ICE - Earnings call transcript Q3 2018 | Intercontinental Exchange, Inc.

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Operator

Good morning and welcome to the Intercontinental Exchange Third 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 note this 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

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

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

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

Scott Anthony Hill

from today. billion. X% & to revenues third pause million, up Thanks, be Clearing slide Listings revenues start currency expenses Trading an of I'll of adjusted performance. the third net on with $XXX were revenues acquire morning, X% foundation Mortgage stake the and year in our margins year-over-year. us early million, joining the to XX%. for year-over-year I'll will were to minority $X.X everyone, totaled ICE which the increased consolidated Data quarter thank X we Warren. net some that key totaled our $XXX Services. for increase operating note quarter exercised versus of quarter in an Adjusted highlights you last here Good ICE's basis. & and organic $XXX operating October on million MERS, option remaining constant X%

Mortgage in operating be ICE will Clearing and in Services reported results & included segment. forward, Going our Trading

quarter will With the the the million lower fourth quarter. in change, other income versus $X roughly be third

ICE Continuing the true-up quarter provision. drove third tax guidance. XX% highlights, tax clarifications range and which expect $XX our the adjusted in was expenses now fourth with a corporate U.S. quarter expense to revenue reflecting reform Services associated million to on million to be $XX with related Mortgage the incremental million in $XX we quarter million adjustments of $X of year-to-date tax around our top However, other to rate prior our in

we rate XX%. and Our and between be is tax adjusted expect to XX% quarter year-to-date rate fourth tax XX% adjusted the

have during to from shareholders adjusted Through helped nearly dividends. cash of earnings record the billion. share All of an of XX% XXXX, first repurchases per of increase to quarters quarter generate operating increased factors deliver three $X.XX, expect to to of these through XX% billion the we XXXX. And shareholders that flows of third record a $X.X to We've returned XX% XXXX. $X.X a and continue cash

act six opportunistically in in $X us billion will dividend announced January for next with over morning authorization the expect This again buyback we arise. and this XXXX. provide buybacks the should Finally, XXXX. grow flexibility capacity need once new the please note And of importantly, new to to we beginning that a authorization quarters,

I'll slide provide of the to increased X Trading third our turn revenue please year-over-year an quarter. Now, Trading & overview X% in where & Clearing Clearing business.

While and options futures impact. third versus improvement trends were last down in volume year, quarter that RPC our mitigated

importantly, More over October, by level In which its is to interest strength WTI through interest virtually and years. quarter up been XX%. every the driven growth up continued five oil, asset class. interest tracking is OI open open day and one is is remaining X% trend near with third year-over-year in higher has This highest including open across X% in up

OI up up And politics of bank interest backdrop XX%. further continued the against and with For finally, uncertainty associated EU central is action. is ag, XX% open rate's interest Brexit,

for versus September markets, As interest guide increase XX% strength ADV gauging our year. can while as well financials oil year-over-year, XX%. of and in in interest health up our is led up Russell leading up the during XX% proving are and derivative October the energy indicator of ADV volumes open year-over-year. volume we natural XX%. recent the volatile as year-over-year, in volatility XX% the up with said, growth many to over of markets options which Overall, excluding and complex by that XX% and tracking our have periods. futures during metal be October. helpful of in our rate And of a gas, volume is And strong are a up Ags is the rebound prior equity our you in growth volumes is clearly is in the volume, is see complex, consistently contract in volumes impact up

discuss I'll to Listings slide move segment. Now, & let's where the Data X

Third currency fees currency result NYSE entering an despite quarter, consistent with This quarter the basis organic was on headwind a business. grew our million. Services constant related softness connectivity small $XXX expectations within to X% our to and revenue Data session

continue Data we This volume some activity an the basis. begun As as the taken exchange Futures a growth customers currency will in on opportunity during by in technology, have X%, quarter. to third rationalize data X% of Pillar expect slower more and Within new of our number efficient up even was session, constant we market, continued the organic in migrating trading of reflecting to the fourth our Futures periods have quarter. dynamic were interest driven revenues Services, data year-over-year

to ICE constant an was revenues as X%, implementation Connectivity our new mitigated from execution the by Moving currency Feeds grew basis. X% and and on prior up Network the offset consolidation business. This Connectivity, organic customer Feeds versus Desktop which was but double-digit revenues, improved legacy Desktops sequentially. revenue the declined growth was onto continued year, and impact stabilized and our of the network by Global in

Analytics our a nearly quarter up were total our of revenue data and revenues, Finally, X.X% half on constant represent and organic of Pricing basis. which currency revenue, an

reference X% tracking in and generate importantly, up fourth in market X% X% our first regulatory pricing confidence core ASV nearly can you XXXX. the environment quarter, As customers' And strength continued start in this giving an see in and the finish and continues year-over-year is in data innovation us the analytics momentum and an business. to X% and acceleration is of to XXXX and XXXX slide, evolving entering to strong half for pricing meet a this needs year. on from XXXX, to Product

