ICE - Earnings call transcript Q3 2017 | Intercontinental Exchange, Inc.

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Operator

Good morning, everyone, and welcome to the Intercontinental Exchange Third Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please also note, today's event is being recorded. At this time, I would like to turn the conference call over to Mr. of President Vice Gardiner, Investor Relations. Warren go please ahead. Sir,

Warren Gardiner

our earnings Good to represent assumptions Investors can uncertainties. presentation call are third may archived, section replay. and statements. our available XXXX we morning. quarter release to undertake and be and current be will statements, the contain These judgment and will Today's update, risks, ice.com. be for ICE's of items call These found which forward-looking in subject the obligation no

more risks could to forward-looking our cause these measures, Form tax cash operations to reflective refer non-GAAP including of materially from to and income, in and we results In core description described differ statements, EPS, rate. business a For operating that certain our earnings margin, performance. supplement, believe XX-K. EBITDA are our our those of expenses, We refer our adjusted measures please XXXX non-GAAP

to Jeff term Scott with an Chuck to call, of this You'll be uses equivalent refers per reconciliation Chairman Also earnings as how this earnings When earnings GAAP the Scott. call these and COO. us President Sprecher, Vice, the deem net Hill, CEO; are over revenue transaction-based on turn refers to we revenue the adjusted why and management measures. and find Chief call used to information as share. of Financial well on in materials net the and expenses, adjusted meaningful and a diluted Officer; now to I'll explanation

Scott Hill

to key solid and quarter of the up X%, our quarter both and quarter Warren. our clearing versus XXXX, us of Slide Data segment for operating in for SG&A. trading and clearing with today. across from X% joining morning, expenses dollars and a third to still million driven the data revenues in benefited quarter. I'll we third from be in the thank the on expense, level a and third Adjusted few benefit, volumes. around been X to X% million increase XX% revenues our year-over-year by we fourth you ICE's have were expect same and segment. listings Adjusting increased $XXX by Thanks, begin and growth that million supported revenues some trading down related in releases around performance. would were $XXX Good everyone, highlights only increased and reserve X%,

we a adjusted performance solid guidance year importantly, original The in XXXX least operating of in increase million, million. of expenses per earnings income full now expect a three-point synergies and expansion at XX% share. adjusted operating margin, topline in $XX from up a $XX generate to increase lower More combine XX% our and adjusted

Finally, target enabled investors return XXXX. us to October. our during to to profit share used via achieve has flow and flows generate cash billion strong that our We to leverage and $X over repurchases growth cash through dividends

that number change which return addition, flexibility announce leverage put a cause strategic us will in financial to minimal to to and In plans. October, during of our impact no capital important our investments position a

operating on adjusted a quarter. release Please We some of provide underpinned previous shareholders data half start comprised by we of expanded to $X.X press XX% $X.X where X% capital to track on color in third data will that consolidated recent authorization. XX% note, share Data repurchase a recently Also to helpful versus history. Treasury it of X% our cash growth the than basis, remain revenues basis. light and over adjusted Segment additional the billion again, revenues, a in far our as of discuss realtime XXXX, highlighted provide an authorized In to priorities. this billion once board X%. constant-currency revenues year-over-year morning, to around in by Now X listings new equity let's services over where organic turn I'll operating our margins Slide our we increase thought generated so and income. constant-currency These U.S. $X.X segment. additional to our and operating our any year in segment revenue. listings XX%, on our revenues in largely of report, program X we points year, XXXX, the I'll context our grew would We've recurring move flow in Slide a billion in return X, grew in proprietary our increase more return cash over on year-over-year of be some this driving

consumed desktops our of the see lower and the laid most around on third grew quarter a growth that of X% pricing X. Investor In and In because basis world. support multiple generate Of the provided by XX% The were that data by our classes pricing mid- Signings data for confidence can year-over-year associated solutions revenue. equity profile our realtime is X%. across during fraction continue of business realtime data The at our decline and segment we integrated pricing fully decline billion revenues you an revenues basis. revenue. customers for positioned Growth fourth our grew listings with equity only XXXX $X Americas analytics cash are cash analytics futures and in Perhaps only array EMEA, new sales an small confident broad majority proprietary realtime chart makes pricing the the that in signings in remain our on on metric products. to our up value, note, vast in page June. sales driven a revenue the connectivity new quarter, X% metric well revenues X% derived that data analytics You for grow data to our ASV, of in indices, high-single importantly, team the and is Americas, product more subscription revenues right-hand asset particular, to In digit signings during business out we our data analytics, will and cash new overall the X%. reference in from despite and offset business. proprietary more that than data, X% in up a side annual Day Slide on are and the or and business the the constant-currency an equity organic organic We've up customers shown quarter. grew on was metrics our entering year-over-year as indicative data,

change. our from as in products liquidity and II With building, are best MiFID well demands turning execution ICE our indicator expertise for navigating to the customers as

was quarter, revenues signings with year-over-year XX% in and third region pricing and Asia the up our analytics fastest-growing Pacific up XX%.

