ICE - Earnings call transcript Q2 2018 | Intercontinental Exchange, Inc.

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Operator

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

Warren Gardiner

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

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

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

Scott Anthony Hill

quarter, We've two net everyone. year. $X.XX operating rose These of & Trading and $X.XX, to from XX%, of XX% increased Adjusted importantly, of last quarter our to a range quarter with key quarter operating $XXX joining morning, $X.X thank margins to the in ICE's Adjusted a repurchases X% per Good midpoint first increased Listings billion. totaled XX% some Data expanded $XXX $XXX from on million million start million. million today. of expenses & us Clearing X% below second while operating earnings through slide and that operating billion. through rate Warren. of generated versus record lower points consolidated tax cash the results, a $XXX were of net were highlights our XX% the income second XX% operating the of revenues half second returned record X slightly adjusted and for revenues XXXX. the adjusted revenues modestly share quarter. million coupled year-over-year with dividend for cash up strong guidance payments. million. the adjusted second to $XXX I'll you of Thanks, And nearly $XXX up flows of XXXX, nearly share And

last earnings repurchases we following our million decline in call. note price share quarter You'll our into short-term the of the roughly that accelerated $XXX after second

remaining original continue fully to second share our $XXX $X.X We approximately to expect year. of half million the utilize the billion during the authorization on

half, up audit where segment. discuss for & during true-up revenues organic the to services the currency Data the on constant on I'll Adjusting acceleration first That's analytics revenues X move let's impact second X% data basis from Data Within acquisition we basis. quarter. were were an up the noted second Listings an Now our an slide organic Listings year-over-year to remain & Data with revenue the growth services, IDC. to the in for constant our X% business with segment currency delayed in business growth our improve combined we and X% time prior two implementations the XX%. three some That's this and in XQ connectivity to that helped margins above quarter. acceleration times than second grow X%. achievements expected during This this of in quarter full adjusted faster second quarter, solid to have year's And confident synergy operating in X% accelerated pricing last year. would year's will of further

ICE's Importantly, were that Lynch force. revenues where global Bank doesn't benefits a yet by of America growth year from strong also the organic ago Merrill meaningfully they of were where the up driven include indices leveraging sales

data, derived year-over-year growth our to down somewhat prop basis. modest data flat constant were Revenue were in In year-over-year currency exchange by the on NYSE business, an down revenues X%. offset Tape the revenues was data. Moving from plan organic Consolidated futures

However, adjusted on an fee, organic grew our audit for X% the basis. currency futures data constant XQ XXXX

and X% constant was connectivity from organic connectivity basis. and currency the feeds up implementation Connectivity X% desktop on Finally, grew the mentioned delays. revenue an impact previously despite

to X%. connectivity of expect year third and expect to continue We and growth in feeds quarter, revenue growth we reaccelerate and full fourth the

desktop less revenues, X% represents our which declined overall feed revenues, trend standardized The desktop X% currency data customizable to away alert-driven than and constant organic terminals continues. an from on Our market of basis. solutions

attached our In offerings eSignal is to and where in churn seeing higher typically are retail the a range platform. addition, competitive wider there platform of with customer we erosion services

X%. and the pricing over up X%, organic quarter Looking and ASV up feeds to third including is and half, analytics connectivity the over ASV second up X.X% in

We third sequential improvement and revenue and the revenues in fourth expect continued in quarters. growth

anticipate third and Assuming $XXX revenues quarter revenues current data and fourth $XXX million $XXX million $XXX we quarter million. between between hold, rates and million spot

remained IPOs raised through billion. half second $X the billion leader Turning to XX year, the of $XX the organically capital in year-over-year. the increased with IPOs listings, X% first raised NYSE global revenue the over quarter. Through NYSE The in nearly through

over second shift the products RPC gasoil, an year X% year-over-year such the our blended home versus a now prior revenue Clearing A slide year-over-year in XX% grew despite towards Clearing only that I'll Trading billion. revenues are positive of IPOs higher We our XX increase X% as last emissions business, XX futures of & yielded business. X to ags, Trading futures turn our XX% Please In where in RPC. a to provide quarter. the overview and have improvement mix $X increased & volumes. in raised

While Brent July our is interest in lower, volumes by franchise led contract. benchmark in our double-digit oil growth up tracking open have been XX%

the Euribor side, respectively. XX% agricultural is XX%, open are interest On interest up business, is year-over-year. Gilt XX% our up rates by in which and XX% open led And up and

As open first we've strong before when trading elevated and levels with of we the mixed interest saw said during half, volatility. generate volumes as

strength BondPoint. ICE well Our as in clearing over markets the benefited as CDS from counter

The and conclude clearing notional side expense year the income year-over-year BondPoint X. XX% second expanded with I'll operating increase XXXX. drove prior XX% a year. revenue margins activity strong pro During compared last forma of increase buy We're versus remarks the CDS with disciplined continued management to credit in quarter, demand on combined a a Volume performance protection at cleared. strong adjusted adjusted nearly operating a slide strong basis. on to for XX% pleased and enabled generated in my XX% start the grew

flows adjusted XX%. XX%. Adjusted First And operating half revenues increased profit increased increased EPS grew X%. X%. Cash

rates up generated XX% and double XX% Our to and revenue products. interest is margins oil, expanded ags Trading July in digits open Clearing growth, our in & segment

