Intercontinental Exchange, Inc. Q3 FY2026 earnings call

• Strong Financial Performance: Adjusted EPS of $2.02 was up 18% YoY, marking the best Q3 in company history. Net revenues grew 15% to $2.8 billion, with adjusted operating income rising 19% to $1.7 billion.
• Record Market Activity: Futures and options average daily volume surged 31% in Q3, a record for the quarter. Total open interest increased 13% YoY, reflecting heightened risk management demand across energy, rates, and commodities.
• Energy Market Dominance: ICE benchmarks are central to global energy trade flows, particularly as Europe rebuilds supply chains away from Russian gas. TTF, JKM, and Brent volumes saw significant double-digit growth, supported by record open interest in options.
• Expansion into Compute and AI Infrastructure: Driven by hyperscaler data center demand, ICE is launching compute futures via partnerships (Oren Index, NativeX Coil Index) to help clients manage GPU rental price volatility and clean spark spreads.
• Strategic Blockchain Partnerships: ICE partnered with TradeXYZ (HyperLiquid) to bring regulated perpetual futures markets onshore for retail investors. Additionally, a joint venture with OKEx aims to connect its 120 million global users to ICE’s regulated platforms via compliant wallet technology.
• Mortgage Tech Integration: Three years post-acquisition of Black Knight, integration continues to deliver synergies. The business leverages AI agents within Encompass and MSP systems to automate workflows, maintaining deep network effects with major lenders like Wells Fargo and Freedom Mortgage.
• NYSE Listings Strength: Despite slower industry IPO activity, NYSE facilitated $26.5 billion in proceeds from 73 IPOs YTD, surpassing all of 2025. Retention rate remains above 99%, with notable transfers including AstraZeneca and Kraft Heinz.

Exchanges: Net revenue reached a record $1.5 billion, up 22% year-over-year, contributing approximately 53.6% of total net revenues. Transaction revenues rose 28%, driven by strong performance in energy (up 26%), interest rates (up 48%), and agricultural/metals (up 62%). Recurring revenues hit a record $422 million, up 8%. Fixed Income and Data Services (FIDS): Revenues were a record $674 million, up 9% year-over-year, contributing approximately 24.1% of total net revenues. Recurring revenues grew 9% to a record $538 million. Mortgage Technology: Revenues were $549 million, up 4% year-over-year, contributing approximately 19.6% of total net revenues. Recurring revenues grew 4% to $405 million.

• Exchange Recurring Revenue: Full-year growth expected at approximately 9%, at the upper end of the prior high-single-digit range.
• FIDS Recurring Revenue: Full-year growth expected at approximately 8%, at the top of the prior range, driven by stronger consumption and index asset growth.
• Mortgage Technology Q4: Recurring revenues expected to grow modestly from Q3; transaction revenues expected to decline due to seasonality and elevated mortgage rates.
• OTC and Other Revenues: Q4 revenues anticipated to be around $100 million, impacted by lower regulatory fees.
• Operating Expenses: Q4 adjusted operating expenses guided between $1.82 billion and $1.92 billion. Full-year CapEx raised to approximately $1.5 billion, largely due to an Atlanta campus purchase.
• Tax Rate: Q4 adjusted tax rate expected towards the high end of the 24%-26% range.

• Regulatory Approval Delays: The Market Access acquisition is pending final DOJ approval, though expected to close in Q1 2027. Retail blockchain ventures (TradeXYZ/OKEx) remain subject to CFTC and other regulatory reviews.
• Mortgage Market Volatility: Elevated mortgage rates may continue to suppress transaction volumes in the fourth quarter and potentially impact near-term growth until market conditions improve.
• Execution Risk in New Ventures: Integrating blockchain-based retail perpetual markets and compute futures involves unproven business models and regulatory uncertainty regarding tokenized securities and decentralized finance (DeFi) frameworks.
• Competitive Landscape: The fixed income data space faces competition, though ICE believes scale and vendor consolidation trends favor its position. Post-Market Access integration must successfully create a unified ecosystem to maintain competitive advantage.

Q: How has ICE's view on real-world asset perpetuals evolved, and what is the strategic value of the TradeXYZ partnership?

A: CEO Jeff Sprecher noted that while perpetual futures are short-term instruments distinct from traditional forward curves, they represent a growing retail trend that ICE should not ignore. The partnership with TradeXYZ allows ICE to bring these blockchain-based markets under U.S. regulation, aligning with White House sentiment against offshore trading. This complements ICE's institutional franchise by capturing retail flow through a regulated framework rather than losing it to unregulated overseas venues.

Q: What is driving the accelerated growth trajectory in Fixed Income and Data Services (FIDS), and how durable is this trend?

A: Chris Edmonds explained that growth is driven by client preference for fewer vendors providing greater scale, allowing ICE to capture more share through its comprehensive data assets. The durability stems from ICE's ability to adapt to evolving customer needs, particularly in private credit via new identifiers launched with Apollo. AI and agentic demands further enhance growth as clients seek proprietary evaluated pricing that cannot be easily scraped or replicated by competitors.

Q: What specific impacts are hyperscalers having on ICE's energy and data businesses, and how does ICE plan to monetize compute demand?

A: Ben Jackson highlighted that data center expansion directly boosts ICE's power, natural gas basis, and carbon markets, as utilities and operators hedge location-specific energy costs. Hyperscalers are also becoming direct subscribers to ICE data services. To monetize compute demand, ICE is launching compute futures linked to GPU rental prices via partnerships with Oren and NativeX, aiming to provide a single platform for managing both energy and compute risks efficiently.

Q: Will Mortgage Technology revenue growth resume next year despite higher rates, and how does ICE justify its long-term investment in this segment?

A: CFO Warren Gardiner indicated that renewal trends have improved significantly since the 2020-2021 peak, suggesting resilience even in a higher-rate environment. He emphasized that ICE is investing in automation and AI to position the business for stronger growth when the market recovers. CEO Jeff Sprecher added that ICE avoids being an "episodic stock" by owning diverse franchises like mortgages, ensuring stability across different economic cycles, similar to how their European rates franchise became a core profit driver over time.