Intercontinental Exchange Inc.

second quarter 2025 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 2024 Form 10-K, 2025 Second 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 in core business performance. You'll find a reconciliation to the covalent GAAP terms in your earnings materials. When you sign 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 Jud Sprecher, Chair and CEO, Warren Gardner, Chief Financial Officer, Ben Jackson, President, and Chris Edmonds, President of Six Income and Data Services. I'll now turn the call over to Warren.

Thanks, Katya. Good morning, everyone, and thanks for joining us today. I'll begin on slide four with a summary of our record second quarter results. Second quarter adjusted earnings per share were a record $1.81, up 19% year over year. These record results were led by a 9% increase in net revenue to a record $2.5 billion, with growth contributions from all three of our operating segments. Second quarter adjusted operating expenses totaled $983 million, and we're towards the low end of our guidance range, driven in part by additional technology-related savings and synergies. As a result of this strong performance, adjusted operating income increased by double digits to a record $1.6 billion, up 13%, and on top of 11% pro forma growth in the second quarter of 2024. This strong business performance allowed us to return $532 million of capital to our shareholders during the quarter, including $255 million of share repurchases. Through the first half, we have returned over a billion to shareholders through both buybacks and dividends. And we did this while also investing in our business and reducing leverage, which ended the second quarter at our target of three times EBITDA, ahead of our initial target when we closed the acquisition of Black Knight less than two years ago. Now let's move to slide five, where I'll provide an overview of the performance of our exchange segment. Second quarter net revenues sold our record $1.4 billion, up 12% year over year, and on top of 14% growth in the second quarter of 2024. Record transaction revenues of over $1 billion were up 15%, driven by a 20% increase in our interest rate business. Record NYSE cash equities and option revenues up 10%, and another quarter of record energy revenues, which grew 25% year-over-year. In addition, volumes in July continued to be strong, with energy ADV up 11%, interest rate ADV up 24%, our cash equity ADV up 54%, and our equity option ADV up 6%. And importantly, open interest continues to build, up 12% year-over-year, including 40% growth in global interest rates and 5% growth in our energy markets. Shifting to recurring revenues, which include our exchange data services and our NYC listings business, revenues totaled $378 million, up 5% year over year. Underpinning growth in our recurring revenues was our broader exchange data and connectivity services, which grew 6%, was once again led by our futures data services. In our listings business, the NYC helped to raise approximately $9 billion in new IPO proceeds in the first half, and an additional $4.5 billion so far in July. It's worth noting that only roughly half of new IPOs have met the NYSE's listing standards, and these high standards remain a critical component of our 99% retention rate. As a result of this strong growth, particularly across our futures data and connectivity solutions, we now expect full-year growth in our exchange recurring revenues to be approximately 4% to 5% compared to prior expectations for low single-digit growth. Turning now to slide 6, I'll discuss our fixed income and data services segments. Second quarter revenues totaled a record $597 million, including transaction revenues of $114 million. On a year-over-year basis, revenue at ICE bonds increased by 8%, driven by 28% growth in our muni business, which was in part driven by growing institutional adoption. Within our CDS business, revenues increased year-over-year, with lower member interests offset by clearing revenue, which increased by 25% year-over-year. Current revenues totaled a record $483 million and grew by 5% year over year. In our fixed income data and analytics business, record second quarter revenues of $306 million increased by 4%, driven by growth in pricing and reference data. And our index business, which reached a record $743 billion in ETF AUM at the end of the second quarter. Data and network technology increased by 7% in the first half, and in the second quarter, an acceleration from 5% growth in 2024. Growth was driven by our ICE global network, continued growth in our consolidated speeds business, and strong performance across our desktop solutions as we continue to realize the benefits of investments to enhance our platform. Please slip to slide seven where I'll discuss our mortgage technology results. Second quarter revenues totaled $531 million, up 5% year-over-year. Recurring revenues totaled $395 million and increased on a year-over-year basis. The year-over-year improvement was largely driven by data and analytics and our servicing business. As we look to the second half, we anticipate the recurring revenues will remain around these levels, driven by the typical roll-off of inactive loans on MSP, which will impact the third quarter, M&A-related attrition, primarily driven by Mr. Cooper's acquisition of Flagstar, and customers resetting their minimums on Encompass. which I'll note is paired with the benefit of higher