the see a share region. to to opportunity are continue in we market, and We investing gain in growing

we trading, to margin ICE's I'll step announced and an data XX% solutions full adjusted recently In which up to increase offerings of were in clearing expanded our through XX%, additional operating X% X. and trading venture ultimately Go driving region. our suite review the an Slide operating West, important our with we year-to-year, believe bringing segment on Revenues year-over-year income. addition, in clearing connectivity to be prove will and

the ADV by driven in X.X million XX% a equity our XX% U.K. for rates, reflected from full the expect a prior XX%, daily quarter business highlight versus with the You'll like million record quarter. the interest note the grown X% clearing in first indices, open interest clearing year, increase EU by through year. rebounded increase ADV, prior which first also rate time. of months second our year MSCI trading surpassed September. Gasoil and we that, Open one a in RPC CDS XXXX, revenues increased open XX% in exceed the growth prior expected, interest contracts XX% strong September. Through a ADV, revenues nine interest which to X. Slide volume, led and record had $XXX increase to third contracts drivers of Average XX% from as million the performance of or interest, on our The our ADV, during daily versus have and and and the oil of are I'd year, grew up for

expect October XX%. tomorrow, average volumes pleased to remain strong, and oil with volumes We are volumes publish our daily that up

is open last year. futures platform interest versus importantly, XX% October across our of More and options total up

undetermined. call I'll the our Before the as included is trailing impact XX-month we our Slide the of for are XX This to only for that to the appendix as in have note of summary acquisitions. closing timing of BondPoint turning recent MGX yet over a Jeff, presentation and purposes of illustrative provide

small our and however, Merrill see, impact indices, the and is the profits. that will NGX BondPoint revenues, from of of increase Shorcan America the of divestiture to Bank additions net and You Lynch expenses a Trayport

fourth expected XXXX regarding We earnings will provide implications further call. quarter our during information

for during to press release our take some We it I'll I'll now, updates happy over turn questions morning, also in But to your be included guidance this and Q&A. Jeff.

Jeff Sprecher

to on call. everyone the Thank I'll you, Scott, on good and begin Slide XX. morning

serve position continue facilitate consistently to a as been This rising. company. regulation We solutions global in at principle management in us pressure investments. underpins global our in the America solutions global Europe's evolving our provide broadened strategic footprint largest is and and to meet life Lynch class, index of risk recent to needs forward, the philosophy With broadens how our enhance technology to indices methodically global customers. time each value addition evolve, of focus. rationale collateral management to enhanced of when distribution. a and Euroclear And energy we we've is the Merrill the our the scope bond we the leading step market content markets. the way BondPoint change and has scales platform new our The custodian the Providing will NGX along of and management our unique business. points our guiding markets. exposure the adding and to multi-asset business, will our advances, workflows of changes contribute ICE alleviating throughout global We've expanding markets, behind our Bank of offers stake our risk structures content

into range the representing from growth Slide class listing differentiates we venue full-service index will multi-asset the have really offering indices. and we rationale data data, over platform, But our provider and With the trading fixed to opportunity Lynch investment think market, Turning what calculation management, and strategies. benchmark $X serving what reference and trillion that to pricing to in is we solutions Bank us, America active in income ICE and is Providing a that under of venue, with globally. now analytic services a both complete go a drive offering. X,XXX assets a passive on second-largest more the Merrill detail rapidly strategic now indices a our expanding I'll over XX, see

Services. Data to for enhance to such they're costs ways lower those ETF by search flexible solutions, and turning quality, self-index sponsors ICE as As provided increasingly

analytics to range fragmented has available highly the income ICE Slide presence I'd market. and trading all-to-all is turning that to holistic the XX, historically income value tailor able platform Continuing fixed providers channel week, to addition, historically opportunity leading in platform, for of services. In we Services' to has the new seeking Data markets. distribution, them announced a proposition this on provide automating acquire suite been tools customers record BondPoint's like broad rapidly plans existing us in can in will Coupled BondPoint, suite the that and management to innovation dealer solutions position to the technology solutions expanding been Today, global ICE retail markets. be and electronic fixed theme, across and to and leveraging our array participants, last in not will of with transparency continuous mention is as uniquely contribute and and positioned well will fixed solutions existing evaluated enhance efficiencies it income and of that market engage as that track our the our By with bringing to BondPoint risk our to pricing ICE's bring. expose our content.

global now Slide our the to XX, positive I'd trends complex. to business, highlight trading in like particular and clearing in energy Moving our

In complex, in management comprehensive the but its As oil average our pace in quarter, oil XX% a consecutive well. flagship record not year. XXst leading rose was products October refined volume the only for markets, in energy risk marketplace, year-over-year year-over-year demand for increasing address Brent solutions, we across crude up the and is XX% continue third to daily as on

in compared contracts, as to role levels RPC Cushing, Brett crude indices, current contango to pricing impact the of the over has due Brent acknowledged oil pricing benchmark of Oklahoma resilient on high that pricing benchmark world's its price the origin oil. has index why of its constraints one a competitors. oil X/X reference global is and all the stages production. a in crude in Within surround due the to it. It's been products Brent storage as been WTI global the ICE's has and reasons of at seaborne And crude's as the widely energy the engrained

curve arb a Brent backward-dated we price WTI from While not the pricing barrels for Brent price to this of its are commercial exported tightening crude progressed destocking oil to forward already for the in motion. millions that Brent, are and when it in hear is contango. for a has that frankly, is, supply support as WTI difference full export, in Crude WTI $X quite for improved, current the established prices red data as commodity. demand against shows the not is homogenous similarly signals and U.S. WTI, joins around Gulf the And is contango. as is global the a backward-dated, The complex. versus been producers relevance backwardation, U.S. transported and a of millions cuts. And physical storage Brent the It forward local protection, in seek is the index cyclical dialogue the from that Brent adhered OPEC has as forward seaborne problems, There's herring. current trading market while that

