Intercontinental Exchange, Inc. Q1 2026 earnings call

Good morning. ICE's first quarter 2026 earnings release and presentation can be found in the investor section of ice.com. These items will be archived and our call will be available for replay. Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment and are subject to risks, assumptions, and uncertainties. For a description of the risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2025 Form 10-K, 2026 first quarter 10-Q, and other filings with the SEC. In our earnings supplement, we refer to certain non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You will find a reconciliation to the equivalent GAAP term in the earnings materials.

When used on this call, net revenue refers to revenue net of transaction-based expenses. 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 explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items. With us on the call today are Jeff Sprecher, Chair and CEO, Warren Gardiner, Chief Financial Officer, Ben Jackson, President, and Chris Edmonds, President of Fixed Income and Data Services. I'll now turn over the call to Warren.

Thanks, Steve. Good morning, everyone, and thank you for joining us today. I'll begin on slide four with our first quarter results, which represent the strongest quarter in ICE's history. First quarter adjusted earnings per share were $2.35, up 37% year-over-year. Net revenues reached a record $3 billion, up 18%. Adjusted operating income totaled a record $1.9 billion, up 26%, with meaningful contributions from all three of our operating segments. This is the product of a deliberate strategy, disciplined execution, and a platform built for precisely this environment. These results build on an already strong base. In the first quarter of 2025, we delivered 8% revenue growth and 16% adjusted EPS growth, which were both records at the time. That compounding dynamic is what distinguishes ICE.

Our business deepens with use, our recurring revenues compound over time, and our expense discipline creates the capacity to invest in future organic growth by simultaneously delivering strong operating leverage and free cash flow. On the topic of expenses, adjusted operating expenses totaled $1.035 billion, in line with the midpoint of our updated guidance range. The update reflected performance-related items such as license fees and compensation directly tied to the strength of our results. With these costs more than offset by revenues. Looking to the second quarter, we expect adjusted operating expenses to remain consistent with the first quarter and be in the range of $1.030 billion-$1.040 billion. Adjusted free cash flow generation was a first quarter record, $1.2 billion, a figure that speaks to the quality of our earnings and the capital efficiency of our model.

In the first quarter, we repurchased approximately $550 million of our own stock, including an incremental $200 million executed during mid-February when the market price of our shares further disconnected from the fundamentals of our business. In total, including dividends, we returned nearly $850 million to shareholders during the quarter. Let me now turn to Exchange segment on slide five. First quarter Exchange net revenues reached a record $1.8 billion, up 27% year-over-year. Critically, these results compound on top of 12% growth in 2025, 11% growth in 2024. Transaction revenues grew 33%. Our interest rate complex grew nearly 70% versus the year-ago period, as investors and institutions increasingly seek to manage duration risk.

In energy, our global oil complex increased 47% year-over-year, reflecting the continued primacy of ICE's energy benchmarks as a reference point for global capital flows. Natural gas and environmental products, which represent half of our energy revenues, grew 37%, a testament to the structural reality that the multi-decade evolution of the global energy mix is increasing the need for sophisticated risk management tools. I want to offer some important context on our volume composition for those who may be wondering about sustainability. March was exceptional for our energy business, the underlying momentum was well established before those events. In addition, energy open interest through April remains up 6%, that persistence is what matters. Customers are not simply reacting to headlines. They're building long-term exposure.

Meanwhile, interest rate open interest stands 63% above year-ago levels, signaling structural expansion in the breadth of how our customers are managing rate risk. In fact, global futures and options open interest reached a new record just this week, up 23% year-over-year, further underscoring that the activity we saw in the first quarter is carrying forward. Our recurring revenue streams, exchange data services, and our NYSE listings franchise reached a record $405 million, up 10% year-over-year, with exchange data and connectivity services growing 13%. These revenues grow as more participants embed ICE's data into their workflows, creating network effects that make us more valuable the more widely they are used. At the NYSE, we continue to set the standard for quality listings globally.

