The paragraph is an introduction to the ICE First Quarter 2025 Earnings Conference Call and Webcast. The operator, Lydia, welcomes participants and introduces Katia Gonzalez, the Manager of Investor Relations. Katia provides information about the availability of the earnings release, presentation, and replay of the call. She notes that the discussion may include forward-looking statements subject to risks and uncertainties, advises where to find more information on these risks, and explains the use of non-GAAP measures in the company's financial reporting. Key company executives participating in the call are introduced, including Jeff Sprecher, Warren Gardiner, Ben Jackson, Lynn Martin, and Chris Edmonds. The call is then handed over to Warren Gardiner.

In the second paragraph, the speaker discusses the company's strong first-quarter financial results, highlighting a 16% year-over-year increase in earnings per share to $1.72 and an 8% rise in net revenue to $2.5 billion. Growth was observed across all operating segments despite macroeconomic uncertainties. Adjusted operating expenses were $964 million, below the guidance range, due to savings and technology-related synergies, resulting in an 11% increase in adjusted operating income to $1.5 billion. During the quarter, $519 million was returned to shareholders, including $241 million in share repurchases, while also investing in the business and reducing leverage to under 3.2x EBITDA. For the second quarter, adjusted operating expenses are projected to be between $980 million and $990 million, with higher revenues and merit increases offsetting the impact of a weaker dollar. Second-quarter non-operating expenses are expected to range from $175 million to $180 million. The Exchange segment achieved record first-quarter net revenues of $1.4 billion, marking a 12% year-over-year increase.

The paragraph discusses significant financial growth in various sectors for the company. Transaction revenues reached nearly $1 billion, up 16%, driven by increases in interest rate business, NYC cash equities, options, and record energy revenues. April saw accelerated volumes across sectors, with notable rises in energy, interest rate, cash equity, and equity options average daily volumes (ADV). Open interest increased, especially in global interest rates and energy markets. Recurring revenues, including exchange data services and NYSE listings, totaled $368 million, up 3%, driven by a 5% growth in exchange data and connectivity services. The NYSE listings business raised over $4 billion in new proceeds, maintaining high listing standards, and the IPO backlog remains strong. In Fixed Income and Data Services, first-quarter revenues hit a record $596 million, with notable increases in ICE bonds, muni business, corporate bond trading, and CDS clearing revenues. Recurring revenues reached a record $471 million, up 5% year-over-year.

The paragraph highlights the financial performance and growth of a company's fixed income data and analytics business. It reports a 4% year-over-year revenue increase, with a 14% growth in the index business, reaching a record $684 billion in ETF assets under management by the end of the first quarter. Data and network technology revenues increased by 7%, attributed to investments in the ICE Global Network and the growth of the consolidated feeds business and desktop solutions. The mortgage technology segment saw first-quarter revenues of $510 million, with sequential and yearly growth in recurring revenues driven by the servicing business and new customer implementations. Transaction revenues were slightly up, benefiting from activities related to closed loans, applications, and increased closing solution and default management revenues. The company achieved record first-quarter results and expressed confidence in its ability to sustain growth amidst macroeconomic and geopolitical challenges.

In the paragraph, Ben Jackson reports on the strong performance and growth of the company's global futures markets, highlighting a record in total average daily volumes, particularly in energy and interest rates. Revenues from futures and options have significantly increased, supported by rising open interest, which is a key indicator of market health. The company boasts eight consecutive quarters of record energy revenues, underpinned by its long-term strategic approach and its role as a trusted global energy hedging venue. This success demonstrates customers' ongoing confidence in navigating uncertainty using the company's technology and market offerings.

The paragraph highlights the strong performance and growth of ICE's oil and natural gas markets. Brent has established itself as the global benchmark for crude oil, with record volumes and revenues in the first quarter due to increased risk management amid market volatility. Similarly, ICE's natural gas markets, supported by benchmarks like Henry Hub, TTF, and JKM, have seen record volumes and revenues, increasing 33% year-over-year. In North America, ICE has anticipated changes in gas markets by creating exclusive basis markets, leading to significant growth in both Henry Hub and basis market volumes. This success indicates the ability to benefit from both short-term volatility and long-term growth trends.