to and currency you'll companies, in the industry have last venue NYSE Data Total business see X% X, continued The X% premier technology market an third constant corporations services this thus the which And solid venue our with through well billion volumes share liquidity revenue Pillar solutions IPO We NYSE the connectivity listing associated market. XXXX. proceeds remains the X% this our growth growth investments revenues been $X our basis organic the far up year. year-to-date listing IPOs Next NYSE NYSE on solutions for revenues currency unique and year. drive on global in XX Listings contribution Improved as in revenue as helped XXXX. in are organic have billion. XX yielded trading as over American, National investment the and gains trading X% this very constant basis slide of finally, growth for such grown in believe enhance from raising and and Services over of provide choice NYSE small as position $XX quarter. an competitive data in that has both additional has on recent such NYSE cap of

volumes the the prior options in cash flows strong that over our open Importantly, revenues, trading we've efficiencies and shareholder NYSE interest and the futures In that is in build generate note XX% I'll continues with year, October X%. delivered summary, returns and coupled total versus around to which business are contribute are revenue, record of XXXX. since total up helped enabling our XX% XXXX, acquisition our up business, in

grown entering ASV strong of quarter will X%. Analytics NYSE up year. And delivers and revenue, revenue, And is the flows. this which a Our grow is Pricing X% fourth generating and the has our nearly X% total quarter nearly cash

allow provide success combined a billion over additional on Ben to on us return over but has and your of the strategy. XXXX. to record track we of XXXX on strategic positioned All $X we'll finish I'll this a call even to strong to hand growth. to note in an shareholders, happy We're take continued to spent questions to initiatives now for cash our Q&A, our bond our update in have as future enhance to be during amount

Benjamin R. Jackson

X. on everyone good on and the to begin morning Scott, Thanks, I'll slide call.

transforming. uniquely address connectivity is reduce are are lifecycle landscape these services, comprehensive fixed customers that and the exist of portfolio looking Participants and and and advances are frictions of and index needs efficiency products the our we ETF through trade for to income growing the across structure suite increasingly to X,XXX positioned solutions and today. income market model. challenging evolves, technology As traditional more With our offerings, the service regulatory fixed over our

down Hub, example day, and first trillion-dollar a trading announcement and portfolio productivity A industry-leading we ICE technology, currently number continue August with data, we past workflow, service. leveraging is and market Trade. not from foundation full the our rebalancing participant this auction has response capabilities that The primary for initiative sometimes to and data, will feedback growth. a reference to service arisen The portfolio of our to to execution tool analytics a the ETF sponsors this lay example from to ETF fund index our if industry create-redeem life our quarter. ETF to expect managers, bring this its launched of robust ETF complete. second taking pricing was Credit disconnected improve ICE hours, process of pricing data a The BlackRock. and Leveraging a large customer network, reference coming is a In

to benchmarked the them flows, our capital absorb error, a while reference underpinned of asset enables a managers largest tracking and utilized world's indices to against trade to the data. limiting particularly product, funds which portfolio efficiently and quickly or reposition changing when those have pricing Some are by leading already benchmark friction

The initiatives already fourth OddBot of and are a Efforts include third micro order customer growing systems in to underway to execution trading. area Aladdin. management client including are streamline number party connecting and to examples will the partnering in These third and and Charles of response electronic with providers, order of workflows. in River demand

the combine industry with the as in price they and speed, liquidity protocols electronic our click-to-trade to comfort additional looking gains RFQ Finally, or found are functionality. trading, well-established quality with streaming execution

larger While our streaming illiquid the helpful tools, technology instruments. highly for to sizes simple are RFQ and trade needs price compared relatively underlying is liquidity

And enhance logged capabilities enhanced day. our third trades over we volume, into robust already this requests our to which the all-to-all platform, XXX,XXX quarter represent working are XXXX. handle functionality over XX,XXX we execution XX% close of in of RFQ existing integrate will RFQ and to per which So our

see across And on challenges we to to the in progress beyond, and we opportunity and so customers forward solve this tremendous look partner future. I updating as you our look real with asset to to class, our XXXX

Jeffrey Craig Sprecher

Good Thank you, to morning Ben. everybody.

markets nearly exchange fact, the $XX and over major available surrounding I've to world. that to efficiency, Today, no banks owned managers, investor exchanges is issues of and and our to they've Today, transparent transparent this equity response Street of cost, the costs equities really the I why generated market guide public. dark to result to and Street little is and across businesses brokers. Wall begin in statements information five U.S.-listed decade investments, equity stark that latency, were equity public who of some improved to brokerage are owners. just our is by when is the discipline U.S. the X% evolution and or the of and for half industry markets it guided a are are free to romanticize. Today, pools decision-making, than estimated of have lowest a markets. to of data U.S. equity the market many security free banks like exchange cyber-security, to exchanges as that the data exchange Wall been that rapid so we acknowledge U.S. few owned to by companies many marketplace. York our capacity. total notwithstanding services year. for I'd advanced Exchange at and is lower New which which the me, by markets by state be lower trade the to public one suggesting equally the last [over] that caused trade the of slide by offer than like that and thought in profits reduced far the trading price the world, and the critical NYSE on operated those data a the the Stock banks fails Before rhetoric It than the public recent my information competition capitalism for fails of believe in to has disbelief for-profit U.S. brokers X, most the to best be costs an ago, interest discriminatory somehow This acknowledge the equity-related address their nation. network era contrast of services years It that direct retail not the the of markets. also competitive is investors the most less resiliency the of colleagues forces to And such status in impact top Exchange is balanced The imposed interest against in and state the in increased billion certain benefit the the in were in at technology IEX current not trade only was and competitive similar was saddened exchanges suggesting of a falsely a power the those same many a XX% investors access costs XX%

