Hello, everyone, and welcome to the ICE First Quarter 2025 Earnings Conference Call and Webcast. My name is Lydia, and I'll be your operator today. After the prepared remarks, there will be an opportunity to ask questions. [Operator Instructions] I will now hand you over to Katia Gonzalez, Manager of Investor Relations to begin. Please go ahead.

Good morning. ICE's first quarter 2025 earnings release and presentation can be found in the Investors 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 2024 Form 10-K, 2025 first quarter Form 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 current 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. With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardiner, Chief Financial Officer; Ben Jackson, President; Lynn Martin, President of NYSE; and Chris Edmonds, President of Fixed Income and Data Services. I will now turn the call over to Warren.

Thanks, Katia. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 4 with a summary of our record first quarter results. First quarter earnings per share of $1.72 were up 16% year-over-year. These strong results were led by an 8% increase in net revenue to a record $2.5 billion. Importantly, against the backdrop of macroeconomic uncertainty, we saw growth across all three of our operating segments. First quarter adjusted operating expenses totaled $964 million, slightly below the low end of our guidance range, driven in part by better-than-anticipated savings and synergies primarily related to technology spend. As a result of this strong performance, adjusted operating income increased by double digits of 11% versus the prior year and reached a record $1.5 billion. This strong business performance allowed us to return $519 million of capital to our shareholders during the quarter, including $241 million of share repurchases. And we did this while also investing in our business and reducing leverage, which ended the first quarter under 3.2x EBITDA. Before I move to our segment results, I will now note a few guidance items. As we look to the second quarter, we expect adjusted operating expenses to be in the range of $980 million to $990 million with the increase versus the first quarter largely driven by a weaker dollar relative to the pound and euro, a dynamic that is more than offset by higher revenues, a full quarter of merit increases and accrual for awards related to our strong year-to-date performance. Second quarter non-operating expense is expected to be between $175 million and $180 million with slightly lower interest expense from reduced leverage offset by the refinancing of our$1.250 million [ph] maturity coming due in May. Now let’s move to Slide 5, where I will provide…

Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 8. Amidst the dynamic macroeconomic and geopolitical environment, our customers continue to rely on our leading technology, mission-critical data and transparent and accessible markets to navigate uncertainty while managing risk. Across our global futures markets, total average daily volumes increased 23% to a record 10 million lots in the first quarter, including records across energy and interest rates. This strong performance drove record futures and options revenues, which grew 18% versus prior year. Building on the momentum of a strong first quarter, ADV into April was up 43% year-over-year, led by continued strength in our energy and interest rate franchise, up 39% and 59%, respectively. More importantly, open interest continues to trend higher, up 8% year-over-year. As we have consistently said, open interest is a helpful guide to gauging the health of our markets and proves to be a leading indicator of volume growth during volatile periods. For over two decades, we’ve worked closely with our customers to develop a diverse, liquid and globally interconnected energy network. Today, as trade dynamics evolve and become increasingly complex, our network provides the critical feedback loop required to address near-term supply and demand imbalances as well as the long-term price signals needed to efficiently allocate the capital necessary to meet forward looking demand. This deliberate and long-term strategic direction contributed to our eighth consecutive quarter of record energy revenues, which increased 23% year-over-year, and that is on top of 32% growth achieved in last year's first quarter. This strong performance is a testament to customers continued confidence in ICE as the global energy hedging venue of choice. In our oil markets, through constant innovation, Brent has firmly cemented itself as the global benchmark for crude oil, pricing…