In the first quarter, we welcomed 25 new operating companies, facilitated the largest transfer in our history with AstraZeneca, and maintained a retention rate above 99%. Turning to slide six, in our Fixed Income and Data Services segment, we delivered another quarter of strong, broad-based execution. First quarter revenues totaled a record $657 million, up 9% year-over-year. Transaction revenues grew 14% to a record $143 million. Performance was led by our CDS clearing business, where revenues increased 18%, driven by elevated global macroeconomic volatility, while recurring revenues reached a record $514 million, growing 8%.

Within Fixed Income Data and Analytics, we achieved record revenues of $322 million, up 7%, aided by strong net new business trends in our pricing and reference data offering and continued momentum in our index business, which ended the quarter with a record $829 billion in ETF AUM, up 21% year-over-year. In total, there is now approximately $2 trillion in assets benchmarked to ICE indices, roughly double the amount tracking this franchise when we acquired the BofA Merrill Lynch indices less than nine years ago, a trajectory that reflects the power of our data platform. Data and network technology revenues increased 11% in the first quarter, reflecting strong demand for our ICE Global Network, Consolidated Feeds, and desktop solutions.

Private global data center network connecting over 750 data sources and 150 trading venues across 24 countries is a physical infrastructure asset that cannot be replicated quickly or cheaply. It continues to benefit from secular demand trends, including higher messaging activity and AI-driven demand for capacity. Please turn to slide seven for our Mortgage Technology segment. First quarter revenues totaled $539 million, up 6% year-over-year. On a pro forma basis inclusive of Black Knight, this represents our strongest quarterly performance since Q4 2022. The broader mortgage origination market remains well below its long-run normalized potential, yet we are growing, which speaks to the strategic value of what we have built. Recurring revenues totaled $401 million, reflecting continued product adoption and the beginning of normalization in Encompass contract renewals.

Recurring revenues also benefited from roughly $4 million of one-time items. Accordingly, we anticipate second quarter recurring revenues will remain around current levels. Transaction revenues totaled $138 million, up an impressive 22% year-over-year, driven by a significant increase in Encompass closed loan revenues, which materially outpaced industry volumes as customers increasingly exceed their contractual minimums, and by the double-digit growth in closing solutions supported by strong refinancing activity. The strategic logic of the Mortgage Technology segment is increasingly evident. The integration of our Encompass origination system with MSP has transformed what was once a collection of standalone products into a true end-to-end mortgage platform, processing a loan from initial contact through origination, servicing, and secondary market execution, a unique offering in the industry.

We have the cost structure, the customer base, and the network in place for when the market normalizes. We are investing through the cycle to ensure that opportunity is captured. In closing, we operate at the intersection of markets that respond to different forces. By connecting those forces through our exchange infrastructure, our data network, and our mortgage platform, we have built a model that is designed to perform through cycles, not around them. This quarter demonstrates what this platform can deliver when all three segments are executing well simultaneously. Even when they are not all in sync, as has been the case in prior quarters, the model still compounds.

The forces that are driving our results are structural: the irreversible digitization of financial markets, the global expansion of risk management needs, the growing reliance on proprietary and institutional-grade data by AI systems and human decision makers alike, and the analog-to-digital conversion underway in the U.S. mortgage market. We are confident in our trajectory for the balance of 2026 and beyond, as the forward opportunity set remains as large as it has ever been. I'll be happy to take your questions during Q&A. For now, hand the call over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to slide eight. Across ICE's derivatives platform, we've built technology that evolves with our customers' needs, combining deep liquidity, global participation, and transparent price discovery into a single connected marketplace. The first quarter was a clear validation of how we've built and scaled our markets. In environments that test liquidity, capital efficiency, and operational resilience at the same time, the value of integrated global market technology becomes visible very quickly. This quarter, our platform was used exactly as intended: to absorb complexity, facilitate price discovery, and allow customers to manage risk at scale. That translated into significant activity across our markets. March marked the highest monthly volume in ICE's history, exceeding the prior record set just two months earlier by more than 70%.

For the quarter, total average daily volume increased 45% year-over-year, with records across interest rates, global commodities, and energy. Looking forward into Q2, total open interest across futures and options hit new records over the past week alone, growing more than 20%. As we have consistently said, open interest is the leading health indicator of our markets, and rising open interest alongside record volumes signals that customers are building and maintaining positions, not speculating and exiting. As market shifts directly impacted inflation expectations, demand for interest rate risk transfer accelerated sharply. At the start of the year, SONIA futures were pricing two U.K. rate cuts. By mid-March, the outlook had reversed to rate hikes, driving a rapid reset in short-term pricing.