from And multiple today and markets, years the here state on as markets XX transparent ago, thoughtfully that estimated years public messages In I number the the we markets the a processes price from that capital bandwidth era. XX in was estimated the economies most known our flawed listening those have world, are a policies only fact, the per as SIP it to regulatory SEC the and fiat. ago. operating times and be market to been and come now same exchanges. aimed all public the are time, critical estimated from ownership participants just equity five why three they're tape the consolidated options what procedures of investments peak messages of of they These of accomplishments is network OPRA just benefit consider exchanges, able did tape hope that the our technology unit all unequivocally were than lower on advancing of technology our sit And the improving as years five regress which of and statement that result liquid before improved to be from of recommending known the up XX% ago. scale and competitive public and the resulted to not an very at we it the to At times from past regulators were Americans beneficiaries

a value information discussed, a to has other that on, a our but the now initiatives of we we have digital our over apply such minority early driven see entrepreneurial for in And we ICE we Ben assets. transparency investors shift technology and to exercised inception. areas since only growth that to Applying itself our blueprint, for efficiency remaining mortgages This option expertise purchase just to summer, prides decade. not income is to stake. markets fixed and a October, the that the and MERS, for that strategy technology opportunity and creation Let me bringing build run to mission playbook the also as completed in that markets

X U.S. familiar million, government it investors registered workflow. data agencies. mortgage parts DTCC MERs And the soon The market. is some Mortgage our for spans and electronifying the not million residential will for years, you're loans electronic system. those XXX in to it called the ownership banks, XX% is help has from States. mortgage X,XXX now is repository Services, U.S. which of goal mortgage number is as registered or over with the and ICE unions, newly rights residential of If an changes Essentially, and the of Membership United in being looking efficiencies, be grown servicing efficiencies originated loans it servicers, the beneficial tracks XX the the past credit mortgage bring over to on the with the market over of by interests

our Solutions costs trillion $XX help will control offerings launched reduce a such newly and paper eNote what for greater of allow oversight market. is eVault and as and

for take digital to spend blockchain and for platform. by ICE, a still up we able at its will we we've and clearing And assets waterfall warehouse delivery plans back management, served this fund as risks most and and by the markets its a Bakkt provided that first BCG, for do of to future announced segregated at of digital possession members to head recently clear crypto customers frame first institutions storage growth Chief that brokerage over August, type joining development White is new but to not have which and ICE to and to with led first pending today. This is be will its includes their for in formation is separate infrastructure. physically-delivered and workflow the Adam studied Bitcoin nascent of will leverages in on in in at security our responsibly to Adam roles infrastructure sell, be assets and serve asset partners is Microsoft This In growth and market innovate Loeffler, solutions and from Bakkt enable of Operating guaranteed Bakkt of time. including bank talking consumers out and to continue Officer. gained one a to in that the to clearing transparency with the their deliver ICE and set both you members buy, it long of phase, a We're are not as US. product, was which seamless in where month, Bakkt asset cryptocurrencies, from her the warehouse who Starbucks, Coinbase company, institutional instead employees a already premiere and In opportunity of approvals, digital the technology the and announced Clearing launch daily in and Another class and Risk leadership $XXX markets. Kelly CFTC work the billion space. December, our a of do more the we critical House physical ICE's of exist designed store for assets. help deal this developments many with institutional know approaching Bakkt we've saw CEO, others. group We've a is Committee solutions. need a great institutional-grade past risk a of approval customers The manner

near growth that with such results. opportunities over you'll opportunities in products, continued term these year-to-date executing medium the we've income new by as longer on term for as Services And our In our their want and the Bakkt. for fixed at ICE years. to if innovation the business consecutive to their remarks I'd Now, will and efforts back lay initiatives foundation to the earnings the until turn Mortgage why session now FinTech their XX you strategy evidenced our with term XX, very for such like for the and contributed ICE. and and grown conduct that X:XX thanking we which revenue our uncovering the to slide is quarter see colleagues third for another moderator, my for call to thank quarter, trust I customers in the last my strong question-and-answer Time. and I'll by Carrie, to conclude AM as Eastern turn our

Operator

Thank you.

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

go first will Repetto The ahead. come Rich question from of Please O'Neill. Sandler

Richard Henry Repetto

Ben, Yeah, the bit the distortion first, – trying the extremely Scott. just to morning, because just easy do that I you to hold of guess, added that good now? think for of electronic little income It what just information lot there's it equity there's exchange right was recognition morning, out portion there will are thanks a just and I seems it the was and your in been a market? because uninformed it stay? and optimistic capabilities thanks on But comments add fixed I Or the anyway, for a a certain was good side. slide U.S. information Jeff, to is sort so like let looking And of it's on licenses. me the fixed the Or the And a – go or at the on markets. driver. this you've Is now place was more RFQ lot to model. subject income something of RFQ change that's see on X

