Intercontinental Exchange, Inc. (ICE) Earnings

Management highlights

### Strategic Acquisition of Market Access - The $5.7 billion enterprise value acquisition extends ICE's core strategy of bringing transparency and efficiency to fragmented, opaque markets, this time to the large global fixed income market. - Combines ICE Bonds' leading position in retail/wealth management fixed income with Market Access' leading institutional fixed income execution network serving 2,100 institutional firms, creating a single unified, end-to-end fixed income ecosystem connecting complementary liquidity pools. - The combined network will create a data flywheel: more liquidity generates more transaction data, which improves ICE analytics, which attracts more users, deepening liquidity further. It also enables cross-selling of ICE's existing evaluated pricing, reference data, indices, and analytics to new institutional clients. - Market Access' growing treasury rates platform will connect to ICE's newly approved treasury clearing system, extending ICE's credit and fixed income footprint into interest rate markets. The shared infrastructure will also support ICE's existing private credit initiative with Apollo, enabling both public and private credit on a single platform. - The deal is expected to be immediately accretive to adjusted EPS in the first full year post-close, with $100 million in annualized expense synergies fully realized by year three, and is projected to close in H1 2027. ### AI and Data Product Development - Launched the expanded ICE Model Context Protocol (MCP) server that delivers ICE's proprietary governed data directly to clients' AI workflows, with complete permissioning and audit trails required for regulated financial institutions. - Launched ICE Compass, an AI-powered pre-trade analytics platform for fixed income that levels the informational playing field for asset managers by providing customized estimates of counterparty bid/ask pricing and counterparty competitiveness rankings. - In Mortgage Technology, embedded agentic AI (ICE Aurora) directly into Encompass (origination) and MSP (servicing) platforms, with governance, audit trails, and mandatory human oversight for high-risk decisions to avoid hallucinations and comply with regulatory guidance. Use cases include automating workflow tasks (service ordering, disclosure generation, borrower inquiry resolution, back-office reconciliation) that reduce client costs and improve efficiency.

Guidance

- Full year 2026 adjusted operating expenses are now guided to $4.19 billion to $4.23 billion, an upward revision driven by higher expected performance-related compensation, accelerated data center investment, and increased product development spending, all categorized as future growth investments. - Third quarter 2026 adjusted operating expenses are guided to $1.063 billion to $1.073 billion. - Full year 2026 CapEx is now guided to approximately $850 million, an upward revision as ICE pulled forward planned 2027 CapEx into 2026 to prepare for future demand growth. - Exchanges full year 2026 recurring revenue growth is guided to the high single-digit range. - Fixed Income and Data Services (FIDS) full year 2026 recurring revenue growth guidance was raised to 7% to 8%, up from prior mid-single-digit guidance; second half 2026 growth is expected to trend to the lower end of the range due to difficult 2025 comparables. - Baseline quarterly share repurchases were increased from $350 million to $400 million, supported by a new $4 billion board authorization for repurchases. - Gross leverage is expected to peak temporarily at 3.4x pro forma EBITDA following the Market Access acquisition, with a target return to ≤3.0x within 18 to 24 months, consistent with prior post-acquisition deleveraging pace.

Segment performance

1. Exchanges: Net revenue was $1.5 billion, following double-digit growth in 2024 and 2025. It contributed ~55.6% of total company net revenue. The rates business grew 24% year-over-year (YoY), with total futures and options open interest up 20% YoY. NYSE transaction revenue hit a record, up 15% YoY; recurring revenue was a record $416 million, up 10% YoY, with exchange data and connectivity growing 12% YoY. 2. Fixed Income and Data Services (FIDS): Net revenue was $645 million, up 8% YoY, contributing ~23.9% of total company net revenue. Record recurring revenue hit $531 million, up 10% YoY, including an $8 million one-time item. CDS clearing delivered its best non-volatile quarter on record; ETF assets benchmarked to ICE indices reached a record $922 billion, up 29% YoY; data and network technology revenue grew 11% YoY. 3. Mortgage Technology: Net revenue was $557 million, up 5% YoY, contributing ~20.6% of total company net revenue. On a pro forma basis including Black Knight, this was the strongest quarterly performance since H1 2022. Transaction revenue grew 11% YoY; recurring revenue totaled $406 million, including a $3 million one-time item, with growth driven by continued product adoption and new client go-lives across origination and servicing platforms.

Risks & headwinds

- The Market Access acquisition is subject to regulatory approvals and customary closing conditions, with completion expected in H1 2027 and no guarantee of meeting projected synergy or revenue growth targets. - Forward-looking results, including acquisition benefits and AI-driven growth, are subject to inherent uncertainties that could cause actual outcomes to differ materially from management projections, as detailed in ICE's prior SEC filings. - Perpetual futures face unresolved regulatory uncertainty in the U.S., with potential SEC jurisdiction over security-based perpetual futures and industry pushback against perpetual futures for real-world commodities, creating uncertainty around the size of this growth opportunity. - On-chain tokenization and collateral movement face unresolved regulatory questions around bankruptcy, title ownership, and systemic risk that have delayed broad institutional adoption. - Fixed income execution market competition remains intense, with ongoing pressure on transaction pricing and prior market share declines for Market Access that may not be fully reversed.

Analyst Q&A

• Q: Why is ICE the best owner of Market Access, and can ICE reverse Market Access' prior declining market share and fee per million trends? /

  A: ICE has built a large complementary fixed income ecosystem of data, clearing, and retail/wealth execution, while Market Access has leading institutional execution share. Combining the two into a single network will eliminate client friction points, create economies of scale, and deliver a unique, unmatched offering that will allow ICE to capture greater share over time. The combination of complementary liquidity pools and existing ICE infrastructure creates a unique value proposition no other provider can match.

• Q: How does the Market Access acquisition advance ICE's private credit strategy, and does it extend the opportunity into private credit trading as well as data? /

  A: The transaction was part of the pre-existing strategic planning for ICE's partnership with Apollo on private credit. The common infrastructure rails being built for the combined fixed income network will support both data and distribution for private credit, allowing market participants at all stages of private credit market development to access greater transparency and execution on their own timeline, accelerating the growth of ICE's private credit initiative.

• Q: How does agentic AI in ICE Mortgage Technology drive revenue growth and share gains, and does it also deliver cost benefits? /

  A: AI models are a commodity; ICE's durable advantage is its governed network of record, role-based permissioning, decades of unique behavioral workflow data, and audited AI processes that align with strict GSE regulatory guidance. AI is already embedded into core platforms to automate high-volume workflows, with new AI tools already being monetized as clients adopt them. AI also drives cost efficiency by automating routine tasks like borrower call resolution, reducing client and internal operating costs, and widens the value surface of ICE's network rather than commoditizing it.

• Q: What is ICE's view on perpetual futures as an asset class, what are the regulatory prospects for onshore U.S. perps, and how large is the growth opportunity? /

  A: Perpetual futures are effectively analogous to leveraged ETFs with a different distribution model, mostly serving speculators rather than commercial hedgers (the core of ICE's traditional market franchise). While the CFTC has asserted jurisdiction and appears open to perps for crypto and precious metals, there is significant industry pushback for perps tied to agricultural and energy real-world assets, and the SEC is expected to assert jurisdiction over security-based perps. The opportunity is mostly incremental for emerging market users without good access to traditional U.S. broker-dealers.