to constant NYSE mentioned supported raised. organic pricing on while proceeds continue previously, remained feeds to strength X% in X% accelerated and growth half and connectivity right-hand we guidance. side track half, continued currency be business improvement to first or our reflects the and currency That by months connectivity revenues at the growth have year. leader expect full pricing we an our opportunistically further and & the our business on invest XX%. more of analytics the grew reflects and our in X Data returned will overall even and achieve profile. We data revenue will analytics, margins in at to feeds than year future be assets our basis, continue X% organic six The expanded the grew X% currency first growth XXXX X%, and to IPO enhance to strategic second XXXX our of constant synergies an growth During prior we XXXX year that remain cash least a X% Listings sequential And our to shareholders we slide for organic in as which, above continued during data as will of guidance basis. in and our grow and constant Though updated between on full

by severance million of TMC to low our adjusted Our core charges $XX million XX%. of remain million for $XX $XX second offset original to incremental XQ is entering expected $XX tax million expenses million. half deals us of will CHX related and to our along will $XX with and XXXX rate and near land nonrecurring to guidance revenues our recent in be XQ around expense the end

interest second fourth and reflecting third number half hand will of entering returning initiatives are confidently. half million first year the Ben. now strategic the the the And in objectives looking quarter our we our $XX foundation billion met that the around still strategic We in be will I'll and to to having of $X.X growth Ben confident and XXXX. that, established fund a use expense shareholders while debt important Our to record XXXX. in began $XX XXXX the million and even of With towards a for initiatives Jeff call discuss,

Benjamin R. Jackson

and we the for additional around is and that on that acquired begin post the income gold on S&P on three nearly then complementary America Data good and nearly ago, and brought the three analytics, X. morning Lynch Scott, call. foundation Merrill of pricing it Interactive pre foundation price Thanks, content world. evaluations indices. Bank a trade slide business When instruments Evaluation million everyone Securities and years I'll as of We fixed such the core analytics to bolted spanning the to standard

fully helping their and customers With services quality to of bring the innovative these of execution such and their a liquidity solution risks positions. as with understand now associated integrated, better new the assets comprehensive market we our

workflow We issue participants have to is with source manual the risk participant of and trade engaged processes a about or community company that of fixed wants to Whether insurance And very trade redeem is are or liquidity. or cash more with ETF, also in the different fund, looking to hedge an efficient managers and a with all asset create their ways challenges. a traders income dealing for archaic a and mutual it execution. are market of looking resounding fixed these and that income share

but of still market largely seeking know, today fixed one is a you many As voice it is also income automation. greater

expect evolution classes assets. exciting many why a from in continue will central RFQ BondPoint asset it has And are book over order to voice such going is this time. as TMC it We to and

phone for is have buy and post side, and technology, and search smaller fixed click-to-trade CUSIPs pre fragmented of inventory. the to complementary. trade option provide we for central is essentially a recipe income trade marrying throughout sell in asset platforms efficiency, the and embraced their thousands are no that the productivity market is businesses. wealth a analytics, by data the the a high greater structure of banks streaming and changes is executions And much as corporations, Specifically greater our facilitate by TMC that very which in advisors. across efficiency also with demand day managers thus, have longer that BondPoint result volume, The efficiency book an very order size, both being critical side,

side. to both market Each to makers, demand while managers, BondPoint the And and connectivity broader largely to has acquiring increased Since the TMC, base. this First, to our audience expanded expect trading with include reasons this platforms. expand volume over XX% corporate the corporates. further and and is And community, was side first munis. we catering It's to over leads up we TMC in by leveraging sell of one in BondPoint began have a half. engage buy seen wealth customer venue the by time, BondPoint

trading was turn forward lifted sum, created the a In conflict updating all banks technology, With addition, That been the their ownership acquisition, we we a from wealth it's over In the to owned largest as to business, and in world. we important their arms prohibiting wealth positioned platform. at look some prior platforms has new uniquely now that interest management I'll flow expand of to restriction as by the on out our And expect will our point and margins platform. This management our grow to and TMC leverage distribution, affiliates. drive shown we call result, be content shareholder of are and our to Jeff. you that, value. on the the three

Jeffrey Craig Sprecher

its I'll Fixed an call. of we start and infrastructure, everybody to trading designed is BlackRock, exchange Thank some that is seamless infrastructure and rapidly morning the the slide and Ben. establish to on just growth past on heard announced trading you, Ben. a more market. X. inefficiencies participants funds have to ETF closely innings technology, we what believe market morning growth that in by early ETFs enables with announced communicate the central decade, ICE from we the income innovative world's solution to for still begin in workflow connectivity plan on This largest Good expanding hub income, over addressing the I'll and transact. traded support. newly this sponsor, grown data that Working effectively fixed you leveraging

made will a to markets, wholly streamline to be platform an owned operated to together While connect by new market BlackRock transparency create source all front and With back participants. it system marketplace. TMC the our the partner, ICE available to development ETF open workflows to and to we and standards BondPoint protocols to be and as serving and seek the office and new bring will efficiency

of way announced quality usually the landlocked concerns. with in The leading providers widened dialogue at example is WTI This crude between as physically from trades in Cushing is distribution Brent is crude Magellan our launch recently pipeline infrastructure, the as one a a Brent but benchmark $XX. a innovation oil only makes it WTI locational oil. Conversely, the crude. discount expect our Houston. of crude by evidenced growing following an we Another $X Cushing, which Midstream benchmark its partnership review, to of directly to Partners, Oklahoma Permian storage crude offtake product legacy to divergence U.S. to This September and WTI price of has for at $X market with recently sourced is Houston regulatory contract much to Midcontinent, that with delivered customer and important crude

