $780 million in the first six months of 2019, with approximately $1.2 billion still available under its authorized program. The company also paid dividends, demonstrating a commitment to shareholder returns.
What is the impact of the Simplifile acquisition on ICE's business?
The acquisition of Simplifile for $338 million in June 2019 is expected to expand ICE's Mortgage Services portfolio, which includes MERS. This strategic acquisition is part of ICE's ongoing efforts to grow its business within its Trading and Clearing segment.
Are there any significant regulatory or legal matters impacting ICE?
The filing mentions ongoing litigation, including a consolidated amended complaint in the LIBOR litigation and the City of Providence litigation. While ICE intends to vigorously defend these matters, the company notes that the resolution of these legal proceedings could potentially impact future financial results, though they do not currently believe they will have a material adverse effect.
06—Continue