Intercontinental Exchange ICE reported fourth-quarter 2024 adjusted earnings per share of $1.52, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 14.3% on a year-over-year basis.
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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.
Shares gained 2.6% in the pre-market trading session to reflect the outperformance.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Performance in Detail
Intercontinental’s net revenues were a record $2.3 billion, down 12.9% year over year. Including exchange net revenues of $1.2 billion, the top line increased 6%. The top line beat the Zacks Consensus Estimate by 0.2%.
Total operating expenses decreased 2.3% year over year to $1.2 billion. This can be primarily attributed to lower compensation and benefits, acquisition-related transaction and integration costs, and rent and occupancy. Our estimate was also $1.2 billion.
Adjusted operating expenses were $973 million in the quarter, up 2.2% year over year. Our estimate was $968.9 million.
Adjusted operating income rose 8.1% year over year to $1.4 billion. Our estimate was $1.3 billion. Adjusted operating margin expanded 100 basis points (bps) year over year to 58%. Our estimate was 45.8%.
Segment Details
Exchanges' net revenues were $1.2 billion, up 9% year over year. Adjusted operating income of $923 million was up 13.3% year over year. Our estimate was $877.4 million. The Zacks Consensus Estimate was pegged at $890 million.
Adjusted operating margin expanded 300 bps year over year to 75%. Our estimate was 71.4%.
Fixed Income and Data Services' revenues were $579 million, which increased 3% year over year. Our estimate was $616.5 million. The Zacks Consensus Estimate was pegged at $582 million.
Adjusted operating income rose 3.7% to $250 million. Our estimate was $255.5 million. The Zacks Consensus Estimate was pegged at $254 million. Adjusted operating margin remained flat year over year at 43%. Our estimate was 41.5%.
Mortgage Technology’s revenues increased 1% to $508 million. Our estimate was $463.8 million. The Zacks Consensus Estimate was pegged at $497 million.
Adjusted operating income was $177 million, which declined 8.3% year over year. The Zacks Consensus Estimate was pegged at $193 million. Our estimate was $207.7 million.
Adjusted operating margin contracted 400 bps year over year to 35%. Our estimate was 44.8%.
Full-Year Highlights
Adjusted earnings of $6.07 per share increased 8% year over year. The Zacks Consensus Estimate was pegged at 6.05 per share. Revenues of $9.3 billion increased 16% year over year and came in line with the consensus estimate.
Adjusted operating income of $5.5 billion increased 16% year over year. Adjusted operating margin of 59% was flat year over year.
Financial Update
As of Dec. 31, 2024, Intercontinental had cash and cash equivalents, including short-term restricted cash and cash equivalents of about $2 billion, up 38.8% from Dec. 31, 2023. Long-term debt of $17.3 billion decreased 16% from 2023-end.
Total equity was $27.7 billion as of Dec. 31, 2024, up 7.4% from 2023-end.
Operating cash flow was $4.6 billion in 2024, up 26.3% year over year. Adjusted free cash flow was $3.6 billion, up 13.2% year over year.
Intercontinental paid out $1 billion in dividends in 2024. It expects to resume share repurchases in the first quarter of 2025.
First-Quarter 2025 Guidance
GAAP operating expenses are expected in the range of $1.22-$1.23 billion. Adjusted operating expenses are projected to be between $965 million and $975 million.
Non-operating expense is anticipated to be between $175 million and $185 million.
The share count is forecast in the range of 575-581 million.
2025 Guidance
Exchange recurring revenues are expected to grow in low single digits. Fixed Income & Data Services recurring revenues are expected to grow in mid-single digits, while Mortgage Technology revenues are expected to grow in low-to-mid single digits.
GAAP operating expenses are expected in the range of $4.915-$4.965 billion. Adjusted operating expenses are projected to be between $3.915 billion and $3.965 billion.
Capital expenditures are expected to be in the range of $730 million to $780 million.
The effective tax rate is expected to be between 24% and 26%.
Dividend Update
The board of directors approved a 7% increase in the dividend to 48 cents per share for the first quarter of 2025. The dividend will be paid out on Mar. 31 to shareholders of record as of Mar. 17.
ICE expects the annual total dividend for 2025 to be $1.92 per share
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 an Industry Player
Nasdaq, Inc. NDAQ reported fourth-quarter 2024 adjusted earnings per share of 76 cents, beating the Zacks Consensus Estimate by 1.3%. The bottom line improved 5% year over year. Nasdaq’s net revenues of $1.2 billion increased 10% year over year. The top line missed the Zacks Consensus Estimate by 0.1%.
Annualized Recurring Revenue increased 7% year over year. The company’s operating margin of 55% remained flat year over year. The Nasdaq stock market welcomed 162 new company listings in the fourth quarter of 2024, including 66 initial public offerings. The number of listed companies was 4,075 at the end of the quarter.
Upcoming Releases
CME Group Inc. CME is slated to release fourth-quarter 2024 earnings on Feb. 12. The Zacks Consensus Estimate for the fourth quarter is pegged at $2.44 per share, indicating an increase of 2.9% from the year-ago reported figure.
CME Group delivered an earnings surprise in each of the last four reported quarters.
Cboe Global Markets, Inc. CBOE is set to release fourth-quarter 2024 earnings on Feb. 7. The Zacks Consensus Estimate for the fourth quarter is pegged at $2.14, indicating an increase of 3.9% from the year-ago reported figure.
CBOE delivered an earnings surprise in each of the last four reported quarters.
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