Customers responded by turning to our markets in size, with SONIA ADV increasing more than 120% year-over-year and open interest more than doubling as participation broadened. Similar dynamics played out across our European rates complex. Euribor futures and options delivered record volumes as expectations for ECB policy shifted. On March 3rd alone, ICE traded over 9 million lots of Euribor futures, underscoring the depth of liquidity our platform provides when markets shift materially. Another contributor to our strong performance is the deliberate method that we have developed for our global energy franchise. Our approach has been consistent. Establish a trusted benchmark with deep liquidity, then surround it with differentials, spreads, and regional contracts, creating network effects and giving customers increasingly precise tools to manage exposure.

We applied that blueprint to Brent and crude oil, ICE Gasoil and refined products, and to TTF in global natural gas. As participation grows, those network effects compound not only through new products and customers, but also as existing participants deepen their activity across the platform. Historically, participants who come onto our platform during periods of heightened volatility stay once conditions normalize, and we expect this cycle to be no different. Importantly, performance was already strong in January and February. Before the Iran conflict escalated in late February, energy ADV was up double digits, and open interest was also up in both months. As disruptions to energy infrastructure and trade flows emerged, energy markets repriced rapidly, and our platforms easily facilitated the global demand.

In oil, record Brent ADV increased 60% year-over-year, with record participation up 10%, positioning the benchmark as the primary venue customers turn to during periods of stress. In our global natural gas markets, TTF delivered record ADV up 61% year-over-year, with record participation up 12%. TTF set a new single-day volume record of 2 million lots on March 3rd, and by the end of March, year-to-date volume was already at 46% of the full year 2025 total. In Asia, JKM hit both volume and open interest records as drone strikes on Qatar's facility, representing 17% of the country's LNG exports, reinforced the critical role of Asian gas benchmarks in managing supply disruption risk. JKM also achieved record participation up 9% from last year.

This strength extended to our environmental markets, where record first quarter average daily volume grew 30% year-over-year, and participation here has grown double digits on average over the last five years. Supporting markets at this scale requires more than liquidity. It requires margin frameworks designed for volatility. ICE Risk Model 2 is now deployed across more than 1,000 energy contracts, improving portfolio margining efficiency so volumes can scale while appropriately increasing capital requirements. Even through recent periods of heightened volatility, margin calls were met without disruption, markets stayed orderly, and risk managers have remained comfortable with the resilience of the system. Underpinning all this market activity is the data and connectivity infrastructure that allows participants to operate with confidence. Please turn to slide nine.

We built the Fixed Income and Data Services business with the understanding that high-quality data, governance, and secure distribution are foundational to how modern markets operate. That conviction matters even more today as workflows become increasingly automated and model-driven. In the first quarter, FIDS delivered a record quarter, with both total revenues and recurring revenues at their highest levels to date, up 9% and 8% year-over-year respectively. Pricing and reference data form the foundation of the business. Each day, we evaluate approximately 3 million illiquid instruments across more than 150 countries. It is important to highlight that only a small percentage of municipal and corporate bonds trade on any given day. Stated simply, this is not data that can be scraped, inferred, or generated synthetically. Our evaluated pricing methodologies have been built and refined over more than three decades and are deeply proprietary.

They feed directly into regulatory, compliance, valuation, and risk processes across the global financial system. These data sets are embedded in client workflows, and switching providers typically requires a board-level decision for fund managers. That same pricing foundation supports our index franchise. During the quarter, ETF AUM tracking ICE indices reached record levels, up more than 20% year-over-year. The indices business also achieved a record quarter, with revenues growing at a double-digit rate. Because our indices are built on top of ICE's own evaluated pricing, the defensibility compounds over time. Shifting from data advantage into delivery and access, our data and network technology business is an increasingly important growth driver within FIDS, led primarily by the ICE Global Network. Demand across this business continues to be driven by clients' needs for reliable, low-latency connectivity to reference data, Consolidated Feeds, and execution venues.