Benjamin R. Jackson

and thanks, Rich. question, Great

ETF step providing the of that starting at hub BlackRock response we've why to for quick solutions we've the pleased to that. industry, and fully services think, fixed to to it. our to back, say we're comprehensive are on I suite that across If fantastic out reached and you our customers But the a just that appreciate that's realize customers getting doesn't with I'm take we're market they're the announced income. coming us And present, like that

out asset it our we But you at right when fixed comprehensive that dealing past manager they're the connecting, strategy look inefficiencies and just landscape and the and and market-leading across have already with post-trade income, launched integrating, that portfolio in assets have investing fixed it, of of a rebalancing with our really pre We helps and large service analytics. this gate. the in customers utilizing starts problems dealing with income it solve that quarter they're

bond You and have conditions. for golden data our terms record of reference

the both source end-of-day pricing, as for as millions are trusted instruments on of We well intraday.

looking possible and TMC to execution much substantial. executing, ability When of where index the Merrill ability and And the the reality be – you these bolstered from, as for BondPoint, best the fixed customers that pretty and for you're instruments expertise price as And it's whether significantly build. as and in illiquid is such handles a capabilities. to that What to highly Our ETF venues, in million to came relatively choice choice RFQ through our handle income BondPoint of hit easy is service, NYSE is Bank where which XXX we're it That's provide Index via streaming to is America for do day. our you – is platforms execute. – started price, the to robust a with now building efficiency the example, of or have updates have with option for RFQ Lynch streaming was acquisition. that liquid us to the get protocols instruments, or may auction to provide

You're on BondPoint, XX,XXX securities. where dealing with prices, streaming

on XXX bonds of you can If a screen, trade sides. go both their single onto you execute

choosing this already continue felt for chooses. mechanism. streaming we market provide platforms people is that. out So there And so RFQ established protocol But us. that are growing have wanted that that's have choice and And an robust the had where to to we you these

Operator

Please next ahead. with The Worthington go from will Ken come JPMorgan. question

Kenneth B. Worthington

Hi. Good morning.

could portion does like segment trading? access for your Exchange In Could connectivity, could on Connectivity And against connectivity the NMS? of us your connectivity. suggest discriminating fall where business, the frame or under to about your that of and XXXX data you of critics or meaningful easily part terms evolve Reg Desktop the a Act you're seems particularly could it SEC focus conversation of more help the

Scott Anthony Hill

Yeah, Ken. It's Scott.

ICE connectivity runs our we've is said, So single as Global a the that business business, Network. across

report to And we as thing us connect to thing. so single at is because a we trade a customers And single it the who NYSE. it have

We who to to consume have connect data. our customers us

trade futures customers connect to to We have in markets. who us our

at look and a any it where in really we will, the more need They remit a see the the or so world And particularly And simply said, clear us fair. as down it it it in bring didn't report were they was business, detail. further, a to you single challenge not SEC whether accordingly. fairly don't from if break prices that

threat one, as don't more that it to so a us And at in business And require pressure. that under a look look we under the business provide future. bit it We may I'll point or at information simply to growth. as a out, continues see capacity

unit continues significantly, to year-to-date of business Jeff the mentioned coming down but capacity overall a XX%. basis capacity grow. is on up growth cost per Our is the

single as run continue So We single we as to thing. do. it thing. a we'll it And that's a what report

Kenneth B. Worthington

you. Thank

Operator

of will come from The next go Bank question America. of Michael ahead. Carrier Please

Michael Carrier

Scott, first guys. Hey, one. Thanks, maybe

been volume Just backdrop. strong. October's on the Obviously,

the over been transaction business? the Like we the driver few Just this the on sense it a next get in because But better part the into the October side. expense if we're your margin and to give – about didn't update of the but quarters incremental wanted thinking levels, environment how volume big XXXX. not maybe any be just You the of we're backdrop should growth. in this from and hasn't

could an to on the wanted update margin. it for get I what just So maybe mean

Scott Anthony Hill

a It's question. great

expense and to volumes incremental and of question, about. noted has to interest built there forget will last there. For why that our be to comes a And people half the business We've built part people no pointed is little revenue, that even though our over year, open volume and it's built powerful growth. very volatility to that's directly so that – that is because with hits, when your seem

the are incremental margins so And high.

that based rest – high of growth, historically, so XX% that open expectation, deliver it's so quarter, October on tremendous delivers volume the interest – our as margins. seasonal and holiday some that and the fourth as in volume growth noting is incremental we that quarter as the slowdown you've through And see over seen really with it that's continued you'll typical growth, runs

more high, $XX And it update & than you Clearing $XX But so regards offset of changed, to that we'll said, $XX million expense to as related margins expense we other nothing because grow, see the million moving that with to really growth. expand, forward, doesn't guidance drive are by didn't add volumes million $X and the growth MERS, incremental million you'll the to really as business, revenue. Trading will overall the margins than

Operator

come will ahead. from go of Allen question next Compass Chris Point. The Please

Chris Allen

guys. up Morning, the fixed to follow Obviously, wanted developing on side. just RFQ. I income

on the there? And in incremental BondPoint. now get maybe us follow-up looking they've Last that? in you side. of the speak wealth give of managers impact as any size the just largest to terms You're had and institutional gave executions then color platform TMC the some impact some a done of Wondering you to on trade on quarter are bigger us the the can if to

