ICE - Earnings call transcript Q4 2021 | Intercontinental Exchange, Inc.

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Operator

Good morning, and welcome to the Intercontinental Exchange Fourth Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mary Caroline O’Neal, Head of Investor Relations. ahead. go Please

Mary Caroline O’Neal

be fourth undertake be ICE’s uncertainties. to ice.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 our could our from filings business our of risks measures our XX-K a results forward-looking certain materially and the For operations SEC. earnings cash description other differ cause those to non-GAAP refer are statements, non-GAAP to of more In and we the performance. core with please XXXX measures. reflective in supplement, our described We refer to Form believe

NYSE additional GAAP page reconciliation Jackson, to President; today us to Throughout net the and this Lynn details over unless references the supplement Chair to Chief the I’ll call President net revenue revenue equivalent items. on Ben You’ll Fixed Officer; and Chair basis. refers the now Gardiner, of Data Financial Jeff used Services. otherwise on Warren. constant Please notes the this and growth earnings find of and certain second Sprecher, on earnings currency definition materials. the of expenses, on the the are Income regarding call for revenue term turn see With the CEO; and per of a Warren Martin, a indicated, share. When diluted transaction-based earnings explanatory adjusted call, in to presentation, to are earnings adjusted of refers

Warren Gardiner

flow quarter today. year-over-year, our Total on Adjusted year. and earnings operating and share than Good compensation fourth higher as totaling billion. a to for results $X.X gross Net which severance joining last to the XX% $X.XX, slightly while best while for X $X a expenses total some shareholders of additional record we XX%, a the leverage I’ll billion, totaled $X.X our as recurring returned performance operating Fourth per by ahead business, to XX%, over million, our of of by totaled quarter marking cash Xx revenues, highlights morning, with well MC. driven also strong increased higher expected, you a billion reducing income by This thank quarter versus the key transaction contributed of the XX%. up history. EBITDA, to in revenues half Thanks, to revenues full buybacks, results. record increased due $XXX company’s schedule. and account finish XX% of dividends begin operating free year. from Adjusted billion grew which performance-based year Slide increased nearly record year our $X.X through everyone, full totaled strong us nearly adjusted

our by increased NYSE were XX% XX% of complex Revenues within business, the and and energy up services quarter in listings. and approximately driven business in our performance part year-over-year, billion, Slide move X% let’s both by by Now of environmental totaled XX% our gas revenues, Recurring include XX% interest in global was our a strong This inflation an while XX% expectations. products, represent exchange full where increase the quarter to and year-over-year. Fourth including oil increase revenues, listings revenues increase provide for net increased energy an our our of of Exchange year. overview increased which XX% XX% a in year-over-year, $X by performance XX% in our driven I’ll rate rising data the which natural growth revenues, segment. X,

record revenues, Services also X% for the $XXX Data segment Turning which ago. our revenues, quarter totaled of index driven a increase XX% fees growth, Fixed X% other services nearly growth quarter. a discuss versus recurring while our and franchise, continued Network segment. quarter accounted I’ll million, Within our by and ICE to Slide and double-digit fixed a another grew Income network in year-over-year, by for of including X. Recurring revenues income, data and in increased analytics Global now our year grew Fourth revenue data business X% offering. demand consolidated X%

For first increased importantly, us for strong value, of revenue year X.X%, by setting And annual year, X%. the or ASV, data up yet quarter revenue the services another subscription full up compounding growth. enters

Fourth for Let’s over revenues, $XXX segment. quarter will Mortgage segment discuss XX% Mortgage go X, totaled our to XX% I million. year-over-year. million revenues revenues, grew of and where Technology Technology $XXX Recurring next Slide accounted which totaled

While Technology fourth we down XX% X% declined a decline that outperformed volumes. quarter, in industry an total Mortgage origination slightly, revenues experienced roughly the in

track guidance. on year, basis, expectations full of doubling to more than target the our Technology billion For a additional period. my Slide reaching ahead forma XX-year pro a with revenues Mortgage remarks on X I’ll our initial grew revenues achieve over XX% well some conclude of and $X.X on

approximately by X% items, on growth growth, and of will top which expected we Technology growth grow we XX% growth be in XX% strong is revenues migrate expect full business, by This is million revenues in noting mid-teens related low to to on to center be the the are It headwinds once $XX of Euronext exceptional connectivity billion phase-out our to continent. again to be that for We Adjusting and related recurring This year, to sterling of LIBOR revenues, year. expect in data the top account an to of and from the the connectivity which of of services last half away our in these FX, recurring is core for $X.XX expect worth post-Brexit decision for is Mortgage certain offset approximately total costs. a to expected reduction our be UK on between includes year XXXX. majority full Euronext planned to business, led again importantly, which billion. our and $X.XX X%

In in and growth revenues. addition, our X% anticipate fourth year quarter Services an Income recurring that ASV another we exits and to up Fixed supported X% by the of X.X%, Data

Moving to expenses.

also to awards, by well all million We by our $X.XX $XX their to are as expect of performance higher to billion. to increase three business in be will $XX years, employees and investments prior driven XXXX product increase strong for across to of our we expenses the of contributions to operating results license million and our tied Consistent with expense, fees the revenues range XXXX expect to resetting synergies $X.XX adjusted of and reward net $XX in by Expenses billion therefore, compensation million. development million to $XX expected as segments.

