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Intercontinental (ICE) Q3 Earnings and Revenues Top Estimates
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Intercontinental Exchange (ICE - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.31, which beat the Zacks Consensus Estimate of $1.26. Also, the bottom line increased 0.8% on a year-over-year basis.
ICE witnessed persistent revenue growth, driven by strong Exchanges and Fixed Income and Data Services. The results benefited from the strength of its technology and data services.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion increased 1% year over year on higher revenues from Exchanges and Fixed Income and Data Services. The top line beat the Zacks Consensus Estimate by 1.1%.
Net revenues from Exchanges were $1 billion, up 4% year over year. Fixed Income and Data Services revenues were $534 million, which increased 12% year over year. Mortgage Technology revenues decreased 25% to $276 million.
Total operating expenses decreased 2.8% year over year to $898 million, primarily due to lower compensation and benefits and professional services. Adjusted operating expenses were $727 million in the third quarter, down 3.7% from the year-ago figure.
Adjusted operating income improved 3.5% year over year to $1.1 billion. Adjusted operating margin expanded 200 basis points (bps) from the year-ago quarter to 60%.
Exchanges' adjusted operating income of $717 million was up 10.3% year over year. Adjusted operating margin expanded 400 bps to 72%. Fixed Income and Data Services' adjusted operating income rose 31% to $241 million. Adjusted operating margin expanded 600 bps to 45%. Mortgage Technology’s adjusted operating income of $126 million was down 40.8% year over year. Adjusted operating margin contracted 1200 bps to 46%.
Financial Update
As of Sep 30, 2022, Intercontinental Exchange had cash and cash equivalents of $6.1 billion, up more than four-fold from the Dec 31, 2021 level. Long-term debt of $18.1 billion increased 46.1% from the 2021-end level.
Total equity was $22.9 billion as of Jun 30, 2022, down 1.4% from 2021-end.
Operating cash flow was $2.5 billion in the first nine months of 2022, up 6.8% year over year. Free cash flow was $2.1 billion, up 7.1% year over year.
ICE repurchased $632 million worth of shares and paid out $640 million in dividends in the first nine months of 2022.
Q4 Guidance
Operating expenses for third-quarter 2022 are projected in the range of $890-$900 million. Adjusted operating expenses are expected in the range of $730-$740 million.
Non-operating expense is expected to be in the range of $137 million to $142 million. Adjusted non-operating expense is expected in the range of $105-$110 million.
Weighted average shares outstanding are anticipated between 558 million and 563 million shares.
Dividend Update
The board of directors approved a dividend of 38 cents per share for the fourth quarter of 2022, up 15% from 33 cents per share paid in the third quarter of 2021. The dividend will be paid out on Dec 30, 2022 to shareholders of record on Nov 16, 2022.
Of the industry players that have reported third-quarter results so far, CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate for earnings.
CME Group’s third-quarter 2022 adjusted earnings per share of $1.98 beat the Zacks Consensus Estimate of $1.93 and increased 23.8% year over year. Revenues of $1.2 billion increased 10.6% year over year and beat the Zacks Consensus Estimate by 0.1%.
CME Group’s operating income increased 20.4% from the prior-year quarter to $738.8 million. ADV was 22.4 million contracts, including non-U.S. ADV of 6.1 million contracts, led by 41% growth in Asia, 31% in Latin America and 14% in EMEA.
Nasdaq’s third-quarter 2022 adjusted earnings per share of 68 cents beat the Zacks Consensus Estimate of 65 cents by 4.6% and improved 15% year over year. Revenues of $890 million increased 6% year over year but missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR. The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
MarketAxess’ third-quarter 2022 earnings per share of $1.58 beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year but fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.
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Intercontinental (ICE) Q3 Earnings and Revenues Top Estimates
Intercontinental Exchange (ICE - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.31, which beat the Zacks Consensus Estimate of $1.26. Also, the bottom line increased 0.8% on a year-over-year basis.
ICE witnessed persistent revenue growth, driven by strong Exchanges and Fixed Income and Data Services. The results benefited from the strength of its technology and data services.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Performance in Detail
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion increased 1% year over year on higher revenues from Exchanges and Fixed Income and Data Services. The top line beat the Zacks Consensus Estimate by 1.1%.
Net revenues from Exchanges were $1 billion, up 4% year over year. Fixed Income and Data Services revenues were $534 million, which increased 12% year over year. Mortgage Technology revenues decreased 25% to $276 million.
Total operating expenses decreased 2.8% year over year to $898 million, primarily due to lower compensation and benefits and professional services. Adjusted operating expenses were $727 million in the third quarter, down 3.7% from the year-ago figure.
Adjusted operating income improved 3.5% year over year to $1.1 billion. Adjusted operating margin expanded 200 basis points (bps) from the year-ago quarter to 60%.
Exchanges' adjusted operating income of $717 million was up 10.3% year over year. Adjusted operating margin expanded 400 bps to 72%. Fixed Income and Data Services' adjusted operating income rose 31% to $241 million. Adjusted operating margin expanded 600 bps to 45%. Mortgage Technology’s adjusted operating income of $126 million was down 40.8% year over year. Adjusted operating margin contracted 1200 bps to 46%.
Financial Update
As of Sep 30, 2022, Intercontinental Exchange had cash and cash equivalents of $6.1 billion, up more than four-fold from the Dec 31, 2021 level. Long-term debt of $18.1 billion increased 46.1% from the 2021-end level.
Total equity was $22.9 billion as of Jun 30, 2022, down 1.4% from 2021-end.
Operating cash flow was $2.5 billion in the first nine months of 2022, up 6.8% year over year. Free cash flow was $2.1 billion, up 7.1% year over year.
ICE repurchased $632 million worth of shares and paid out $640 million in dividends in the first nine months of 2022.
Q4 Guidance
Operating expenses for third-quarter 2022 are projected in the range of $890-$900 million. Adjusted operating expenses are expected in the range of $730-$740 million.
Non-operating expense is expected to be in the range of $137 million to $142 million. Adjusted non-operating expense is expected in the range of $105-$110 million.
Weighted average shares outstanding are anticipated between 558 million and 563 million shares.
Dividend Update
The board of directors approved a dividend of 38 cents per share for the fourth quarter of 2022, up 15% from 33 cents per share paid in the third quarter of 2021. The dividend will be paid out on Dec 30, 2022 to shareholders of record on Nov 16, 2022.
Zacks Rank
Intercontinental Exchange currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Of the industry players that have reported third-quarter results so far, CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate for earnings.
CME Group’s third-quarter 2022 adjusted earnings per share of $1.98 beat the Zacks Consensus Estimate of $1.93 and increased 23.8% year over year. Revenues of $1.2 billion increased 10.6% year over year and beat the Zacks Consensus Estimate by 0.1%.
CME Group’s operating income increased 20.4% from the prior-year quarter to $738.8 million. ADV was 22.4 million contracts, including non-U.S. ADV of 6.1 million contracts, led by 41% growth in Asia, 31% in Latin America and 14% in EMEA.
Nasdaq’s third-quarter 2022 adjusted earnings per share of 68 cents beat the Zacks Consensus Estimate of 65 cents by 4.6% and improved 15% year over year. Revenues of $890 million increased 6% year over year but missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR. The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
MarketAxess’ third-quarter 2022 earnings per share of $1.58 beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year but fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.