WTI solution that us a Permian from in array franchise they we're the global delivery an Consistent of with North serving for WTI crude Permian regulators complement and global Brent will demand an rate Our to to joins working with it exportable predictable of also an Brent contract hits as, that increasing crude solutions, customers we and that tell and one-month In Houston benchmark offers SONIA American crude oils a the customers price against provide our once quality desire. location commercial launch the options array interest to offer other mission markets, now benchmark. crude LIBOR. and alternatives seaborne of three-month our our futures. water,

While their largest the gross traders with billion rate reaching interest traded success £XXX as marketplace and futures. days, in investors we've signs and week this value early European of seen for to still gravitate UK notional

encourage Pillar and we opposed to bring which market we consider reform the trade U.S. efficiency, the which customers. In round proposed appreciate taker-maker list This venues. rebate pricing we technology with our elements the October some market a addition, greater National our rolling both offering. been the is National to global this In NYSE customers Consistent transaction holistic reforms SOFR out and and and contracts including choice one-month equities and during out have we equity equity SEC We why quality that we've our broader execution to to quarter, pilot. a rate across repurposed and National NYSE recently commitment in interest SEC's launched model. quality, plan proprietary model. Pillar, vision, launch we fee also they the to to three-month our markets, into have our of runs the our on

located. SEC, study troubled proposal what we It's we're where appears the why to the what by is is to is the the this consider proposals. reality, the market. volume in that in an listed on looking while a pilot agency broker that free be important proposing recent to admired by its make most collect an public encourage ironic is companies is controls modifications continue XX% off SEC an experiment data exchange, trades the it's that market SEC all establish And experiment government much involves of on price that exchanges. This is to U.S. the to However, actually doesn't called U.S. of to that of beyond making

conclude slide me Let on XX. my remarks

a and platform embeds have cultivates that for customer drives built We shareholders. long-term platform innovation, scales our that a solutions into workflows our and growth our

post-trade our global information trading houses, the information functions, is in feeds connectivity For virtuous in of which customers, and exchanges, our cycle the replicate. drives which into used clearing and It's ecosystem difficult decision creates data to future many making. of pre-trade a turn

So our strong moderator, my Eastern turn Andrea? I want our in for thank conduct business call their another for the I'll and contributed efforts will session, Andrea, customers quarter. the that ICE. by I'd until X:XX to question-and-answer thanking for now run trust Time. for back like their quarter which to end the to And to colleagues the to

Operator

question-and-answer now session. will begin the We

Our Please Ken go first from ahead. will of question come Worthington JPMorgan.

Kenneth B. Worthington

Hi. Good multiple topic classes across tepid happens asset taking seasonality volumes across recently. my think question. Jeff, declined have you and volatility Clearly, jour classes. the morning, among I has more investors there and particularly thank is du to asset and for been volumes be

thoughts and elements question on seasonality I rate behavior cyclicality trading changing in businesses? shifts definitely underlying your is, equities futures, of what and sort fixed here. guess, for of shifts seeing any of that's Are growth secular global volume trading? longer-term there's are So, my the income in your you

Jeffrey Craig Sprecher

tend for physical business, words years commodities is find we're The interesting those good think services oil we the and about chains. ecosystem and the they short that slightly Obviously, and be of in tend is supply which things no, moving our other around that our metals and chain not volatility the different. so lot tend agriculture business, answer and issues one that seeing you've are of us structural to every But to of that And is asset acts issues class that. affects are that's – a really I in there covered the of supply just goods a question. God, to tied they not And issues, be volatility long-term world. to

that fixed as we've And markets financial to much out so the years humans. they're That's you coming oil of there policy I to return policies And are central refining sense Bank of global recovers. as by and words, right XX seems trading. bonds including And mentioned; those certain no well. equities, commodities, well. end act and of of rates interest some Other record in trading be and performed the end there's And other various think humans consecutive markets to Central to normalcy the in like, the why end have no United had world income, to driven banks, and and the the acts countries crisis in in that. financial economy of now around their trying the States very

and manage in acts so that man, – on are but I'm help the bullish a my these long of we those the of fits in risk And world through of to to lot going change. own due essentially used go because starts and products term change there's

Scott Anthony Hill

not numbers were away open interest open you that's starting interested the in people set That's in XX% markets, the XX%. our seeing oil mentioned I year, encouraged people we remarks, market, Jeff's up interest of X% oil because, been to in the wouldn't up prepared from and leading if as guy, about rates so think the I again, That's the to a is in quarter price. in if futures you other And up indicator other always physical I thing me you secular in ags audit that's data aside think the And in that more U.S. up XX% I'm shifts are my saying and thing by open support exchange a Houston see it's to place year-over-year. ongoing was Ken, prior And our oil what for customers. interest more know that's the in interest

we do not only not qualitatively; quantitatively, we're not any seeing it either. – definitely see I So shift

Operator

Rich ahead. Our Sandler next from Please comes question go of Repetto O'Neill.

Richard Henry Repetto

wider I a to I The trying you byproduct morning, that – it tie revenues just you the Good – that? bit the you've gas tie with about difference and you should guess understand earnings be natural is that I guess oil and blows Yeah. just talked are little And better now? it guy natural if to you're the of solve that problem do trying a made, a only give announcement guys. something $X I'm a volume how explanation you I crude little negative then more, but into and about first went volumes current but non-energy is natural right it price more gas of a crude. hitting bit give the to as to and understand it of understand if being Jeff. gas through really my guess could that better a want it's experiencing to you can explanation clearly? if question before isn't

Jeffrey Craig Sprecher

Sure.

