ICE - Earnings call transcript Q1 2018 | Intercontinental Exchange, Inc.

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Operator

Good morning, everyone and welcome to the Intercontinental Exchange First Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. And I'd like to turn the conference call over to Warren Gardiner, Vice President of Investor Relations. ahead. go please Sir,

Warren Gardiner, CFA

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

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

the this and on as turn net Chief share. Scott refers earnings our President. the see today regarding CEO; per on You'll of expenses, measures Supplement net and why for Also are: explanatory find transaction-based now the terms. and the notes additional in Officer; uses used to management Form term Jeff a in deem Chairman to Hill, definition on call call page refers revenue earnings earnings the Scott. call, to of Ben diluted Please us I'll with and GAAP details these of the Sprecher, second reconciliation the our Earnings Financial of over to Jackson, the XX-Q. explanation certain an as adjusted equivalent how information When be this adjusted materials, to we revenue well meaningful

Scott A. Hill

growth our slide and million our which and And increased $XXX first down revenues joining start. increased quarter. X% operating and record net morning, were $XXX net Data revenues I'll to to billion. first ICE's grew excellent X% supported below $XXX year-over-year XX% key Good from million consolidated XXXX quarter, clearing X highlights revenue Trading Warren. expenses X% us today. thank start $X.X off slightly for an guidance services is was of a some the solid to by with on organically. everyone. the quarter This for Thanks, year-over-year. totaled you revenues million.

growth revenue income of operating of adjusted management and up percentage year's expense X% last Our points, a increase generated million, XX%, adjusted quarter. operating over $XXX first X and margins

million, in quarter of operating of changes XXXX range Looking quarter up expect XXXX, including a of be anticipated to the of expenses second to to compensation and million the the investment. adjusted full $XXX we $XXX key ramp

billion pressure For $X.XXX management has the the $X.XXX the to continued benefits of full even revenues, our allowing high-end disciplined expense expense as guidance us dollar to of mitigated it the lower year, weaker billion. our from

our line another quarter, first from at bottom also benefited the solid quarter During MERS.

We automation work have technology of nearly deliver our the that to the in phase to the market. mortgage platform enable support strategy completed next new our will

in stake our million February, Euroclear, Euroclear on joined the nice a a received return a annual And dividend also of $XX committee early XX% investment. to We executive member our related in board.

reform adjusted impacted state quarter negatively consequences by adjusted the stock lower was per some first from XX% adjusted of $X.XX, adjusted generate X% growth, quarter revenue share the and X% operating quarter growth, of record Our but tax U.S. of rate to rate income. of earnings our benefited vesting combined income XXXX. taxation of foreign XX% and in tax a tax unintended first to from related federal up

billion tax to adds fourth XX% shareholders that from our year-to-date of Additionally, quarter up through our $XXX million to All and our improved adjusted a $X.X cash recent million. million dividend. ago. remains through well of we quarter generated first $XXX for cash the our stock nearly operating of federal year than time $XXX to quarter capital flow the benefit change, of and first of April, And above that used the through in return to repurchase cost points importantly, XX more capital. from returned the basis same the law increase a April, ROIC by We've

up year-over-year. Within Now, quarter. pricing X% please increased X% by in services data analytics data X grew which turn was to services. were X% data revenues listing growth X% and strong segment data our related to Adjusted reference were where were I'll in segment. our by up organically margins driven the percentage and discuss listing points XX%, exchange revenues up the up year-over-year. and driven signings was slide Data to data XX%. futures pricing services, and X the This organically and data Exchange continued performance by in business organically

connectivity by exchange leading Importantly, a a of trading finally, and be capacity. current our growth has connectivity reflected indicator in in revenue in solution XX% driven up futures And for our rising was in growth increase proven global to organically desktop data often markets. our future XX% demand in

year-over-year. its increased $XX during XXXX, revenue best in equity market the through proceeds a billion X% quarter number for posted over listings, organically The period. raising offerings XX of to the volatility NYSE in since first spikes Turning despite IPOs

business, from an XX% around think revenue as we're consider effort the as with our data tape contract. under momentum incremental business, forward to X. it revenues provide from you XX% at of price include services Let's data acceleration in X% end in future an or metric ASV first the the M&A In the transparency revenue achieve growth analytics of And ASV with when is or time ASV. annual move billion X% year-over-year confidence consolidated value to of our it entering help high-single which more about to and you currency This $X.X XXXX does to continued to ability franchise. a at of slide increase modeling pricing provides and and providing X% in the next detail our by our further growth That or quarter, signings, erosion in important for while products I stood At our deliver long-term not is our and in X.X% of confidence mentioned. point growth adjusted year. and the ASV snapshot capacity such nearly previously is impacts, up supports of our a supported subscription target mid subscription network increases, to to XX% is signings around digits. our and an

continued I'll and including Turning year-over-year record X% business. Gasoil X, franchise our across our oil an Total quarter. of revenue in first by and overview increased volumes. the clearing to clearing slide year-over-year Trading increased ADV XX% provide trading strength supported

and also we contributions In as offerings posted volumes, record interest Ag, first returned quarter index addition, volumes. equity from good options including had a MSCI solid to markets. our equity rates and volatility Cash equities sterling and