Thank you, Ben. Please turn to Slide 11. In the first quarter, we delivered record revenues, record adjusted operating income and record adjusted earnings per share, marking the very best quarter in ICE's history. Our record results underscore the quality of our all weather business model and the value of our products, leading technology and mission-critical data. We've deliberately positioned the company to have a mix of transaction and compounding subscription revenues to give revenue upside exposure to investors while hedging our downside risk. We've placed the company at the center of some of the largest markets undergoing analog to digital conversions. We've mixed our footprint between financial markets, which react to central bank acts of man [ph], and physical markets, which react to disrupted supply chain acts of God. We've diversified our global footprint because at all times, somewhere in the world, there are risks that our customers and our potential customers need to manage. We believe the combination of these factors is what makes ICE an all weather name that generates growth on top of growth. Across our futures and options markets, first quarter volume and revenue represented the highest quarter in ICE's history, with volume increasing 23% to deliver 18% revenue growth over the prior year. This record performance is strong evidence of the ever growing need for global risk management as our customers continue to turn to ICE to manage risk across the thousands of contracts offered on our platform. Our open interest is up 8% year-over-year. These results illustrate that during recent high levels of market volatility, market participants are managing risk by adding to their positions and not leaving. As the world's leading energy marketplace, the breadth and the diversity of our global platform drives an important network effect, producing capital efficiencies for our…

[Operator Instructions] First in queue, we have Ken Worthington with JPMorgan. Please go ahead. Your line is open.

Hi, good morning. Thanks for all the color in your prepared remarks. I was hoping you could address investor interest in the Rocket purchase of Mr. Cooper, particularly in the context of its acquisition of Flagstar. So given Rocket's prominence in the mortgage market, how do you see Rocket's business strategy comparing to what ICE is putting together in mortgage? And where does ICE compete and where does Rocket use ICE? And then maybe secondly, if we look at Flagstar and Cooper, how much business is at risk of transitioning away from ICE over time? And to what extent do your recent wins offset the potential loss of Flag and Cooper?

Hi, Ken. It's Ben. A lot in there, and I'll try to hit it all, and Warren may also chime in on the latter part of your question there. So, I think the headline is that it's a validation of our strategy. We have been working now for many years to build out a complete end-to-end life-of-loan platform on behalf of our clients. And remember, we are doing this on behalf of 3,000 clients that we have within our ecosystem, some utilizing parts of our end-to-end platform and some utilizing all of it. We also, as I said, have been doing this for a number of years now, and we have approximately 2,500 engineers, product experts, and AI experts that have been evolving, enhancing and innovating our platform now for many years, all within a single front to back ecosystem. And, again, it’s on behalf of our clients. And a key thing to highlight there is that we are a neutral, independent third-party. We are also leveraging our AI expertise across all of ICE to mine things, as an example, like our servicing data, to help the client that actually owns the MSR to efficiently market a refi opportunity to their client at the right time with the right product to help enhance their ability to recapture loans. Another benefit, as I mentioned, is that we are an independent neutral provider of technology, and we -- put simply, we don't compete with our customers. And evidence to this is to the success that we've in growing out this ecosystem and attracting new clients to come to it is all the successes that I've mentioned quarter-over-quarter that we've had bringing in some marquee name clients onto our ecosystem. We also, as I said in my prepared remarks, we signed 20 new Encompass clients in Q1, and we also signed a significant new MSP client in United Wholesale Mortgage. If you saw the press release that came out yesterday as well as articles that came out around that, you will see that UWM specifically selected our servicing system and our client portal to help curate homeowner and lender experiences that help improve their recapture rates and referrals. And they specifically highlight as well that another reason they came to us is not only the technology expertise, but the fact that we are a neutral independent provider. So when I look at attracting a client like that into our ecosystem, one of the largest originators in the United States mortgage business, and them coming onto our platform and then look at the funnel behind that of clients that are engaging, subservicers that are on MSP as well as us directly to move loans to us, we feel great about our overall position.

And then, Ken, just to give you some of the numbers around that. So I think we previously would said Flagstar was around on an annualized basis around 1% of IMT revenues. And then Rocket Cooper is a little less than 3%. Importantly, there a lot of that’s going to be the servicing MSP in particular and they actually just recently signed a multiyear contract. So in the event they even do choose to move off of MSP, I will just be clear that it's going to take a couple of years and there's no change to this year’s guidance as a result of any of that. We will start to see some impact from Flagstar as you know towards the end of this year. But in terms of Rocket Cooper, there’s no impact on 2025.