transaction fees. We expect these items to largely be offset by revenue from new customer implementations and cross-sell expansions. Transaction revenues total $136 million, up 15% year-over-year, driven by double-digit revenue growth related to encompassed closed loans, MERS registrations, and default management solutions within our servicing business. Before I turn it over to Ben, I will highlight a few third-quarter guidance items. Third quarter adjusted operating expenses are expected to be in the range of $995 million to $1.5 billion. Related to the second quarter, the increase is expected to be driven by higher customer acquisition costs at the NYSE as the IPO market rebounds, as well as higher technology spend related to our data center build out and strategy. Lastly, moving below the line, adjusted non-operating expenses expected to be between $170 million and $175 million in the third quarter. In summary, We delivered record second quarter and first half results, including record revenues, adjusted operating income, and adjusted EPS, building upon our record 2024. We also, once again, achieved our leverage target ahead of schedule. As we look to the balance of the year, we're focused on strong finish to our record first half and on setting ourselves up for continued success in 2026. I'll be happy to take your questions during Q&A, but for now, I'll hand it over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to slide eight. Across our futures and options markets, we've worked for nearly three decades to build out the scope and depth of our multi-asset and multi-geography offering to allow for both flexibility and precision trading from wherever in the world customers choose to trade on ICE. As a result, a record of over 1 billion contracts have traded on ICE through the first half. including a record 673 million energy contracts and a record 462 million interest rate contracts. This record performance drove 19% revenue growth in our futures and options revenues in the first half and 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. Across energy, markets have grown more global, more interconnected, and more complex, shaped by shifting trade flows, regional dynamics, and growing complexity in how energy is transported, produced, priced, and consumed. We have continuously invested alongside this evolution, recognizing the importance of deep liquidity on our platform. Today, as a result of organic and inorganic investments, trading on our network is not tied to any single product or limited to any one region. Instead, we have built a diverse energy network that provides deep liquidity and price transparency across the spectrum of fuel sources, from oil and refined products to coal, natural gas, power, environmental markets, renewables, and ancillary products such as biofuels and their related credits. In essence, regardless of how the market evolves, whether driven by geopolitical change shifting trade flows, or growing demand in the developing world, we have strategically positioned our platform to offer customers the tools they need to manage risk effectively. In the UK, for example, coal has been phased out of electricity generation, while across Asia, it remains a significant part of the mix to support rapid industrialization. At the same time, electricity prices are influenced by natural gas. Whether active in oil, gas carbon or a combination by providing access to these contracts through a single platform we provide the critical price transparency across the energy spectrum to help customers manage increasingly interconnected pricing dynamics the value that our diverse deep and liquid energy markets provides to customers contributed to another record volumes across our complex driving our ninth consecutive quarter of record energy revenues This strong performance is a testament to customers' continued confidence in ICE as the global energy hedging venue of choice, with energy revenues up 24% in the first half and growing 13% on average over the past five years. In our oil markets, Brent has become the world's most widely used benchmark, pricing roughly three-quarters of the world's internationally traded crude. Importantly, Brent stands as the cornerstone of a broader franchise that includes our Midland WTI, Platts Dubai, and Middle East Mervin grades of crude. These critical pricing relationships extend to refined oil products, where ICE's low sulfur gas oil market similarly anchors price discovery for refined products globally. Together, these benchmarks form the foundation of a cohesive web of more than 800 related oil products developed by ICE giving participants the ability to manage risk with precision across the oil value chain and around the world. These innovations have enabled us to continue to serve our global customers, with record oil volumes in the first half increasing 25% year over year, including records across Brent, WTI, Midland WTI, Platts Dubai, Mervin, and gas oil. In our natural gas markets, we've adopted a similar playbook, establishing liquid markets in TTF, JKM, Henry Hub, and North American basis markets, offering a broad range of natural gas benchmarks with trading hubs across Europe, Asia, and North America. As global LNG flows have increased and price relationships between regions have deepened, our TTF benchmark has emerged as the global reference point for gas pricing, much like Brent has for oil. This dynamic is illustrated by JKM execution