and In groups, realized addition, are $XX initiatives Bakkt. a we support of savings IPO to of which the million we through productivity portion expect an incremental we following $XX of efficiency our fund the operating million technology and across electing to net operations in

year, last to expect Mae to XX million of similar and for incremental to and in rebuild related XXXX. see Lastly, the of our we CapEx. $XX appendix Slide Ellie D&A expense accounting Please a roughly guidance expense reconciling the purchase bridge

share. from our record Moving grow, consistent growing dividend our XX% our per $X.XX quarterly year-over-year share dividend per track to $X.XX with increase we next capital to and plan to as by allocation we of

per nearly share XXXX, range, are the within quarter, deploy of that repurchases representing the acquisition In the a increase to addition, second expect operating XX% to we first leverage our last Mae. buybacks million delivered in Ellie and delivered full now of in approximately In a quarter share. prior income targeted finish of year. and record versus quarter revenue, to we We our earnings record summary, growth towards we another double-digit $XXX

invested double future planned. a growth target in digits achieved also array We initiatives, year our increased our an of and leverage than originally earlier dividend

delivering and for is to focused an to Ben. questions creating Q&A. shareholder off on, evolving once now, I’ll your As XXXX, it value backdrop. ever what growth I’ll hand during we take But be again, kick we’re macro over happy against

Ben Jackson

Thank thank Slide us you for joining turn X. you, morning. Warren, this to and Please all

year to are for We another pleased record ICE. report

the secular and are efforts of with model our the and the NYSE. results and environments. it growth my analytics expanding across year drive I’d over across macroeconomic business financial of ability colleagues tremendous like at relationship our strong discuss a and reflect Our of Lynn position data have energy the our some variety highlights across customers the And across our we organization, to trust the and trends to driving we’ll growth to that income, turn on fixed markets. great mortgage our focus from to

mortgage data, well and expertise position happening analog-to-digital accelerate Our the industry. across the network us conversion to technology

electronification mortgage rate interest of and continue volumes. costs increase, we regardless mortgage origination in a to will of believe continue is a As origination variety environments trend

to revenues. resiliency intentionally Part secular revenue. Our is trend ability strength our by our more driven to strategy growth evidenced to this of business that is of recurring recurring and by shift capture the

it secular customers including give strong energy in across ability in the business strong to globalization AIQ a achieved in of this platform. and transition. and tailwinds secular record our with flywheel opportunity coming the continue and environmentals. The drove effect on importantly, to XXXX, our confidence market. eClose of billion Across new our capture complex, participant mortgage we have captive like products platform we more TTF the also sales gas volumes us and revenues, energy in markets, breadth volumes every efficiencies. cross-sell the not We new base of industry, and energy customer and see to to addressable This $XX us to capture natural only clean the the including seeking And to the depth to our Brent, but positions nearly and connectivity in trend grow electronification

gas built of globalization including business, We gas benchmark. global of global have TTF platform grew and the XX% rise driven LNG have as European and volumes And our drove emerge on a TTF. natural in marker, to of natural XX%. gas The record growth revenue our XXXX, the

early develop the and gas our in across business. volumes leading revenues to initiatives be increasing relied and acquiring reached by year. including risk an Our of contributed California prior gas a power to XX% on to building renewable volatile those and versus markets increase We around XXXX, record global complex, in markets. and also These to UK Exchange markets we environmental manage record greenhouse EU, carbon into environmentals, volumes continue And in in to allowances. the environmental a the navigate participants XXXX were Climate diversify number

related transparency we of and With transition, venue spectrum. clean to now across manage uncertainty risk well the turn and energy provide volatility the navigate over choice customers are the to to that, positioned call I’ll As as energy the the Lynn. price

Lynn Martin

you, With is our risks to provide core, and data both add such goal as our well understood risks commonly transparency solutions to emerging Ben. as technology ESG. at Thank which as

insights capabilities and our non-opinion-based XX our alternative and muni And to data across providing reference technology risks accelerate and data security of with financial of bond increase to our transparency fourth will our breadth to delivery Analytics. Combining greater risQ we to in participants. the expanded data with products the coverage change market issuer ESG the Level existing offering. quarter, the mortgage-backed the We financial NYSE ESG bring including our markets, and of and climate the data acquisition continue geospatial community,

and commitments. from carbon zero Our trend data, the us secular net technology benefit towards leading to well position marketplaces sustainability and

Turning and flexibility fixed drive rapidly automation, delivery of our data growing Increased proprietary passive now business. index continue demand for and investing to income. to

the index NYSE. business fixed data XXXX data XX% our of a to in transparency tools ETF are growth. transitioned billion planned of the positioned $X.X proprietary year market front-office analytics the was less listings. IPOs, new our growing tools automation. with As prices, of that well in lead innovators AUM entrepreneurs office. and markets that home. evaluated group fixed the close grow five of than flexibility business reference $XXX more the We for historically The income with to capital quality connect And contributed tools largest passive These market, our directly as the and front tech critical This funds and with billion continues consecutive opaque, income offering the by to double-digits. be over uniquely drove in continuing for the continue AUM suite from for indices liquid help of their including investing positions three some and IPOs our flexibility us drive our the our to listings are as of tailwind highlights of with of NYSE pricing a to for our growth to analytics and revenue is for a in and largest we’ve four to served the record tools, The needed of pre-trade of middle funds to double-digit leading a office managers Leveraging strength created importantly, and XXX provider taken growth ICE back the business. funds evidenced asset and through fourth billion we data, during QX $XX an nearly I’ll our IPOs. during additional to three year XXXX us in XXXX. continued transitions and have selecting we

exchange recently less complex, to and community XX processed in manage messages to of nearly with risk group. as The cementing we position as continue when with equity across response week equities our further enables proven a times and the our of our the open trillion customers better last also prioritize median day X.X close. We our leading single as than volatility issuer microseconds technology, market-leading significantly was performance provide less at the our technology which

