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Intercontinental (ICE) Q1 Earnings Meet Estimates, Revenues Lag
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Intercontinental Exchange (ICE - Free Report) reported first-quarter 2024 adjusted earnings per share of $1.48, in line with the Zacks Consensus Estimate. The bottom line increased about 5% on a year-over-year basis.
Intercontinental delivered solid results in all three segments. The performance reflected the strength of a balanced and diversified business as well as the results of the strategic investments it has made.
Performance in Detail
Intercontinental’s revenues, less transaction-based expenses, were a record $2.3 billion, up 21% year over year. The top line, however, missed the Zacks Consensus Estimate by 0.4%.
Total operating expenses increased 32.4% year over year to $1.2 billion. This can be primarily attributed to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication, rent and occupancy, selling, general and administrative, and depreciation and amortization expense. Our estimate was $1.1 billion.
Adjusted operating expenses were $930 million in the quarter, up 25.7% year over year. Our estimate was $939.5 million.
Adjusted operating income rose 17.6% year over year to $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin contracted 200 basis points (bps) year over year to 59%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Exchanges' net revenues were $1.2 billion, up 75% year over year. The Zacks Consensus Estimate was pegged at $1.5 billion. Our estimate was $1.6 billion.
Adjusted operating income of $916 million was up 13.2% year over year. Our estimate was $785 million.
Adjusted operating margin expanded 100 basis points year over year to 75%. Our estimate was 68.5%.
Fixed Income and Data Services' revenues were $568 million, which increased 46% year over year. Our estimate was $571 million. The Zacks Consensus Estimate was pegged at $578 million.
Adjusted operating income rose 1.1% to $259 million. Our estimate was $188 million.
Adjusted operating margin contracted 100 bps year over year to 46%. Our estimate was 32.9%.
Mortgage Technology’s revenues increased 37% to $449 million. Our estimate was $534 million. The Zacks Consensus Estimate was pegged at $530.5 million.
Adjusted operating income of $185 million more than doubled year over year. The Zacks Consensus Estimate was pegged at $276 million.
Adjusted operating margin expanded 100 bps year over year to 37%.
Financial Update
As of Mar 31, 2024, Intercontinental had cash and cash equivalents, including short-term restricted cash and cash equivalents of $2.1 billion, up 46.2% from Dec 31, 2023. Long-term debt of $20 billion decreased 208% from 2023-end.
Total equity was $26.3 billion as of Dec 31, 2023, up 2% from 2023-end.
Operating cash flow was $1 billion in the first quarter of 2024, up 54.5% year over year. Adjusted free cash flow was $877 million, up 30.3% year over year.
Intercontinental paid out $258 million in dividends in the first quarter of 2024.
Second-Quarter 2024 Guidance
GAAP operating expenses are expected in the range of $1.21-$1.22 billion. Adjusted operating expenses are projected to be between $945 million and $955 million.
GAAP non-operating expense is anticipated to be between $225 million and $230 million. Adjusted non-operating expense is suggested in the range of $205-$210 million.
Share count is forecast in the range of 572-578 million.
2024 Guidance
The company expects Mortgage Technology revenues to decrease to low single digits.
GAAP operating expenses are expected to be in the range of $4.87-$4.90 billion. Adjusted operating expenses are envisioned to be between $3.79 billion and $3.82 billion.
The effective tax rate is projected to be between 22% and 26%.
Dividend Update
The board of directors approved a dividend of 45 cents per share for the first quarter of 2024. The dividend will be paid out on Mar 29 to shareholders of record as of Mar 14.
CME Group Inc. (CME - Free Report) reported first-quarter 2024 adjusted earnings per share of $2.50, which beat the Zacks Consensus Estimate by 2.4%. The bottom line increased 3.3% year over year. Revenues of $1.5 billion increased 3.2% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 0.7% year over year), market data and information services (up 5.8% year over year) and other (37% year over year). The top line beat the Zacks Consensus Estimate by 0.8%.
CME Group reported average daily volume (ADV) was 26.4 million contracts, which decreased 1.9% year over year. Non-U.S. ADV reached 7.4 million contracts. The total average rate per contract was 69.5 cents.
Nasdaq (NDAQ - Free Report) reported first-quarter 2024 adjusted earnings per share of 63 cents, which missed the Zacks Consensus Estimate by 3.1%. The bottom line declined 8.7% year over year. Nasdaq’s revenues of $1.1 billion increased 22% year over year. The upside can primarily be attributed to a 6% impact from organic growth, net benefit from acquisitions and divestitures, including Adenza, and a $2 million increase from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 0.3%.
Annualized Recurring Revenue (ARR) increased 29% year over year to $2.6 billion. Adjusted operating margin of 53% expanded 100 basis points year over year. The Nasdaq stock market welcomed 79 new company listings in the first quarter of 2024, including 27 initial public offerings. The number of listed companies was 4,020 at quarter end.
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.125 billion to $2.185 billion.
Upcoming Release
Cboe Global Markets, Inc. (CBOE - Free Report) is slated to report first-quarter 2024 results on May 3, before market open. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.04, suggesting an increase of 7.3% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four quarters.