Benjamin R. Jackson

rebalancing, combination to ETF and of I'm assets as to we that data, Rich, And the my all where like you I've really you enabling to our ETF been so life reference trading it's think gave initiatives similar Similar really as and initiatives portfolio is Yeah, protocols these our combination I there. our performance that's through well updating that of over the alone. Chris. high bringing about these is and expertise thing platforms. response the TMC mentioned volume index in That's these assets, the in us updating I our combination of of so XXX,XXX the to pricing as of to time, remarks analytics across trades institutional these get the prepared execution think QX have the the on question, is around assets, for we to had To everyone assets these your needs direct businesses, – question BondPoint. what's and I hub thanks

as that up about think double can you being If digits.

also strategic expansion So and space into we we're see these the of these growth that platforms through with the initiatives. the pleased some institutional in

Operator

Jefferies. go of Please will ahead. question come next Fannon The Dan from

Daniel Thomas Fannon

Scott, Thanks. on morning. clarify capital to wanted Good return. just the

think lot the for and guys first I billion. $X.X in said months. already is I billion, a $X.X have year You goal at you And nine think you're your the done here

to buyback about opportunistic should capital – think of want how and about side even return at into and number we can least of terms we that's priorities? So if think the the in just an XXXX

Scott Anthony Hill

the Yeah, we'll for and billion it's at good been question. that's $X.X land. where think a year consistently I We've the

unfounded coming we earnings under As did repurchase. of you'll our a in some the was was we completely second bit move and felt off share accelerated opportunistically the the recall quarter, that of pressure and stock call, of

take. will Our – We'll authorization year this for this middle is our Share or give quarter $X.X that. to exhaust million $XXX it, dividend likely year. spend this billion. of We'll above grow

a seems get ours share the you So value. shows $X nice to that's our board's – new importantly, bit view still true The disconnected where $X.X the to billion. thing be price of our authorization and, billion from that it about continued is

we have the prices are to flexibility we do only not the share to have six opportunistically. more if disconnects our the over there in move quarters next repurchases, grow now so capability And

but on to under when the said, And position we dividend a to update we again so repurchase into would the we'll exactly expect positioned XXXX you I I and which, the think share grow in grow move to stock to in you XXXX. expect much February during comes as call, want to on is But the how signal to an unwarranted also continue our spend repurchases, cash come as pressure. to the we be specifically be to we give returns,

Operator

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

Alex Kramm

revenue back like for But to I flush Thanks bit correct, actually transaction you the second. for can think out if us $XX per for I morning, Scott. of MERS specifics little go Good a I $XX, there, Wanted the to mean, everyone. model forward? model I'm kind more going Hey. think it's a today.

So capturing new of XX% – but already originations. you're

So up? Or different is as basically, we be how watching go is model a data fit model for try what originations line? to should there So this could revenue the And backloading? the this business? in down will for we basically

Jeffrey Craig Sprecher

question. Jeff. this good a is Alex, It's

you industry providers, market the that we States now a you see the the application, other very home What it's and and you'll now digitize entire paper-oriented. look may, are statement, scenes, that and that and legacy basic that you'll mentioned, a MERS paper charge those working is still mortgage now, mortgage it MERS your services refinance printed the statement to online across the use can you business the you closing think to if many paper MERS buy realize out backbone probably people with that it though the business behind closing in certain is the or So has to really connectivity for dealt form. on $XX United backbone ultimately connected that what name things the MERS, add market. and we're in know have take right of at $XX, is Even with $XX, that legacy on The the your of industry, registration with the because an unbelievable you is do so don't get mortgage registration. way

could by held Many note would two even not their essentially the launched we services part pointer eVault services; banks is, it's note can kept vaults mortgage itself note if where where the how large and put tremendous our that MERS launched our service. digital. we're have and now you, solution and by an What talking small to have centers is these seen many cyber banks mid-tier uptake which on we users. a many, interested vaults small in And the the form. would a then are have that the data as the record inside own so actually of what MERS golden the have we've in layer, of that And But in one-stop and be market be eVault the can of could mortgage by about inside So MERS. and be them providers and tell eNote we've increasingly, MERS. capabilities an new digitized they at digital capacity go that beyond an eVault

new the fantastic that business. a business the talking about are we the be allowed legacy you talk to mortgage when initiatives that legacy electronification you a to future to that the have really new So about. that Not business now is in we those that The space about. necessarily profits the digitizing platform the is things we'll company it's us already generating place. talking we'll buy be growth But of

Scott Anthony Hill

model And Alex, with bit to help the just a question. little

I the guidance our kind think XXXX think is on ICE income then look comments I about base. by you Jeff's think best fixed Ben's that the of to XXXX out to two, generating years the to that to at similar probably the really I will fourth starting think four and XXXX, initiatives four multiply and take as cetera, And which growth that et of as point Services, do record today growth thing the three, into on and on comments quarter in new through Mortgage then building with XXXX, generate us track strategy out. investing growth builds

Operator

next Goldman from comes question ahead. The Sachs. Alex of go Blostein Please

Alexander Blostein

you of your million, $XXX NYSE you million helpful think data? should heard on not Hey. any guess, of mention Good Is I all data $XXX had I side morning, that QX? in I it way data some market on much I impact and Scott, Thanks session or sort again guess, those think I in incremental the NYSE choppiness fees. things. to guide how quantify, guys prior for, whether guys. for the are

