Exhibit 99.1
Intercontinental Exchange Reports Record First Quarter 2020
• Record first quarter revenues of $1.6 billion, +23% y/y • GAAP diluted EPS of $1.17, +38% y/y • Adj. diluted EPS of $1.28, +39% y/y • Operating margin of 57%; Adj. operating margin of 62% • Operating income +32% y/y; Adj. operating income +30% y/y • Through March 31, 2020, returned $865M to stockholders | Jeffrey C. Sprecher, ICE Chairman & Chief Executive Officer,said, “Amidst these highly uncertain times, we are grateful for both our customers’ business and their trust. The dedication of our employees and our focus on leading technology is what provides the foundation for our global markets to operate smoothly in times of stress. This combination enabled us to generate the strongest quarter in our company’s history, reporting record revenues and double-digit earnings per share growth. As we look to the balance of the year, our focus remains on the safety of our employees, while also continuing to ensure that our markets, clearinghouses and related data services perform to the highest possible standards.” |
ATLANTA & NEW YORK, April 30, 2020 -Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listing services, today reported financial results for the first quarter of 2020. For the quarter ended March 31, 2020, consolidated net income attributable to ICE was $650 million on $1.6 billion of consolidated revenues, less transaction-based expenses. First quarter GAAP diluted earnings per share (EPS) were $1.17. Adjusted net income attributable to ICE was $708 million in the first quarter and adjusted diluted EPS were $1.28. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
Scott A. Hill, ICE Chief Financial Officer, added: "In the first quarter we generated record revenues, record operating income and double-digit earnings per share growth, which enabled us to return over $850 million to stockholders through our dividend and stock buyback program. This performance also enabled us to continue to invest in our business, ensuring we can continue to provide our customers with critical risk management tools while also creating value for our stockholders."
First Quarter 2020 Business Highlights
| $ in millions | Net
Revenue | Op
Margin | Adj Op Margin |
| | | | |
| Data & Listings | $676 | 46% | 52% |
| Trading & Clearing | $883 | 65% | 69% |
| Consolidated | $1,559 | 57% | 62% |
First quarter consolidated net revenues were $1.6 billion, up 23% year-over-year. Data and listings revenues in the first quarter were $676 million and trading and clearing net revenues were $883 million. Consolidated operating expenses were $677 million for the first quarter of 2020. On an adjusted basis, consolidated operating expenses were $597 million. Consolidated operating income for the first quarter was $882 million and the operating margin was 57%. On an adjusted basis, consolidated operating income for the first quarter was $962 million and the adjusted operating margin was 62%.
Data and Listings Segment Results
First quarter data and listings revenues were $676 million, including data revenues of $564 million, up 3% year-over-year, and listings revenues of $112 million. On a constant currency basis(1), segment revenues were up 3% with data revenues up 4% year-over-year. Data and listings operating expenses were $367 million and on an adjusted basis, were $322 million in the first quarter. Segment operating income for the first quarter was $309 million and the operating margin was 46%. On an adjusted basis, operating income was $354 million and the adjusted operating margin was 52%.
| $ in millions | 1Q20 | 1Q19 | % Chg | Const
Curr(1) |
| Revenue: | | | | |
| Pricing and Analytics | $276 | $266 | 4% | 4% |
| Exchange Data and Feeds | 180 | 176 | 2% | 2% |
| Desktops and Connectivity | 108 | 104 | 4% | 5% |
| Data Total | 564 | 546 | 3% | 4% |
| Listings | 112 | 111 | — | —% |
| Segment Revenue | $676 | $657 | 3% | 3% |
| (1) | Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 1Q19, 1.3021 and 1.1355, respectively. |
Trading and Clearing Segment Results
First quarter trading and clearing net revenues were $883 million, up 44% from one year ago. Trading and clearing operating expenses were $310 million and adjusted operating expenses were $275 million in the first quarter. Segment operating income for the first quarter was $573 million and the operating margin was 65%. On an adjusted basis, operating income was $608 million and the adjusted operating margin was 69%.