quarter, momentum segment a year. up Gasoil continued XX% some on volatility to oil in led volume by in XX% Our of CDS quarter combined which in $XX the to strong the and range credit strength adjusted an cleared notional. prior XX% adjusted with increase building Gasoil related up on to trends. volume daily was tool revenue I'll of as slide first up Europe demand record expanding benefit Asia. semiannual year-over-year a strong from clearing color April in roll the a margins and from with expand million in business, is being of the continues average protection for trillion generated X% and adopted providing prior diesel X a performance In This the a The increasingly our as products. operating barrel, market, business particularly hedging on wrap refined additional our efficient also a helped benchmark for in liquid for proxy year. led to a was income compared and generated revenues record $X.X

hedging, also Brent during lows, to in North markets helped across while with ECB, accelerated, been need volumes the American gravitate continued see in Fed, dynamic beyond the significant the interest April first uncertainty, gas once towards reached X% growth has growth and markets. our we levels products of volume March in rates In realized individually interest natural our year-over-year In gas In volumes in historic was levels up or central and were England basis our continued are key record the while April. has Euribor ADV volatility from set commercials markets month. our the position continue futures a below despite are year into year-over-year the open Brent political which to April collectively. volatility levels been year-to-date has outperformance sterling month, the trending XX% policy related to regional to pace of for addition, European open whether Strength related year-over-year. suppressing XX% slower X% start the complex, of XXXX at XX% levels by up period. or After our financial ago. natural commercial through XXXX nearly up doubling half record nearly business, again participants drive portfolios our a open across for their interest up Year-to-date, And realized impacted to strong, bank the Bank and volumes

as was addition, continues for grow. customer In the engagement year, the versus markets equity continue up to index and in X% volatility to ADV prior MSCI elevated non-U.S. month be equity FTSE our and levels

growth off improved call XXXX. in enhanced growth our and XX% alongside Jeff. serve on expense our generating So, delivered strong positive strategic in continues priorities, to for produced and to and we economic With earnings a our increase income, priorities, X% our return the yielded I'll from revenue strong executing earnings. quarter investment, further adjusted our and that, in strategic to positive capital recent tax growth rate to deliver operating summarize, turn results. our And and customers, adjusted value are innovating control and our a shareholders commitment early contributions strong running Mid-single-digit again an over to

Jeffrey C. Sprecher

trends slide to Scott, a the call. and X. highlighted and begin Thank capture those We've you, number I'll to good secular just strong on trends. everyone of execution morning our on

our expanded the billion have cash and flows, to with in shareholders income, markets $X.X along into April. returned of strong resulted and a through and with listings Coupled in strength options cash data translated and that Our the solid growth diversity produced futures over record global efforts and operating of we revenue earnings record per markets. volume adjusted generated end share, margins, growth equity performance, solid adjusted double-digit record our

that Today expanding our workflows uniquely known We of has lead pleased a seek for content we're and business, performance, at into and opportunities, the grown our this infrastructure XXX% spoke breadth The some expanded and platform our our for our around to technology Investor lines and leveraging with as the ICE our index strategically encompasses markets SFTI which innovate bond evolved across ways creating our of last business and customers asset depth While shareholders. classes our more our year. secure and as growth These well include and supporting Global as automation positions customers means original network on focus global Network of they our vast in solutions. future based to this its us each we're network. is value Day and the to world. valuable beyond which connectivity an on market platform growing expertise our infrastructure capability,

search to benchmarks they deconstruct they and terms offering. are shift time, alpha. to more update managers better and slide our seeking active space. flexibility their market equities in in differentiate assets At The demanding our growing indexation range for in XX, control performance in fixed the and richer analytics investing and more and innovate as data towards income to how resulted of has turning passive and managers the So of and on you I'll same index their passive understand progress

customers a their our to distinguish rapidly-expanding Our us have needs. shaped market enabled services this our evolving based and in way, they've approach to unique on

our fixed and services demand uniquely managers this we've we fee We're to underlying income licensing serving become indexes for approach, blocks we benchmark in index the operate and choose to the in that are model, services particularly sponsors and well construction. of the pursue ETF data services. the can under we listing building and ETF while analytics sponsors, trading We our index benchmark. venue pricing the services. Arca. for content, traditional components calculation markets detailed And a as our a ICE's growing self-indexing own traditional historical index also to multi-prong into offer key leading ETF and the So, as go offer creating proprietary because NYSE and selection and able crucial all real-time a data, reference in fund leader

NYSE-branded of needs, an allowing risk to can what sponsors We platform of services to management in the and development. their ICE seeing meet offer it's ETF future So, self-indexing to around benchmarks, this you customized inform consume, we've where enhance for built needs. whether success asset or an regardless and tailor flexibility, their managers are assist open or or specific solutions managers choose And complete product strategy. index to

with Over we and the self-indexing signed the past with XX some index now relationships ETF have few of established sponsors. the agreements fund quarters, sponsors we've XX major top of

of on basis. XX% revenue year-over-year sign a As pro increased this quarter our forma index first a success,

we're sell-side issues. and of cycle and while these growing market seeking a a stages the So, held this signs transform executing addressable markets move its like that are in we've to and fixed a number we're solutions still seeing back where very I'd XX. income Like helped market of of strategy, is many the across buy-side market. to the inefficiencies life we're past, by early now to trade deploying slide it's traction the encouraging within in