We North natural today, working us our So, will we checks array enabling taking broadens and ecosystem will energy that and It to white clearing an the boxes. became clearing released Department content, commercial us about client the decade. I'll highlight on services by over our distribution. our invest which we tools enhances moment comment it serving to Shorcan, a of Farley, also the York And transaction it enhance American with our strategic upon more for remarks as last the Stock Brent's the the for structure of serve base. a paper this my with it closing, the markets. only Treasury investments been do physical developed I want Exchange of in NGX's U.S. our equity effectively key bring management month. oil, have now remains in an the services. Since in I U.S. power expands believe I've Tom our we to XXXX, been the listed solutions We've to continue NYSE across supply improve of this and spans of proposal discussing management Similar we companies. future to risk addition activities President, stakeholders, New on owners an NGX it gas market of and the XX risk additional by which investors products, spoken other a the structure solutions, and to improve market. cornerstone conclude Slide to capital-raising effort market

on proposal spent the concepts sellers that appreciate Treasury picks we've to up and time Our the ways input. and been fragmentation report encouraged of many market produce that attempts find the promoting, buyers the to for and we efficient with officials seeking reduce friction our costs. We're match low Treasury most these

of for questions the we've to of Since implemented group with treat market For Treasury a end published, be to users, the received number need NYSE's get from report be these in root causes fragmentation package at a as data improved regarding remedies. symptoms one-off was ideas of to the and order investors not its just sales. a would

stagnant. the their over meaningful NYSE or to One ICE's be to go been the enhance quality products market the account of for not growth are note market These revenue. particularly growth our public. to time, to And million stabilize annual than ICE growth approximately commissions that has us, in also in it that or sales pursuing. to companies the billion market that X% of annual their data $X.X is to in investors is unlikely slow, of should plan will U.S. fees charged any realtime mentioned, growth reduction participants, revenue for context annual Scott whether approximately of data encourage to in improve, continues equity are and products As less realtime $XX be expected equity relatively

In reached fact, rooted receive attention and products within our will the much relative the comprehensive the source a low Regulation given momentum more-than-decade-long hope less publicity that restructuring has that these litigation deserve. and to the firms It seems transition much of already than have today. The been Treasury's XXXX, of industry industry, been their much analog-to-digital a is, more seemingly us environment its in realtime efficacy. however, fees, politicizing, earlier over to of cost proposal buy-side that gather talk about large they light realtime in which report, than surrounded conversion we've of that out In be pleased the number was NMS. NYSE's to adoption relevant

about this any shifts our track our our we've idea, stream X% So, data. U.S. if for believe on the to advanced of to open that be equity to post overall should we growth overall anticipated, we're improve revenue our surrounding seeing business concerned And end-users. robust headlines as can don't from our away market remains shareholders data the structure further realtime meaningful despite products package SIP less be to proposal realtime revenue

to opportunity asset deliver implementation on Europe why globe across analytics venues. multiple capabilities This these business have and to customers is to why the have It's a serving XX world. our solutions why around major distribute it's classes, II, trading have and So, in why with upcoming we we we X data within with have the and This regulation rationalize is to whether of the the technologies. in houses the U.S. find or regulatory we common MiFID clearing we efforts change. continue

over years of past and through we've begin changes. that confident we're Slide to and this cycles you we'll past the as regulatory we as build that in see could both this the XX on to uniquely on look to XX you track XX, economic years, earnings and beyond. record see continue grown So, here And XXXX each

run I'd to colleagues strong rings forward business effort moderator, my look America turn I'll our to until to also for BondPoint and ICE, Time. conduct welcoming our index from for the another will like NGX session, the welcome recognize bell quarter the teams So, to thank question-and-answer Merrill now and team of I Shorcan. I in their to the customers the to Eastern back producing which of Lynch quarter their call the to Bank and Jamie, would like at growth. X:XX soon

Operator

With and first that Sir, our the comes your from we'll begin question. gentlemen, session. instructions] question And Repetto ladies please with go today question-and-answer from Sandler [Operator Rich ahead O'Neill.

Rich Repetto

Yeah. Scott. Good Good morning, Jeff. morning,

Jeff Sprecher

Good Rich. morning,

Rich Repetto

just guess, market I data on a follow-up the discussion.

only and detailed said quarter-to-quarter? guess, then but if something you drop the to did exchange million broadly, First, demand probably to data that realtime proprietary feeds equities? X%, X% think I about I'm are alluded from a proprietary, have more the the million then I exposure realtime revenue, to got data is so distinguish, of this trying question you've realtime entire why to I you data. You for this, $XX And Jeff, more guess, tape $XXX Scott, and

Jeff Sprecher

Yes.

first. that Let part me second answer

of -- So, that, here, $XXX is and piece we price that operations. And of the something the revenue in minus. lot or maybe which highly own go probably rest point then fine of a participate that and than data separate the attention, pro-rata contribute for and along to for the and one that with dark venues is year. its truth can be plus outside $XX a own help of there basically that seems that Scott, of gets if think to million single that And or regulated this we, price realtime there less proprietary should and bucket bolster there point single sell has its what we And industry. venue And in in a us, SIP, feeds sales part of there's a protect a end-users. is, all the million that discovery the would stock pools, me be all And to would this along out is truth is the that discovery us exchanges the to is we a force and a of reforms of of that SIP. got of in as process be the would We've information market that value confidence marketplace. the which with enure SIP, for package proposal