Our trends across drive NYSE the will the investments income and well our technology Jeff. of call over and growth turn competitive our coupled sustainable secular markets I’ll to differentiators data leading now the continue with into fixed the finance, in the to future.

Jeff Sprecher

upside morning. share. of record the strategy growth to Thank you per marked of the positioning importantly, all-weather and an volatility of a center that our joining you, company that and record Lynn, an risk drives of analog-to-digital record that Slide year at turn business ICE largest less and the a with our Please all consecutive made and markets of XXXX has revenues XX. XXth business top growth downside adjusted now undergoing model on a us strategy reflects provides position name, conversion, diversify to for this thank some This track earnings growth. the to

across environment. so to one asset cyclical are intentionally not have macroeconomic we tied classes one trend diversified that We any or

of record concerns driven bank our in inflationary activity. energy and central part by For XXXX, complex speculation we volumes example, saw across in market

in interest recently, XX% in a more increase Our also in revenues. European and XXXX UK rate benefited from increase a XX% volatility, January revenues business driving interest rate and our

as the driving of grew nature forma the clearing and of rates, Technology broader model. rate XX%, quarter volatility our again, demand business CDS And Our XX% this a reflection against business business protection. even fourth pro XXXX, credit revenue market, backdrop recurring management up our rising all-weather outperformed Mortgage the in for interest growth risk in increased, of including

cyclical on across positioned growth remain begin and occurring we capitalize As on asset are classes. than many XXXX, front to we we us. better investing focused And ever executing the and the of secular trends on opportunities in

our and Before we thank and end customers our to in trust ICE continued like prepared for like efforts. at their my their colleagues business for their remarks, thank I’d XXXX, to I’d

that, our to excellent in the turn other Your With until hard conduct quarter to the best best company’s Time. contributed history. X:XX company’s results, to our it making question-and-answer our Eastern work combined operator, with year in history back call session I’ll the the now Andrew,

Operator

first Repetto with Sandler. comes [Operator begin question now question-and-answer from We’ll Instructions] go ahead. Piper Please The session. you. Thank the Rich

Rich Repetto

morning, Yes. guys. Good Good morning, Jeff.

rate about you looks forward? the we in recurring think that? revenue then on mortgage. more revenue is you you’re Could offset, that going but monitor color up offset guiding in progress lastly, now like the on to Is volumes the growth offsetting interest mortgage? was a give Jeff, know Any XX%, think, large digits. you for how do futures simply question recurring metrics numbers? It low-double I that the sort Is us that – about forward? slowdown I and talked of what my origination it to, So can just And on going

Ben Jackson

start Hi here. it’s I’ll Rich, Ben.

hit a answered you in the you So way the on question. bit the – it

top see of Warren subscription growth in have headwinds are headwinds. at of his have where side commentary do up compounding we in XX%. industry the the I some But you there volumes there consolidation? volumes that types scene? on see industry we’ll we of be if to Could despite the mean, such business. originators you that. some But you see of Potentially So to composite Potentially, environment, coming bunch not. headwinds, macro brand-new going a those of of also, down we have see are on an of growth to a that we’re to in visibility this take in great as subscription because phenomenal could right at new customers a business have grow opportunity pipeline new brought looking we the mean, analysts you now. business And that the macro teens I looking that some

have as we industry-leading our other of we to on that renew the them of to business, our ability subscription. our year, had as cross-sell a those customers have pilot have AIQ that have We we And towards small is as renewed well stable a like of we that that more that then percentage a point-of-sale customers We provide roughly in the looked large given where renew. will move dynamic them year solutions. solutions With going customers program shifting efficiency towards subscription last last year. XX% at more that

codified a We’re are that. much this year. successful roughly of larger program this we’ve a And renewing the to that XX% of doing percentage year hit

So revenue, those, great to we about. and believe, grower all we lead are subscription there offset a will macroeconomic tailwinds of to feel environments which teens in the

Jeff Sprecher

name macro And growth and position years few that to just over on the to Yes, on thought geographies. will Rich, last the and global really Jeff. grow how in be this top we’ve hard environments company an is all all-weather of