XX Over which dealer of income declined years, to be primary the used past levels, dramatically. inventory source fixed liquidity, the

While funds doubled, at of over flowed the income U.S. the $X fixed the the number six-fold, in of the alone. nearly market income grew same trillion U.S. ETFs and fixed corporate time debt into size

so, advances some and transition information the cost looking of solutions our unwinding transact. participants their policies, access for this for lower to with QE aligning for total ability workflow their market improve that And been time. are We've to in

fixed Our rich pricing reference trade content workflow. business, is data the bringing to income of our of the income foundation a critical and set fixed

These each and our flow complemented along has by for the potential nearly enhancement, expertise It and critical such uploaded Global ICE and product groundwork customers as us combined attribution. trading pricing day. of data indices, innovation and best analysis, factor-based reference opportunities. a provides liquidity tools it's And inventory an with be with technology into cash modeling execution. assets expansion of and fueled platform our analytics products deliver our delivered unique lay $X window our pricing, securely trillion to decades to Network. with Our enables by real-time further data are our customer This that offering, and all performance scenario their can over sees

customer market facilitate liquidity increase our the the this a Network what up as when BondPoint BondPoint and which additional first fixed base markets. in its markets, XX% and brought underserved protocol this help to technologies efficiency such Consistent markets. energy technology average and We've more first liquidity of tapping user in to space. infrastructure, into acquisition leverages order record invest we've quarter, more a equity January offers we'll book, Our seen is as soon bringing we a the part our into year-over-year. similar resting growth In number as BondPoint the efficiency of did also execution and click-to-trade and the income average participation broader for expanded bids to to and And futures rising that seen and business. brought over this markets, of year-over-year, activity data is ICE Global deliver the a set ICE we quarter, in volumes in participants. XX% saw a as and our of community record steady coupled growth daily notional a a

growth for as we're fuels the a so, and as that the market. our tools, post-trade solutions, growing content in well-positioned of trade, of And underlying pre-trade, owner and provider a

financial buy-side Network flexibly a With its me to known The institutions, XXX XX. providers, into now ICE Let range and sources, sell-side data unique proprietary gathered markets. flow global the Global market and serves a within market SFTI, the third-party turn as across is it data Network slide With roots ICE information and including backbone for content, over Global as exchanges an traders and from unparalleled its industry. expansion offering serves of third-party unique makers. clearing houses,

As portfolios, and to consuming integrity retail and to the manage of data markets more customers. wholesale become quality analyzing sets crucial on reliant the large is data and

a of critical Global information. ICE workflow that flexible solutions participants, connect the so, markets as And distinguishes true us Network and end-to-end provider

provider of slide in efficiency on deliberate our Let world leverage XX. And services around we expansion, this on a that can growth just focused have me management commodity driving across focus all differentiate both to few and to remarks for We've see, conclude our how never our the really company as globe. start-up we've increased, small culture. been vast differentiated opportunities now front growth my new driving on of solutions on We're in a stakeholders. products with a for comprehensive opportunities And data, innovative our return us. growth whether to the in financial and risk is automation the are infrastructure information. or These our base the virtually our around the and initiatives more our asset from markets grown growing and all maximizing for customer and classes and our value this to focused and been our opportunities it's markets of connect the technology of We've and disciplined customers. you

to customers thank Eastern the my session like want I'll until for I'd Time. to their colleagues for Importantly, for our turn to he'll and now their ICE. I their question-and-answer record to a another quarter And X:XX moderator, yet back trust. conduct business our efforts Jamie, call thank that for and contributed

Operator

And O'Neill. Please your gentlemen, our Ladies from now go first we and Repetto will the from question. with begin ahead Rich question session. question-and-answer comes Sandler

Richard Repetto

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

Jeffrey C. Sprecher

morning. Good

Scott A. Hill

Good morning.

Richard Repetto

would of from data, XX% your about of in have. Jeff new that, foundation – to products you you more but market new exchange buckets? the offerings? can different through the your other those think, actually strong out, the at that coming peers just right differentiate, stuff, sort peers, Day income look saw put data guess the in and peer guided growth. if But their those coming it and growth Analyst from you growth and data guess, the And is another imagine broader I'm and talk was is I line which Scott, because So, then market X% in pricing of market trying also, differentiated products that see and buckets you is I you of fixed much the saw on a with pullback it I your and customers your to could you areas guess, guidance. data if is some or the one first organic organic question I I

Scott A. Hill

Yeah.

