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Intercontinental Exchange, Inc.
CEO : Mr. Jeffrey C. Sprecher

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2022 Q4	2.1% YoY	-6.8%	-72.1%	2023-02-02

Warren Gardiner says,

Key Highlights

• Fourth quarter net revenues of $1.8 billion, up 4% YoY, and full-year revenues of $7.3 billion, up 4% YoY
• Adjusted operating expenses of $740 million, within guidance range
• Fourth quarter adjusted EPS of $1.25 and full year adjusted EPS of $5.30, up 5% YoY
• Record free cash flow of $2.9 billion in 2022
• Authorized an 11% increase in quarterly dividend to $0.42 per share, beginning Q1 2023

Exchange Segment

• Fourth quarter net revenues of $982 million, and full-year revenues increased by 8%
• 11% growth in agricultural commodities, and 13% growth in equity derivatives business
• Record year for listing transfers with 34 transfers, including more operating companies in the last three years combined

Fixed Income and Data Services Segment

• Fourth quarter revenues totaled a record $537 million, up 13% YoY
• Record transaction revenues of $537 million, up 89%
• Recurring revenue grew 4% for the year and it was up 5% after adjusting for Euronext

Mortgage Technology Segment

• Fourth quarter Mortgage Technology revenues totaled $249 million, and full-year revenues totaled $1.1 billion, up 16% YoY
• Recurring revenues grew 10% YoY and less revenues increased by over 30% YoY
• Expecting mid to high single digit growth in recurring revenues in 2023

Guidance

• Expecting mid to high single digit growth in recurring revenues for Mortgage Technology segment in 2023
• Expecting recurring revenue growth, excluding FX and Euronext migration headwinds, in mid-single digits for Fixed Income and Data Services Segment
• Expecting low single digit growth in recurring revenues, excluding a $20 million headwind from the cessation of LIBOR, for Exchange Segment
• Expecting adjusted operating expenses to be in the range of $3.04 to $3.09 billion, with strategic investments and cash compensation expense driving an increase

Benjamin Jackson says,

Interest Rate and Equity Derivatives Business

• 20% volume growth in interest rate complex and 15% growth in equity derivatives business
• Rising inflation and central bank activity across the globe presented an interest rate environment that has not been seen in generation

Global Energy Markets

• 17% increase in global gas volumes in 2022 including 24% growth in North American gas business
• An evolving energy supply chain in Europe has led to increased demand for global liquefied natural gas (LNG)
• European carbon markets experienced headwinds in 2022 due to geopolitical and macroeconomic uncertainty

North American Environmental Markets

• Record year with volumes up 5% year-over-year in 2022
• One of the largest providers of environmental products including renewable fuel contracts, carbon allowances, nature-based solutions, renewable energy certificates, and climate data

Fixed Income and Data Services Business

• Record revenues in 2022 underpinned by recurring and transaction revenue growth
• Rising market uncertainty and interest rates are driving an increase in demand for credit protection
• ICE Bonds business recorded revenues up nearly 100% year-over-year

Mortgage Business

• Continued electronification driving workflow efficiency is a secular trend that is expected to continue
• Recurring revenues increased 16% in 2022 due to leveraging mission-critical technology and data expertise to accelerate analog to digital conversion
• Data and analytics products increased 31% in Q4 and 24% for the full year in 2022

Q & A sessions,

Impact of LNG on Global Natural Gas Supply Chain

• Natural gas is now a global energy product with LNG being freely flowed anywhere around the world.
• Due to this global supply chain, supply disruption events can be rebalanced more efficiently, creating market clarity and bolstering confidence in trading products like ETF.
• New contracts in the LNG space, few basis contracts in Europe, are being invested in to help traders manage around macroeconomic environments, which can be tradable.

New TTF Contract in the U.K.

• A new TTF contract, a look-alike to the one in the Netherlands, is being launched in the U.K. to provide customers a choice.
• It is important to point out that this TTF contract will trade alongside another TTF contract already in the U.K. called the TTF frontline.
• Price caps can create issues for market participants, so the new TTF contract provides a free market price discovery mechanism to manage risk in the clearing house and to settle contracts.

Supply Chain Changes in the Oil Market

• With supply chain dynamics of U.S. oil and Middle Eastern oil backfilling the lost Russian oil supply, ICE has invested in building fundamental building blocks to enable a growth of 8% to 10% over a long period of time.
• Investments in a whole bunch of different areas around oil have been made, including the launch of the Midland WTI contract and ICE Futures Abu Dhabi and the Murban contract.
• Market confidence is coming back, as seen with the growth of the open interest in gas oil and Brent options contracts.

Shifting Transaction Revenue towards Subscription

• ICE is intentionally shifting more transaction revenue towards subscription to make the business model much more predictable and has successfully grown subscription revenue in the fourth quarter of 9%.
• New start-up companies and large banks looking to upgrade their legacy infrastructure are part of ICE’s sales funnel, which reflects growth factors for the future.

Strengths in the Environmental Marketplace

• ICE has the most global complete suite of solutions for pricing carbon, offsetting carbon risks, and trading renewable energy credits.
• A symbiotic relationship is seen between energy and carbon pricing, with energy producers and consumers needing to care about the price of carbon.
• Headwinds were seen in the European Union allowance markets in 2022, but market data subscriptions continue to grow, showing the underlying health of the business.