Ben And a positioning be classes we interest commodities help that that are of very participate people a tend us, and that central in there’s And environment, refinancing we rate businesses company tends rates. which to our manage in energy same transaction do our in default in income new cash-out volatility. our agricultural obviously, Similarly, credit people raise volatile to mortgage like house commodity businesses interest platform. the lot will inflationary and and environments. risk. so and we about, And inflationary we And banks futures is businesses, include has And those a and from even drive for benefit drive talking to home in interest therefore, rate see the rate interest pressures buying do space, inflation have the hedging, to services asset which lot what a of volatile that thinking as is to refinancings, fixed mortgage that been of a and swaps data versus well. house

the really well this in feel like positioned environment. we’ve So company we

We also done isn’t like a inflation, positioned things isn’t over The rate if years activity. low environment of we well feel felt the really interest that a of number bank base. last if augment vulnerable, company we’ve that and there the central there we is always where lot few

as So we will about risk position purchase that’s really the thinking hope managers, for how you, safely limit like company, but feel your we’ve you today. can our tried upside downside stock in growth our company to and

Rich Repetto

helpful. The Very you. Thanks, Jeff. helpful. colors Thank

Operator

with The ahead. comes Please next Jefferies. question from Dan Fannon go

Dan Fannon

utilization the Thanks. could you And Good sense products. think to about where some market phase wanted there, mature kind of environmentals morning. of these the we customer financial of kind markets get question and the of if of a maybe address as are base is we some of size the your of that in versus complex. it about and on think My versus commercial to adoption

Ben Jackson

that take in very And about terms lot when UK, our look in is the physical of in more. North XX market of for physical derivatives world. the you given thinking that’s Ben. derivatives see of there as spending estimates of XX at that times, common we around size the geographies strong it’s out one. it. any we’ve year, emitted a on of take what to billion we’re seen We’ve marketplace. that is have And markets, I’ll at the the proxy top now, a of and really a emit time if the underlying into those the of been this derivatives about the present geographies mature the carbon market the And around of EU in markets that as look they this tons trade would any around alone of Dan, not Hi this terms America, tons atmosphere where And right billion XX carbon. and we

are as for So just physical XX that XXX billion as And today, billion market matures marketplaces a proxy around how in equivalent that we that’s XX in strong, if you you can TAM today, that tons use that the a times define were markets trade. of tons. we traded the

obviously, and what trading coming companies long in growth trading adds about their will we’ve of and And coming X more strong on hit and more of as help of as markets. participants, there is well those transactions lead we’re these in sectors where that, geographies that go derivatives in And TAM. XX% today. adds economy the feed more going So geographies. runway X, a economy is and voluntarily that Scope products more to that also are more That the sectors measuring the will in X in emissions to the with

growth that happen just I think is that world’s XX% of the place TAM come to the growth of if area given do that we obvious they But just physical represent capture we market. that that other on very outlined. and and that size we’re very, world programs, global increase our opportunity venues, trading of around more geographies well-positioned the in The will around

Dan Fannon

you. Thank

Operator

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

Alex Kramm

is the Hey, morning, on months side, last It’s about Yes. ask subscription-based. of that I’m on well, broadly. you’re I to obviously, everyone. companies. big the more few Seems the inflation in your earnings good interested want business or I like pretty lot for XX% this managing mean, revenue been side. season so topic, but of a a cost

is revenue easier? course, what And into make of subscriptions, much is of of recurring to you. could to that or baked you any then, into discussions what degree your help curious degree that your built broadly? So CPI forecast how pricing Thank

Warren Gardiner

Warren. it’s Alex, Hey

a X% some it’s of there about wouldn’t to that part year. of contracts. going we element that’s I is of an to of for So some yes, particularly the terms to the our part huge the But X% building necessarily when be again, into that say on in CPI of guide built is it. extent, data there talk

I if come side, business; terms start and about the to business. to you really in going to talking the the January; ags business; commodities interest which – that commodities within great the have will, what down think on our rate to of the inflation, is in Ben that’s more a it’s revenue really Jeff been exposure, CDS business business, off the and

more terms the I that’s if you of So on think really in our leverage to will, inflation side. expectations, revenue

had really thinking always is, we’ve pay-for-performance a way out But potential both always employees have side, year On as think – the the on things look, we nature, There a services, were employees certainly right. have goodwill, It’s it. imagine, monitor third-party retain like that seeing about of cloud providers or of of would some like that things the costs cost technology that you’re utility that all kind we’re side, be seeing that pockets that to that’s with pricing We perspective. if up And you do think talent are things to and kind we the we that’s I provided you you then and want that We some but of like today. into from will, been baked good – again, some best built – on, uptick some and guidance we obviously that, I culture. our comp costs, year. this there. providers or

of baked that So as comp into our all again, expense the position year, we’re guidance that’s saw. side. the And you on comfortable for with

Alex Kramm

Fantastic. Thank you, guys.

Operator

from question next Worthington Ken of The JPMorgan. Please go comes ahead.

Ken Worthington

with and early you seeing were the wanted I your ICE Jeff, and a that pick acknowledging to investments. other morning. little good about Hi, and blockchain, brain here and potential crypto bit Bakkt

about to late world? technology crypto Alex’s vision at Exchange? the you the comments to the is equity crypto trading you And developing that the like integrated time mortgage ecosystem a information cash see see think And some seem for parts the towards of process indelible ecosystem? mortgage cash is chance Do mortgage getting much ecosystem more more last equity there the is to we in it the then your either the process, for look York these in blockchain area? your the vertically conference New would the And over crypto specialization a does you a evolve like of year. or is role moving then more ICE closer As second, like digitize might there helping Stock ecosystem way. implications have of Or

Jeff Sprecher

Those are two really for Thank thoughtful Ken. you those, questions.