Okay. Rich. Thanks,

of first the revenue the indicated. broadly, is yes, So, that we all, growth in coming buckets

I As of Investor said XX% every to et going indicators be at from demonstrate new pricing can cetera, get a from the And it's coming from not number last products, summer, but it's generally Day buckets. you and that. those that exactly year XX%

I customers, was up pricing example, are our That's about all of analytics XX% and new that and products, the signings For XX%. more. customers existing new and selling mentioned buckets the

ones is up again, or one good So, more capacity where customers as signings from. indicate give XX%. another driving capacity trying same is And capacity. more the coming Connectivity guys metrics, is example. where will working to you Again, demanding that to we're may a is we're that growth give be you customer that new

And ASV products, into good that delivered from an of of organically seeing new currency the good getting quarter of constant not mentioned where it we're I price a et leads that organically, some those I to So, but contribution all we think is contribution from And builds in course, X.X%. are X% only we all up well. new as cetera. customers,

what's I that's fundamentally driving think it. So,

some had our data. actually data some to there exchange and good of to right regards We in sequentially you're quarter think a with be their I both peers issues with seemed year-to-year.

had As exchange of I strong call, X%. really data futures a on mentioned we the growth

results, we things is of one seeing it's which our mentioned, certainly have you're what to that diversity think of offer. the I in the you products

us about two we're breadth a difference U.S. about about subject today of It's I not not nature a not It's really the maybe for ago rates, versus the to our So, not just think just Asia. sales a just not market. It's got or But any single we've oil. team. key gas. of interest is about or just It's products. year natural

acquisition met we the hard Commodity our leader. and Sales, have With who IDC, Investor strong you runs And our a Edmonds, sales Noble, of together a really at really Chris acquired Global worked Tim good sales who on team, really Day, cross-selling.

to among execute for customers go extent talking IDC's the out ICE interest opportunity energy sales that. we're communicate data, about the and information, services to teams data there's (XX:XX:XX) when that able information we're or So on rate data an or to

shale So say XX% fact market that And a last It's of sales breadth surrounding us need data. those is the commercial is in are And mentioned are we people data. hedge serve I natural that and I basis distinguishes gas. interest and are and up those then thing initiatives. commercials risk strength of That's because it's would order on our open our the team. fracking more in of market people And to our they their types more market. working the

well So, data exchange to to and our for specifically and futures I of perform allowed that think business grow. combined data it's all underneath our that's that overall

Richard Repetto

trading combined that or had look Got platforms platform what don't And came distribution just you you at available, it. what look to of or how – would to info try make your Jeff, you about I talked How good the it if you've it do sort about where got you're other so behind on and at at probably be do an the overall, fit and a you've is follow-up distribution I market, doing, I acquisitions? would it done – important. talked – organic the evaluate? be. income look you've do you with you – BondPoint the guess, would – the won't thanks have with fixed in platform and you're like would you've how platform for imagine quick, think it. I'll the inorganic But how from

Jeffrey C. Sprecher

thoughts. got I've a couple Yeah.

is many lot digital. there's in conversion and But of for out so point its we as bond the can can so touch to Global so trading, great, enhance the our places we trying helping – just on connectivity that global with ICE would workflow be big, data to workflow. that driver. with as we set trading. Network, that a and necessarily tried touch One as my we and to that's the the remarks, to we're If analog but is, have want prepared is starting people I First points market not

driver thinking we Our your and indexation, on as analytics, a about where we're the that's can workflow, data, it. how is touch whole, analysis market

out reconstruct sort of try slice energy. and reenergize then, and bolt premium of the here have, a I mean, for and other can on for that even those lost In for buy buy favor, network growth. worked have that terms small off deliver we very them that to business. M&A, we that's to accelerate have have go like that value you've knowing accelerate and dice well allows extreme, them it think, for have just we buy and though are a our we us. legacy very And we to the kind to of That them companies We when onto the sell we putting us again to growth playbook companies immature pay their and businesses witnessed parts, into that a poised fallen years. premium infrastructure in shareholders pay And can of for that our may and we that them, where, we

obvious other a do of in sort can and broadly a that both we difference. points that cycle, to the life that words, we middle, at make on well company's two us look that's so, those speaking ends. in and the end something buying growing priced, we fully of It's And of less

And rate it's it was was growth now a IDC, the doubled then at XX% that validated for mature validated So, growing was for X%, us. Similarly that's very growing that so good around our very buying at that that point why us. which turning BondPoint we fact fit hope. a company that

Richard Repetto

Got you very Thank Jeff. helpful, much. it. Very

Jeffrey C. Sprecher

you. Thank Yeah.

Operator

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

Kenneth B. Worthington

And morning. I'm going Good on follow up Hi. to question. that

listings, indexes terms you've about products, in the to analytics. suite fixed of to So, to like income, ETF of data, talked

fixed evolve ICE's does the value from And extent As a electronic for and company term? business data to? for go fixed the ICE how to fall IDC, income voice long market the from income, to and Thanks. the proposition go value trading does migrates should like to does does in proposition create where where in proposition into hands, in a what competitor's this the connect Tradeweb, that data that to threat value

Jeffrey C. Sprecher

Sure.

