Intercontinental Exchange Inc.

Good morning, everyone, and thank you for joining us on today's ICE fourth quarter 2025 earnings conference call and webcast. My name is Drew, and I'll be the operator on the call today. After the prepared remarks, we will have a Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. And to withdraw your question, it's star followed by two. And with that, I'll hand over to Steve Eagerton, VP of Investor Relations, to begin. Please go ahead when you're ready.

Good morning. ICE's fourth 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 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 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 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 Gardner, Chief Financial Officer, Ben Jackson, President, Lynn Martin, President of the NYSE, and Chris Edmonds, President of Fixed Income and Data Services. I'll now turn over the call to Warren.

Thanks, Steve. Welcome to the call. I'm glad to have you leading investor relations for us going forward. Good morning, everyone, and thank you for joining us today. I'll begin on slide four with our exceptional full year 2025 results, which demonstrate the strength of our diversified business model and the consistency of our execution. 2025 was a landmark year for us. We delivered record adjusted earnings per share of $6.95, a 14% increase year over year, marking the best performance in our company's history. This achievement reflects both the resilience of our franchise and our team's relentless focus on operational excellence. Full-year net revenues reach a record $9.9 billion, up 6% year-over-year, with balanced growth across our platform, including 5% growth in recurring revenues, providing durability and visibility, and 8% growth in transaction revenues, which demonstrate robust customer engagement and growing demand for risk management tools. Our discipline approach to expense management continues to drive operating leverage. Adjusted operating expenses totaled $3.9 billion, reflecting our commitment to cost discipline while also investing strategically. I'm particularly pleased to report that annualized expense synergies from our 2023 Black Knight acquisition exited the year at an annualized rate of approximately $230 million, exceeding the updated $200 million target that we set early last year. Based on this momentum, we now expect total expense synergies to reach $275 million by the end of 2028, a $75 million increase. We're nearly 40% above our initial commitment when we announced the transaction back in 2022. This app performance underscores our integration capabilities and our proven ability to identify incremental value creation opportunities. These results drove record adjusted operating income of $6 billion, up 9% year-over-year, demonstrating the quality and scalability of our business model. Turning to capital allocation, our record operating performance generated $4.2 billion in adjusted free cash flow, which we deployed strategically to enhance shareholder value. We repurchased $1.3 billion of stock, increased our dividend by 6%, and reduced our leverage ratio from 3.3 at year-end 2024 to three times as we closed 2025, all while funding strategic investments across our business. This balanced approach reflects our confidence in both our core operations and our ability to capitalize on future growth opportunities. Moving to slide five, let me walk you through our strong fourth quarter performance, which provides excellent momentum as we enter 2026. Fourth quarter adjusted earnings per share totaled $1.71, up 13% versus the prior year. Fourth quarter net revenues of $2.5 billion increased 7% year over year, with transaction revenues growing 8% and recurring revenues advancing 6%. Fourth quarter adjusted operating expenses totaled $1,010,000,000, coming at the midpoint of our guidance range and reflecting our continued focus on balancing cost discipline with investments in future profitable growth. Now let's turn to slide six for our exchange segment, which delivered outstanding results. Our exchange business achieved record fourth quarter net revenues of $1.4 billion, up 9% year over year. Notably, this compounds on 9% growth in 2024 and 14% growth in 2023, demonstrating sustained business momentum. Transaction revenues grew 8% by our global oil complex, which increased 12% year-over-year. Our natural gas and environmental products, which represent nearly half of our energy revenues, grew 10% in the quarter and 15% for the full year, reflecting strong structural demand for energy risk management and the ongoing energy evolution. Importantly, these positive trends accelerated into January. We saw record monthly volumes of 23% year-over-year, including a record month for energy ADV. Further supporting momentum into February is robust open interest, growing 19%, including 7% growth in global energy and 48% growth in our interest rate complex, reflecting heightened volatility, increased hedging demand, and the mission-critical nature of our markets. Our recurring revenue streams comprised of our exchange data services and our NYC listings franchise reached a record 391 million, up 11% year-over-year. Growth was driven by a 16% expansion in exchange data and connectivity services. After adjusting for a one-time true-up in Q4-24, exchange data services grew 11% in the quarter as customers increasingly rely on our comprehensive market data and technology. Our NYSE listings business continues to attract the highest quality companies from around the globe. While only about 40% of global IPOs met our rigorous listing standards in 2025, the NYSE facilitated $25 billion in new IPO capital formation, welcoming 71 new operating companies, including seven of the top 10 IPOs. In addition, our retention rate remained above 99%, while we also welcomed several transfers, including Virtu, Etsy, the largest transfer in NYSE history, AstraZeneca, who officially transferred to the NYSE this week. This performance reflects the enduring value proposition that combines the NYSE brand with our leading-edge technology. Looking to 2026, we expect exchange segment recurring revenues to