Scott Anthony Hill

Yeah.

and security have old have. rationalize But new our the to Pillar of actually far efficient makes number better, from technology the us capabilities far rollout uptime make far base. an – It that that's rolled trading us our largely And As a around opportunity technology to our as customers taken the technologies, some technology. will better. has that expense more mentioned, we've it Pillar dynamic sessions I they made of

a third bit. that hit little so And quarter the

it As the quarter will mentioned, quarter. think couple the bucks continue million fourth into a I in just I

it's so quarter. double which we've the about, pricing I it our the in strong a from grew overall, accelerating But things. little particularly solid analytics of digits. our and data, And of trends noted puts And in which was scheme pressure the numbers. detract and on very bit the futures are It in which business small exchange talked trends the feeds doesn't

is of pretty them reality has the I in number that of our So data in the be overall pieces. business services was soft well. quarter data That's will the again in the business think one the quarter. clicking fourth and engine bit But a a moving is

Jeffrey Craig Sprecher

the the this are services just there's been the maybe obvious, another financial state There's management have the brokerage where also consolidation public space market-making to the the consolidation in business exchange think large backdrop of, the increased company of in going but large going share. consolidation in a the been consolidation that I all on And aware operators. follow There's a There's business brokers market by been a business. on you a ETF exchange business. that been on call just in

in by it transacting in and the digital is And to capital States our of massively business equities ultimately, against which transaction financial space lowered these cheapest the cost really consolidating say all raising overall services world a you putting And the is Our place world. it's why cost systems. United the lowering we that scale can manage see industry. and digital is across

Operator

from Please of The Bank. Bedell go next Deutsche Brian question will ahead. come

Brian Bedell

comments data of move or can said, to data the talk exchange Clearly, contribution accelerating, to Maybe up we $XXX quarter. to very data you side. Scott. fourth Thanks data finish Maybe as market into just analytics about the much. look within stronger the million. also is at Great. connectivity the million pricing Thanks on into as desktop futures if $XXX the the XQ. The for also you the the line growing

million collection $XXX then given feeds of the acceleration enough data expect And that range? of that exchange and a sort any a those the the keep guess Pillar also, So bottom with headwinds data you as of quarter? headwind bucket potential or of upside million look we in is a in trends XQ, to potential audits $XXX some into this into just we I should

Scott Anthony Hill

that weren't there quarter run fact any. we didn't frankly. there quarter, Look, audits on quarter going the were and any suggests unusually it the run Yeah, I'm as caused if the will, are part you simply it's think a term. business. look, I just It overall kind in And pointed that of part – particularly not that we've doesn't suggest the fourth we on business given impact that focus out point anything the to because weren't a every large outsized a any quarter. when over of to rate of, The longer

quarter I think quarter. to terms. in the see to what business you continue accelerate should to services is data continue to the see quarter And expect absolute you to it

mean has terms. and overall. consistently Overall you and X% noted, is growth in X% as the it for Analytics third ending between quarter, Analytics Pricing quarter see up see I X% entering as and is up the ASV And Pricing that You it I grown. ASV business in the fourth well.

I we've So of think got across businesses. strength the all

minimum little exchange tend good fourth quarter. out on softer third volume about will size fees. futures exchange bit to asked expect get You because The some the is into I the are volumes a the our little of more we exchange specifically bit data quarter great. our when reality is data, a that don't of that continue data the commission

doesn't to go up drops that maybe which It's that's away. revenue revenue the in down the trading. And data, matters. total and in show I interesting we it's consistently dollar it's dollar revenue doesn't a it's And where And does deliver. from sit, a so earnings because where that up show that total dollar

business. slide the revenue get from So business, X the in great volume terms the on every hung board. an data contribution we in I that quarter record single earnings, of I'd NYSE at the And quarter. track a look acceleration number given any underappreciated up growth on and in consistent trading too showed growth across the I wouldn't of think in

Operator

of Jeremy will The next Campbell ahead. come Please Barclays. question from go

Jeremy Campbell

maybe if or upside it, of they to guys trading there growing we out a, falling will you I with ETF this that far, come know bond this hub positive so space of build Thank activity, Ben, sort you. that any in ETF white most some hub, Or clear been competitors said short there? the then on some adoption institutional kind response more larger ramp that there platform. early of with And of of you see the on? has hurdles heavy-lifting there Hey. is end type stemming some is but your do the to from our extra is

Benjamin R. Jackson

Jeremy. Thank question. you, Great

ground they what's didn't to have got initiative about to this we So, be it's the it announced it A We the remember, in ETF the brought from hub, BlackRock. actually isolation. lot and And thinking successful be into leading the off they really see on that we in product this of the built. one of leveraging us market. requirements – in of expertise were do when to going need to want that issuers

messaging banks that for other help this instant that's the that we've we're be do as this open and combination response the that our index and us times, assets is it plan the the marketplace, with industry and participants to And market-makers, do finalizing be platform us that has this they data The that thing BlackRock well positioned we analytical advisory guiding that industry. to requirements, to the our all and as main And to the negotiations that and capabilities, create-redeem their we to the other finalizing going utility have finalize as the a this, unique with ETF of in XXXX. build came quarter the in expertise made issuers, be formed that, unique us launch and past our authorized overwhelmingly positive. and of handle believe embraced partner, newcomer willingness in we be we I architecture to out our by execution assets, to meet happen to we're speak. other why mentioned to would going committee process, really that as We have been gone an are several to the space the the

and growth disconnected to a process, someone fill really rate. sum, a in growing annual no market filling acting to no void. consistency So standards, nobody it, it at But And needs in underpinning error. step really that's of where is compounded void a has XX% in we're systems, prone that

Operator

of question Herbert come Citi. will go Please from The next Ben ahead.