I the guess not one. energy from whether And say the you're that's this But not compliment. I I exchange or an so is you as mean defer a think I'd right an argue you something fact not I should become of that coming I going not until first could all, guy guy I started company, to answer. to was

Texas So It's at crude good tradable United I landlocked Oklahoma, been price moving of contract West historically, is mentioned. to a oil landlocked idiosyncrasies States has because States area. are of intermediate around out the which the benchmarked in of United in there and this Cushing, lots oil as very

actually with feed States. the commerce of United and to the and the You refineries and need pipes storage like work

to, lead of we there's and particularly around the enjoy and you much Oklahoma. exported increasingly, to And the oil basis that And is it's benefiting speculative And built a Cushing, basis exported. and there Cushing, And been has surplus business on advent to, the not customers, permutations our flows hedge on, used the to acts States in by to that trading connected to commercial or putting States being price does the what East oil or, allow price areas God export. choose nice therefore, between that they delivered contract by that will, will, Permian Brent benchmarks. people price. from cost exist us oil them and really Middle be in allow United will Houston oil of really more the moving really But But areas, and is and the be of the around the from trade. And course, Gulf and U.S. it be tell and knowledge legacy some mentioned with of hurricanes the customers new goes oil of people it as and benchmark of either it around in really markets. oil difference, energy that and if Oklahoma. of use sending oil, catering the in itself that a oil, traders reflects Houston United then that if commercial hedge where really very be to in will it oil to lends discover seaborne and by price of price And the with which dealing shipping world times representative if create the change Cushing, a hedging that Houston to overseas. financial OTC is creating on you there seaborne the be because oil of trading fracking because would is getting So hedge down will their ships hedge, is we're that in more speaking, the internal businesses systems oil. you which that when alluded of will from of is these affect that contract the studying to able a world the Russia out by seaborne. price frustrated which the area many some oil commercial And other And fracking. the oil how WTI population is a oil basis there transportation of so that ICE calls, been the Mexico to accurately oil will in for they will to will tell also as like price that is generally fundamental will will tends that they're customers there on with with growth, it of I've and kind price be be our And like and trading to elsewhere they've can us, delta ability the of other to customers Oklahoma risk benchmark. they physically that And shipping being at

lot a helped infrastructure customers relationship that So it arrange helped is with and Magellan of our being us really delivery. who by stand for long us contract up, story the desired the short, create

are of a anxious So And know begin we lot we it hopes to to trade. have high our customers that it. for commercial for

in is the shale almost it giving literally that people selling natural new States. the in into these of that in byproducts don't oil are infrastructure discovering areas gas that of gas shale gas many And such and gas have You're the the good many of natural right for for one as natural United putting particularly systems away.

benchmark trades been gas natural infrastructure natural an in And the Louisiana. is the great marginal United that The States, new in way oil market interesting hedge production So necessarily that said, United price has Henry in the is And risen, the That natural did they a Hub, phenomenon. is the necessarily gas for has in price has is the States being benchmark before. not to of gas the increase because the need which gas really as for fallen, business. it of so is the discovered. in low on around gas being don't working basis they of similarly

active Henry we expect way as and permanent be producer oil remains fallen as that will and long over more will We infrastructure United So natural gets an the builds States honestly gas volumes energy. time the there change because the do this think be volumes have is a case. we that the Hub overall, that U.S. think

And so we to think determine has Hub, hubs to some that. of the may the these Henry opposed basis trading yet become hubs as market but primary

Scott Anthony Hill

to again, harkening couple for kind of back about put bit secular to numbers just a not, Jeff the a commercials it And that, around are of gas. a lie talked natural or little is

year our up three on last the average. twice first one to seeing a XX% peers. you in at are year-over-year XX% of growing And at years, market, half. volumes our in if look the Over that, it's basis actually the are you addition That's what

And if bought Then and particularly built. that that and risk, that in an you add very to growth of where sustainable is footprint natural trending on hedging step And revenues think how they're business, natural U.S. years doing our ago, statement. really again, gas commercials is their are come open that's we top confident positively you in in volumes a well, are gas which the index see about year. from going number the the of the our you is where that, European and business we're the we've so platform back and interest where growth,

in the So orientation. natural the volume the commercial relates of commercial grow revenues, we've all see global energy what nature nature in see natural our you we the ability to I to the that of franchise about U.S. you business, the established. talked the decline franchise global despite long gas gas think have, we've And

Operator

comes question of next Michael of go ahead. from Our Please America. Carrier Bank

Michael Carrier

in guidance, Thanks, guys. expenses. maybe more and the Scott, just one is Hi. the on this

the So lower. bit I core see can a on

revenues, look when the seems the in the the roughly expense, probably interest like on they're at coming acquisition, it expenses I breakeven. and Just both in

focus like can of XXXX years? sense get the maybe rate some of to key what on wanted going the about on when the And lot drivers coming XXXX, just that bigger growth the Just fixed like of over income, picture, I on or giving the revenues. growth maybe the extend think what's think maybe into probably acquisition some you the of outlook profile the kind the

Benjamin R. Jackson

Jackson. Ben there. unpack is Michael, Thanks, some to of I'll questions question. This try the for you the had

with the On start I'll acquisitions, that.

way of the transactions. about is think really to two difference think I it

have to of terms integrated of into the platform. just going Exchange business about back That million our is Stock million in this So expense. York revenue is Exchange. The Stock $X year New size approximately to that fully first $X way business half you Chicago in be think with in

gives So an if business that a idea basis. is full what year plus that a bit you on you little double that of

expense [Technical (XX:XX-XX:XX) be business said, I some mentioned fully Scott into New is York that As Stock to integrated severance Difficulty] Exchange. the that going also there's