grow in the mid-single-digit range, driven by continued growth in exchange data services and expansion in our listings franchise. Turning to slide 7, Our fixed income data and services segment delivered another quarter of strong execution. Fourth quarter revenues totaled $608 million, including $101 million in transaction revenues. Within ICE bonds, continued growth in municipal bond revenue was offset by lower retail, corporate, and treasury activity, while strong CDS clearing results were offset by lower member interest income following the FOMC's rate reductions in 2025. Importantly, recurring revenues reached a record $507 million, growing 7% year-over-year. Our fixed income data and analytics business achieved record revenues of $318 million, up 5%, driven by our pricing and reference data offering, which posted its best quarter for net new business since 2020, and our index business, which ended the year with a record $794 billion in ETF AUM, tracking ICE indices, up over 20% versus last year. This growth reflects the increasing adoption of our data and indices, as well as the quality of our benchmark products. Data and network technology reached record revenues, increasing by 10% in the fourth quarter, reflecting strong demand for ICE global network, consolidated feeds, and desktop solutions. As customers integrate artificial intelligence into their workflows and require ever-increasing volumes of high-quality data, we're uniquely positioned as a critical technology provider. For 2026, we anticipate fixed income and data services recurring revenue growth in the mid single-digit range, with growth expected to trend towards the high end of that range, underpinned by another year of high single-digit growth in our data and network technology business. Please turn to slide eight for our mortgage technology segment results. Fourth quarter mortgage technology revenues totaled $532 million, up 5% year-over-year. On a pro forma basis, including Black Knight, This represents our strongest quarterly performance since 3-22. Recurring revenues totaled $391 million and were in line with our expectations. As we discussed in prior quarters, some customer renewals came in at lower minimums. Importantly, these renewals are paired with higher per transaction pricing that becomes increasingly beneficial as origination volumes normalize. The impact from lower minimums was largely offset by strong implementations and product expansions. particularly within origination technology. Transaction revenues sold 141 million, up an impressive 20% year-over-year. This was driven by a significant increase in transaction revenues from encompassed closed loans, as customers increasingly exceed their minimums in an improving origination environment, along with double-digit growth in MERS registrations, which was supported by strong fourth quarter refinancing activity. Turning to 2026 guidance, We expect total mortgage technology revenues to grow in the low to mid single-digit range. The high end of our range assumes the number of loans originated across the industry grows in the low teens, while the low end assumes flat to modest growth. Importantly, at both ends of this range, we anticipate continued growth in recurring revenues in 26. Several factors underpin this confidence. First, revenue synergies have nearly doubled from $55 million at year-end 2024 to approximately 100 million at year-end 2025, with further runway ahead. Second, we substantially worked through the 2020 to 2022 vintage contract renewals, reducing but not yet eliminating the headwind from encompassed minimum adjustments. And third, we continue to see strong product adoption and implementation momentum. These positives will be partially offset by previously disclosed client attrition related to certain M&A activity in 2025. Please return to slide 9, where I'll provide additional context on our 2026 guidance and outlook. We expect 2026 adjusted operating expenses to grow between 4 and 5 percent, between $4.75 billion and $4.140 billion. This includes approximately $25 million in accelerated stock-based compensation related to adjustments to our compensation plan. As a result, we expect less incremental stock compensation expense in both 27 and 28. Additionally, we currently expect depreciation in the euro and pound to add roughly $15 to $20 million. So note, it's more than offset by incremental revenue. Excluding these items, expense growth is expected to be in the 3% to 4% range, driven primarily by annual merit increases, reflecting our commitment to rewarding employees for their exceptional contributions, and strategic technology investments across our platforms. Among several other initiatives, these investments include expanding our data center footprint to meet growing customer demand and developing new artificial intelligence tools that will drive future productivity and innovation. Regarding capital expenditures, we expect 2026 investments to be between $740 million and $790 million. This includes installing AI infrastructure such as GPUs, storage, and network equipment designed to handle AI and data intensive workloads. Importantly, CapEx also includes elevated investment in real estate of approximately $250 million as we build revenue-generating data center capacity and new office space in Jacksonville, Dallas, Washington, D.C., and India. These are all strategic growth-enabling investments that position us for long-term success. In closing, 2025 was an exceptional year for ICE. We delivered growth across all key metrics, revenues, adjusted operating income, free cash flow, and adjusted earnings per share. We exceeded our synergy targets, invested strategically in our infrastructure and technology, and returned significant capital to shareholders while also strengthening our balance sheet. As we begin 2026, we have tremendous momentum. Our diversified business model, market-leading positions, recurring revenue base, and operational discipline give us confidence in our ability to deliver another year of profitable growth and shareholder value creation. I'll be happy to address your questions during Q&A, but for now, I'll turn it over to Ben.