As clients scale their data consumption and deploy real-time valuation engines, proximity to reference data sources becomes critical. This favors ICE's owned and operated infrastructure, where data, compute, and connectivity sit together rather than in public cloud environments. ICE owns and operates its data centers, and we're building additional capacity as client demand accelerates, delivering operational security, data protection, cost predictability, and the low-latency performance our clients' workflows require. Turning next to our CDS clearing business, it delivered a record revenue quarter, with growth approaching 20% versus last year, driven by elevated activity across index, option, and sovereign CDS products, which delivered a record of $2.7 trillion in notional clear on March 20th. We invested in this business coming out of the great financial crisis and continue to innovate as the market evolves.

Treasury clearing is now operationally live following SEC approval in February, and we are actively building the repo rulebook well ahead of the regulatory mandate. A meaningful development during the quarter was the launch of ICE Private Credit Intelligence with Apollo as our anchor partner. This initiative builds directly on ICE's strength in fixed-income data, analytics, and market infrastructure, extending those capabilities into the private credit market, one of the fastest-growing asset classes. Private credit participants are increasingly operating alongside public fixed-income markets in portfolios and risk systems. ICE Private Credit Intelligence is designed to support that convergence. By leveraging our existing data science, analytics, and secure distribution capabilities, we are positioning ICE to play a central role as private credit continues to institutionalize and scale. Across FIDS, we continue to expand the breadth and relevance of our data sets to complement our traditional market data.

During the quarter, we launched our Polymarket Signals and Sentiment product, which normalizes prediction market data for institutional workflows and is available exclusively through ICE feeds. We are also incorporating additional correlated data sets, including Reddit and Dow Jones content, to provide broader context around market sentiment and information flow. As these data sets scale, the ways in which clients use our data continue to expand. Whether powering automated workflows, AI models, or real-time decision-making, every use case requires high-quality proprietary inputs, and we believe ICE controls the most comprehensive and institutionally trusted data sets across these markets. Importantly, customers are embedding our proprietary and secure real-time data for inference in their workflows, not simply consuming it to train models and then move on. As these use cases deepen, demand for ICE's proprietary data increases rather than decreases.

The dynamic of growing client engagement is also evident in our Mortgage Technology business, where we continue to advance the platform to support clients across origination, servicing, and capital markets. Please turn to slide 10. The opportunity in mortgage remains significant, our platform is positioned to capture it across market cycles. The business continues to execute against its core thesis, helping clients automate, connect, and scale in a highly cyclical environment. In the quarter, revenues grew 6% year-over-year, driven by double-digit growth in both origination technology and closing solutions. Manual intervention still exists across parts of the mortgage workflow, we see a long runway to continue automating and delivering real savings for our clients.

Thank you, Ben. Good morning, everyone, and thank you for joining us. Please turn to slide 11. 25 years ago, ICE started with a single idea, that opacity and inefficiency in markets were not inevitable conditions. They were problems that technology could solve. That conviction is the foundation upon which our technology rests, and it's never been more relevant than it is today. This was a record quarter. In fact, the strongest quarter in our company's history. This milestone is not the product of one favorable market environment. It's the compounding output of an all-weather business model that's been deliberately constructed, one that's designed to grow in all conditions. Since inception, ICE has built markets that bring efficiency and transparency to an increasingly complex, regulated, and constantly evolving world. A reality that is intensifying, not receding. Global systems are more interconnected.

Capital moves faster, and expectations for oversight and transparency continue to rise. Our role has never been to forecast which scenario will emerge, but to build the technology that allows markets to function across all of them. Essentially, a picks and shovel strategy. This is why we've intentionally placed ICE at the intersection of markets influenced by both physical dynamics or the acts of God, and those shaped by policy and human decisions or the acts of man. During periods of volatility, we see participants turning to our futures platforms to manage risk with increasing demand for trusted fixed income data and evaluated pricing. At the same time, our Mortgage Technology business benefits from structural tailwinds as the digital modernization continues to advance. We do not build point solutions for moments in time. We build mission-critical systems that operate through cycles across jurisdictions and under regulatory oversight.