| $ in millions | 1Q20 | 1Q19 | % Chg |
| Revenue, net: | | | |
| Energy | $353 | $229 | 54% |
| Ags & metals | 84 | 62 | 36% |
| Financials(1) | 123 | 83 | 48% |
| Cash equities & equity options | 113 | 77 | 48% |
| Fixed income & credit(2) | 122 | 87 | 41% |
| OTC & other transaction(3) | 13 | 11 | 11% |
| Other revenue(4) | 75 | 64 | 16% |
| Segment Revenue | $883 | $613 | 44% |
| (1) | Financials include interest rates and other financial futures and options. |
| (2) | Fixed income and credit includes fixed income execution, CDS execution and clearing and ICE Mortgage Services. |
| (3) | OTC & other transactions include physical energy. |
| (4) | Other revenue includes interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange member fees, and agriculture grading and certification fees. |
| • | Energy futures and options revenue in the first quarter increased 54% year-over-year driven by a 54% increase in average daily volume (ADV), partially offset by a 2% decrease in rate per contract (RPC). |
| • | Ags and metals futures and options revenue in the first quarter increased 36% year-over-year driven by a 31% increase in ADV and a 2% increase in RPC. |
| • | Financials futures and options revenue in the first quarter increased 48% year-over-year reflecting a 31% increase in ADV and an 11% increase in RPC. |
| • | U.S. cash equities and equity options revenue in the first quarter increased 48% year-over-year reflecting a 45% increase in cash equities ADV, a 41% increase in equity options ADV and a 9% increase in cash equities RPC. |
| | ADV (lots in thousands) | RPC |
| | 1Q20 | % Chg | 1Q20 | % Chg |
| Energy | 3,938 | 54% | $1.45 | (2)% |
| Ags & metals | 588 | 31% | $2.29 | 2% |
| Financials | 3,511 | 31% | $0.54 | 11% |
| Interest Rates | 2,865 | 28% | $0.39 | 5% |
| Other Financials | 646 | 46% | $1.23 | 15% |
| Total Futures & Options | 8,037 | 42% | $1.11 | 4% |
| | | | | |
| Cash Equities (in millions) | 2,734 | 45% | $0.049 | 9% |
| Equity Options | 4,681 | 41% | $0.10 | (15)% |
The first quarter of 2020 included 62 trading days for commodities, other financials and cash equities and equity options and 64 days for interest rates. The first quarter of 2019 included 61 trading days for commodities, other financials and cash equities and equity options and 63 days for interest rates.
Other Matters
| • | The effective tax rate for the first quarter of 2020 was 21%. |
| • | Operating cash flow for the first quarter was $520 million and free cash flow was $434 million. |
| • | Unrestricted cash was $583 million and outstanding debt was $8.3 billion as of March 31, 2020. |
| • | Through the first quarter of 2020, ICE repurchased $699 million of its common stock and paid $166 million in dividends. |
Financial Guidance
| • | ICE's second quarter 2020 data revenues are expected to be in a range of $565 million to $570 million. |
| • | ICE's second quarter 2020 GAAP operating expenses are expected to be in a range of $646 million to $656 million and adjusted operating expenses(1) are expected to be in a range of $575 million to $585 million. |
| • | ICE's full year 2020 GAAP operating expenses are expected to be in a range of $2.607 billion to $2.657 billion and adjusted operating expenses(1) are expected to be in a range of $2.320 billion to $2.370 billion. |
| • | ICE's second quarter 2020 non-operating expense(2)is expected to be in the range of $50 million to $55 million. |
| • | ICE's full year 2020 capital expenditures are expected to be in a range of $300 million to $330 million. |
| • | ICE's diluted share count for the second quarter is expected to be in the range of 546 million to 552 million weighted average shares outstanding. |
| (1) | 2020 and 2Q20 non-GAAP operating expenses exclude amortization of acquisition-related intangibles. 2020 non-GAAP operating expenses also exclude acquisition-related success fees. |
| (2) | Non-operating expense includes interest income, interest expense and net other income. |
Earnings Conference Call Information
ICE will hold a conference call today, April 30, 2020, at 8:30 a.m. ET to review its first quarter 2020 financial results. A live audio webcast of the earnings call will be available on the company's website at www.theice.com in the investor relations section. Participants may also listen via telephone by dialing 888-317-6003 from the United States, 866-284-3684 from Canada or 412-317-6061 from outside of the United States and Canada.Telephone participants are required to provide the participant entry number 4506597 and are recommended to call 10 minutes prior to the start of the call. The call will be archived on the company's website for replay.
The conference call for the second quarter 2020 earnings has been scheduled for July 30, 2020 at 8:30 a.m. ET. Please refer to the Investor Relations website at www.ir.theice.com for additional information.