very be name, one, you if move will broaden velocity to happen so of too – names. will in bid, the easier in your the will world each about market, you because there platform because a from ability things will to a in market that digital many things the move or are And the there tenors. are offer know, a trade of it's futures-type that and couple that and market, because the will have So, out to unlikely analog of many one bonds position. you'll access just And true think then as increase will to different that any in you you'll there immediacy participation be an it likely be the

offer. think the platform. But what transparency. be that to bid, to not to more and all favor, all if on duration you trade a we names, on the so, liquid seeing, this well-known liquid we're world price It's And witnessing, a what we're in will is that and names, tend more the and are the more you tenors have likely isn't inventory two-way that going to able and be then just around trade have can other earlier

broadens, And those view that marks. we're And And of those and going names. as marks daily so, more we the participants to need to are provider there you're as more for going the be more think interest data. there we that want I be to has the in that are in prepared customers just of the that data some demand as read there remarks, by been my to market, going market

it So, of different by is not a by your Tradeweb changes If anything group question. to in the sure it's right people. It's us. answer now, people, group owned of a for specific world owned I'm

More calculate the portfolios. accurate importantly, names technology because in market and off-the-run their investing they've more keep we more that deliver and is difficult ways into demanding to and the made

Kenneth B. Worthington

you an wonky in term that's Great. to arbitrage discussed a I past. creates it positive, you. China it I think seem launched another Maybe be has as question, opportunity, contract I Thank the the oil And all in but (XX:XX:XX) a think expected. near as would gained we traction think have

question, what a than a in viable part And the for but rather two ultimately there is seems leverage leverage of this directly China? It better way context it that's like You've products. of difference, one? of with longer potentially Thanks. Can and ICE with or opportunity does term, for do contracts big So, or commodity the a financial begs opportunity. mean it suite I'm to better oil China makes sure indirectly? a Brent got the market it. you not a

Jeffrey C. Sprecher

Yeah.

about their all, WTI the In source, That's China have contract is historically. interesting their the that benchmarks are you production oil words, delivery referenced not Brent it's oil point. worked a So, other source. delivery of way what's in and priced the that contract contract. it's oil the first priced a at that's at

basis infrastructure to source grown a of essentially it, sort and its at product point. transportation get market is and with which take And add price so, to production to the the benchmark a up delivery has the price its then

and active Brent-Dubai a trade basis obviously also and we Brent, have market. is market market listed we that So, very a

has exchange that in at that a Dubai. a competitor least or have also – an has We a peer

of in transportation the this value to there China. is the got sort any now component that of, That's – and and okay, in add oil price you've what so, in now notion of Dubai. largely of And oil event, price is a infrastructure here's

And the market. and contract that, we world that as alluded Most to China of contracts. points a you point that one full is, think so different basis basis the over thousand is WTI. what I to and see energy of benchmark list Brent delivery additive than is grades different in It's We are those more is points. a of

perpetuity. run, into in it We benchmark growth to it think the probably contracts we but contribute for think So be not in additive. will the short just will

have business lot They've that infrastructure Europe. and we They up oil Europe. a of us with set desks was trading The do and come second have and Asian part of petrochemical your there. in commercial question customers in

to they've if of will, trading where the the come similarly source, so to oil, you is. And the

because companies to change are and on to outposts are Asian attract to being hedge all to that used kinds for that attract don't those mainland. so Europe expect we And in that be those of business difficult the would talent

Kenneth B. Worthington

Great. you very much. Thank

Operator

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

Alexander Blostein

income because that's market in considerably. reminder guys grow AUM you going getting just dollar the the a fixed to on kind going that's self-index, And you you you've self-indexation, want terms ICE royalties go and that's the indices are the then could definitely as on it indexation Great. back pretty Thanks. morning. the guys hear Good yield of the Jeff, definitely I think like help get trend opportunity. big to like of to well. totally feels on that about seems a that Can a highlighted us kind in maybe proprietary of

Jeffrey C. Sprecher

past, lot managers. hands in And building brands. of larger Sure. that asset were competitive. our and the in their space thought model own managers more and it's into names concentrated a the the doing Well, is more getting were – are is management the the so, historical And brands that on brand of of getting the more increasingly indices. and the And those process

– of I managers brands. But what in them a can much have finding their mean, in and do what We indices. dollars a own they that's it that the is brand. themselves many for we they to market, brands, can people put on AUM the as create reference a at are those an and of has of finding pay power charge name brand. lot their and order lot party's they're price And for cheaper amazing the own don't were own their per own to third they able form index, their because have NYSE-branded to

will mentioned, services create sell per non-dollar So, to on a what we've you where done we is, try platform an AUM basis. as I open

software example, more we you engines license. for that have, can We a under traditional calculation license

is we have also that data between a strong dollar recognize the middle, selection the the value. really been you brand index which have working let's license brand strong We has then, where we brands and also some analytics validation us of basis. our where own can value that And per recognize does is two in of ICE the manager, that we've and the we third-party calculation, on but AUM and

come up so, let's or some hybrid And AUM with some dollar lower per model.

we with we're want going We you to We we that and as the the digits. that think to brand when say have can them also mid-single we high and our use of in to the – that to a And go single and for negotiate it's be with return are business been case mid the grow this we AUM, grow we to for going across gather because deal to this your you customers looking the think at in of people and can very like of open dollars made. table data to market. that we recognize with quite in trends sit and high-single you, to while gather that is market Alex, if digits well, there's a at you are us hope kind do form which basically

XX our that's not really growth said, successful. work We're accelerating really so, XX and it's job, greedy. We've managers good onto been future contract Scott as a and the drive offering. platform. top with this getting helped of strategy. very to our done getting it's trying managers out the We're data And to And

