ICE's third quarter 2025 earnings release and presentation can be found in the investor section of ice.com. You'll find a reconciliation to the equivalent GAAP terms in the earnings materials. When used on this call, net revenue refers to revenue net of transaction-based expenses and adjusted earnings refers to adjusted diluted earnings per share. Throughout this presentation, unless otherwise indicated, references to revenue growth are on a constant currency basis.
Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items. I'll begin on Slide 4 with some of the key highlights from our record third quarter results. Third quarter adjusted earnings per share were $1.71, up 10% year-over-year and the best third quarter in our company's history. Net revenues totaled $2.4 billion and were underpinned by a 5% increase in recurring revenue.
This recurring revenue growth was fueled by a 9% rise in exchange data and a 7% uplift in fixed income and data services, both reflecting sustained demand for our high value proprietary data offerings. After adjusting for these benefits, we would have been towards the low end of our guidance range. Excluding this benefit, the adjusted tax rate would have been within the prior 24%-26% guidance range, and as a result, we expect the fourth quarter tax rate will normalize to between 24% and 26%. Moving to capital allocation, we returned $674 million to our shareholders during the quarter, including approximately $400 million of share repurchases.
What went well
- Third quarter adjusted EPS of $1.71 rose 10% year-over-year, the best third quarter in ICE's history, on record net revenues of $2.4 billion.
- Recurring revenue grew 5%, led by 9% growth in exchange data and connectivity services and 7% growth in Fixed Income and Data Services recurring revenue (a record $495 million).
- The Exchanges segment posted $1.3 billion in net revenues, and futures and options open interest surged 16% year-over-year toward the end of October, with energy futures up 14% and interest rate futures up 37%.
- FIDS revenues reached a record $618 million; ICE Bonds revenues rose 15% (muni up 41%), the index business hit a record $754 billion in ETF AUM, and data and network technology revenue accelerated to 10% growth.
- ICE returned $674 million to shareholders during the quarter (including roughly $400 million of buybacks), reduced debt by about $175 million, and cut gross leverage to just over 2.9x EBITDA.
- ICE announced a strategic investment in and data agreement with prediction-market operator Polymarket and unveiled its ICE Aurora AI platform, citing over 95% accuracy in AI-based reference-data extraction across roughly 40,000 documents processed monthly.
What went wrong
- Within the CDS business, results were pressured by lower member interest income, a direct result of lower fed funds rates.
- Third quarter results included several one-time items that management said would not repeat, including about $6 million of audit-related exchange-data revenue and a few million dollars of one-time FIDS revenue.
- The adjusted tax rate of 21% benefited from prior-year tax audit settlements; management guided the fourth quarter rate to normalize back to 24%-26%.
- Management flagged higher fourth quarter adjusted non-operating expense of $180-$185 million, driven by interest expense tied to the Polymarket investment, and typical seasonally lighter fourth quarter mortgage purchase volumes.
More on Intercontinental Exchange, Inc.
Reported 2025-10-30 · figures from the Intercontinental Exchange, Inc. Q3 2025 earnings call.