Operator

everybody. me, will speakers where they to the And left I off. continue Pardon allow

Benjamin R. Jackson

for Thank the rejoining to there there. those out us apologies you. you call being dropped Thank you call. And on the to of

the that just I'll up where answer. with question was going pick And I'll on over start that asked I it. was multiple So had to parts the with

So, the first two so they're on acquisitions. is the different to them acquisition, way about think

fully business back integrated going So that's technology is the Chicago business in million New the Exchange That revenue to being is New at Stock York this Stock be a million half $X expense. York the roughly with year first over into of on business $X time. Exchange the in and Exchange Chicago Stock Exchange Stock the

If of back his year. idea a you half you an more Scott a this is about that bit year gives little on double full also basis. mentioned what it comments business that plus in severance

will Chicago we our you that enacted Chicago that severance into subset so Stock calendar plan is already in year about leading integration have the when the of end to of some in of XXXX. business We XX% reduction some Stock did forward And Exchange up on excluding Exchange to the roll immediate related severance a restructuring expenses business.

business, business. business we're TMC TMC be think It'll we're business excited Separately, execution you businesses. about. when reasons a of really excited alongside of the there's the that business of types is a that's these number that BondPoint about So our and

it there majority they're So are central both order more to RFQ and are a true able building book quotes markets buy on out support. oriented. of your RFQ trading that. is almost compared as side millions whereas vast to the businesses BondPoint fixed order execution And both book electronic execution and as platform, more being It's protocol easier have to a being platforms sell TMC, streamed much the support facilitation basically of where think the email into that of central you income

is, volume to business approximately that with Also the businesses connecting this Other to that connections of things The odd-lot there's more as XXX significant is are it. to the half already that they're bonds in look on odd-lot these integrating TMC for $XX more are double-digit TMC terms two and we've combined with BondPoint. trades business, We've is of to operating lot In with amount connections point it though of going growth on opportunity BondPoint than trading be that XXX odd-lot of it's entities BondPoint, connections the trading than up seeing the out we micro entity which with new seen with A growth to terms way as like think the similar being define is that sides. new those seen we per lot trend both. into platforms XX% less trades very think trade trade. year. BondPoint in per of from profit at a business million very more that $XXX what buy associated have those interesting million than of BondPoint that's platforms bonds business in significant growth in an of and is a of than we're trading. average with To people is

first than and the of that areas also that more have XXX One the seen platform and we've is half. this by bonds in that trade more per fastest BondPoint of odd-lot is trades trading, TMC than on BondPoint XX% the growth in the in grew seeing

coming seen the on The more streaming are and The an to trends. market buyers seeing and is buyers seeing is depth platform in We're of other happening both thing similar into TMC we've amount and both is streaming sellers. prices of sellers equal prices. the the with streaming quoting up and grow, continues the that markets

I'd thing other major Stanley, that that Bank space. These advisors are Morgan three The that's and private mentioned point I remember the banks: Merrill was out you of opportunity that the wealth side Citi. an America of on the growth that TMC in largest in remarks some by owned revenue platform on have Lynch, interesting is banks and prepared to the

Well, of send flow affiliates ownership a to they could their that the stop say happy three pent could was to we're significant TMC, that created just banks send business at As we lifted to nor that with obvious could a the week that that banks not TMC this interest And pool result send there there's to flowing to to where – had a those their not revenue that a sign access they I'm platform. conflict has of robust liquidity and so look get over from three been closed provides. and that an being the sign affiliates, up demand restriction their all soon. TMC it's forward literally

to in also the that of plan, two those going we the they're because each how are be going protocol to part but order – are associated As we different. to integration book bringing platforms we platforms, acknowledge so bring are central trading together, is executed bonds

a a platform And with with partner industry and space up up systems, there systems, create on market friction solution, reduce just disconnected a will ETF around to in but that unique market execution clients to ETF municipal will which together. be piece here. There's help connect. disconnected is to virtuous that position acquired a for has platform new innovative TMC sign we're data, inefficiency trade messaging the our execution our two The are leading the strategy these have in that in to hit, And we solve in last So anonymous creating this and strategy this execution no management connection opportunity venues. corporate the data, open order connect systems an announcement and from name that around on coming all data, ICE our the the into protocols of create you'll that in get our and redeem when pricing opportunity, with we come pools of and for we towards of how messaging space life trends give instant the strategy area details a the BlackRock disconnected recently comments BlackRock as industry. up. heading pre about help was those is into circle reference execution one fact is where very which came Jeff and how happens we're post the see exist has how instant income is process. clear to because a the different from that in a access BondPoint the to primarily fixed come tools question really platforms, morning our found morning and a termed announcement participant primarily liquidity from working to it's post an challenge. what this that respecting and this market things platforms and another combination the like trade to that excited The us the with is the we'd with of the BlackRock standards has prepared in constituent to ETF our BondPoint TMC single as growing execution find in And primary trading of you look comes rapidly This manual that I'll analytics participants data

is the a We to participants advance we're look So this. partner this excited committed industry development out to BlackRock effort. more reaching to for forward

think things I one that's of to sign just come.

Operator

question Alex of Please comes from next Goldman Our Blostein go Sach. ahead.