Historical futures, options and cash ADV, rate per contract, open interest data and CDS cleared information can be found at: http://ir.theice.com/investors-and-media/supplemental-volume-info/default.aspx
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
| | Three Months Ended
March 31, |
| Revenues: | 2020 | | 2019 |
| Transaction and clearing, net | $ | 1,364 | | | $ | 862 | |
| Data services | 564 | | | 546 | |
| Listings | 112 | | | 111 | |
| Other revenues | 75 | | | 64 | |
| Total revenues | 2,115 | | | 1,583 | |
| Transaction-based expenses: | | | |
| Section 31 fees | 166 | | | 69 | |
| Cash liquidity payments, routing and clearing | 390 | | | 244 | |
| Total revenues, less transaction-based expenses | 1,559 | | | 1,270 | |
| Operating expenses: | | | |
| Compensation and benefits | 278 | | | 248 | |
| Professional services | 29 | | | 33 | |
| Acquisition-related transaction and integration costs | 12 | | | — | |
| Technology and communication | 131 | | | 107 | |
| Rent and occupancy | 21 | | | 17 | |
| Selling, general and administrative | 49 | | | 42 | |
| Depreciation and amortization | 157 | | | 158 | |
| Total operating expenses | 677 | | | 605 | |
| Operating income | 882 | | | 665 | |
| Other income (expense): | | | |
| Interest income | 6 | | | 9 | |
| Interest expense | (72 | ) | | (71 | ) |
| Other income, net | 20 | | | 23 | |
| Other income (expense), net | (46 | ) | | (39 | ) |
| Income before income tax expense | 836 | | | 626 | |
| Income tax expense | 178 | | | 134 | |
| Net income | $ | 658 | | | $ | 492 | |
| Net income attributable to non-controlling interest | (8 | ) | | (8 | ) |
| Net income attributable to Intercontinental Exchange, Inc. | $ | 650 | | | $ | 484 | |
| | | | |
| Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders: | | | |
| Basic | $ | 1.18 | | | $ | 0.85 | |
| Diluted | $ | 1.17 | | | $ | 0.85 | |
| Weighted average common shares outstanding: | | | |
| Basic | 552 | | | 568 | |
| Diluted | 555 | | | 570 | |
Consolidated Balance Sheets
(In millions)
(Unaudited)
| | As of March 31, 2020 | | As of December 31, 2019 |
| Assets: | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 583 | | | $ | 841 | |
| Short-term restricted cash and cash equivalents | 999 | | | 943 | |
| Customer accounts receivable, net | 1,569 | | | 988 | |
| Margin deposits, guaranty funds and delivery contracts receivable | 108,863 | | | 64,987 | |
| Prepaid expenses and other current assets | 239 | | | 220 | |
| Total current assets | 112,253 | | | 67,979 | |
| Property and equipment, net | 1,503 | | | 1,536 | |
| Other non-current assets: | | | |
| Goodwill | 13,527 | | | 13,342 | |
| Other intangible assets, net | 10,212 | | | 10,258 | |
| Long-term restricted cash and cash equivalents | 404 | | | 404 | |
| Other non-current assets | 1,002 | | | 974 | |
| Total other non-current assets | 25,145 | | | 24,978 | |
| Total assets | $ | 138,901 | | | $ | 94,493 | |
| | | | |
| Liabilities and Equity: | | | |
| Current liabilities: | | | |
| Accounts payable and accrued liabilities | $ | 548 | | | $ | 505 | |
| Section 31 fees payable | 165 | | | 138 | |
| Accrued salaries and benefits | 127 | | | 291 | |
| Deferred revenue | 504 | | | 129 | |
| Short-term debt | 3,071 | | | 2,569 | |
| Margin deposits, guaranty funds and delivery contracts payable | 108,863 | | | 64,987 | |
| Other current liabilities | 248 | | | 197 | |
| Total current liabilities | 113,526 | | | 68,816 | |
| Non-current liabilities: | | | |
| Non-current deferred tax liability, net | 2,312 | | | 2,314 | |
| Long-term debt | 5,252 | | | 5,250 | |
| Accrued employee benefits | 191 | | | 198 | |
| Non-current operating lease liability | 272 | | | 281 | |
| Other non-current liabilities | 286 | | | 270 | |
| Total non-current liabilities | 8,313 | | | 8,313 | |
| Total liabilities | 121,839 | | | 77,129 | |
| Commitments and contingencies | | | |
| Redeemable non-controlling interest in consolidated subsidiaries | 97 | | | 78 | |
| | | | |
| Equity: | | | |
| Intercontinental Exchange, Inc. stockholders’ equity: | | | |
| Common stock | 6 | | | 6 | |
| Treasury stock, at cost | (4,647 | ) | | (3,879 | ) |
| Additional paid-in capital | 11,810 | | | 11,742 | |
| Retained earnings | 10,103 | | | 9,629 | |
| Accumulated other comprehensive loss | (333 | ) | | (243 | ) |
| Total Intercontinental Exchange, Inc. stockholders’ equity | 16,939 | | | 17,255 | |
| Non-controlling interest in consolidated subsidiaries | 26 | | | 31 | |
| Total equity | 16,965 | | | 17,286 | |
| Total liabilities and equity | $ | 138,901 | | | $ | 94,493 | |
Non-GAAP Financial Measures and Reconciliation
We use non-GAAP measures internally to evaluate our performance and in making financial and operational decisions. When viewed in conjunction with our GAAP results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparison of results because the items described below as adjustments to GAAP are not reflective of our core business performance. These financial measures are not in accordance with, or an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance. We strongly recommend that investors review the GAAP financial measures and additional non-GAAP information included in our Quarterly Report on Form 10-Q, including our consolidated financial statements and the notes thereto.
Adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders, adjusted diluted earnings per share and free cash flow for the periods presented below are calculated by adding or subtracting the adjustments described below, which are not reflective of our cash operations and core business performance, and their related income tax effect and other tax adjustments (in millions, except for per share amounts):
Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation
(In millions)
(Unaudited)
| | | Trading and Clearing
Segment | | Data and Listings
Segment | | Consolidated |
| | | Three Months Ended
March 31, | | Three Months Ended
March 31, | | Three Months Ended
March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 |
| Total revenues, less transaction-based expenses | | $ | 883 | | | $ | 613 | | | $ | 676 | | | $ | 657 | | | $ | 1,559 | | | $ | 1,270 | |
| Total operating expenses | | | 310 | | | | 228 | | | | 367 | | | | 377 | | | | 677 | | | | 605 | |
| Less: Amortization of acquisition-related intangibles | | | 25 | | | | 23 | | | | 45 | | | | 54 | | | | 70 | | | | 77 | |
| Less: Acquisition-related success fee | | | 10 | | | | — | | | | — | | | | — | | | | 10 | | | | — | |
| Adjusted total operating expenses | | $ | 275 | | | $ | 205 | | | $ | 322 | | | $ | 323 | | | $ | 597 | | | $ | 528 | |
| Operating income | | $ | 573 | | | $ | 385 | | | $ | 309 | | | $ | 280 | | | $ | 882 | | | $ | 665 | |
| Adjusted operating income | | $ | 608 | | | $ | 408 | | | $ | 354 | | | $ | 334 | | | $ | 962 | | | $ | 742 | |
| Operating margin | | | 65 | % | | | 63 | % | | | 46 | % | | | 43 | % | | | 57 | % | | | 52 | % |
| Adjusted operating margin | | | 69 | % | | | 67 | % | | | 52 | % | | | 51 | % | | | 62 | % | | | 58 | % |
Adjusted Net Income Attributable to ICE and EPS
(In millions)
(Unaudited)
| | Three Months Ended
March 31, 2020 | | Three Months Ended
March 31, 2019 |
| Net income attributable to ICE | $ | 650 | | | $ | 484 | |
| Add: Amortization of acquisition-related intangibles | | 70 | | | | 77 | |
| Add: Acquisition-related success fee | | 10 | | | | — | |
| Less: Income tax effect for the above items | | (21 | ) | | | (20 | ) |
| Less: Deferred tax adjustments on acquisition-related intangibles | | (1 | ) | | | (17 | ) |
| Add: Other tax adjustments | | — | | | | 3 | |
| Adjusted net income attributable to ICE | $ | 708 | | | $ | 527 | |
| | | | | | | | |
| Diluted earnings per share attributable to ICE | $ | 1.17 | | | $ | 0.85 | |
| | | | | | | | |
| Adjusted diluted earnings per share attributable to ICE | $ | 1.28 | | | $ | 0.92 | |
Free Cash Flow Calculation
(In millions)
(Unaudited)
| | Three months ended
March 31, 2020 | | | Three months ended
March 31, 2019 | |
| Cash flow from operations | $ | 520 | | | $ | 654 | |
| Less: Capital expenditures and capitalized software development costs | | (59 | ) | | | (65 | ) |
| Add/(Less): Section 31 fees, net | | (27 | ) | | | 35 | |
| Free cash flow | $ | 434 | | | $ | 624 | |
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company formed in the year 2000 to modernize markets. ICE serves customers by operating the exchanges, clearing houses and information services they rely upon to invest, trade and manage risk across global financial and commodity markets. A leader in market data, ICE Data Services serves the information and connectivity needs across virtually all asset classes. As the parent company of the New York Stock Exchange, the company is the premier venue for raising capital in the world, driving economic growth and transforming markets.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 6, 2020. We caution you not to place undue reliance on these forward looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
SOURCE: Intercontinental Exchange
ICE-CORP
ICE Investor Relations Contact:
Warren Gardiner
+1 770 835 0114
warren.gardiner@theice.com
investors@theice.com
ICE Media Contact:
Josh King
+1 212 656 2490
josh.king@theice.com
media@theice.com