First when we an think mind. about our the we well, values – blockchain, value it record. value is its main two of The main indelible all, has it in creates about think

that And so society title it’s certain so And in a why as property. example, record. have we are to title extent, for indelible rights views an mortgages, insurance an property something have that we insurance, wrapper around to a

that any both other that would homes accessed many, are by rights for mortgages definitely ensure or an area imagine is that focused something that’s could an And on. asset it’s property can record And so many we people, that you indelible grow. or

cryptocurrency and from marketing a and broader used houses second mind share to give captured more direct to brokerage attribute The more tool has really as that people move the of environment customers brokerage blockchain it digital has access. analog houses been and is

balance to Western in They And done and broker and broker-dealer organized third Generally been didn’t market. their our balances. question, do laundering and the having crypto So your space can of of this? the regulators have has once customer there’s have a collective crypto the interesting and the those know that clearing customers, amelioration they And the intermediaries part credit a digital. are between of market. customer. digitally themselves about they brokerages that broader in is the And the in by obligations that some backstop been are world is our which AML case the their engage is relationship, anti-money of about the of firms a speaking, access those question, disintermediated the a of somewhat have And case. obligations are there brokers your checks infrastructure largely that really clearinghouse. exchange what the regulation sheet their KYC blurring seeing speaking, the to in there do that And obligations the is clearing that the and thing for customers has that, want the then and brokers new and of customers. not they to are to markets, providing all The whole of responsibility for that being it companies,

more were, maybe is move and end-to-end issues directly you AML end processing other subjected end important they and matching companies KYC, around of decide the is up And has we regulators industry those aren’t companies to as had what, so legacy their credit see to community. they stress to a to regulators the have opening conditions – as participate maybe better way, if do the say, If historical to and to IOSCO that that platforms have amelioration if their opening platforms, the users know engines in to subject companies, banking. the work the to essentially are then bypassing those passing thought and the some standards straight-through directly up going clearinghouse users and clearinghouses be having brokerage and which our consumer terms companies testing, those a you and same

the at I States, that decades. done saying about has what But see thank subject business? thoughtful. as have a That lot XXXX I the they’re too that, the wanting your you. of is Act last there’s protection. crypto regulators they Act to question protection fraud the for read lot happen and updated, you in of now that But over predict new be the space? of think lot Securities a and notwithstanding largely extent are bring one They’re comment, very the thinking they wrestling in that essential space and doing XXXX the for what articles will is people it’s I’d – various business XXXX. tools the towards to with. act but suspect the Act I’ve withstood market United Or and speaking you what Act in questions. that with you’ll even of the bring those have can regulators to Do customer in based as helped do you the a crypto in all, structures soon change is technologies they And into to deal we’re to technology there, legacy XXXX which the the there’s make legacy now

Ken Worthington

Thank you, Jeff.

Operator

next The ahead. with go Stanley. comes Cyprys question from Michael Please Morgan

Michael Cyprys

morning. sense bit business And do good are your you parts wanted might cloud. would today you could I taking the the for remind more you Thanks a to take think forward, do business which about make able ask I was hoping the which as to for of opportunity cloud. think question. versus to see, you to cloud? look how Hey, migrating the the your on us, more be organization parts can which about time? of you sooner and the ones of What benefits do just

Jeff Sprecher

lot in of cloud question. the is where a great We access the products. attribute another to in use are And our the cloud main a active get can the and customers all, it’s our that network just us businesses. cloud It’s of brings – first we

own hooked our lot run networks. And data of also and a centers, we we’re own third-party network. We our have to

of way, – screen a and providers. lot goal by and platform our providers the So third-party

our to managing receive control Where not the network it services us is better costs able would because and technology So us cloud. and we’re to the is is as in the we size, that from clients cloud important our to our scale prefer extent us are of to own when we important infrastructure. that have to

around the mentioned to in seeing inflation pressure highest one right is around that now those services a think, that in done the of our to questions, the are his control notwithstanding. lot of have Warren I inflationary remarks the analysis moats have we’re cloud. And this. as, ability in don’t costs probably We good We

that happy clients, so some think And to bear to is provide augmented them think we not necessarily costs, the the core we to we core I others. is that to through want And I than have, we you service at our last that different that we that its an access that mention It’s that to would at those people’s as technology. run cost infrastructures. see But it I we’re important if thing cloud. however, we’re but service. of get key have you’ll other not core in others, always to way from its It’s in not its at license something felt something it’s something not the control control peers and our

Michael Cyprys

Great. Thank you.

Operator

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

Alex Blostein

Alex. It’s guys. Hey,

to gave a last to into XX% growth of meaningful But Do XXXX color expect to reasons this is wanted a about a clearly, in for is slowdown think reasonable XXXX for XX from earlier Thanks. and reasons, mortgage – really of over relate some a it’s dynamic medium months. you the question variety in specifically. mid-teens more low term? rate run So back kind north second. pretty recurring the revenues over of of months? well I this XX a to should just sort the you go The of next the described just Or we the you

Ben Jackson

is this Alex, Ben.