Alexander Blostein

That's year, Kind of pulled The cleanup timing And being synergies the despite question the the obviously or of expense the of then, Scott. delta just additional for for slightly synergies FX, lower some that versus forward? what just prior? the is a helpful. the was guide

Scott A. Hill

would with we'll had Ben, deliver anticipated. $XX of question. of efficiently working synergies, end efficiencies of and target hurt to number about M&A the all more line to the We're and FX We're the net we had million I and than will integrate and good but this of our actually covered the we $XX certainly expense a over more sitting year, are as we that business. mentioned have coming that The expense and he million integrated The the was we has originally revenue to that's more two impact where a now. by efficiency right revenue able we it's be on businesses, year. $XX be in come recent to better generating believe parts No, actually $XX acquisitions, item integration were for that other recently going again, million, I'll one at of the the core be plus our efforts And continued circle probably track into acquired better my the business. businesses, that. some only is million million. back regard the is to to but in from than $XX going team left, around down you

Alexander Blostein

it. Great. Thanks, guys. Got

Operator

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

Brian Bedell

guys. Hi. Good morning,

get Let back data, just I me on guess.

to and revenue mix It For looks the like U.S. the if from to also on view it correct towards shifted the growth like the growth of high-single you X% longer-term talk Europe in can me Europe – digits, but the I'm X% obviously mid- your about and wrong, quarter-over-quarter. actually that? looks

growth that, at you customers you from and indices, could elaborate increased about mix? – in And managers what Europe maybe rest guess, your And looking also, maybe MiFID environment of actually usage Jeff, the in are if that's just active correct? So, active what data then data versus the you that, doing? I talked they're the from on drove to how relation

Scott A. Hill

Yes. Sure.

to customers we've come the So, for are by well contribute revenues II even still into though continue of now previously, look, European place, to strongly, and in continue quarter as year, regard first with think, it's frankly compliance. MiFID the the which, the driven, to number to indicated do as a I you and there said, scrambling

that's the quarter. to think I not so unique first And

frankly unique even it's to be think year. going this I to not

will I place well. that Signings see it think the signings. think clearly And Europe were you on even XX% in is XXXX more you as if year-over-year. up into continue at I look

sell Now, it II team number is really grow another single we're of I'm to customers indication products that delivering. is going the help forecasting and every the to sales with to they XX% MiFID that not have but quarter,

Pacific Asia contribute and so, put emerge numbers. to U.S. continue And up the solid business will strongly, to continues as continues just European the to

Jeffrey C. Sprecher

helped and gotten lot the better products income stronger having that the putting real equity income of It's of And on back able same combine from now success. ETF the kinds the ETFs underlying having data. and our have better in just a is growth a stronger managers. major and ratings you second space. us we very seeing we particularly point, their evaluations good And It's of value asset good particularly a few that business over and move obviously were the create business give fixed evaluations to last growth bond transaction recall their the There's improving year, has offering, turn area. that ratings, ability really to assets then that design they and capability, is fixed around years, capabilities trend over and in S&P. evaluation business S&P into to for same results you're may with their which a they're the last But which interest the given and been in other bought

Merrill indices. the bond of And area, portfolio, bond the America Lynch so, of we in thousands Bank acquired index

to not valuations. help a index and and standard, a in lot figure an be index we have this end-of-day manager being have terms how out But able substitutions licensing will we that can but quantitative we a people attractive only platform an expertise So, actually use. data, be well-known, all of design do can with underlying to will that and that of the ability, well-respected provide also operable the and have

lot I non-equity on who are mentioned, has well ETF as business of a right managers top that and, done particularly the is so, focusing space And the now. attracting

Brian Bedell

the Obviously, just improved quarter is and in nicely in year, like in That's again. a Okay. now question back then of it looks helpful. first it the but that's RPC then energy. April a on dive And the end into up maybe took

going talk about maybe the don't anything it's you what if like underneath just were if It really I So, so shift, can there's else not drivers? mix there? on looks know

Scott A. Hill

Look. Yeah.

relatively you saw tends any or you in bit But April period first consistent. we're through again, that you the year have volatile of quarter, some on given at go or first the of more the quarter a pressure RPC. quarter or look to whether think downward I as last that

we're For energy, think $X.XX in April. I

back look and $X.XX. somewhere go You we've over been $X.XX time, and between

is have we're open maintain regardless I able to each of consistently RPC. a the because despite revenue through drop interest or growth, volume made, of maintain volumes bottom to of our year. one minus share, reasons most are line the able couple of plus volumes, done So we off that's importantly, as the the And our grow, it's that's see and RPC management where think which why where growth and, we you cents one peers maintain

mix that don't But gas You're being nat there's and and right. I things speaking, trade that's lower in it's generally to think benefited a to And particularly attention impact from rates. RPC. commercial we just flow. were us us paying volumes to not large market I strong although be Brent us stable. and April, a the allowed those think, more certainly for needing It's are pay being down, the have

Brian Bedell

Okay.

trend sub year than – recent of the for from in rest aside the the line sort of RPC lower the more mix? rather of with sort So, quarter first is most

Scott A. Hill

I I'm your not sure well. question heard

Brian Bedell

No.