Our next question comes from Kyle Voigt with KBW. Please go ahead.

Hi, good morning everyone. Just given the balance sheet deleveraging and now return to capital or return to buybacks, just wondering if we get your updated thoughts on M&A. And as we think about areas of focus for ICE, most of your inorganic capital deployment over the past 5 years has been into the mortgage tech segment. I guess, what you’ve built there and the assets that are remaining in the ecosystem, do you think there's still a sizable consolidation that's left in that set in that segment? Or should investors be thinking about maybe a return towards inorganic capital deployment in other segments of the business?

This is Jeff. That’s a great question. We've been really diligent about delevering after our most recent acquisitions in order to be able to return capital through share buybacks, which, as you've mentioned, we've now been able to start. And we've been pretty diligent about delevering to try to hit a target of at least 3x, or less. And we are making good headway there, which would then free up tremendous amount of cash flow, which we could use for return to shareholders. I think if you listen to our prepared remarks, what you are hearing is all three segments of our business are doing really well. And so we've been, knock on wood, particularly accretive at our share buyback policies. They've had great returns for our shareholders. And so given how well the company is doing and given how we are starting to free up cash flow, it just feels right to us to lean into those share buybacks at this point. In terms of M&A, we always look for opportunities and we judge those opportunities against the opportunity to own our own company through share buybacks. And we will continue to do that. You're right in that we've through organic and inorganic work, really built out an amazing end-to-end platform for mortgage, and the major pieces are seemingly there. We do get offered all kinds of bolt on things that could bid on that network. But again, we always run them through that same lens of, is it a better ROI to just continue to invest in our own shares with a company that is really highly performing right now.

The next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Hey, good morning everybody. Thank you for the question. I wanted to dig in a little more into dynamics in energy markets today. Obviously, incredibly strong results in April for obvious reasons continues to be quite robust as well. As you look a little bit forward and if we are in a more uncertain macro backdrop and in fact we will see slower economic growth et cetera and to an extent that weighs on oil prices in a more sustainable way. Can you kind of help us sort of think how that could impact the customers need to hedge and just sort of the broader activity in your energy markets, how different could that be from sort of prior periods of lower oil prices and subdued volatility? So I’m just kind of trying to better understand the durability of the franchise today versus maybe prior periods when oil prices settle down at all over place.

Thanks for the question, Alex. It's Ben. So as you know and can appreciate, we are in the business of helping clients manage risk exposures to commodities, and capital across our futures franchise. And when you look at today's environment, there is more and more risks that people have to have to manage and new risks that people need to manage. Just rattling off a few, you've got the trade and tariff situation. You got the potential for recession. You've got concerns around energy supply. You've got concerns around energy supply security. You've got the transition over a long period of time towards cleaner fuel sources. You've got regional and global interconnectivity of supply chains as well as demand dynamics that can impact across regions becoming more of an interconnected world. Supply chains are continuing to evolve, and that’s just naming a few. So all this means that there’s more and more risks for people to manage, and we are in a unique position having a truly global platform that provides people the ability to manage these risks across the energy spectrum, including environmental. We have thousands of contracts around the world with deep liquid markets that enable clients to do this. And what we are seeing right now is that more people are coming to our markets to manage risk. So not only are we hitting records, and throughout, the prepared remarks that all three of us had today, you heard record after record and product after product. But, also, across each of these, it's important to highlight that open interest is growing at the same time, which means that people aren't leaving the market. They are actually coming to it, even more so to manage risk in these times of heightened volatility. And that's what we look at. We have looked at for, since the inception of the company, and continue to look forward for on a forward basis as being the main barometer for the health of the market and a forward looking indicator of volumes to come. So we feel great that on the back of a 30% growth in energy on top of a fantastic year last year, that open interest is up 8% at the same time.

The next question comes from Dan Fannon with Jefferies. Your line is open.

Thanks. Good morning. My question is on fixed income data. You guys highlighted a couple of index wins. Could you put some numbers or context around the size of those? And also just how you think about that potential opportunity on a longer term basis?