Look very, I business So of that estimate backdrop segments when sorry, of a Warren or very around each in – we down in the and of but being When you look the this to business, executing not look at the transaction evidence business, being our overall what’s strategy have that are – down used again, that each the the the underneath well. for environment this we that? at at of macro business XX%. volumes there. And segments composite

growth how customers of to a as more that be decline, on our a that out on we’ve that our we see volume adopt business over And despite analytics grew driver year-over-year. will of these and So number time, automation. data calls talked continue playing and

year-over-year. in a We that’s starting lot on year-over-year to seen the volumes industry covers also way leading item industry transaction outperformed past that’s innovations closing have lot in And ramp-up subscription. ramp our see line that we’ve customers we and as this And of towards grown were. the growth over underneath on move that, – has item, substantial before to on as that brand-new a we’re and explicit what did invested not origination more the more line item some those, there, And line year. an it’s

on the feel business those. in volumes program of a despite those It’s them, good executing subscription, predict how for And just really ability one terms year. hard program how to drop drop codified of year, the and in the customer percentage. a renews hit on about play that the a strategy and a to much each in percentage industry long are this to pilot is year – we we’ve grow more of last the great towards on XX% in larger roughly small business will outperform remember, this shifting as to volumes. – feel in revenue was started near-term our we we out, and but given our we this every that more So renew based And backdrop

have math. doing We long a runway, mean, the I

We have many a to that believe to lead to we’ll in item. long many, line years runway continue over we that that execute growth subscription

Alex Blostein

All you. right. Thank

Operator

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

Brian Bedell

environmental Ben, to come could Maybe, just a morning, back Two-parter. to the I complex that. Thanks. question and your Great. answer folks. if on Good prior question

inching clarify expectations north total your time we TAM is like What revenue. we so. a that about growing? the of a whether on that you carbon about wanted the energy the – that complex energy TAM transition. your is gas First, for then thinking as is view grow gas if just transition carbon looks to grow nat well, if should is a also as tons gas energy nat of into or sort XXX environmental XXX like then long-term a of your transition, environmentals up more we is I physical mentioned, just current XX% of and to it be as of And want portion your now over billion Nat and to that on move XX% as think to tons secondarily, revenue,

Ben Jackson

Yes.

Okay. Brian. Thanks,

physical traded, now. based The estimate that the XXX So that’s again on we yes. where on billion so there, I equivalent tons geographies just of are used

the that’s to can even North you putting America, there as that’s get see it that. EU And asked So than of XXx we UK as markets a multiple and picked XX% the maturing, are you but on way magnitude and and that. order question, more up

very can Xx take benchmarks, X, easily. well-established that you it If be

So it that that. we a than see bigger get as as can matures this market

governments world be then overall are an more the billion I world tons around have around as happening that kind see to added after as we – to more sorry, XX the a opportunity emissions in can of environmental of the add well. as also as of billion more more that But achieved of that that near medium-term programs, as that go $XX geographies more adds So TAM the more and markets. get as around carbon of programs, that world

over So there’s an acceleration happen that that could on time.

gas On you out, natural environmental gas, nat pointed continuing is the grow. at to XX%, also

gas business the around only the business is really Our natural global gas world.

business growth. TTF top grow on of to Our continues

a the saying that with And energy transition. customers cleanest estimates the continue world double backdrop demand to to with and that coming fossil gas us energy is that’s – that the using as going environment. around manage So we towards their pleased is as likely now our that risk to transition to of an that the risk much to we’re coming ever And and going you’ve this this transition cleaner this of seen be industry much to as between natural to to in customers and in that, fuels compound to help be important XXXX, see to the bumpy. to see element are environment. us And manage as coming

Brian Bedell

you. Thank Great.

Operator

question go comes next Please ahead. Oppenheimer. Lau with The from Owen

Owen Lau

Or you like you OCC opportunistic plan Could leverage taking about your balance please sheet additional you. maybe and to will you thank talk deconsolidate Thank more your investment? and your to question. Bakkt? balance sheet my to be investments? morning Good What’s for make

Warren Gardiner

Warren. Owen, Hey, it’s

in recall, Bakkt, was probably it It to fourth respect as the you we quarter. public deconsolidate in went did that with So – October.

that on investment a So business. making confidence sheet. very number and – That’s over lot for certainly, we our in an state that of that we’ve been that’s of have happy the outlook a with we’ve have been a years is balance

that on that of on plans we it, there small exact to the don’t front. respect I something terms it’s sheet. there’s update of to recall With there. that but our in So hit kind of that’s is I – any balance We think have mark investment OCC, don’t anything a

what opportunity I there’s there. at if Certainly, necessarily side the and thinking wouldn’t that’s say the with. do part any in it’s to that, moment. equity So of we’ll But something options we we’re see about begin

So about I be wouldn’t thinking that.

to of investments, over adjacent do you within that – look we Euroclear know, that we we some other the are for of with sort So our what time, in do, opportunities business. as and do are

will opportunities those as for it. look see those in and we invest so we And

small be when expect opportunities could do most past. to XX that – we’ve But minority those you in continue ones those those part, will minority of of think investment, I sort to some done investors the arise. the you’ve us So as seen the with for

Owen Lau

right. you. All Thank

Operator

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

Kyle Voigt

good specifically to wanted morning. on I still the energy Hi, interest. topic, ask and just a question Brent open on Brent

open year-on-year futures the interest earlier OI but in week. options that XX% in as down was growth nice of seeing We’re complex, specifically Brent this

a would stronger volatility year, just So over I expected guess past to I with there. we’ve bit seen trends price market the see have the oil the

decline of if would could you kind or still cyclical this kind you. whether there normalization something more be is related on on the Thank secular of to you there’s helpful. COVID causing whether think Just wondering opine that’s going

