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Intercontinental (ICE) Q3 Earnings Beat, Revenues Lag Estimates
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Intercontinental Exchange (ICE - Free Report) reported third-quarter 2023 adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate by 4.3%. The bottom line increased 11.5% on a year-over-year basis.
Intercontinental Exchange witnessed a revenue increase attributable to solid results in all three segments.
Performance in Detail
Intercontinental Exchange’s revenues, less transaction-based expenses, of $2 billion increased 16.9% year over year as a result of higher revenues at all three segments. The top line however missed the Zacks Consensus Estimate by 0.4%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Total operating expenses increased 29% year over year to $1.2 billion, primarily due to higher compensation and benefits, acquisition-related transaction and integration costs, technology and communication, depreciation and amortization and selling, and general and administrative expenses. Our estimate was $916.6 million. Adjusted operating expenses were $812 million in the quarter, up 11.7% from the year-ago figure. Our estimate was $767.4 million.
Adjusted operating income increased 9.9% year over year to $1.2 billion. Our estimate was $1.1 billion. Adjusted operating margin contracted 100 basis points (bps) year over year to 59%.
Segment Details
Exchanges' net revenues were $1.1 billion, up 11% year over year. The Zacks Consensus Estimate and our estimate were both pegged at $1.5 billion.
Adjusted operating income of $817 million was up 13.9% year over year. The Zacks Consensus Estimate was pegged at $790 million. Our estimate was $769.5 million. Adjusted operating margin expanded 100 basis points year over year to 73%. Our estimate was 71.5%.
Fixed Income and Data Services' revenues were $559 million, which increased 5% year over year. Our estimate was $560 million. The Zacks Consensus Estimate was pegged at $561 million.
Adjusted operating income rose 0.8% to $243 million. The Zacks Consensus Estimate was pegged at $256 million. Our estimate was $256.4 million.
Adjusted operating margin contracted 100 bps year over year to 42%. Our estimate was 45.8%.
Mortgage Technology’s revenues increased 20% to $330 million, Our estimate was $259 million. The Zacks Consensus Estimate was pegged at $326 million.
Adjusted operating income of $131 million was up 4% year over year. The Zacks Consensus Estimate was pegged at $121 million. Our estimate was $102.1 million.
Adjusted operating margin contracted 700 bps to 36%. Our estimate was 39.4%.
Financial Update
As of Sep 30, 2023, Intercontinental Exchange had cash and cash equivalents of $1.3 billion, down 83.5% from the Dec 31, 2022 level. Long-term debt of $21 billion increased 16.1% from the 2022-end level.
Total equity was $25.5 billion as of Sep 30, 2023, up 16.1% from 2022-end.
Operating cash flow was $2.6 million in the first nine months of 2023, up 4.5% year over year. Adjusted free cash flow was $2.5 million, up 14.8% year over year.
Intercontinental Exchange paid out $713 million in dividends in the first nine months of 2023.
Q4 Guidance
GAAP operating expenses are expected to be in the range of $1.21 billion to $1.22 billion. Adjusted operating expenses are expected to be in the range of $955 million to $965 million.
GAAP non-operating expense is expected to be in the range of $240 million to $245 million. Adjusted non-operating expense is expected to be in the range of $225 million to $230 million.
Share count is expected to be in the range of 572 million to 576 million.
2024 Guidance
Capital expenditures are expected to be in the range of $500 million to $525 million.
Dividend Update
The board of directors approved a dividend of 42 cents per share for the fourth quarter of 2023. The dividend will be paid out on Dec 29 to shareholders of record as of Dec 14.
Nasdaq (NDAQ - Free Report) reported third-quarter 2023 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 67 cents. The bottom line improved 4% year over year. The improvement was mainly driven by organic growth and solid results in the Solutions segment. Revenues of $940 million increased 6% year over year and beat the Zacks Consensus Estimate of $929 million.
Operating margin of 52% contracted 100 basis points year over year. The Nasdaq stock market welcomed 87 new company listings in the third quarter of 2023, including 39 initial public offerings.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.785 billion to $1.805 billion.
MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2023 earnings per share of $1.46, which missed the Zacks Consensus Estimate by 2%. Moreover, the bottom line declined from $1.58 per share a year ago. Total revenues increased 0.1% year over year to $172.3 million in the quarter under review. However, the top line missed the consensus mark by 0.6%.
MarketAxess reported operating income of $66.9 million, which decreased 12.3% year over year. Its high-grade trading volume declined 0.5% year over year to $326.3 billion, missing our estimate by 11.3%. Average daily volume (ADV) of the same product category rose 1.1% year over year to $5,179 million but missed our estimate by 10.2%.
Management revised the expense guidance upward to be between $432 million and $438 million for this year, the mid-point of which indicates an 11.1% increase from the 2022 reported figure.
CME Group (CME - Free Report) reported third-quarter 2023 record adjusted earnings per share of $2.25, which beat the Zacks Consensus Estimate by 1.8%. The bottom line increased 13.6% year over year. This marked the ninth straight quarter of double-digit growth. Revenues of $1.3 billion increased 9% year over year and beat the Zacks Consensus Estimate by 0.01%.
Operating income increased 11% from the prior-year quarter to $820.2 million and beat our estimate of $750.5 million.
ADV was 22.3 million contracts. Non-U.S. ADV reached 6.5 million contracts, up 7% year over year, including 16% growth in interest rates and double-digit growth across agricultural, energy and metals products.