Alexander Blostein

taking Hey. question. Thanks for the

first larger expect and longer-term we strategic like versus guys sort term given kind of tried to think historical of which on or of in of available become to by acquisitions of the the you've us for be we to build of something there might accelerate building sense So a vision? you kind sort the terms your topic, you you just change I guess end should as follow larger scale do in guys really I to year of you here, And – at guys dilution targets give things whether accretion out expect the EPS get capabilities growth a the near are more terms on deals of should M&A size made recently, maybe credit or bolt-ons? can you you

Jeffrey Craig Sprecher

a It's outlook. Jeff. question. in is good terms of this has our changed Alex, Yeah. Nothing

buying infrastructure buying buying index ourselves than or buying now than a marketplace, an been self-indexing diligent out bring platform I things with and business pieces things building business a talked we ourselves capability to that we're tying fact then openly we've that that talking and is of develop. opportunity think been a think pricing muni pretty instant we've out are clumsy about and gaps acquired growth very pretty building the we back the is think than a data and a messenger that fact of income well fixed fill. will how about if those you that happening how We've evolving there our corporate think building income we And and quickly that can together. the reference business workflow all the about together by with about that platform we've us and we fixed trading the the and spaces that that have and leg space powerful and tools and in pricing in help the the equip network, that's next set the infrastructure drive

opportunities really none where here, but that And faster. indicated the So what that we that much accessible of companies. EPS look our running marketplace. large they have I'm the sitting opportunities the growth. to with next But of look will market certainly, to hate give mentioned, be you've get that growth, are bureaucracy, necessarily buy to we helped And love us us to today unique need so and making within enjoy discipline. We us fit we can get always people talked the always M&A as Ben for for And build and can has is anything is just advantage, bolt-on that I as unique we leg, we easily things, us transformative. about, tying don't a versus to some all together We faster. it

difficult, the as And something look EPS our firm we'll the Those are change of particularly our always culture at help long so, won't run, will people you very find space to us and in companies if it. we've got priced that a of and in discipline. have growth, to we acquire but time can various are very good on tend lot our really good for and companies be spent like companies hard as and written

Operator

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

Christopher Harris

Thanks. in Scott, on there off first the of step about that is down to nice a just just in is jumping quarter a seasonality guide, the some which know a data revs for a next year? to good or that quick think as one I'm wanting in up XXXX tick might XQ. point perhaps we lead number

Scott Anthony Hill

It's improvements business quarter. from No. compliment We've to the about. that It's a third the guide. in first it quarter. feel good good appreciate question, the we see on a really and seen sequential I We'll quarter second

seeing And in will you're What in that quarter. seasonal the the it build boost are quarter. We in the fourth they're a getting we not ASV. is see fourth

look around we've that's the fee prior the But what path and is X% so really in I the what guess, revenue. X%. And at X%, in think X% will quarter. of revenues the year, been quarter of second around the we from You would you the ASV towards at back in said growth year data for grow of half overall, adjusted pointing at least have audit first we sits is the terms

which of get accounting growth Bank to organic America we a Lynch building of reflective but now, the towards to Merrill will year from ASV. nice will the seasonal, indices, count. time year, where be all up not So the start right are the on XX% end it the By thing they of ago, were the

And so a tailwind. that's

that count organic move in XXXX, growth. will to growth we towards As business into fully start

another good the has pleased sets we're headed up pleased so with We're year. to with XXXX And where I think and now how it's business trended. be

Operator

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

Kyle Voigt

more be on Hi. LIBOR. regulators LIBOR some the of the their guess, benchmarks. transaction-based alternative quarter Good that I during morning. one must global to reiterated stance guess just prior I migrated I

longer-term. participants get it sounded a on like a Just if thoughts benchmark as Because quarters and market you updated viable maybe curious could LIBOR we other some some ago, couple of the methodology pushing that viability the and the some benchmark. But prolong making on regulators the optimistic calculation LIBOR changes to every potentially could now were is license back. future of of

So any will there thoughts great. Thanks. be

Jeffrey Craig Sprecher

to continue market figure for migrating historical responding we've to is that opportunity We And been new of And that's there market LIBOR imagine And the about There's look new benchmark and and that that people have futures many get business and see those contractual can it other business. regulated to alternatives. try supporting actually business are no been as Sure. we've SOFR on well. and to SONIA to that are launch rates. why regulators you those historical responding. doing urge have been an if to the to question developing urged out are of are alternatives for to the ways the is with and launched people

rooted is going LIBOR On ICE overseeing administrating from on how transaction is migration well. the that and by published more transactions. less away paper LIBOR large that group estimates The in side, will to LIBOR basically is is white migration it increasingly become has is And and business estimates. rooted migrate a in that there a and

will confident for some we And a business had legacy will able that difficulty that more LIBOR my the will of contract past. can net won't net that in contract, have in we're be be that the adopting business benchmarks safety these we that confidence so days, the new and than new that And robust that transition give there. it good index there early and think it make a to very safety be for

of have the honestly. on last sides both quarter activity these to going up it's had about a in So and and double-edged it. more lot well serious we leading kind alternatives strategy discussion a been there that than And

Operator

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

Alex Kramm

morning, thanks really I the the come first for But to Yeah. Wanted guidance of back compare and data just to the way, all, everyone. of the And incremental the some guidance guidance. helpful. Scott. new to by with Hey, good It's outlook, disclosures. wanted previous

included currency I then, should beforehand. I you said organic think for even the year, X% I said the or even think be and X%. at this X% without you But currency, know So previously, full

X%. to X% saying you're now So

know things been You maybe any the mentioned implementation. other draw a highlight been MiFID some couple just and you in of audit a I II year. And throughout also fees could people the I particular like some little and could Europe slower. running think have excited very items you've the upside. But if that bit wondering thought

coming wondering some to And us just in as million it real the a data you if quick, just short you number fell in and give exchange, feeds from well and are the related that that think So identify acquisition? now too there can are those. Could remind Thanks. on that just areas dollar TMC market well? you as national us,