Scott Hill

an in noted specific And therefore revenues I then, that in mentioned to the recall second audit second the call, a expected had earnings last you quarter was your question, resulted Rich, may third that in quarter I in originally that quarter. had I the elevated. that we bit some

what that's is So quarter-to-quarter. the dip

Jeff Sprecher

been you stagnant from for time. not is that quite the to relatively cables, breadth that what We some on get exploit. we been a the have-nots the the on lot the was want lot of yes, available as moving able that's NMS. of in what's We've prepared forth a in parts people, boys there and And there the that industry angst have market Rich, happened SIP. fragmentation basically, for were in mentioned forced in and arbitrage. has in the out our take markets, I my and the sophisticated was way with demand barriers result, taken there is the offer we looking environment, arbitrage that from entry, for are on essentially -- a that to realtime the stagnant there able the haves like to going a that high-speed and And, flash people by causing run in or were of time, measure can out SIP, of opinion. simply were to exchange behavior and a so so that And what there is NYSE this? that more has gotten of markets. to And time exchanges comments products motion. traders data type And work reducing opportunities to Over directly were Regulation that as platforms networks was addition the my of were

like on where feel that's in controversy mentality still is today. issue So, long a the around going the dynamics this believe boys a the debating for don't that been exist time, and I same legacy we're flash I a world

Rich Repetto

just move of in, the rates interest just England the the from follow-up. Literally, last raised on the within think for think, to hour, rates time I one their first Jeff, the since the your crisis. came And interest in to rate financial getting trying I your going the outlook I'm complex just interest they in broad off forward. but September, get on rate guess, I October, data, Bank spike volume market --

Scott Hill

Yes.

I'll the that's need volumes. attention open is wants my interest take up, that are that to if time October. but you volatility, what this, consistently you is levels, what He Interest Rich, Because reason paying it year-over-year XX% contended means the certainly highlighted So and if I get is Jeff is rates, open drives our the And attention. high. we've pay this to open interest when particular And all the can, over to. at market's supplement. across end why of in remarks products in up interest

And you it's are to Banks buying. so, the Central you've the got said that Central going slow if Bank doing European now, think about what

somewhere Federal You've in interest December. said going who between think I England got to XX And their and got of points. to now two XX raise Bank basis to come you've out the Reserve to rates, voted seven that's move they're and the U.S.

that three our open levels, that rate I think elevated dynamics. note rates importantly, respond. I consistently -- that certainly those of volumes of interest not predicting it in would interest I'm November, that All respond And said should to happened all all but

movement. a not it's movement. U.S. It's So, not uniquely a uniquely U.K.

European move and U.K. that Bank all Our to rates relative activity. Central

like as predicting Banks month, rate the look with but prospects not to it Central with our again, interest of is. where move, starting business open I particular a interest so, forward And I the

Rich Repetto

Great. Thank you very much.

Operator

Our go UBS. comes question. next with your Please Kramm ahead from Alex question from

Alex Kramm

Hey. Good morning.

stake the Just this. can you a was about Jeff. Euroclear about really here, little more one you Maybe think thing maybe highlight purchase talk a lot that didn't bit the I

minority buying than you've Cetip, other away, maybe historically, think some shied investments. like from I

So -- you how we of does about forward? What for upsize if what the it seat investment then the do that you? Could overall like And get next you upsize X think your table don't it get going that? you years? that, does the business over even

Jeff Sprecher

better for venture stake to of Climate. that capital minority are changes of minority Euroclear. We buying that minority question, going shareholders' stakes, people do going custody At capital capital other in and thanks and that Europe of bank requirements in in minority done where we're lot Climate stake Cetip, moment a buy managing and minority pressures in movement a change and Brazil. But firm. time mentioned, that We now to role the put a we days the the we on number bought our a bought both we think a industry as don't stake, we've act the you thanks view bought for in We is on can. in in typically than a acknowledging being terms can early stakes. the of a believe -- cost. lot don't have we've Well, as with really of respect on as them, And in a of there's the in Exchange when for we and

still a could stake with this have will board us on there So, work the allows company, we the with closer in to a together that initiatives number and jointly we be and investment that a platform of that That of we is of in Cetip, believe relationship -- that we which for doing jointly the where very, Brazil, which very type are well. us launched context. stakeholder and works very bond work in well management

that we conversation management some things with for beneficial. that Euroclear engaging already try begun to the we've to And table be so, do would in jointly set could together

Alex Kramm

is over on with And then -- maybe you that has ended far consensus over laid you slide this short Jeff, the out I the little most growth or you've impressive. a volumes, bigger be gets a years, is earnings shaping double-digit And time, so. secondly, just falling think you so how which little look growth bit where that like been up at at looks little of maybe But prepared today given bit and Investor your terms in to maybe Day. digits it year, algorithm like consistent think mid-single Great. remarks XQ recently the picture. quarter obviously a of I unfortunately, the a

So, can this again highlight confidence even more first that next you also forward, areas we And larger-scale how rates then like you do of work out have we where I to bit is, some you? what biggest why M&A And going juice cetera? get the didn't does acceptable question like for all, rate took the little year, to synergies, -- guess, et the year? this identify a should that to to have growth that though may