Ben Herbert

Thanks question for Scott, taking of follow-up, on just to morning. that more backdrop kind Mike's Good volume Maybe XXXX. just constructive Hi. question. into a a the if persists

areas that? investment up are any might perhaps against you Thanks. looking Just to ramp be there

Scott Anthony Hill

look, starting We've million we've years Yeah, framework point synergies XXXX got of the deliver you to think that. we'll different. last expense, lot go, I'd looks a committed you're don't I yeah, to think and that as $XX the I about think to couple back

future historically identified the move a revenue. We'll to some than into And tended through obviously have or which But to merit X% year. up D&A so $XX and then that. We've do as X% into had XXXX for to employees Our call. coming another that think XXXX give build out increases. ICE tick into or XXXX million of coming did look as year and we delivered IDC February Pillar. bonus doing. data we has We roll it our good certain out different specific CapEx center roll into to were of support Services, looking did that plan in investments spend we've revenue – current moving reinvest And really savings, Data we've our made tax and and we're move XXXX. the I that framework then our as holds we and We'll going specifics into I note wouldn't go expense XXXX. you more we into

I level. volumes. trading consistent none are wouldn't driven the is level at necessarily investment think to of a expect I pretty your by and other Directly so that to But remain. And question, the be dynamic will similar

that inform margins with with to open metric bottom does to decisions has that certainly will, will will that our extent, plans no line and and to is our And will extent volatility key and so the to that drop requires indicator shareholders. it an the it that expand as trend continues a return regards expense is additional that the but and capital determine interest

requires XXXX, to incremental spend. on very revenue. expense overall similar the is for open interest Clearing going built directly and & So model's growth little to look very Trading That

Operator

Voigt ahead. KBW. go of Kyle question from next come will Please The

Kyle Voigt

morning. Good Hi.

to it the to regulatory question by that environment proposed third-country amendments ask a CCP really the on wanted were Just the European last relate year. and Commission

to I think, U.S. those Chairman that a EU impacts clearing respond kind of proposal. to about [Christopher] vocal potential Giancarlo the houses has of been on more and has lot threatened

risk jockeying involved. and be you're in between given how the moving Thanks. your you're what will EU, all thinking And wondering the this to U.S., positioned of the you kind potential from resolution uniquely Just about think UK forward. likely business all jurisdictions that

Jeffrey Craig Sprecher

here. Thank Really years you. the we spends management how good up. That's you know a has the end question, question, is, is, amount exactly it's bit way framed a your the time a to one like with is which last way about we're that pretty significant thinking it of the and don't for couple team going

able have our skills Europe years we to like, assets third-country and our CCP But CCP. in third we question is, So of work. fix And those you so could going then UK interim are not that regime access access EU, Europe. we we may some not, to and large hone Europe. a And which case third to into theoretically have as jurisdictions. have be need U.S. feel the to the the felt move country outsiders can Europe which kind presence if case UK, they the regime. various that in for may and some in there'll need have And we may follow Obviously, like, will move may the a markets country kind be have European how of may It in businesses jurisdictions. technology for a our and in capabilities to between CCP in become know. that's It

So right all is mix of now. the that in

a involved. people that is there's all conversation out for of a would to I the and be coming that that Brexit recognition solution an hard think interim Europe failed UK recent with the deal bad

infrastructure. want story we've and I government said, constructive And conversation lot said, about are taken. think working parties. the going we how negotiations short, between our background the so these to want law to oversee are services U.S. the financial in that within And things, that basically on Long our Those the a various rational of overcome we current has infrastructure. financial has positions each has to services oversee Europe seen

that are that players going in they're work middle in that gray happening many notwithstanding markets to in are they appreciation I to have interest global the to to the economies. But together places. so order in And best risks. rhetoric. honestly, on need access of that the the both for find local that's There's hedge an and international everybody's going see And do area how the

optimistic more I'm than I for few years. honestly So been last sitting have here the being

Operator

The question will Vincent next of Please come Autonomous. ahead. from Hung go

Vincent Hung

Hi.

