Summary
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 billion remaining under its authorized repurchase program at the end of the quarter.
Financial Highlights
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Financial Statements
Beta
| Revenue | $1.63B |
| SG&A Expenses | $41.00M |
| Operating Expenses | $618.00M |
| Operating Income | $680.00M |
| Interest Expense | $71.00M |
| Net Income | $472.00M |
| EPS (Basic) | $0.84 |
| EPS (Diluted) | $0.84 |
| Shares Outstanding (Basic) | 563.00M |
| Shares Outstanding (Diluted) | 566.00M |
Key Highlights
- 1Revenue growth of 4% year-over-year for both the three and six-month periods ending June 30, 2019, driven by both operating segments.
- 2Data and Listings segment revenue increased by 5% for the six-month period, showcasing the strength of its subscription-based offerings.
- 3Net 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.
- 4Diluted 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.
- 5The company repurchased approximately $780 million of its common stock during the six months ended June 30, 2019, with $1.2 billion remaining authorization.
- 6Operating 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.
- 7ICE successfully acquired Simplifile for $338 million in June 2019, expanding its mortgage services portfolio.
Frequently Asked Questions
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.
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.
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.
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.