Ben Jackson

Kyle. Yes. Thanks,

So as see temporary. this we do

overall, X% interest at year. today over open you If Brent look last about is

we also You that tremendous last another where volatile year was remember business. very to in year, got saw growth

But So still that top growing growing that’s you we’re of nicely. compare difficult. are business looking at a business on that and that,

to and lot to some of their help in The in overall, participants markets. ways the risk industry oil with addition, last then and just going for within we Gulf it participants Brent to early example with be as complex. launched and manage way a launched two by selected physical crude working seen American to come of it people Gulf And In of had we up in have in with innovations year the help the a oil many for both to HOU hedging overall up going where we new were which them gets as we the come and is have physical And Midland Dhabi market contract, TI price would better brand-new oil Futures to market overseas. supporting that’s our Coast success Asia. that tremendous hedge contracts weeks of ago, ICE WTI complementary we to see Abu those in a Murban pickup amount industry highly price days, Midland those contract, is the

area geographies see COVID in we opening the But here. does unfortunately, So some complex. it’s continue environment and do and and an jurisdictions gyrations to invest. closing, we’re overall, going feel great We to and closing, about create opening oil the

Kyle Voigt

you. Thank Understood.

Operator

of with The next Siegenthaler comes from America. Craig go Bank Please question ahead.

Unidentified Analyst

This strategy Craig. York on December’s given markets? has do on little in Should all the changes thought meaningful Or team listings, lowering companies at public will had more coming you be I better a help the or NYSE? to the competitive New pivoting new make new to XXXX the appeal Stock a to tech any more leadership precursor Specifically any standards to more maybe Exchange brand on is Thanks. to anticipate to Ely you question for see incremental? as a for changes. we changes those listing

Jeff Sprecher

in And broad their in try the generation and now This surrounded because And I’m Good opportunities markets. Sure. in by exposure a to leadership question. give and so those generation. changes that skills different is that trying than geographically talented, in company to businesses were to we’re the people give history. so to start younger them Jeff. incredibly team the diverse, is leaders our that’s that to delivered best that’s year opportunity me, put an

I to her Martin Exchange. I’ll if to ask Lynn And what she be able York So Stock would let she’s thinking. tell thrilled the was New lead you

Lynn Martin

to the think and me is last changing. of seat But may – the opportunity And Yes. the of favored healthy of cement capital see a days the for it’s got I mean, of we this companies environment. of raising further the a got the although coming year, a to home global as Thanks, question. I shifting thanks continue have some as I We’ve but competitors. markets. in NYSE of timing Jeff, macroeconomic about early being drivers IPOs, NYSE, at market to importantly, environment year pipeline really we’ve the bit, the see our given great

the the strong recently, valuing I the and technology made things. businesses governance, been our that capital differentiators technology market bear to favors trading, see that the we we’ve of really York that stability through And the model. broader to cost that have more differentiation to to assets other looking strengths really shifting, talking in they’re come of are model, the around model. we’re investment in And The Stock are Exchange. lower that market given bringing issuers also our and CEOs resonating NYSE New for and they’re our ICE So different market, various as and message valuing

Unidentified Analyst

Thanks. it. Got

Operator

The go next question Atlantic ahead. from Please comes Equities. with Simon Clinch

Simon Clinch

do on in could CapEx think guys. to sort housekeeping us about can you as – how Hi, And fiscal going for drivers question. out color forward? I a driving of if Thanks to particularly, separate if for XXXX? taking tease growth my that the give just I really wondering wanted the a bit more what’s to CapEx you guidance. was really

Warren Gardiner

Simon, Hey Sure. Warren. it’s

right. So

this you know, the $XXX range. So kind as the we end year. about million, That of was were high towards of

to related is of Some that Bakkt.

of full we Mae. year Of course, Ellie had a

to $XXX as million. at $XXX As million guidance the you next it’s looking year, you’re saw, about for

to and sorry, There’s savings. expansion revenue-related that. going project million some million result are That’s to Those in We cost are some product to – planning about million. within data to so that $XXX $XXX adding center migrations eventually upgrades. some – $XXX $XX million or

of $XXX million Ellie guidance year, investment. kind things the of of this around all that on good probably Within that too. So end Mae, of back range

So XXX, those which ICE to well, range, for the when that number efficiency XXX that to and you of legacy to sort prior to where we’ll peel acquisition pieces, investments center. some we’re been data of back you’re start was down going off of some it these years has is – around and back making to the a of and productivity call be

Simon Clinch

Great.

