10-QPeriod: Q2 FY2021

Intercontinental Exchange, Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 29, 2021For Securities:ICE

Summary

Intercontinental Exchange, Inc. (ICE) reported strong financial performance for the six months ended June 30, 2021, driven by significant revenue growth across its segments, particularly in Mortgage Technology. Total revenues, less transaction-based expenses, increased by 19% year-over-year to $3.5 billion for the six-month period, and by 22% to $1.7 billion for the second quarter. This growth translated into a substantial increase in net income attributable to ICE, which rose by 62% to $1.9 billion for the six months and by 139% to $1.25 billion for the quarter, demonstrating effective cost management and operational leverage. A notable event during the period was the successful sale of ICE's investment in Coinbase, which generated a significant gain and contributed substantially to 'Other income, net'. The company also saw increased operating expenses, largely due to investments in technology and compensation, partly driven by the integration of the Ellie Mae acquisition. Despite these investments, ICE maintained strong operating margins and continued its dividend payout policy. The company also provided an updated outlook on its capital return plans and strategic initiatives, including the ongoing integration of acquisitions and expansion into new markets like the UAE.

Financial Statements
Beta
Revenue$2.13B
SG&A Expenses$60.00M
Operating Expenses$908.00M
Operating Income$799.00M
Interest Expense$106.00M
Net Income$1.25B
EPS (Basic)$2.23
EPS (Diluted)$2.22
Shares Outstanding (Basic)563.00M
Shares Outstanding (Diluted)565.00M

Key Highlights

  • 1Total revenues, less transaction-based expenses, increased by 19% to $3.5 billion for the six months ended June 30, 2021, and by 22% to $1.7 billion for the three months ended June 30, 2021, compared to the prior year periods.
  • 2Net income attributable to ICE common stockholders surged by 62% to $1.9 billion for the six months and by 139% to $1.25 billion for the three months ended June 30, 2021, year-over-year.
  • 3The sale of the Coinbase investment resulted in a substantial gain of $1.23 billion, significantly boosting 'Other income, net' for the quarter.
  • 4Operating expenses increased by 37% to $1.81 billion for the six months and by 39% to $908 million for the three months, driven by increased compensation, technology, and acquisition-related costs, notably from the Ellie Mae integration.
  • 5The Mortgage Technology segment showed exceptional growth, with revenues increasing significantly due to the full period impact of the Ellie Mae acquisition.
  • 6ICE maintained a strong balance sheet with $602 million in cash and cash equivalents and $1.4 billion in restricted cash and cash equivalents as of June 30, 2021.
  • 7The company declared and paid $0.66 per share in dividends for the six months, totaling $374 million, reflecting a commitment to returning capital to shareholders.

Frequently Asked Questions

The increase in revenue was primarily driven by strong performance across all segments, with notable growth in the Mortgage Technology segment due to the full period impact of the Ellie Mae acquisition. Additionally, the Exchanges and Fixed Income and Data Services segments also contributed positively, with increases in data services and listings revenues, and resilient trading volumes.

The sale of ICE's investment in Coinbase in April 2021 resulted in a significant gain of $1.23 billion. This gain was recorded as 'Other income, net' and substantially boosted the company's net income for the second quarter and the first half of the year.

The Mortgage Technology segment, significantly bolstered by the acquisition of Ellie Mae, demonstrated exceptional year-over-year revenue growth. Management expects continued strength from this segment as it benefits from the end-to-end technology platform serving the U.S. residential mortgage market, driving efficiency and digital workflow solutions.

ICE continues to focus on strategic investments and acquisitions while also returning capital to shareholders. The company has an authorized $1.2 billion remaining for future stock repurchases and has maintained a consistent quarterly dividend policy, recently announcing a $0.33 per share dividend for the third quarter of 2021.