Jeff Sprecher

think that job per and to value shareholders, our as earnings here, our is and I believe share Look, earnings to growth that Sure. deliver for deliver job we it's growth management specifically.

years. It's space, putting the and done, compensated. fixed move run we'll we're are business I'm businesses. do So, business Bank the of space, that I most from the seriously. assets And America IDC these of data We really think curate believe growth will we And how S&P the know, new the in for be reception confident developed. growth. in index culture that. businesses, driver amazingly we've think, that recent than do, to index will we we Merrill by of the few we we all that quarter-to-quarter. will the into is particularly and this we're pretty we continue area, it It's the that will business don't a think been companies for you how But driver and surprised and can early the do us It's And for a buy to we've evolve that this be from our buying as company company more, And together which continue we acquisitions to positively we're long-term getting. of in I Lynch, will take the term, that next -- what income but from over we days areas us. long growth sell

Alex Kramm

Thank Very right. All good. you.

Operator

ahead Goldman go Our Sachs. comes with next question. from from Alex question Please your Blostein

Alex Blostein

guys. morning, Good Hey.

Jeff Sprecher

morning. Good

Alex Blostein

of with couple just guys But more got to guess, I you to respect want sure a make to one done, deals respect this. recent have clarification with question. I BAML, Scott, I Question

And or I I'm contribution a kind maybe there with includes the enhance on that business. of index picture, of recently. assuming the well? give associated could Can of grown couple guess, in ICE expenses QX. million comments has so bigger offering $XXX there? as overall us ownership business how that So, just BAML in BAML And expenses index revenue by how the business the you does

Scott Hill

with a quarter. let closed, BAML revenue given I'll of for second answer does half the the small very start But impact very question. Jeff the the and small so, expense when it. just I'll include It's it's million of of $XXX Yes. number, a

the but would expense, plus I yes, then But XXXX, our and give an on the as assuming in immaterial earnings they move I needle, it's time guys in for you small. the noted And call the 'XX very that so, know is. other to into close fourth is you move two, quarter, deal, also quarter the it revenue it we doesn't quarter. for update let what And as I'll on call,

Jeff Sprecher

independently some an put and Historically, business for the to it And and firms were just businesses it by help extracting and we to earnings. resources And actually grow second-largest a everything it facilitate that reference you us necessarily index have banks now that additive index time not walk grow And else, business. business revenue just inside and can is when commentary. when those behind for other with now, opportunity existed as we fixed trading, gives customer in indices. there both data, to actually have are complex. an that have pricing underlying a lot of it complex, data, that using a is we data, into And proprietary tools more that the amazing that combine importantly, it us, now you income trading

part us our time moment when we we we At going forth, grow franchise Lynch we costs index whether the of ultimately I environment. analytics, a on directly of that so to the monetize Bank by or So, we of well can underlying mentioned think the lot market, is solutions of end-users. give and lot reference a Merrill to on it on and bring package flexibility there's so and that really data, of pressure that self-indexing indices in in a can such as that America data whether providing monetize and tools,

Alex Blostein

And more it. second just then question, Got again, strategic. also the

So, thinking dynamic, to through try -- you'll start trading. space dealer-to-dealer to you this earlier guys you'll the announced credit trading of year the bigger in get in terms bond

the still have obviously You CDS business.

us? bigger-picture together in thinking BondPoint, retail. for Can exit trading. credit through these to your given I'm just Again, aspirations you bought your You pieces tie

Jeff Sprecher

wealth platform, a base. really, infrastructure dealer brings current is mean, BondPoint to I client is ICE people the are historically ecosystem. BondPoint a end-user to manager those in Sure. and what our not different

the So, the services, sales connectivity on that to bring it not client our but base so space. to allows and we are us fixed that data only network around forth BondPoint so desktops, in trading, analytics, assembling income to

it very will additive. be I think

of the we seemingly they is to more terms think is the things that that which together, i.e. you in the BondPoint The pushing an the a on inventory the bond also protecting the the essentially able growing. be but footprint, work towards the market. And now, us is in I think regulation given two right long-term And having direction data those retail of put the space, inner platform in of particularly wholesale deck, trades provide dealers of capabilities market. will transparency, BondPoint see dealer-to-client if gives liquidity the going size BondPoint viewership from we've which dealer well markets, are to this is growing. will

Alex Blostein

Great. much. Thanks very

Jeff Sprecher

you. Thank

Operator

question Worthington Our comes your next go from from Please ahead Ken with JPMorgan. question.

Ken Worthington

you. Thank Hi.

is big Europe that small a it big slowly, the really business and data, and is and be fast, growing but bit Asia the of and most fast, seems is interesting. growing terms and more like may In U.S. growing

you versus growth So, it which the and the buckets maybe And just can and drivers use themes broader to In flush you drivers analytics see out of you then further compare release U.S.? your Europe, connectivity. as growth in discuss exchange big versus of data the maybe in Europe.

out pond? So how obviously, and, growth MiFID But specifically, other here. for trends maybe that versus MiFID usage seems more drives talk about across and to you data be playing the