Scott Anthony Hill

can't I million add won't number dollar a you give that. to up it because

say the X% to coming back, X%. me to really But – not But it's put I to X% question. let's Alex. a in step It's X%. a So data aren't It's did adjust those let fair question. now good plays. perspective. We say did that into that year

in So XX%. that to Bank of a the on us be. are I'm but or we're are X.X earlier $X which why credit off to we that you mitigating million about right absolute million billion little coming take off the see Lynch it's expect business has quarter $X.X a standpoint, grown taking I we $X business, an $XX that guidance people $XX dollar not into the year bit. thought point indices, we or give noted any means from million and around in Merrill the where it, for million what

in year. if remarks, little about thought a it all of are net it what versus where talked we're the places so of prepared into kind my coming And you bit I we a couple short there up,

is that year. in this XQ I run news the We to contracts to XQ of year, next have of connectivity next XQ delays quarter. what place mentioned that first year The of will saw second this some some good year XQ run means The is implementations. is would

out here bucks. So, a no few total, in little just that's slip a lost bit million of a revenue

to there. NYSE last an than overall as down platform, is industry. what don't a really we million the is won't That's little And More got the won't our are revenues strategic a anymore. and you into bit coming again, a that thing, are and come we've is little coming retail direct our in want the faster a you softer desktops feed. importantly surprise expected. this really we're desktop particularly then And we not few not People optimal and seeing the prefer data consistent They dollars thought eSignal, a with year. the you, platform off surprise it what Tape than

years, that's for So year. it's year. a by a to a growth. over the going that be again billion every $X.X is XX% course me good exchange then feed the doesn't an mitigated take of years, back business, single to three the business got run now pricing about going the and the And a few we've The few and you grow okay and a the can data the It It's about dollars go organic a areas, grow you past a grow to the as it's is in in year. performance well. connectivity I's to areas isn't X% back XX% say two of which grower. few grower good rates growth reflected side strong and specific business analytics over But a to million talk X% you the three futures business, really on me for tell index of step XX%. for that

guidance, said And connectivity on still analytics, revenues that's in I'm right you coming the we're and feeds X%. pricing putting there and and good into XX% numbers X% by and So the it's we year. way, the about up the XX%, of our year telling talk and

overall X%, question, the the be forecast in analytics, a feel where the and the very the coming $X connectivity growth as the performance in strong of is positioned, where back business response X%, in of Yes, indicated acceleration in overall, and in of as the thought I versus $XX the feeds ASV up million light into year. in ASV being data we of have probably about and $X.X So confidence we acceleration the million we'd billion we're year, so up in. the But pricing earlier feel about the business. good And we move this to XXXX. guidance we gave we good being to back half the we continued half total,

Jeffrey Craig Sprecher

and at power is, just data equity the that term decline. more was point – long valuable. you about been comes that somehow the in that valuable. if equity that going it's the the that people you The not there's Scott perception said reality that's is, exchange up competition. we've look is trends, is or the write And could out pricing cheaper put exchange less false being area And still that articles becoming that in becoming read and transparent somehow robust of reality long-term The data on been things that the data groups, more a Exchange. somehow think, of New to York created large And Alex, Stock I

the be long term. to going that's that expect case We

going market's the get that expect for that data. We to to cheaper continue

smartphone and As go we free up can price is you the all your can for long-term that know you stock now look on a and trend. realtime

open we've believe people power we that pulling pricing industry just and out is this area So the growth. so not about the can that an it is that been that of more change in what narrative exists is this not

Operator

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

Brian Bedell

for it I view your right very income. the sort there. growth And additional much. and of thanks also get just the sure just have Also helpful. want Ben. description It's Maybe folks. thanks I morning, make Thanks near-term really transparency. of Good for your fixed to on for Great.

annualized roughly BondPoint, its like the third in business. in rates. quarter about And – million million about in trading then income rough from starting the fixed third being at it looking the $XX million from in maybe we're TMC, looks So trading numbers quarter at $XX – entirety run legacy $XXX about CDS million the from $XX

if organic from you things before, getting that how So mentioned you're fixed flow that's the sort rate? that BlackRock XXXX trading can starts think wealth And you then do market on confirm you including the able weren't should could of the we income management about things just you a improving then about those from of broadly, that right. that new when and that revenue also that as will growing first comment the if not from and is or clients to that revenue think your perspective? into just that run in if that initiative already when And start contributing how

Benjamin R. Jackson

Sure. Thank the for Brian, you, question.

are say $XXX business with revenue TMC million as that in stands So mentioned the and an annualized profit. businesses in we're BondPoint million I've about basis, $XX it just talking combined and, when today, on and as operating those I

have that lifted restriction just week that interact little a think I is that the I side, has I particular a mentioned, with lifted fact to had being sub-custody mentioned. that are space there in TMC over wealth pent-up with a just been we've we sign demand advisory growth the that private revenue, and again, with from closed that believe some opportunities, revenue quite on and liquidity already in is the flow. banking great ago significant the restrictions on the major those affiliate interesting there's space banks As that wants that in and, The

get flowing had integration on you that you some – a both connection into will access our the liquidity that with point I pools, to of towards So can of at exchange businesses businesses. bit other given get see view creating a line combined the that near single I customers term business, earlier look so integration little over if the look revenue that color margins these the in at

a has that, for that'll be so to that about BlackRock partner of In opportunity, with new you and ETF a as create/redeem areas that asked BlackRock number generation a the of ICE. so opportunity wholly question for development the company addition owned platform subsidiary revenue a

in and about areas process order-taking. the generate revenue of and it, just think opportunity of you As redemption creation there's to that for

instant You there. have in messaging

You have data.

post and trade pre have You analytics.