Okay. you. Thank

Operator

from ahead. go Please Kramm UBS. follow-up Alex a have we with And

Alex Kramm

can how January three-month Obviously, we quick are transitioned? trading rate side, in with in mortgage your side. see it, We on eClose? contract XX% the be just Thanks moving do kind – the of alone? use with on I couple just I of we year, math, just the Hey, many your here. missed clients the Any it’s RPC obviously, very on or I quick. number also the but quarter in in and wondering that color are contract where probably a lag running for transitions can a here what’s to number, would your IBOR, numbers. book know great. good has a I higher. Yes. the been guys. January And in Maybe then like you about but us also maybe follow-ups there. where but update the a One subscribers or where And an have in you terms update of terms now give of subscription subscription of know then it’s an transition stand

Ben Jackson

on start mortgage can give color I’ll side. I the Alex, some interest short-term well. as the rate on transition

ramp. eClose, of we’re terms that see continuing to In

So and at quarter were we we went to update customers here. last – XX last the

XX. now at We’re

And costs be to to year-over-year heavily closing to customers fees up, on to actually on statement of item the we’re associated customer. closing to line that because of be up continuing that’s lot So that the see end go closing going another that grows basis that as a up. ramp line is transaction-oriented the we a as ramp going those see and closing area item yet pick

as that important per line deliver solutions, and are something So capture more and which And that we is to that’s is item. able revenue to more highlight loan, we that. of on closing innovations important these more

item, of pilot percentage program, we we renewed. line small subscription the what did when a last started is and that On so year

of of around this the number year. program last that year. percentage ZIP codified touched XX% if take based much going on what learned that’s we we pilot larger a are ballpark the to renewed, the So you the hit a And program, through to that’s of right we’ve going code probably XX% now that a renew XX% of that that

a long of So ballpark that ahead of and we the that runway do years us. very being you being have accomplished do percentage we able small what into this a of gets have over multiple to

sterling well have environment volume when the you as transition as overall to short complex Just look for that trading from But in off in and came we’re rate SONIA. rate seamless – at that off. both obviously, some we’re interest the what in, as ARB EU, to interest. and is versus sterling well away, this trading We’ve us the the volumes, transition. seeing marketplace, seen Warren to start volumes transition a I’ll terms went off that sterling hand some SONIA market short in overall short was in of overall as it the the open did talk we short-term RPC. great both went of about rising trading to when terms that That U.K.

Warren Gardiner

RPC. Yes, Alex, quickly on just the rates

lift bit little you’re seeing a yes, there. So of

bigger the on we As as had much side. sterling we that’s of short kind contract transition into a what know, you SONIA, than

RPC if benefit, kind So a of for there’s to from that. equivalent will, the you account

if look neutral level. be about it a you’re thinking revenue, were notional that the So it revenue basis, to a if on on relatively should just at you

there rates The course, then, our that be all other component equal, at component of Obviously, run rates of a short-term for kind month mix, versus the what as forward. can this well. to RPC But And this so probably I think impacting a interest – thinking that place we medium-term a good of a is our impact current it’s think can I factor moving for overall. business. there’s again, good rate of good level, rate kind there you’re reported else about of – at future be FX through of flow that and for

Alex Kramm

up will follow that. I good. Thanks. on Sounds

Operator

understand Please there’s is KBW. more time from follow-up. I Voigt go That from And ahead. Kyle for one

Kyle Voigt

squeezing for follow-up. my thanks Hey,

I the is growth think, the adjusted expense X% year-on-year just comparing midpoint the expenses, excluding of the Bakkt. So OpEx, on to guidance,

Again, Thanks. XXXX given you are can in looking five just Just to wondering view we’re on on if how could or years long basis, if you adjusted the delivering leverage right business rate mix wondering business growth operating committed excluding if you growth, change over an of Bakkt. talk then the long-term your the specifically? us update about for And ICE? so, expense what’s expense past term the at

Warren Gardiner

Thanks, Kyle. Good Sure. Sure. question.

the the So that of it’s we’re IPO electing I X% Bakkt. you’re Again, invest about midpoint, to At related there’s as in growth. of right. my to said portion a that remarks,

about that savings that it’s savings you operating if had from the from million – we of Bakkt, about include some we revenue, So $XX it’s got of Bakkt.

some We’re going portion year to this of and ops in invest projects. a the of tech that

that, midpoint So over with would that’s things those just you And that now. probably and we given savings, we those do to if that But that five are about had a do of time. point that. is would at coming of have chose the the will, to done, certainly, we opportunity them elect from we

being good look, of ICE and And so has always on nature. expense about things and been conscious that controls controls cost

as later. longer to in term, But compensation of about of it’s then that save past. merit take that expense growth That’s of kind lower expense to single-digit half it we’ve that terms being we you’re kind And annually. order of in what talked think the been about so I do in opportunity And did base. thinking about our it’s

probably that when it’s a think expense, range. about I similar in you think noncomp

So the it’s within line I assume that’s We give I revenue again, don’t growing to revenue. faster place expense context but growth organic lower basis that expenses. fair on And the is think a overall growth for be. think an safe a single-digit range of than revenues kind against of business, to top

operating of million million for this so of margin. yielded That’s revenue, $XXX a XX% added we I instance, think which or year, $XXX incremental incremental income. about

certainly and here committed there, we’re can but to think, would flow business yes, through. the very to term, medium, we So over operating that. that I much long Transaction fluctuate certainly yes, leverage expect

Kyle Voigt

Great. Thanks, Warren.

Operator

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

Jeff Sprecher

great to as our have morning. for to day. continue our to of and all running thank customers you And all-weather call, innovate look a for results business with and forward updating this you I the us model soon continue thank for Andrew, give We Well, we you hope we the drive growth. joining you that, as you,

Operator

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

You may now disconnect.

Intercontinental Exchange (ICE) 3 Feb 222021 Q4 Earnings call transcript