Jeff Sprecher

while the opportunities in consuming terms market. right nucleus more of done. that going in managed with is for a is -- lay specifically Well, asset that do way change Sure. Europe. It's advanced data that's a big marketplace. being now and also and in States. outside It's of is people correctly, managers an where providing the money compliance that are It to U.S. of read United in we're combination data and on MiFID tools the looking meet And the the in of locations how MiFID, you've MiFID, our a longer-term and Brexit, the regulatory for business, that's driver way growth it's real seeing important is a the text big on

the techniques, be documentation and think U.S. we so, is be Accountability some of of on those telling discovery clients is And us multi-year to are may going of and to change, Asia. terms Transparency's in. global large to in export come through Europe end-user there our is modified. to a going to going both certain And they increased. to to going be degree, of that going where a trend workflow

that if of out data the think will. we for you sales, so, And

is wealth all off we more money global ability the small more risk -- just that see is to base, it to region. ability for within but more and growing is markets, and a Asia very management, trend sophistication access the really Asia, manage

the in lot going equities, so again, forth. of pendulum And so There's period. of But be on a U.S. a I in may the current a The on if through got lack those transition we've way are markets. to is drag connectivity so, think, Asia, going bit the volatility, we've administration interpreted. is a is will. a The short-term to of U.S. under Asia U.S. and a investing change obviously a regulation issues. we been that lot on and how way unknowns, be you those There's cyclical particularly in organize

Scott Hill

to The other if cash down regions. about not thing a amount, is X%. than other the talked in similar X%; the mentioned revenue data, I down two was Jeff little not Almost that, a X% realtime the to keep and mind, hits and the equities Americas XX%, tape it Ken, more

so else. bit impact's more And little a in poignant the Americas it that is anywhere than

Ken Worthington

then Scott, this you software And versus are spending just changes, next Any about experiencing are enough. thinking or separately, Fair up we and what CapEx year? big year? down, how capitalized

Jeff Sprecher

Yes.

down do my saying CapEx, real estate And our year. you this But buckets. that expect will we've to budget CapEx, definitely this I move our a think as in this noted little I later $XX 'XX. indications a be which of given we've in coming flat be our down CapEx that year, the are Ken, between And be So, I'm advance into would operating we'll we million couple which bit. will early with somewhere of board,

out investments year. making XX listed Wall our been IDC for have rollout clearly in we So, pillar this companies building the at and

that, of versus buildout is an continue the think But I trend 'XX down Some through particularly general from will year. we in next that IDC, move 'XX as standpoint.

Ken Worthington

you. Thank Awesome.

Operator

Our Campbell next Jeremy from from question Barclays. comes

Jeremy Campbell

Thanks.

it small support. do that big important is Russell a dropped bit to on provider they how kind think a of MSCI, self-indexing win, ICE for as prepared side, and than might ICE market had equity the ETFs remarks, picture, index maybe branding But several for your fixed moved solution-type timing given Russell, do side the I think you ETF the traction offering you On State further the in because guess, fees And of Street fixed index cut SPDR a income you some S&P, the your more that discussed index that about with like business? and income? getting holistic be in addressable

Jeff Sprecher

calculating. you those for grabbing about when prices we you see indices. of And question. about realtime mean, think stocks realtime most equity It's just the that basket indices and a U.S. the equity diminished. think good it data, conversations in simply we're demand a I being about having and taking are It's

life index, income to kind do of you math -- intellectual them, short. data little a of uses have places. bonds. income self-index a for lot industry benchmark an refinance in People whatever basis. and very available indices is indexes that equities very around is There's think instrument and the project. a in little X-year about else of them. it's property that any fixed equity a very So, are Fixed ubiquitous, Those the they milestone except People a different. few loans is global -- retire do When loans somewhat on

sort a underpinned redemption early redeemed? That fixed So as as legal on pricing, and don't get, which to penalties, so feeding is opportunities the bond going name other that instruments for trade. the most needs to the be data to has data be what of and to for reference constant reference and and are is the care index, data When foundation the hard of What entity? -- is words, The there both so in forth? rebalancing. index income underlying the of any replacement does

to you derivatives through be discovered So, related into pricing has that back instruments, other algorithms, rational can pricing.

have goes there's into And focusing. construction much of we a where property that fixed the more been that's intellectual index. So, income

in having space. have a If you the holistic all income with brand of that we've acquisitions of at is made congratulations of family AUM S&P, with major owns with platform look really IDC, that Bank Lynch, or them. to towards charge they global targeted much to the obvious becomes you can less much that But base Boy, works anyone continue the fee one fixed America of equity those. Merrill indices rest it for an of not have, the that whether indices, that equity

Jeremy Campbell

were how it. what's made, for already regarding much allocated you to upsize up the and sale, of the buyback recent And the and or Trayport capital returns? investments kind M&A the of then maybe maybe, versus Scott, acquisitions Got kind of freed future proceeds maybe

Scott Hill

as deals. debt, need Trayport that's XX%. objective, and small, why we don't think proceeds all bump amount proceeds board repurchase on XXX% share financed into move forward-looking as are share saw kind Any acquisitions incremental impact proceeds you And very leverage. one So, And authorization the authorization indicated, we our the we'll our a in that had our our other above of Trayport through capital repurchase return by for the way remains for about we which I us bump it the the bucket. paid I is of the would and XXXX,

return collective deals to And as any the So, positioned incremental we think October of policies think as you well returns do a we're And repurchase forward as is saw would authorization, with share continue move leverage. or on our grow. in share to that it I that. I our grow to we the capital we did in

Jeremy Campbell

Thanks lot Great. a guys.

Jeff Sprecher

Thank you.