patterns with roughly 60% of JKM volumes executed by the JKM TTF spread as participants draw assurance from TTF's deep liquidity to manage risk across an increasingly interconnected gas market. In the second quarter, volumes in our global gas complex increased 14% versus the prior year, contributing to a record first half to deliver 27% revenue growth year to date, including 19% growth in the second quarter. The importance of the evolution of energy markets extends to our leading environmental markets, which work with our oil, natural gas, coal, and power markets to provide the price transparency across the energy spectrum. Year to date, record volumes in our environmental portfolio are up 9% year over year, including 37% growth in our North American markets. In summary, The guiding principle has been consistently to create a cohesive platform where customers can navigate complexity across markets. Our single platform model isn't just efficient. It's essential for navigating an increasingly dynamic energy landscape. Participants can operate across markets with a broader view using tools that were developed not just in reaction to trends, but often in anticipation of them. Turning now to our fixed income and data services business on slide nine. Driven by multi-year investments in both technology and data, our comprehensive platform continues to generate compounding revenue growth, delivering another quarter of record revenues, which grew 5% year over year. Our high quality evaluated prices provide mission critical transparency for over 3 million global securities daily. Across our reference data business, we've improved the precision of our underlying data reduce the time to capture newly issued bonds, and have continued to add to our coverage, thus providing a truly comprehensive offering. As a result, clients of our evaluated pricing business are increasingly drawn to the quality of our reference data. The quality of our pricing and reference data combined with over 50 years of experience serves as the foundation for what is today one of the largest providers of fixed income indices globally. Whether it's benchmark indices, analytics, or unique solutions like our custom indices, ICE serves the entire ETF ecosystem. Year-to-date revenue on our index business is up double digits, with passive ETF AUM benchmark to ICE indices growing to a record of $743 billion through the end of the second quarter. In our data and network technology business, revenues are up 7% in the first half, driven by our ICE global network as well as continued demand for our desktop and feeds offerings. The ongoing investments in our ICE Global Network business and resulting growth reinforce its position as the gold standard for resiliency, latency, and security. ICE Global Network securely connects participants to more than 750 data sources and more than 150 trading venues, including ICE and the NYSE exchanges. Within our desktops business, new clients are switching to ICE for the reliability of our service, the quality of our data, and the sheer range of data sources. Similarly, growth in our consolidated feeds business reflects investments we've made to elevate and enhance our offering. Firms continue to seek more high-quality data from a range of different sources in a cost-effective manner. At the same time, they want access to new, unique content, and thus our competitive and comprehensive offering stands to benefit. We've also added features to give latency-sensitive clients additional confidence in the speed of our data. This suite of data services, together with its institutional customer connectivity, is highly complementary to our ICE bonds execution venues. These venues, which offer our customers choice of protocols, including auction, click-to-trade, and request-for-quote, round out a broader fixed-income offering. Year-to-date, revenues in our ICE bonds business are up 12% versus the prior year and have grown 9% on average over the past five years. In summary, when we combine the long-tail secular trends, such as the electronification of bond markets, workflow automation, and the shift to passive investing, our comprehensive data offering is positioned to continue to deliver compounding growth well into the future. Shifting now to our mortgage business on slide 10, Consistent with our strategy to bring efficiencies to workflows, we are uniquely positioned to drive greater automation across the mortgage space. Such investments are critical not only to meet rising customer expectations for a digital-first experience, but also to drive long-term operational efficiency and competitive positioning in an evolving mortgage landscape. For nearly a decade, ICE has been building an end-to-end digital mortgage platform that spans from customer acquisition all the way through to the secondary capital markets. This enables efficiency gains for our clients and bridges critical gaps between disparate systems. Our unified mortgage technology suite aims to simplify mortgage origination and refinancing into a single-click process, streamlining processes for lenders while reducing costs, errors, and time. The opportunity for customers to acquire and retain more business starts with our industry-leading customer engagement suite. This end-to-end suite of sales, marketing, and borrower engagement solutions, unique to ICE and seamlessly integrated with our loan underwriting platform, provides mortgage lenders with an opportunity to