Artificial intelligence fits squarely within that strategy. It accelerates the way regulated workflows are processed by embedding intelligence directly into our systems of record, preserving governance and auditability, and while improving speed and insight. Importantly, as automation increases, value shifts towards workflow outcomes rather than seat pricing. We recognized that early on, that pricing on workflow outcomes would be the preferred pricing model. As AI is incorporated into these workflows, that pricing model remains durable and stands to benefit us. Internally, we're already deploying AI in production across our organization. Teams are using it to undertake code writing, enhance pricing workflows, accelerate index calculations, support client interactions, and earlier identify loan servicing issues. These are not experiments.

Our data team is actively transforming our proprietary and non-proprietary financial, market, and commodity data into AI-ready formats, and they themselves are internally integrating AI technologies into ICE to enhance data utility, extraction, and analysis for our clients. ICE now offers an AI model-controlled protocol server, or MCP server, located in our data center and available on the ICE Global Network to ease access to ICE's non-proprietary data. We are actively engaged with major AI model vendors to explore the development of additional server protocols and topology for further access to, and the protection of ICE's proprietary data. The non-proprietary data in ICE's MCP server recently launched and is being offered under existing license agreements to some of our customers to see if this type of delivery has benefits versus traditional data connectivity methods.

You can see from our quarterly results that the revenue from ICE's data and data infrastructure showed very strong growth. New technologies such as tokenization and prediction markets are drawing increased attention. We approach these developments from first principles. How is risk managed? How does settlement function? From where does trusted data originate, and how do participants gain regulated access. Those questions matter regardless of the form that risk transfer takes, and they're questions that ICE has spent decades learning how to answer. At the New York Stock Exchange, we're putting this into practice. We're building a tokenized securities platform that combines our high-velocity Pillar matching engine with blockchain-based distribution and settlement designed for 24 by 7 trading. We are pursuing regulatory approval under existing federal law, and this initiative is not dependent on any pending legislation.

We've also signed a memorandum of understanding with Securitize, naming them as the first digital transfer agent to support the tokenized security issuance and lifecycle management on our platform. Our partnerships with Polymarket and OKX reinforce these initiatives from different angles. Polymarket continues to deliver strategic value through differentiated event-driven data that we've begun distributing to our institutional clients. Polymarket's engineering team is collaborating with us concerning on-chain settlement and 24 by 7 capital movement. OKX, which serves more than 120 million users globally, is working with us to connect its crypto native audience to ICE's regulated markets, including U.S. futures and NYSE tokenized equities, while giving us a pathway to launch regulated crypto futures tied to OKX spot crypto prices. These initiatives complement our core franchises as our center of gravity remains the technology that supports global risk transfer, price discovery, and capital formation.

Last month, with Apollo as our anchor partner, we announced the launch of ICE Private Credit Intelligence. The private credit asset class has grown into one of the largest in the world, yet it still operates without the standardized reference data framework that is foundational to the transparency in traditional fixed income markets. No consistent reference data layer currently exists, and there's no common foundation for assessing risk across portfolios. We're beginning with the data layer, establishing common reference data, governance, and permissioning from the outset. This is the same playbook we followed with publicly listed fixed income instruments where reference data, evaluated pricing, and indices became essential market utilities over time. The objective is to introduce comparability and consistency into workflows that it increasingly requires. We've navigated similar development cycles before. European natural gas once lacked benchmarks holding broad participation and confidence.

We invested early, built the foundational capabilities, and today our European TTF natural gas market serves as the cornerstone of a global natural gas franchise. This Private Credit Intelligence initiative follows a similar playbook, and the intent is to build upon our reputation as one of the leading providers of pricing, reference data, and indices to bring greater transparency to an asset class currently in need of such industry standards. To close, this was a record quarter for ICE, with adjusted earnings per share growing 37% year-over-year. More importantly, our performance reflects choices we made years ago, investments that were deliberate, integrated, and built for durability. The world is more complex and more volatile than when we started. That complexity is not a headwind for ICE.

It's a condition that our business is designed for, and this perspective continues to guide how we think about the next phase of growth. I'd like to conclude today's prepared remarks thanking our customers for their continued business and their trust. I'd like to thank my colleagues at ICE for their execution and commitment that made another exceptional quarter possible. I'll now turn the call back to our moderator, and we'll conduct a question and answer session until 9:30 A.M. Eastern Time.