So it seemed flood like some to competitors. up consensus lot also at SIP maybe perhaps data, the there's additions and improvements of making a through roundtable, of opening the to around enhancements SIP (XX:XX) the the speed

data How could for SIP those the much So there a prop charging offsets let's revenues? Or of negative be say, be feeds? from that this happened. for driving could your

Jeffrey Craig Sprecher

of Well, the tried hope it's everybody proposal maybe and we adopt that prop the is when and uses feeds and hard uses that out on put may or the Or feed. we everybody But NYSE, to answer a so to prop there recall maybe know no industry get forth. SIP you we straw-man that. that the SIP would bought how rid we so to

And still certainly need of market continue in access and a have participants to area transaction the look the to exists It our go to a into been SIP do to I We SIP change rhetoric. will that us. things, So volumes somehow there And invest that lengths course, total is I've and not and to the there's that get tiny. as us the peers of would the that that we including we suggest spend in the may hurt going and delivering SIP, markets all rid any benefit see the to is the volumes, at in some there's equally constant in of most no scheme distinction. market changes the two-tier believe the perception extraordinary of operate upgrade. should of of mindset longer. speed that amazed even messages quite so don't had long press

make be there's I should it's to continued sit and the So about a agree the market be small investment. continue in a the there whether over – all long better. to as ball issues But debate to should it's we the think all anybody should should large probably seems can the vote to that who and vendor be be don't room and debate get who going don't who it as of in scheme in things impact

Operator

question next from come The Chris ahead. will of Harris Please Fargo. Wells go

Christopher Harris

perhaps the an apart? make far do for is a your the to morning. an the these appreciate bargain compromise with too on this industry market guys. with think I unrelated tried there on Jeff, equity all Thanks, at Unfortunately, past in respect that market point are data reaching structure grand unsuccessful. was a think, you comments on to together the the But know you matter. you've fees? opportunity, banks Or this challenges, just come and do two sides

Jeffrey Craig Sprecher

go fee part data the revenues higher thing as market they're come the companies banks any not fees looked better that. of or of should that their deal. What thing us statement think, the by went SEC was large freeze to should think there when a such should like the access saying make I great fees a as analog is are to routers, has was propose down. we a digital like BMW interesting as doesn't go lower of order market When argument. part SEC's that to where Maybe with that action, oh, they but exchanges? everyone pains decade. missed the went was a in The smart a not And don't by to data. from the a filings massive It's actions where of is heart think from I that's didn't we go no a an fee on uses we pilot increases. and When great no not people ETF a when now why as lot Mercedes the we that negatively the using filings of such are result listed such there largely order router gets fees a made pilot freeze these realized that over ETFs. thing question. good proffered and up no a debate that And made to versus by as the were large Really of a We may were Rover of there over smart this suggest Robo-advisor that to hundreds large we for the this as industry that hundreds fee Range providers and why These players went argument even it the to don't what though robust time impact be which to of versus of data Robo-advisors. and is qualitative the thing market a

in getting those of on and decreases All so they're are different products or so things And products and fee rid changes cases, of forth. and many bundles. and and services

so a show – guys course, have a where big army ever And have drafting of them in, filings back the like going work, too that are of if in don't the conversation with be of big has so in had of often footnoted way different many go staff those up and these So or Show of to a high, going exchanges sure And these has put forth documented of that we And that and going the there's many of to they're and when everything's army. Stock or quiet an to since way there's it's conversation have that inside don't I'm of And now if says in way on, bundle, we situation. been don't on owned lawyers. that know you filing, an on with staff litigators happened filings a price around a form these to away, and like they with may army many is bag be and very environment believe the this many wasn't And do you with I staff, on cases be as provisions you forth. for and go the that withdrawn, the negotiation worded, and we're the like up that down. and we are That goes cases economists here because a SEC ever you the forward advising I forward. show and may said that lot said seen with years. filings We going not that gone well up been is a draft at we litigators. ICE prices SEC. that in order, And a this good that staff large in filings. the staff in result go a wanted there. It filings they that has situation exchange, and modified rubberstamp past, have an from of have and in don't to listening interfaced Exchange with a and is from New or in it's the access think raise an we've down of so bunch work not dynamic be me and are least consultants, next few what new idea. York prices The or mixed now you're the written of

use policy. a my think, like going convinced industry for It players on I'm to actually – this that, I'm realizes pressure prices, that's convinced what's I'm the some taken effort reduce this a a that in feels pressure to the environment fees now, there of that massive is at and the going if my it think I part right the may that and so And But fees. lot negotiation. I'm lobbying And the not downward oh, SEC not downward on to as good happen is away. big of have when right industry

Scott Anthony Hill

Yeah.

too is, It's markets, overall than of participation the the to the data. pieces. quality trading, to And point markets, the I of Jeff more all talking keeps it's the of data, important it's just not trade cost sight think in the the market. in about lose an that's

customers, And analytic is business our model and customers. It if so, back, at all pricing and pricing analytics products, half delivered, the new drives data again you look it's and why we revenue new go existing I XXX%.

and revenue, every we of other the For I little markets exchange get are half up providing to better that's the it. why earnings a of but overall it those or growing And too really fees, it's share more And overall, less fewer the connectivity, data it's higher on little the which into. our with revenues session hung is trading side, revenue whether falls it a data on a It's our of and customers? wouldn't works that we'll side one dollar trading side, on data trading take. growing bucket intricately

Operator

question-and-answer conference this turn remarks. And to I today's now back closing session. would concludes Sprecher to like Jeff over the for any

Jeffrey Craig Sprecher

have thank joining all we'll hope in you for Halloween, We'll you safe and talking a Thank today. great I a with fourth you, be our you And we quarter. forward to all report speaking results and Carrie, for the again to February happy and day, when us soon. you look

Operator

Thank The presentation. you today's conference now has attending for concluded.

may day. now great a your Have lines. disconnect You

Intercontinental Exchange (ICE) 31 Oct 182018 Q3 Earnings call transcript