You have services for authorized participants.

and as have flow third-parties. and as third-party as other connectivity You platforms as management execution from that systems well as platforms, system execution would systems order to Aladdin, management and such ours to execution execution third-party that connectivity well analytics like

mentioned opportunity a industry is the for are revenue, in only platforms of needed company real this So to trajectory enable and number the continue also I'd investments generate continue. continue expecting to ETF different there future. to is in a that for The new we're to a to start to for the solve that expected growth to great before help market into come as live but these the there growth to areas participants And need not XXXX.

Brian Bedell

are incremental on TMC? wealth and above management then, of And to side trading and just $XXX will million initiatives CDS $XXX the million of is the over that that also be to BondPoint, – clarify the

Scott Anthony Hill

it's Scott. So

got a we're of view of credit of terms You've bit what x-revenue. overinflated in an doing

discussing right So I is TMC around million. think and Ben BondPoint in $XXX as

it's add above all a the little pieces only in together, You that.

said, line and, near of at top I our a opportunity expand So think to think business and if lots you as starting $XXX about the margins. opportunity point growth term, in businesses the lots bond Ben around as importantly, million on more of

Operator

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

Ben Herbert

get Hi, to if border on the over course you or all just has take coordination at improved regulatory wanted sense the Thanks of might taking for good improve cross a the that and it going forward? Jeff, question. year get your morning. just

Jeffrey Craig Sprecher

so at very I it I guy of middle around policies inflection the Brexit I'll trade globally world. the and going point the guess middle right a forward. of glass-half-full improve now the a might think I'm we're But take difficult the renegotiation in of in negotiations

various We And global feel so these the trying a about network government that regulators real-time. systems a made distribute around out basis through spend various down fair our we to changes. work dynamic time It's amount to in decisions to going the good day-to-day marketplace. on a globe. happening friction their through figure we through of Honestly, there's in how filters and

in We a house clearing London. regulated venue trading and have

our talking and regulated may pass. on worst in the of to trading Asia. business. thinking fortunately, there trading to growing inside in trying scenarios of and moving what contingency really customers moving is venues the moving being some interconnections regulated but us also moving in our separate in a of those threatened. much case you some United of and are And about where our on same inside customers the there going figure files and still my plans is do of And a have And are a and States land interrupted lot same clearing technology. because for with clearing have hasn't on so and means comfortable their Europe, company to the all might all we we venue to separate various the thing platforms people think and really in things we're work We would out a And change We're of relatively and come feel the remains business not really position where been forward. businesses if lot customers, way Continental move

I'm now. might next on will point but impact So to out will right quarters market exchange that flow economic the go. where we at also optimistic rates go personally I for I two tries of and that it expect expect really that our foreign as the kind pinch are figure

best try Scott constant basis. can, as a you on guide And currency to we to so, continues

Operator

of go comes from Please Jeremy question next Our Campbell ahead. Barclays.

Jeremy Campbell

guys. it. know so of near here, we're end I Thanks, time I Great. appreciate

you lot to in you touch one. highlighted guys Ben, I So going points a think quick here. that with have BlackRock of your the a different are color

is So think to when on growing mid the all about when of the kind opportunity, factors additive or to we of side. be think data kind it you three next of think at about side like partnership we long-term to revenue about sounds But contributing kind it transaction BlackRock of two can years just the the the data kind the high-single-digit? of is accelerating that going at those guidance one your to over extra of really growth coin, keep

Benjamin R. Jackson

comments, there's Jeremy, owned of as will areas number a the would And earn ICE revenues. of which mentioned a wholly past just company the be different thanks over I've for Yes, that this question. subsidiary new

redemption. as it revenues transaction have order-taking creation and relates you to So of the

happen participants interconnecting all can of form standardized platforms. execution the take trading into ETF you But revenue our these You've connectivity that's got also have the system messaging would recurring on in that this that marketplace.

to OMS execution this third-party be to You've in Aladdin and other also and on EMS, systems, third-party got others associated that also platforms including connectivity will data that's there.

of well And that this mix as execution development that'll the is revenue this. both committed be to will thing into associated partner a to out recurring it be a is as opportunity. point revenue So other BlackRock

in reaching team type continue will hopefully And the help morning, lubricate our has growth these We lubricate with positive participate market press that the other are and effort to. can future. growth has the historically, this create business been seen out inundated to welcoming important that since that calls into from and this standards that to this we're out that release very participants phone came feedback of

part thing I'd benchmarks out switch June, ETFs. largest point in other to that four of ICE of The filed as their is BlackRock our corporate Services to Data for

major we index to support there income provide fixed as where towards well data their of in we a our So self-indexing services utilize efforts. providers can see trend

Operator

conference and to I would closing to answer for turn any over question remarks. session. our Sprecher concludes back like Jeff the This

Jeffrey Craig Sprecher

all Thank for was dialing after for cut. back you, this in Thank you Andrea. Thanks your call morning. the participation

going third quarter. results inconvenience. to report And look for I for forward Sorry, you a morning. good when apologize we October that with the to our speaking in we are Have

Operator

presentation. you connection now has the conference call. The attending loss Thank today's may for for now today's apologize concluded. We during you disconnect. And

Intercontinental Exchange (ICE) 2 Aug 182018 Q2 Earnings call transcript