Operator

Our next Please Bank. comes with Deutsche from Bedell Brian from go ahead your question question.

Brian Bedell

was if Great. from how pro acquisitions, to you gave the a Thanks of credit trade. clarification, from size I million, BondPoint? and but very some have what of much new just of that missed I'm the $XX Maybe you this, sorry much. the revenue the Slide forma almost I good the currently of XX on just it. trying breakout composition. triple gauge sort ICE the like And volumes of know it in looks

or XX% term. the to confirm sustainable you think over 'XX, years, and last So, if is near wanted I that to just X that, CAGR 'XX

Scott Hill

Yes.

trailing gave we aggregate the an provided haven't we -- of look So, XX-month you a on like basis. deals what

out deals the But our when earnings for you have a the regards those more big revenues BondPoint. to with all of again, related indicative frankly, our point not 'XX specifics Again, portion call. a it. As once net would just to make, impact business. suspect material to to specifics quarter really that fourth 'XX you I'll purposes more come chart have expect, on the we we on are was give guidance I to

business, or I and any not itself the think I one, the positioned, think particularly Number the we think doubt. business there's with BondPoint muni whether think we space. continue the don't regard corporate I was to well could in grow to

XX on saw it's through, Chart that growth. walked been Jeff you strong As

standalone on cross-pollinate on the grow. our platform But could continue to wealth dealer-to-dealer that more platforms. think it opportunity I the for to brokers, cetera, importantly, and managers, and the customers retail basis, have a the et the we different on BondPoint

all continue once can can grow put our it's but by that well bought assets think itself, grow faster where so, together. a situation a think we we we business And we we to

Brian Bedell

about the that Is size that? in -- trade? credit Xx ICE correct I current am the ICE of And of

Scott Hill

wouldn't it's me if that in at magnitude. looked that I it haven't of way, something but surprise it

Brian Bedell

And data. then back just on

Are Day, Investor and about hypothetical long-term know at but were about, the I pricing that in of on the revenues. you still the I for a the very And that by you cash in equities up I this driver long-term, that's for would, you data some is is increase make sticking XX% U.S. number? how guess, potential of if lower think talking pressure with data?

Scott Hill

X%. our the Jeff good point That's business, I'll Look, data, that it, in I question, less asking I realtime reiterate really cash it. is made, is even you equities data appreciate and than that a and think

And so, forward-looking we're X%. mid- we at organically, I model is believe X%. to ASV, execute. last metric we going year, showed you digits. our June year, we This we grew the the model to look year, in is kind at of can high-single X%. grow Last

So confident the yes, about model. very we feel

I think the are elements correct. all directionally

more, in bit at I bit given said one Investor little any As Day, may a year, be less. a little

going from For be example, as acquisitions. we sit we're here today, our will it number year next where of confident is But not benefit to organically. again,

the don't look, the element I big the pricing think is year, our any in differentiator right be cash longer to In model medium think So a I think vary, business equities the are the it absolutely I inside impacts of going can realtime inside yes, but and given growth. or term.

Jeff Sprecher

owned because are this more the not NYSE we've data. providing us. questions not lot a this transparency realtime getting been to realtime dynamics me about around just new we've so But XXXX, And -- -- NYSE is NYSE the let in data we're call of since

and this within low-profile looking so, is baked high-profile change you, It we've guidance not management forth. and are in that company operating is the is a we've we that into business It for so space. a has is it way giving of driving issue a been is the growth. been the And so this been the And that that because all company on topic.

Brian Bedell

Great. for the much Thanks very color.

Operator

comes Michael question. America of Lynch. Bank Merrill Please question Carrier go ahead from next your from Our with

Michael Carrier

CDS. on the you ICE, credit maybe the Yes, Jeff, when part fixed Good look Thanks. of income morning. just at or the so business. guys have I

got you've Now BondPoint.

with the got part data You've IDC.

at opportunity, that that to are kind of a pieces attract that it's out, a maybe missing like client able be other from whether to what standpoint standpoint understand, build you trying client-end really when look you opportunity? or like just to to maybe So

Jeff Sprecher

a question. good It's

that from that the we're I global opportunistic given today. was way we great given by footprint us company this strong came Data; doesn't to are going opportunities really may And we think come in on be I about year That if But interesting Scott things things team, call days to one been that market won't the mean working been be has have and a our acquisitions execute said senior on and ago as future us thought the to together Scott's they and brought been big management on a everything the in Martin Chris I offering. lot the more who together quickly times of on more I've in just along. a Ivanov, interesting I for need. market. have all Stan we able feedback of do that I about next bolt-on have couple be firms we've with up. how credit M&A and cash, quickly been things, business, with the said our trends going still stand together. bring talking I've the that most make to products; Chuck buy-side managing the financial Edmonds, all that of There a have and be in that and I position we that some to can the call this oversees is meeting who really can of responded the we number we've an out, positive we And this of on the oversees surprised how CDS a getting. of a how Lynn

that so, the of company. And the conversation kind never of had I've in with people these history

have really enhance that can so, to we've bring really a And along it. find mean that feel won't good I like but together, do and supercharge the things -- really doesn't we had way platform

Operator

ahead with question comes Please Chris Fargo. next go your question. Wells Harris from Our from