The paragraph discusses the strong performance of the company's North American gas complex, which experienced 30% growth, driven by record options volumes and a strategic investment in the European TTF contract. This investment, combined with geopolitical shifts and rising LNG demand, has solidified the TTF contract as a central benchmark in global natural gas markets, demonstrating significant volume, revenue, and open interest growth. Additionally, the global shift towards less carbon-intensive fuels supports natural gas demand, especially in developing economies. The company's JKM contract is highlighted as a key price benchmark in Asia, where it has achieved record volume growth. Furthermore, the company's environmental markets, especially in North America, have shown a 15% volume growth, supporting price transparency across the entire energy spectrum.

The paragraph discusses the company's achievements and growth in its fixed income and data services businesses. It highlights record revenue growth in fixed income markets driven by automation and passive investing trends, with a significant increase in assets under management for ICE indices. The company has solidified its position as a major provider of fixed income indices, benefiting from the growing demand for ETFs. New licensing deals with global asset managers also contributed to revenue growth. Furthermore, the data and network technology segment saw a 7% revenue increase due to a rise in demand for desktop solutions, the ICE global network, and feeds offerings as clients modernize workflows. Notably, their desktop business, including ICE chat, experienced double-digit growth.

The paragraph discusses the innovations and growth within ICE's various business segments. It highlights the launch of ICE Voice, a cloud-based audio solution integrated with ICE Chat, enhancing real-time communication for market participants. ICE's global network has seen growth due to data and technology investments, solidifying its position as a secure, resilient network. The ICE Bonds segment reported a 16% revenue increase, driven by technology investments and increased platform accessibility, enhancing market liquidity. In their credit default swap clearing business, market volatility increased demand for credit protection, leading to a 40% rise in CDS notional cleared. The company plans to expand its Fixed Income and Data Services. For the mortgage business, ICE has developed an end-to-end life-of-loan platform that improves transparency in the mortgage-backed securities market. Trust in this platform is evident with 20 new Encompass clients and a notable new mortgage servicing client in Q1.

The paragraph describes an end-to-end mortgage solution that starts with a customer engagement suite to identify and acquire customers cost-effectively. It integrates data and AI-driven sales, marketing, and borrower engagement tools to optimize marketing campaigns, streamline the origination process, and reduce costs. The journey continues with an advanced loan underwriting platform that digitizes borrower data, facilitates AI-powered verifications, and integrates compliance and fee information, offering a comprehensive underwriting experience. The solution also features automated quality control and audit capabilities to enhance loan quality and value. Once loans are originated, they can be seamlessly transferred to a servicing platform due to its full integration with the underwriting system, ensuring efficiency and cost-effectiveness throughout the mortgage process.

The paragraph discusses how ICE is leveraging its technology and data expertise to improve the mortgage industry. By providing near real-time data and increasing transparency, ICE helps lenders and servicers compete effectively for business recapture and make better pricing and prepayment decisions. ICE's extensive mortgage data, contributed by most mortgage servicing firms, aims to boost investment confidence, market liquidity, and reduce costs for borrowers. They have signed a large global asset manager onto their McDash data, enhancing risk modeling. ICE is creating an integrated platform offering a range of mortgage-related tools and services, reducing origination costs and improving workflow efficiency. All these services are connected through a common data standard on a neutral network operated by ICE, keeping both client and consumer interests in focus.

In the first quarter, ICE achieved record financial performance, highlighting the strength of its business model, which includes a mix of transaction revenues and subscription revenues. The company has strategically positioned itself at the intersection of major global markets transitioning from analog to digital, ensuring growth and risk management opportunities. The diversified global footprint of ICE, encompassing both financial and physical markets, allows it to manage various risks for customers globally. ICE reported the highest volume and revenue in its futures and options markets, indicating an increasing demand for risk management solutions, with a 23% increase in volume and an 18% rise in revenue compared to the previous year.

The paragraph highlights the strong performance of ICE, a leading energy marketplace, during a period of market volatility. It reports record first-quarter operating results, marking the eighth consecutive quarter of record energy revenues, with a 23% increase from the previous year. This performance is driven by high energy trading volumes as participants hedge against geopolitical risks, resulting in a record energy trading day on April 4. Additionally, there's a 7% increase in total energy open interest, particularly in the Brent benchmark contract. Looking forward, potential changes in U.S. energy production could impact the global supply chain. Furthermore, mixed inflation and geopolitical tensions are increasing demand for interest rate risk management, leading to record quarterly volumes in ICE's interest rate markets.

