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Intercontinental Exchange (ICE) Q1 Earnings & Revenues Top

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Intercontinental Exchange ICE reported first-quarter 2021 adjusted earnings per share of $1.34, which beat the Zacks Consensus Estimate of $1.30. Also, the bottom line improved 7.2% on a year-over-year basis.

Results reflect a combination of recurring revenues and diverse transaction-based revenues.

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote

Performance in Detail

Intercontinental Exchange’s revenues of $1.8 billion increased 15% year over year on higher revenues from Exchanges, Fixed Income, and Data Services and Mortgage Technology. Moreover, the top line outpaced the Zacks Consensus Estimate by 1.6%.

Net revenues from Exchanges were $974 million, down 7% year over year, while Fixed Income and Data Services revenues were $468 million, which increased 1% year over year. Mortgage Technology revenues increased nearly eight fold to $355 million.

Adjusted operating expenses were $729 million for the first quarter, up 22.1% from the year-ago figure.

Adjusted operating income improved 11% year over year to $1.1 billion. Adjusted operating margin, however, contracted 300 basis points (bps) from the year-ago quarter to 59%.

Exchanges' adjusted operating income of $676 million was down 10.3% year over year. Adjusted operating margin contracted 300 bps to 69%. Fixed Income and Data Services' adjusted operating income declined 2.2% to $178 million and adjusted operating margin contracted 100 bps to 38%. Mortgage Technology’s adjusted operating income of $214 million was up more than eight-fold year over year. Adjusted operating margin expanded 500 bps to 60%.

Financial Update

As of Mar 31, 2021, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, up 2.8% from the Dec 31, 2020 level. Long-term debt of $14.1 billion was up 0.04% from 2020-end level.

Total equity was about $20 billion as of Mar 31, 2021, up 2.4% from 2020-end.

Operating cash flow was $734 million for the reported quarter, up 41.1% year over year. Free cash flow was $702 million, up 61.8% year over year.

Q2 Guidance

Revenues for second-quarter 2021 are projected in the range of $844-$859 million.

Operating expenses are estimated in the range of $895 million to $905 million while adjusted operating expenses are projected in the range of $742 million to $752 million.

Non-operating expense is projected in the range of $97 million to $102 million while adjusted non-operating expense is estimated in the range of $105 million to $110 million.

Share count for the second quarter is expected in the range of 562 million to 568 million.

2021 View

Operating expenses are expected to be in the range of $3.545 billion to $3.595 billion while adjusted operating expenses are expected to be in the range of $2.880 billion to $2.930 billion and include incremental Bakkt expense and increased forex.

Dividend Update

The company paid out $187 million in dividends in first quarter.

The board of directors approved a 10% increase in its quarterly dividend to 33 cents per share. The dividend is payable on Jun 30, 2021 to stockholders of record on Jun 16, 2021.

Zacks Rank

Intercontinental Exchange currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities and Exchanges

First-quarter earnings of Nasdaq NDAQ and CME Group CME beat the Zacks Consensus Estimate while that of MarketAxess Holdings MKTX missed the same.

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