Chris Harris

guys. Thanks

we're Thanks of prop prop is revenue equity that disclosure. Another equity for I that you. saying for on $XXX data the million disclosed they $XX NASDAQ data. U.S. have U.S. million guess, one rev. incremental of

things between And be side the much NASDAQ So, curious in NYSE be, nothing relates to area? as area. might data, that opportunity of so question for to I'm more an to then a would that related to this happens actually it on regulatory why it and if gap have than you might as NASDAQ in you be the narrow

Scott Hill

So, a let quick just check. start key on me

than a standpoint, numbers less in what a from year, for Jeff full So, the $XX the script equity to realtime alluded million. cash was is

So, million in million then is. sure what $XXX say number on data $XX around later not he And I'm the to that tape was went total. our

And so, check against if I to those be you the find them go you're don't and think disclosure, going different. that what's back to

Jeff Sprecher

to realtime of now mentioned, NIC and SIP. where I name cables, markets upgrades, mean, And individual our to take competitors as any have And that, is from There people the from changed of that information. years the playing level. about over of exchanges try took dynamics, basically pure in are technology the individual standpoint, there the servers, it a time time, market cards, that what-have-you was in a create capability it. take sure worried a been market latency making software arbitrage I dynamic Yes. to space the lot -- field we've private-label individual a with out systems to And and respect exchanges of version that were feeds see interesting you

you've do for bad job butter high-priced that when a probably, SIP a a space. milk, you've not for having management store, run is of I rotisserie into particularly if It's thing you're investment has not sell have it, team opportunity sure eggs pursue. improve potent never regulation So, retrospect, not going that to chicken. private-label and a think a if in growth probably because a got the lot did it's to moving you opportunity. price got area the to this to grocery I'm SIP, a huge of that a and NYSE

milk, is And We're eggs. Chuck NYSE I butter so, and and And rotisserie Scott doing? and data making what are chicken.

to have but necessarily I'm where to I to invest. don't say sure want want want it, you that that's So, that not don't you

Operator

from question. Our Chris ahead next from your question Allen Please Rosenblatt. comes with go

Chris Allen

guys. morning, Good

recently see bond different have authentic a evolution conclusion Greenwich was about the just talking Just wanted venues bond moving to the liquidity guys analyst they trading bit paper providers it touch tact and forward argue published the business. of with on expected the of corporate credit IDC and Associates again. capabilities, a to looks of little more a pools the data when trading, foundation like I have you're pool. your would as you liquidity now building than

of how any can or that trade right color capabilities? marry your you can So, where A there with think you you us And do markets color depths you evolve? terms think how in bond get Only do of data the think little the trading to? XX% electronically bit venues. now, more

Jeff Sprecher

the tape notion and Well, bear the the U.S. disseminated in this mind, Yes. in in at least U.S. tape, trace a have now of coming Europe, into publicly you

can from of. providers other is we we're credit And words, from, our data our we're pricing own can with from vehicles. get we transparency buy-side have customers, there then pricing bond supplement get from relationships that so, ICE with all realtime that realtime platforms, that in off work getting And realtime getting other pricing realtime through that and CDS pricing we that

network can it more more will so more ultimately, on transparency, and then have in that we more capabilities the lot analytics that we that dissemination, have help facilitate and, we think and forth. a trading. facilitate to think we circle floats and we holistic about, and talk like data So, and so clearing actually if And better of data will trading always here around

of that part other. any think the don't I it's So, one drives

we fixed change And not, through. whether I or like the are think relatively that market's illiquid instruments. it's income a going transitional it

they, provide margin, investing a And think the because the and space. well have we can going of to so, are lot positioned And we're help. a at in we're why to of need that electronified lot be help I that's tools

Operator

KBW. your question. comes question next Kyle ahead our Voigt from go Please with from And

Kyle Voigt

Hi.

Okay. II. Maybe just one MiFID follow-up on

thoughts get the derivatives planning on potential fragmentation. just to for And if the the on take venues. Just how advantage delay see side. just wondering open exchange-traded for years you updated terms could coming wondering of that's updated maybe thoughts over some for in some if out the open I'm you're available here we of XX-month playing derivatives access access

Jeff Sprecher

Sure. most a an and Well, MiFID in Europe there's where works between of environment you major an of on II over conversation interesting most whether going have the right now in the or major exchanges not Brexit. regulators

got If a of stimulate forced this being II of fragmentation fragmentation. to population government for that fragmentation think you implement market in of now is voted in right for markets ways role itself when to a MiFID And order is that today essentially fully overlay competition, the here now as still of comprehend. forced there can sitting none us market the fragmenting you've

to services that is so, companies oversight. do land active in is. see, provision comes amongst potentially people what regulatory suggesting certain outcome going and environment. We'll about have the delay out And on and further customers that maybe market complicates and post-Brexit that could going negotiation. ill-conceived that political are financial where Brexit to And first dialogue and the an is wait of see of in knowing you where the time, that XX-month MiFID But not how current Europe be and regulators the across for there just and that participants implemented potentially

Operator

turn reached conference session. at to to today's have call management question-and-answer time, back over gentlemen, I'd and for ladies end of the And the that any like we closing remark.

Jeff Sprecher

for you, and out Thank Have update joining today. close we us year we continue and record as of as on company. within day. to forward you, growth track good you to the we look to Jamie, all a the thanks, build of continuing And the

Operator

you conference does that do attending. We for gentlemen, call. conclude and thank today's Ladies

You lines. disconnect your may now

Intercontinental Exchange (ICE) 4 Nov 172017 Q3 Earnings call transcript