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Intercontinental (ICE) Q3 Earnings Beat, Revenues Lag Estimates
Intercontinental Exchange (ICE - Free Report) reported third-quarter 2023 adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate by 4.3%. The bottom line increased 11.5% on a year-over-year basis.
Intercontinental Exchange witnessed a revenue increase attributable to solid results in all three segments.
Performance in Detail
Intercontinental Exchange’s revenues, less transaction-based expenses, of $2 billion increased 16.9% year over year as a result of higher revenues at all three segments. The top line however missed the Zacks Consensus Estimate by 0.4%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Total operating expenses increased 29% year over year to $1.2 billion, primarily due to higher compensation and benefits, acquisition-related transaction and integration costs, technology and communication, depreciation and amortization and selling, and general and administrative expenses. Our estimate was $916.6 million. Adjusted operating expenses were $812 million in the quarter, up 11.7% from the year-ago figure. Our estimate was $767.4 million.
Adjusted operating income increased 9.9% year over year to $1.2 billion. Our estimate was $1.1 billion. Adjusted operating margin contracted 100 basis points (bps) year over year to 59%.
Segment Details
Exchanges' net revenues were $1.1 billion, up 11% year over year. The Zacks Consensus Estimate and our estimate were both pegged at $1.5 billion.
Adjusted operating income of $817 million was up 13.9% year over year. The Zacks Consensus Estimate was pegged at $790 million. Our estimate was $769.5 million. Adjusted operating margin expanded 100 basis points year over year to 73%. Our estimate was 71.5%.
Fixed Income and Data Services' revenues were $559 million, which increased 5% year over year. Our estimate was $560 million. The Zacks Consensus Estimate was pegged at $561 million.
Adjusted operating income rose 0.8% to $243 million. The Zacks Consensus Estimate was pegged at $256 million. Our estimate was $256.4 million.
Adjusted operating margin contracted 100 bps year over year to 42%. Our estimate was 45.8%.
Mortgage Technology’s revenues increased 20% to $330 million, Our estimate was $259 million. The Zacks Consensus Estimate was pegged at $326 million.
Adjusted operating income of $131 million was up 4% year over year. The Zacks Consensus Estimate was pegged at $121 million. Our estimate was $102.1 million.
Adjusted operating margin contracted 700 bps to 36%. Our estimate was 39.4%.
Financial Update
As of Sep 30, 2023, Intercontinental Exchange had cash and cash equivalents of $1.3 billion, down 83.5% from the Dec 31, 2022 level. Long-term debt of $21 billion increased 16.1% from the 2022-end level.
Total equity was $25.5 billion as of Sep 30, 2023, up 16.1% from 2022-end.
Operating cash flow was $2.6 million in the first nine months of 2023, up 4.5% year over year. Adjusted free cash flow was $2.5 million, up 14.8% year over year.
Intercontinental Exchange paid out $713 million in dividends in the first nine months of 2023.
Q4 Guidance
GAAP operating expenses are expected to be in the range of $1.21 billion to $1.22 billion. Adjusted operating expenses are expected to be in the range of $955 million to $965 million.
GAAP non-operating expense is expected to be in the range of $240 million to $245 million. Adjusted non-operating expense is expected to be in the range of $225 million to $230 million.
Share count is expected to be in the range of 572 million to 576 million.
2024 Guidance
Capital expenditures are expected to be in the range of $500 million to $525 million.
Dividend Update
The board of directors approved a dividend of 42 cents per share for the fourth quarter of 2023. The dividend will be paid out on Dec 29 to shareholders of record as of Dec 14.
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
Nasdaq (NDAQ - Free Report) reported third-quarter 2023 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 67 cents. The bottom line improved 4% year over year. The improvement was mainly driven by organic growth and solid results in the Solutions segment. Revenues of $940 million increased 6% year over year and beat the Zacks Consensus Estimate of $929 million.
Operating margin of 52% contracted 100 basis points year over year. The Nasdaq stock market welcomed 87 new company listings in the third quarter of 2023, including 39 initial public offerings.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.785 billion to $1.805 billion.
MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2023 earnings per share of $1.46, which missed the Zacks Consensus Estimate by 2%. Moreover, the bottom line declined from $1.58 per share a year ago. Total revenues increased 0.1% year over year to $172.3 million in the quarter under review. However, the top line missed the consensus mark by 0.6%.
MarketAxess reported operating income of $66.9 million, which decreased 12.3% year over year. Its high-grade trading volume declined 0.5% year over year to $326.3 billion, missing our estimate by 11.3%. Average daily volume (ADV) of the same product category rose 1.1% year over year to $5,179 million but missed our estimate by 10.2%.
Management revised the expense guidance upward to be between $432 million and $438 million for this year, the mid-point of which indicates an 11.1% increase from the 2022 reported figure.
CME Group (CME - Free Report) reported third-quarter 2023 record adjusted earnings per share of $2.25, which beat the Zacks Consensus Estimate by 1.8%. The bottom line increased 13.6% year over year. This marked the ninth straight quarter of double-digit growth. Revenues of $1.3 billion increased 9% year over year and beat the Zacks Consensus Estimate by 0.01%.
Operating income increased 11% from the prior-year quarter to $820.2 million and beat our estimate of $750.5 million.
ADV was 22.3 million contracts. Non-U.S. ADV reached 6.5 million contracts, up 7% year over year, including 16% growth in interest rates and double-digit growth across agricultural, energy and metals products.