Dan, it’s Chris. I will let Warren if he wants to talk about the numbers in a second. But I would tell you that that business continues to perform incredibly well, and it's really on the back of investments we've made around our ability to quickly customize certain indices, that are meeting the needs of the clients as they are coming up with new investment strategies along the way. So the more opportunities that we can create for them and they then take that to their end users or end investors, that's really where the conversation has been going over the last year and really starting to bear some fruit on that. The -- we haven't talked about who those index providers are, I'm sorry, ETF issuers are around that. But, one, that we are moving, it's about 10 billion of AUM that’ll be coming over, at this time.

Our next question comes from Benjamin Budish with Barclays. Please go ahead.

Hi, good morning and thanks for taking the question. I was wondering if you could unpack the IMT guide a little bit. I know that the guidance is unchanged versus prior, but definitely some changes in the environment. It sounds like from some of the other companies that have reported, there are things like delays in bank implementations and decision making. There’s some worries about the consumer even though we've seen rates come down like a little bit. So just curious, are there any sort of moving parts, under the surface? Anything going better, anything going worse? Or is it really still kind of everything is the status quo? And then, Warren, if you don't mind, could you maybe just kind of quantify the one-time revenues? And is that -- are there typically one-time revenues, or was this a little bit out of the ordinary this quarter? Thank you.

Sure. Let me start with that one first just because it’s a quick one. So, yes, it was just a -- it was a few million dollars. We don't typically add them on the [indiscernible] credit. So that I just want to point that as we kind of think about taking out, call it, $2 million, $3 million of the -- of kind of that from the run rate as we kind of move forward on the servicing side, in particular. So in terms of the guidance, like, certainly things change around the margin, but nothing significant such that we would be adjusting our guidance that we gave last quarter, which at the high-end was expecting sort of mid teens growth in origination volumes and towards the lower end more flattish. And so certainly out of the gates, it was a good first quarter. Ways to go. We will see how origination volumes trend. I mean, obviously, the 10-year is actually a little bit lower than where it was when we gave that guidance, not necessarily materially. Obviously, there's been some movement, of course, in between. But everything is kind of moving, I think, in the right direction on that front. And we feel very good about that guidance as we kind of head into the second quarter and the rest of the year. And so ultimately it really enables us to focus on executing on the investments that Ben spoke to, and really stitching together this neutral third-party ecosystem that can really I think bring some efficiency to the industry and homeowners over time. So feel good about our position as we head into the rest of the year here.

Our next question comes from Patrick Moley with Piper Sandler. Your line is open.

Yes, good morning. Thanks for taking the question. I have one on the launch of New York Stock Exchange Texas in the first quarter. We've seen an increasing focus on the state, Texas Stock Exchange planning to launch next year. NASDAQ said that they’re going to open up a regional headquarters in Dallas. So just wanted to get your thoughts on what drove the decision to shift resources into the state of Texas? And then, more broadly, how are you thinking about the potential for capital markets, to shift into the state, in the coming years? Thanks.

Hi. This is Lynn. Thank you so much for the question. Our move with NYSE Texas is sort of a continuation of a trend that we've always adopted at ICE, which is we see an opportunity, we stay close to our customers, and we execute on it quickly. It's why we were able to announce and then launch 6 weeks later NYSE, Texas. When I zoom out though, Texas has always been an incredibly important state to us across ICE. We've had offices in the state of Texas, in Houston in particular, for more than two decades given our roots as an energy company and an energy exchange. And if I look at the New York Stock Exchange, it is the largest state in terms of issuers with combined market cap of around $4 trillion. So this is nothing more than us doing the latest in our continuous playbook of staying close to our customers. We were really excited that we were able to announce our first listing alongside opening the exchange, that being Trump Media and Technology Group. And we've had incredibly positive dialogue with our issuers down there, so I would expect to be able to announce some additional listings in the near future. Additionally, we are in the process of bringing live the functionality around listing of ETPs, exchange traded products, which we expect will go live in Q2. So the way we really think about this is the next evolution in the way that we stay close to our customers in an incredibly important state where we have more than 3,000 customers across our entire ICE ecosystem.