In the first quarter, the Gilts market saw an 8% volume increase, notably 12% growth in March, and a 62% rise in open interest year-over-year. Overall, the multi-currency interest rate franchise noted a 21% rise in open interest. At the New York Stock Exchange, cash equity trading volumes grew 20%, and equity options volumes rose 8% year-over-year, resulting in a 21% increase in equity trading revenues. Despite economic volatility, advanced technology enabled efficient trading, handling record volumes and messaging rates with rapid processing times. The NYSE facilitated over $37 billion in daily trading activity during opening and closing auctions, and its distinct model reduces volatility and costs, reinforcing its role as a trusted risk management platform.

The paragraph discusses ICE's expansion into Texas with the launch of the Texas Exchange, which has been well received by their issuer community. The company is focused on enhancing its market platforms and risk management products. The speaker thanks customers and colleagues for their contributions to a successful quarter and invites a Q&A session moderated by Lydia. Ken Worthington from JPMorgan asks about the implications of Rocket's acquisition of Mr. Cooper, particularly in relation to ICE's position in the mortgage market and potential business risks from the acquisition. Ben Jackson responds, indicating that the acquisition validates ICE's strategy, and Warren may provide additional insights on the latter part of the question.

The company has developed a comprehensive end-to-end life-of-loan platform for its 3,000 clients, with 2,500 engineers and experts continuously enhancing its features. As a neutral third-party provider, the company ensures it doesn't compete with its clients. It leverages AI to optimize client services, such as marketing refinance opportunities. The platform's success in attracting new clients is evidenced by recent signings, including 20 new Encompass clients and a major new client, United Wholesale Mortgage, which aims to enhance homeowner and lender experiences and improve loan recapture rates.

The paragraph discusses the attractiveness and advantages of the speaker's platform in the mortgage business, emphasizing its neutrality and technological expertise. They highlight the engagement of significant clients like Flagstar and Rocket Cooper, noting that these clients contribute to their revenue through servicing contracts. Flagstar is expected to have an impact toward the end of the year, while Rocket Cooper's impact isn't expected until 2025. The paragraph also touches on capital allocation, questioning whether future mergers and acquisitions (M&A) will continue to focus on the mortgage tech segment or shift towards other areas.

The company is focused on reducing its debt after recent acquisitions to enable capital returns through share buybacks, aiming for a leverage target of 3x or less. All business segments are performing well, enhancing shareholder returns through buybacks. The firm is selectively considering mergers and acquisitions but evaluates them against the benefits of share buybacks. The emphasis remains on investing in the company’s highly performing shares, despite opportunities for expanding their existing mortgage platform with additional enhancements.

The paragraph discusses how the current global environment, marked by uncertainties such as trade issues, potential recessions, energy supply concerns, and the transition to cleaner fuels, adds more risks for clients to manage. Ben Jackson highlights that their global platform is well-positioned to help clients manage these risks across the energy spectrum through deep, liquid markets and thousands of contracts. As a result, more clients are using their markets to hedge and manage risk in today's interconnected world.

The article discusses the growth of open interest in the market, highlighting its role as an indicator of market health and future volumes. Despite increased market volatility, more participants are joining the market to manage risk. The paragraph notes a 30% growth in energy alongside an 8% rise in open interest. In a subsequent exchange, Dan Fannon from Jefferies inquires about fixed income data and index performance. Chris Edmonds responds, emphasizing strong business performance due to investments in customizing indices to meet clients' needs and mentions the movement of $10 billion in assets under management (AUM) to their indices.

In the article paragraph, Benjamin Budish from Barclays asks about the current state of the company's guidance amid environmental changes, such as delays in bank implementations and consumer concerns, and whether these factors have affected the status quo. He also inquires about one-time revenues and their usual occurrences. Warren Gardiner responds, noting that the one-time revenues amounted to a few million dollars and are not typical for the company. He emphasizes that there are no significant changes warranting an adjustment to the company's previous guidance, which projected mid-teens growth in origination volumes or flat growth at the lower end. Gardiner adds that while the 10-year rate is slightly lower than at the time of the original guidance, it hasn't changed materially enough to affect their projections.