– a better April Just quarter XXXX...? better and a in as of the last RPC thinking sort in at we of about of the year guide for trend look as energy, rest would April fourth

Scott A. Hill

month again, minus and yeah, XX and that plus quarter. month a on last it any couple XX, But, bit look any $X.XX move almost plus little products, pennies over or every minus or again, of you could every we're think volatility, participation X, in based Look, Yeah. around quarters, or quarter around. a I the market

Brian Bedell

it. Got

Thank you so Thank much. you. Okay.

Operator

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

Kyle Voigt

Hi. Good morning.

Jeffrey C. Sprecher

Good morning.

Kyle Voigt

guessing was remaining your rolling $XX dividend $X out digital Euroclear new on that a OCC. out million remarks and year. infrastructure in of MERS investing the the I'm or called I million you out that the as MERS the called this dividend. other prepared from you're $XX you was think income and million in Just $X million this And business strong quarter,

that color we and growth new some whether is platform us give you'd not business equity fully or as the if more step MERS that income you. specifically more wondering from substantial on could see type Just maybe the out. Thank growth or in function line some progress rolled for

Scott A. Hill

Yeah.

it wonky the hand quickly (XX:XX:XX) we're me Jeff about with to then strategy excited I'll MERS talk that and Let about. the to start

line So, year. and stuff of things this there the in income, the we MERS million year, into In you're a that dividend. other But we right, contribution three of the bunch rest that of $XX always that impact are other income dividend, had are for pension expense take, there around. which the just matter; down the moving OCC moved

so, And OCC million to and $X in $X other a going $X of million you million pension. right and $XX quarter, That's income range. million negative million as kind the MERS from about out be the to from think $X is to about

in from and that gave with talk got we're a you model headed about standpoint. you So, We to good we quarter, Jeff I'll let the where obviously, MERS from contribution first that. a definitely

Jeffrey C. Sprecher

Sure.

to hook now progress people the infrastructure we've MERS. new participants. mortgage the will, that up need the the if parallel of are all-new made is infrastructure That the hundreds for in is system, with platforms legacy essentially that we system. space are in And in opening that built So process market to There digital running we've of an you for have MERS.

start now I point the their market and some quarter, dealing would third in change But start into more level of workflows that to people to over an who mortgage. new the That's place, into an reason take time connect the detail, that platform will market are in engaged and that's the a – all the to summer more new robust expect they, infrastructure own move market for much much over they we spill have that is digital their the can are towards once get into participants. and So particularly will the with participants, systems that platform. because important major it a rebuild mortgages deeply will And to we MERS.

some mortgages a time, how the U.S., internal get it's with the adopt of their definitely will It and trying jurisdictions It's market. in usually macro local improve MERS. in thousands with registered day, There it's clumsy able that can mortgages, kind that us the that are definitely they they'll registrar. been early quite but the quickly of a now, level. digital figure how coming. of out workflows end At trend some the own to be thousands of very, for the be has deal to with and for industry at specifically space of adopters – it's locally engagement mortgages have – us engaged with trend a hard very because, Some the to engage right gauge the

start to to not So, paper. digitize it. you will. and of vision your part keep the get records underwriting it which the to And lot all with have as as and a on upstream, a well goal if is click of become the case boxes will time in to of actual we're of handed be about that's try we to to on may But and the that digital until it possible process able to much our registrar. screen, last track to of able to mortgage But homeowner in your local paper take recordation, signature, as deliver your to think digital workflow, read sit a jurisdictions the the be for participation, kitchen,

driven early us. results that expect been that we've strong pleasantly there's and have for we So, adopters growth, surprised helped, been

Operator

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

Michael Carrier

backdrop improvement we business see But one, in maybe there just on or maybe guys' credit the of of like a working versus maybe market? in just guys. cyclically the sort is given the the get the first to could clarity kind more the on wanted of traction and now more it And CDS see Thanks, that. how we should enough seems big saw your Jeff, we changing past where couple market's that regulatory just years sense of kind quarter. dynamics of this

Scott A. Hill

regulatory over of last opened for see the we encouraging I in been march a business that's a it efficacy probably the quarters, even clearing That Customers little the think longer been Yeah. It's need And that a it, first clearing. continued four into they steady since to the this doesn't maybe the on thing quarter question. most because and coming up year. five good that is anymore. exist a push than are has

helped you got the like exposure, come where that to it see quarter a guys start want XXXX. you of big when first financial that the is buy-side the it did risk protection, nine in confidence that so, revenues that And to lot drives in order looking And notional quarter, management. their other because It those people have us way clearinghouse in smaller is see the a institutions the you've the cleared It back see it's cover into is firms. to their credit it big the reason the want clearing. not

roll a quarter So, I'm Clearly, month. trended. was has that business first helped that how very with pleased it the

minus it again. repeats will solid second the business quarter, growing expect the So, but a that be trend don't XX% quarter, I around continue another I or year, we'll suspect plus really it bit. in in This of little roll, third think I the

the that seen the good. dynamics for Customers efficacy us to needed business. the very anymore regulatory model, the have So, are of market isn't push clearing and really grow