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Intercontinental (ICE) Q1 Earnings Meet Estimates, Revenues Lag
Intercontinental Exchange (ICE - Free Report) reported first-quarter 2024 adjusted earnings per share of $1.48, in line with the Zacks Consensus Estimate. The bottom line increased about 5% on a year-over-year basis.
Intercontinental delivered solid results in all three segments. The performance reflected the strength of a balanced and diversified business as well as the results of the strategic investments it has made.
Performance in Detail
Intercontinental’s revenues, less transaction-based expenses, were a record $2.3 billion, up 21% year over year. The top line, however, missed the Zacks Consensus Estimate by 0.4%.
Total operating expenses increased 32.4% year over year to $1.2 billion. This can be primarily attributed to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication, rent and occupancy, selling, general and administrative, and depreciation and amortization expense. Our estimate was $1.1 billion.
Adjusted operating expenses were $930 million in the quarter, up 25.7% year over year. Our estimate was $939.5 million.
Adjusted operating income rose 17.6% year over year to $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin contracted 200 basis points (bps) year over year to 59%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Segment Details
Exchanges' net revenues were $1.2 billion, up 75% year over year. The Zacks Consensus Estimate was pegged at $1.5 billion. Our estimate was $1.6 billion.
Adjusted operating income of $916 million was up 13.2% year over year. Our estimate was $785 million.
Adjusted operating margin expanded 100 basis points year over year to 75%. Our estimate was 68.5%.
Fixed Income and Data Services' revenues were $568 million, which increased 46% year over year. Our estimate was $571 million. The Zacks Consensus Estimate was pegged at $578 million.
Adjusted operating income rose 1.1% to $259 million. Our estimate was $188 million.
Adjusted operating margin contracted 100 bps year over year to 46%. Our estimate was 32.9%.
Mortgage Technology’s revenues increased 37% to $449 million. Our estimate was $534 million. The Zacks Consensus Estimate was pegged at $530.5 million.
Adjusted operating income of $185 million more than doubled year over year. The Zacks Consensus Estimate was pegged at $276 million.
Adjusted operating margin expanded 100 bps year over year to 37%.
Financial Update
As of Mar 31, 2024, Intercontinental had cash and cash equivalents, including short-term restricted cash and cash equivalents of $2.1 billion, up 46.2% from Dec 31, 2023. Long-term debt of $20 billion decreased 208% from 2023-end.
Total equity was $26.3 billion as of Dec 31, 2023, up 2% from 2023-end.
Operating cash flow was $1 billion in the first quarter of 2024, up 54.5% year over year. Adjusted free cash flow was $877 million, up 30.3% year over year.
Intercontinental paid out $258 million in dividends in the first quarter of 2024.
Second-Quarter 2024 Guidance
GAAP operating expenses are expected in the range of $1.21-$1.22 billion. Adjusted operating expenses are projected to be between $945 million and $955 million.
GAAP non-operating expense is anticipated to be between $225 million and $230 million. Adjusted non-operating expense is suggested in the range of $205-$210 million.
Share count is forecast in the range of 572-578 million.
2024 Guidance
The company expects Mortgage Technology revenues to decrease to low single digits.
GAAP operating expenses are expected to be in the range of $4.87-$4.90 billion. Adjusted operating expenses are envisioned to be between $3.79 billion and $3.82 billion.
The effective tax rate is projected to be between 22% and 26%.
Dividend Update
The board of directors approved a dividend of 45 cents per share for the first quarter of 2024. The dividend will be paid out on Mar 29 to shareholders of record as of Mar 14.
Zacks Rank
Intercontinental currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Peers
CME Group Inc. (CME - Free Report) reported first-quarter 2024 adjusted earnings per share of $2.50, which beat the Zacks Consensus Estimate by 2.4%. The bottom line increased 3.3% year over year. Revenues of $1.5 billion increased 3.2% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 0.7% year over year), market data and information services (up 5.8% year over year) and other (37% year over year). The top line beat the Zacks Consensus Estimate by 0.8%.
CME Group reported average daily volume (ADV) was 26.4 million contracts, which decreased 1.9% year over year. Non-U.S. ADV reached 7.4 million contracts. The total average rate per contract was 69.5 cents.
Nasdaq (NDAQ - Free Report) reported first-quarter 2024 adjusted earnings per share of 63 cents, which missed the Zacks Consensus Estimate by 3.1%. The bottom line declined 8.7% year over year. Nasdaq’s revenues of $1.1 billion increased 22% year over year. The upside can primarily be attributed to a 6% impact from organic growth, net benefit from acquisitions and divestitures, including Adenza, and a $2 million increase from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 0.3%.
Annualized Recurring Revenue (ARR) increased 29% year over year to $2.6 billion. Adjusted operating margin of 53% expanded 100 basis points year over year. The Nasdaq stock market welcomed 79 new company listings in the first quarter of 2024, including 27 initial public offerings. The number of listed companies was 4,020 at quarter end.
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.125 billion to $2.185 billion.
Upcoming Release
Cboe Global Markets, Inc. (CBOE - Free Report) is slated to report first-quarter 2024 results on May 3, before market open. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.04, suggesting an increase of 7.3% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four quarters.