The paragraph discusses the strategic move by the New York Stock Exchange (NYSE) to launch its Texas branch in the first quarter, as part of an ongoing trend by its parent company, ICE (Intercontinental Exchange), to capitalize on opportunities that align with customer needs. Lynn Martin, representing NYSE, emphasizes the importance of Texas to ICE's operations due to its extensive history in the state, particularly in Houston, as an energy company. Texas is highlighted as a key market for ICE, with the New York Stock Exchange having issuers in the state with a combined market cap of around $4 trillion. Moreover, the text notes an increasing focus on Texas by various financial entities, with other major exchanges like NASDAQ planning expansions there.

The paragraph discusses a strategy to maintain strong customer relationships by evolving their services. They recently announced their first listing, Trump Media and Technology Group, on their exchange and are in positive talks with other issuers, expecting more listings soon. They are also planning to introduce exchange-traded products (ETPs) by Q2. They emphasize the importance of staying close to their over 3,000 customers within their ecosystem. Furthermore, in a Q&A session, Ben Jackson addresses a question from Craig Siegenthaler about mortgage transaction revenues, noting an increase despite lower origination. Jackson mentions successful client sales and anticipates that many deals closed over the past years, like those with JPMorgan Chase and M&T Bank, will start to generate revenue in 2025 as these clients transition live, a process that takes 12 to 18 months.

The paragraph discusses the performance and trends observed by a company in relation to its financial services. It mentions that certain channels, including Citizens Bank and Webster Bank, are becoming active, which is expected to be beneficial as the year progresses. Warren Gardiner discusses a change in transaction fees due to lower minimums and higher per-closed-loan prices, leading to better results from closed loans compared to the industry average. Alex Kramm from UBS inquires about the fixed income data, noting a significant quarter-over-quarter increase, but also a rare decline in the fixed income data line. Chris Edmonds responds, suggesting there isn't a lengthening in the sales cycle for individual products, despite some companies experiencing elongated sales cycles.

The paragraph discusses the time it takes for product implementation, noting that more complex, multifactor implementations tend to take longer than off-the-shelf products. Jeff Sprecher hands over the discussion to Warren Gardiner, who explains the reasons for a sequential decline in revenues: a shorter quarter, fewer bulky dataset sales, and a downturn in equity markets affecting their Index business. Despite these factors, it was a strong quarter for net new business, with improved year-over-year sales and customer retention. The conversation transitions to a question from Ashish Sabadra, an analyst with RBC Capital Markets.

In the paragraph, Ben Jackson explains that their company's open interest (OI) growth is predominantly driven by commercial customers, as the business is heavily focused on them, especially through physically settled products. He cites the growth of the Midland WTI product, which has seen significant physical deliveries, as evidence of this focus. Regarding the influence of geopolitical changes, like a resolution between Ukraine and Russia, Jackson argues that it won't significantly alter the volume due to the multitude of global risks currently present.

The paragraph discusses the growing energy demand driven by innovations like AI, and highlights the U.S.'s role as a major oil and LNG exporter, especially to Europe, in light of resetting supply chains and concerns around energy security. It then shifts to a discussion of the mortgage business. Simon Clinch from Redburn Atlantic questions the potential update on the previously mentioned $14 billion Total Addressable Market (TAM) for the mortgage sector, particularly after recent experiences with ICE 2025. Ben Jackson responds by stating that their perspective on the TAM remains unchanged since the Black Knight deal, and they are focusing on executing revenue and expense synergies.

The paragraph discusses a company's comprehensive ecosystem for lenders, spanning from customer acquisition to capital markets. It highlights successful cross-selling strategies, such as integrating United Wholesale Mortgage into the MSP platform and leveraging proprietary data for CRM and lead management solutions. The paragraph also mentions significant cross-selling achievements, with 100 instances in the last quarter, and ongoing investments in capital markets to utilize rich datasets. The speaker thanks attendees and emphasizes the company's 25-year commitment to innovation and growth for shareholders.

The speaker wishes everyone a great May Day, mentions they will talk again next quarter, and the operator concludes the call, thanking participants and informing them they can now disconnect.

This summary was generated with AI and may contain some inaccuracies.