Operator

ahead go next Our Autonomous. question. your from question from Please with Hung comes Vincent

Vincent Hung

Hi.

of share on do you're one what I so in key of ICE and in benefits And like business is you because interested preferred Bloomberg's acquisition for shifted IDC for data thoughts index? particularly by fixed the calculated recall what claiming around from your bond income (XX:XX:XX) market Treasury your the was players Barclays I'd you then of the the index be they more challenge the AUM? the in competition large customer think ETF of So, seeing market Bloomberg

Jeffrey C. Sprecher

Yes.

that consuming but have There's they get. it you unique. as for of want as major everybody's space, people much have, honestly, of information now bit information. managers a are many we we're we as pointed thirst see little right So, And Vincent, can out, this that the in all competitors to

not ICE that of mentioned. strengthened them, done it of data if competitors. good our us if customers Lynch network well necessarily thinking you sure us complementary you The a give of viable will. establishing America Merrill indices has of IDC Bank vision, were a I'm competitor. providers a thinking And a of well are lot as that brand, we've our So, as them bunch They're job putting will. you banner both we highly under own was just of the of the But together our ultimate are known, really and as getting known. and onto can

also have close relationships in a We them managers. of with touch listings in mentioned, as the you ways lot on very venue. many, large ETFs, including We many our

So, we there, challenges our to we be seems people we that engaged about of organizations so the deeply and know many at and opportunities, that are levels helping. can talk these their

and issues them help that business to that workflow need complete the multiple fact middle about solution, the talking into front, at in them they are with on touch have index companies that office, MiFID and add that to you with what you. working points these plug we compliance, the regulatory If and a help back you're

continue into steady, these helping to that growth organizations long-term contributing indices nice, to that of All our get is to drive going business. to we're that and that from is organically think, we

Operator

Our with Please your ahead Herbert from question. next Citi. from go comes question Ben

Ben Herbert

taking Good Thanks question. for Hey. morning. the

was you're with return just to reform? buyback the the and just on thinking it capacity Just go how maybe against And about tax board, the discussions capital that, M&A? wanted pre then given authorized to your maybe just

Scott A. Hill

Yeah.

with buyback. So, the let's start

million, relative look the use about that where consistently, capital. go own is price be, our for don't discussion about then in best And did it. says priced you we're a that in of internal that investment yeah, dollar on market, talking do analysts January. told every frankly, do of it's $XXX as million how the we go we million strategy. them, our because at with model with we the April. We need generate return to easy we And we things with right best $XXX where kind seeing buyback we've internal think you're you investment. are we we and our priced. And that's the did should in through board got of one $XXX you we now, typically told mean, And of our spend board obviously, with the you talk So, pretty on we're I M&A

So, you see the trend. kind can of

going that capital because shares. buybacks. need significant we've Euroclear and execute to it, good been in you'll is We're returned that's deal be rate leverage Having be able strategic the to dialing cash the still top standpoint. and run sense. still you second And bought We BondPoint flows, transactions news some and to the the bought back without dividend back for We did we're on from we know generating solid we that capacity out where you on really important the in shares. it's that the that, a where back of we investment made and asked add have the the we M&A. we think If most said most largely question is it buybacks makes

the certainly right return it's where ability to we in a having will right certainly over through to return, There where we allowing we right are not And not can may now. with of we not generate at with make April. to that's the $X.X have of we're us generative billion moment but where right tradeoffs, so, And where time are the right or. pick terms come our company now, either the deal cash

Operator

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

Christopher Harris

guys question a ask Brent contract. Thanks. follow-up Shanghai you I wanted on to the

contract are customers market based opportunity switch between contracts introduction go rightly But back forth be that? the new we to those a definitely over or Might lead we and to guys Just thinking your about commercial this and that of for out China. of some thinking should the You that about be how traders creates this to should in customers your maybe Asia? Asian-based how not? point

Jeffrey C. Sprecher

get that you're an in Middle producer oil Sure. Well, of you're delivery customer that in to Asian buy But have you the contract. probably an the mean, the the the of opportunity oil, wants if in or got that, transportation it and if in and only States infrastructure Sea the or how to to United then into out East China. North figure you've not to the but Asia, I hedge production you're

that and coming remember And in increasing we're is trade to commercial customers two every traditional benchmarks there's so, sides seeing what and volume. of service these want China to contracts and basis

displaces in of because of right to lots growing the and So, growth new which are the benchmarks anything. continue world a trade I benchmarks, It's don't against have one market It's markets. important an those basis we'll to big of expect both which in basis there that the a happen represents China, in important we markets oil the hundreds contract But underlying basis well we do kind economy. it this of now.

Operator

remarks. And gentlemen, the ladies at for and session, closing allotted I'd the time, this management conference to of to turn time over like today's end reaching any question-and-answer for the and back call

Jeffrey C. Sprecher

and a today. that's quarter. the speaking you look Well, when for forward Have results report us in thank we'll Jamie, you with current August to and you, morning. good all We joining for thank

Operator

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

lines. You disconnect may now your

Intercontinental Exchange (ICE) 3 May 182018 Q1 Earnings call transcript