Our next question comes from Craig Siegenthaler with Bank of America. Your line is open.

Good morning, everyone. We have a question on mortgage check originations. So we saw transaction based revenues were up 5% year-over-year despite a drop in origination. So can you help us reconcile those results? And we are also curious if you started to see the elevated volume of bookings from last year start to hit revenues. And if so, what could the revenue ramp on those new implementations look like from here?

Hey, Craig, I’ll start and then Warren may chime in after. So as I've mentioned, we continue to have great sales success with our clients. And as we alluded to on the last call, 2025 is when a lot of those deals that we closed over the last couple of years, that a number of them are going to start to go live because it does take 12 to 18 months to get some of these customers, in particular, large customers to make these types of transitions. So this year is one where we have a number of large clients that are going to start to go live. And some of the clients that we've mentioned in the past are things like JPMorgan Chase. You've got M&T Bank. [Indiscernible] is going to start going live through some of their channels as well. Citizens Bank, Webster Bank, and then just go on down the list. So we are as this year plays out, we are going to continue to see benefit from that.

And then on your transaction fee question, Craig. So one thing you've heard us talk about last couple of quarters was around customer renewals and minimums and on Encompass and particularly. And with those lower minimums has been coming has been paired with higher transaction fees, price per closed loans. And one thing I think we saw during this quarter is those minimums have come down. We've seen loans and customers go over those minimums and add up in a higher transaction fee. So we did have pretty good results in terms of closed loans relative to what the industry had, but we also got a little bit of help from the higher PCL or the transaction fee, if you will, on the Encompass side. And that was part of what you saw in terms of the outperformance there.

Next, our question is from Alex Kramm with UBS. Please go ahead.

Yes. Hi, good morning. Just coming back to fixed income and data for a minute here. I think listening to other financial services companies, there's clearly sales cycles are lengthening in some parts. So just wondering what you're seeing there. I think if I look at your ASV number, it may have been the biggest quarter-over-quarter addition. So it seems like the 1Q was still pretty good, but any updated thoughts on that? And maybe also why the fixed income data line was actually down quarter-over-quarter? We don't see that too often on a dollar basis. So maybe just a little bit more color what’s going on there. Thanks.

Yes. Alex, this is Chris. I'll start with. On the sales cycle thing, I think the way I would let you think about that is, if you’re looking at an individual product, I don’t see any linking in the sales cycle, itself. They take about the same amount of time. I think if you have things that are more complex where you're putting multiple items together, that can take a little bit longer because the implementation side of that on the client side, when they decide to have a multifactor implementation, it takes more time for that schedule. So you can see that impact being a little bit longer when it comes to pass there. But generally speaking, on a one-off product that is off the shelf, if you want to think about it that way, I don't see a link in that sales cycle at the moment. And …

I will turn it over to Warren for the other question you had.

So, Alex, in terms of just the sequential decline in those revenues, that was three things really. There was one fewer day in the quarter, which will have an impact on how we accrue for revenue. There was also a fewer one times in the quarter. And then -- or really, it's hard to call them one times because we always have them. They are kind of big bulky dataset sales. But so we had that a little bit relative to the fourth quarter. And then the equity markets were of course down a little bit. And we do have some equity exposure in our Index business. It’s probably about a quarter of it. But that also put a little bit of sequential pressure on the results. So it was those things that drove it. In terms of the ASV, I think it's important too to note that this was actually one of the better quarters in a while for net new business for us. We saw improving sales on a year-over-year basis as well as improved retention. And so I think those two things were an important part of why you saw some better results on that front relative to what you saw in the fourth quarter maybe on the ASP front.

Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Please go ahead.

Thanks for taking my question. I was wondering if it’s possible to parse what percentage of the energy OI growth over the last several years is driven by commercial customers versus financials? And then just maybe a quick follow-up on that earlier question on energy would be how would a change in geopolitical environment such as, like, a Ukraine Russia piece influence the volume going forward? Thanks.

