Intercontinental Exchange (ICE) Tops Q3 Estimates as Exchange Revenue Grows 22%
ICE's net revenue rose 15% to $2.77 billion and adjusted EPS of $2.02 beat the $1.97 Zacks consensus. The stock jumped 4.5% on Thursday.
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange and a string of futures markets, reported third-quarter net revenue of $2.77 billion, up 15% year on year, beating the $2.73 billion Zacks consensus. Adjusted earnings of $2.02 a share, up 18%, topped the $1.97 Zacks consensus. The results came out before Thursday’s open, and the shares jumped 4.5% on Thursday to close at $163.04.
The gain was ICE’s biggest since 2 July, when it rose 4.9%.
What stood out
Trading did the heavy lifting. Exchanges net revenue rose to $1.54 billion from $1.27 billion a year earlier, and transaction revenue, the fees ICE earns each time a contract changes hands, rose 23% to $1.40 billion, the release and Zacks showed.
That followed a busy quarter in its futures markets. ICE’s monthly statistics showed total average daily volume up 31% year on year in the third quarter, with agriculture and metals volume up 57% and energy up 18%.
The other two units grew more slowly. Fixed Income and Data Services brought in $674 million, up from $618 million, while Mortgage Technology, the home-loan software business, rose 4% to $549 million. Chair and Chief Executive Jeffrey Sprecher said in the release that it was ICE’s best third quarter on record.
The outlook
ICE raised its 2026 forecast for recurring revenue growth, the steadier subscription-style income from data and listings, to about 9% in Exchanges and about 8% in Fixed Income and Data Services. On the call, management said it expects Mortgage Technology transaction revenue to fall in the fourth quarter as mortgage rates stay high.
Sprecher also announced a deal under which ICE will become the exclusive operator of Trade[XYZ]’s regulated markets, a move to bring perpetual futures, contracts with no expiry date popular in crypto trading, onto regulated US venues.
Our take
This was a clean beat driven by trading volume, and the raised recurring revenue forecast shows the steadier businesses are growing too. Even after Thursday’s gain, the stock sits 6.9% below its 52-week closing high of $175.10 from 26 January. Next quarter we’d watch whether futures volume holds up and how deep the expected dip in mortgage transaction revenue turns out to be.
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Mostly Markets is for information and education only and isn't investment advice. Theo Park is a pen name. Prices are from Nasdaq and CNBC as of the time stated.
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