scale their operations by efficiently identifying, attracting, and acquiring new customers while improving the ability to retain existing customers. By enabling lenders to target borrowers with the right products at the right time, it reduces the time and cost of acquisition. Blowing directly into the next phase of the mortgage workflow, our leading loan underwriting platform provides significant operational efficiencies. Here, we collect borrower data in any form, we digitize and normalize it, and once harnessed, enable lenders to leverage our AI tools to quickly and efficiently verify credit, income, and collateral as well as audit that the loan package meets underwriting requirements. This creates consistency, uniformity, and efficiency. We've also integrated our property tax, flood, closing fee, and compliance-related information for borrowers and lenders. These various automation capabilities integrated into our loan underwriting platform are designed to provide customers with a complete and automated underwriting process to help increase both frequency and velocity while reducing cost of production this is one of the many reasons we continue to add new clients to our platform and as evidence to this we have signed 43 new encompass clients through the first half 23 of of which came from the second quarter alone as we move to the servicing stage of the loan lenders have the opportunity to unlock additional value by utilizing ice for their servicing technology needs our servicing platform has proven to be an industry standard and has a long history of dependability that servicers trust. Once originated, lenders can seamlessly transfer loans to our servicing technology or easily move loans acquired from other lenders that are on our technology, a functionality that has been enabled by the integration of our loan servicing technology with our underwriting system. Importantly, customers can trust the quality of the loan package through our automated quality control and audit capabilities, which enable servicers to quickly identify and remedy any critical information that may be missing from a loan file as the data and documents progress through the process. By integrating capabilities and data across mortgage origination and servicing, our platform creates opportunities for our lenders to provide more timely products to consumers. For example, lender servicers can now deliver a self-service home equity or refinance lending experience for their end consumer via an interconnected technology platform, effectively enabling them to quickly and efficiently compete for, recapture, and retain clients, which should also improve the overall consumer experience while lowering their costs by matching the client to the right product at the right time. We also continue to find ways to leverage our industry-leading mortgage data to increase transparency in the secondary capital markets. For example, in April, we launched a new RFQ protocol for mortgage-backed securities, taking another step to improve the MBS market. This new functionality sits along ICE bonds' existing MBS click-to-trade marketplace. Later this year, ICE bonds plans to integrate pricing and analytics from ICE mortgage technology to help traders make more informed trading decisions. Also, in the second half of this year, we plan to launch the first version of our secondary whole loan trading platform. This is designed to automate and provide significant efficiencies to what is today a very analog process. The combination of IMT's data and community of customers provides us an opportunity to deliver unique innovations to our customers, such as our secondary whole loan trading and MBS execution on ICE bonds. Lastly, in June, we launched the ICE Average Prime Offer Rates Index, or ICE APOR, which represents the annual percentage rates derived from average interest rates, points, fees, and other terms on mortgages that are offered to consumers. For lenders, consumers, and secondary market participants, the APOR is published by the Consumer Financial Protection Bureau and must be used to determine whether the loan meets certain regulatory requirements. which can impact the terms of a mortgage and whether the loan qualifies for securitization. With the CFPB's mandate and services under review, we launched the ICE APOR Index to provide another option for this service should the MBS market need an alternative. In summary, on behalf of our clients, we've assembled an end-to-end platform that is operated by a neutral, trusted third party in ICE. bringing together the key industry stakeholders from origination to final settlement in a single network ecosystem. We have a touch point to nearly every U.S. home mortgage connected to more than 3,000 lenders, 48,000 settlement agents and closing attorneys, 2,500 county governments, the GSEs, 80,000 notaries, 100 loan servicing companies, 1,000 mortgage-backed securities investment firms, and thousands of third-party data and service providers who can now communicate with one another by a common data standard on a robust network operated under ICE's cyber overlay. Our comprehensive platform automates workflows throughout each stage of the mortgage lifecycle, resulting in lower costs to originate service loans for our clients who can then pass those savings on to the end consumer. all while helping lenders and servicers better recapture and identify new business opportunities. With that, I'll hand it over to Jeff.