Hi. This is Ben. I think the way to think about our OI growth is that since the inception of the company, we built this business very heavily focused on the commercial user in mind. And, in fact, in a lot of these markets, many of them are physically settled products where people actually have to have the capability to make or take delivery of the end product. And as we even create new innovations, I'll give you an example. In our Midland WTI product, HOU, that we've launched that's been growing very nicely for us grew, 200% on a on a year-over-year basis. Pricing Midland TI that that's basis Houston hits the water and is now going into the Brent complex, that contract physically delivered, and we are seeing 2x the amount of actual physical deliveries on that contract than our peer does on their Corp WTI contract. So that just gives you a sense that the people that are in there trading our products and the people that we focus on really growing the health of ROI across all of our energy products, that it's heavily based on the commercial end user. And on your question around if geo -- the geopolitical situation is solved, which we all hope it is at some point here soon, is that going to change anything? We don’t see it changing anything because of all the other risk factors that I mentioned in term that I mentioned in the answer to Alex's question earlier, that there are so many other risks around the world that that people are faced with more than probably any time in history and especially some newer risks. And at the same time, you’ve got energy demand growing for growing to support new innovations around the world like AI. That’s topic that consumes a ton of power. So we see the other factors that are out there continuing to drive demand for our markets and the fact that supply chains have reset where U.S. is a major oil and LNG gas exporter, in particular to Europe on the LNG side, as the supply chains reset like that and also a focus on energy security and the supply of that and the security of that supply that’s coming into Europe, that those things changing would take a long time, if ever.

Our next question comes from Simon Clinch with Redburn Atlantic. Please go ahead.

Hi, thanks for taking my question. I was wondering if I could just take a step back on the mortgage business and just go back to the $14 billion TAM that you originally sort of set out for this business. I was wondering if you could update us on your thinking around that, particularly after your recent ICE 2025 experience. Just if there's any sort of evolution of that TAM, if you if it's perhaps bigger than you expected? Or how to think about any sort of changes on that going forward? Thanks.

So our thinking has not changed on the opportunity around the TAM that we announced and that expanded TAM that we announced when we did the -- that we did the Black Knight deal. And what -- we've been focusing on is, is really executing against the revenue synergies, in addition to the expense synergies that we talked about last time and last quarter, is executing against delivering on those revenue synergies. And a lot of them have to do with, the fact that we have a front to back complete ecosystem that enables lenders from the point of customer acquisition all the way through to the capital markets executing on that vision and our ability to be in a great position because we provide services to just about everybody in the mortgage space in some way, shape, or form on that front to back ecosystem and to cross-sell. And whether it's the success we've had that we've mentioned on many of these calls of cross-selling Encompass MSP clients or the reverse selling MSP to clients that are within the IMT ecosystem. And a great example that I brought up of United Wholesale Mortgage, they are already in our ecosystem, and it was a cross-sell to bring them onto the MSP platform. And then last but not least is that that third area that I’ve talked about around our -- the investments we've made in our consumer acquisition suite of CRM and lead management solutions to cross-selling data, that proprietary data that we've put now onto the Encompass network that we've been able to sell to our clients. And we had 100 cross sells of that to our client base, last quarter alone. And then continued investments that we’re making also on the capital markets side to take some of these rich datasets and introduce them for the first time to our fixed income and data services segment to cross-sell those rich datasets in there, and we are having some great success there that I alluded to as well in my prepared remarks.

Thank you. We are now out of time for further questions. So I will hand you back over to Jeff Sprecher for any closing comments.

Well, thank you, Lydia. Thank you all for joining us. As we celebrate our 25th anniversary of our founding, hopefully you can see from our results that we continue to build innovative solutions and we are working hard to advance markets and are delivering compounding growth to our shareholders. So with that, I hope you have a great May Day, and we will talk to you next quarter.

This concludes today's call. Thank you very much for joining. You may now disconnect your line.