Q4 2023 Intercontinental Exchange Inc Earnings Call

Okay.

Charlie: Thank you for watching! www.intercontinentalexchange.com. Hello everyone and welcome to the ICE Fourth Quarter 2023 Earnings Conference Call and Webcast. My name is Charlie, and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to ask a question, please press the star followed by 1 on your telephone screen. Please note that we will only take one question per person before moving on to the next. If you wish to ask a follow-up question, please return to. I'll now hand over to our host, Katya Gonzalez, Manager of Investor Relations, to begin. Katya, please go ahead.

Okay.

Okay.

Okay.

Okay.

Okay.

Okay.

[music].

Okay.

Okay.

Yeah.

Charlie: Hello, everyone and welcome to the <unk> fourth quarter 2023 earnings Conference call and webcast. My name is Charlie and I will be coordinating the call today.

Charlie: You'll have the opportunity to ask your question at the end of the presentation, if you'd like to register a question. Please press star followed by one on your telephone keypad.

Charlie: Please note that we will only be taking one question per person before moving onto the next question I.

Charlie: If you wish to ask a follow up please return to the queue.

Katia: I will now hand over to our host Catchier Gonzales manager of Investor Relations to begin Katia. Please go ahead.

Katya Gonzalez: Good morning, ICES's fourth quarter 2023 earnings release and presentation can be found in the investor section of ice.com. These items will be archived, and our code 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 uncertainty. 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 2023 Form 10-K and other filings with the SEC. In our earnings supplement, we refer to certain non-GAAP measures.

Katia: Good morning, Ice's fourth quarter 2023 earnings release and presentation can be found in the investors section of the ISR com.

Katia: Startups will be archived and our goal will be available for replay.

Katia: 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.

Katia: 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 2023 Form 10-K and other filings with the SEC.

Katia: 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'll find a reconciliation to the equivalent GAAP terms in the earnings materials. When used on this call net revenue refers to revenue net of transaction based expenses and adjusted <unk>.

Katya Gonzalez: We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You'll find our reconciliation to Google and 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.

Katia: <unk> refers to adjusted diluted earnings per share.

Warren Gardiner: 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, and Lynn Martin, President of the NYSE. I'll now turn the call over to Warren. Thanks, Kat

Katia: Throughout this presentation unless otherwise indicated references to revenue growth are on a constant currency basis. Please.

Katia: Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items.

Warren: With us on the call today are Jeff Sprecher Chair and CEO, Warren Gardiner, Chief Financial Officer, Ben Jackson, President and Lynn Martin President not the NYSE I'll now turn the call over to Warren Thanks, Scott.

Warren Gardiner: Good morning, everyone, and thank you for joining us today. I'll begin on slide four with a summary of our strong fourth quarter and some key highlights from our record 2023 results, for the quarter, net revenues totaled a record $2.2 billion, and Proforma for the acquisition of Black Knight increased 7% versus last year. For the full year, revenues totaled a record $8 billion, and on a pro forma basis, increased by 4% year-over-year. Fourth quarter adjusted operating expenses totaled $952 million, $3 million below the low end of our original guidance range driven by lower compensation expense and acceleration of expense synergy.

Warren Gardiner: Good morning, everyone and thank you for joining us today I'll.

Warren Gardiner: I'll begin on slide four with a summary of our strong fourth quarter and some key highlights from our record 2023 results.

Warren Gardiner: Fourth quarter net revenues totaled to a record $2 2 billion.

Warren Gardiner: And pro forma for the acquisition of Black Knight increased 7% versus last year for.

Warren Gardiner: For the full year revenues totaled a record 8 billion.

Warren Gardiner: And on a pro forma basis increased by 4% year over year.

Warren Gardiner: Fourth quarter, adjusted operating expenses totaled $952 million.

Warren Gardiner: $3 million below the low end of our original guidance range, driven by lower compensation expense and acceleration of expense synergies.

Warren Gardiner: This strong performance helped to drive fourth-quarter earnings per share of $1.33, up 6% year-over-year, and record full-year adjusted EPS of $5.62, also up 6% versus 2022. 2023 free cash flow, totaled their record $3.2 billion, enabling us to return nearly $1 billion to shareholders through dividends while also continuing to make strategic investments such as our September acquisition of Black Knight. These strong cash flows, as well as the full divestment of Black Knight State and Dun & Bradstreet, enabled us to reduce debt outstanding by roughly $700 million in the fourth quarter and by $1.4 billion since we closed on our acquisition in early September. As a result, adjusted leverage ended the year at approximately 4.1 times pro forma EBITDA.

Warren Gardiner: This strong performance helped to drive fourth quarter earnings per share of $1 33 up 6% year over year and a record full year adjusted EPS of $5 62.

Warren Gardiner: Also up 6% versus 2022.

Warren Gardiner: 2023 free cash flow totaled a record $3 2 billion.

Warren Gardiner: Enabling us to return nearly $1 billion to shareholders through dividends, while also continuing to make strategic investments such as our September acquisition of Black Knight.

Warren Gardiner: These strong cash flows as well as the full divestment of Black Knight stake and Dun <unk> Bradstreet enabled us to reduce debt outstanding by roughly $700 million in the fourth quarter and by $1 $4 billion. Since we closed on our acquisition in early September.

Warren Gardiner: As a result adjusted leverage ended the year at approximately four one times pro forma EBITDA.

Warren Gardiner: Now let's move to slide five, where I'll provide an overview of the performance of our exchange sector. Fourth quarter net revenues were, for the record, $1.1 billion, up 14% year-over-year. We had transaction revenues of $781 million, up 22%. This was in part driven by a 31% increase in our interest rate business and record energy revenues, which grew 46% year over year. This strong performance included a 41% increase in our oil complex, 66% growth in global natural gas revenues, driven by another record-setting quarter for TTF, and 23% growth in our environmental business. In addition, January set the tone for what we expect will be another strong year, evidenced by robust levels of total open interest in January of 20 percent year-over-year, including 22 percent growth in global energy and 23 percent growth in ags, as well as record average daily volumes across commodities, energy, and total options. Shifting to recurring revenues, which include our exchange data services and our NYC listings business, revenues totaled $355 million in the fourth

Warren Gardiner: Now, let's move to slide five where I'll provide an overview of the performance of our exchange segment.

Warren Gardiner: Fourth quarter net revenues totaled a record $1 1 billion up 14% year over year.

Warren Gardiner: Transaction revenues of $781 million were up 22% and.

Warren Gardiner: In part driven by a 31% increase in our interest rate business and record energy revenues, which grew 46% year over year.

Warren Gardiner: This strong performance included a 41% increase in our oil complex, 66% growth in global natural gas revenues driven by another record setting quarter for TTS and 23% growth in our environmental business.

Warren Gardiner: In addition January sets the tone for what we expect will be another strong year evidenced by a robust levels of total open interest in January up 20% year over year, including 22% growth in global energy and 23% growth in ads as well as record average daily volumes across commodities energy and total options.

Warren Gardiner: Shifting to recurring revenues, which include our exchange data services and our NYSE listings business revenues totaled $355 million in the fourth quarter.

Warren Gardiner: Similar to last quarter, growth in the number of customers consuming our global energy and environmental data was partially offset by the rolling off of initial listing fees related to the strong IPO market in 2021. It's worth noting that despite a slower year for IPOs across the globe, the NYSE led the industry in transfers for a second straight year, including a total of 32 transfers from other exchanges. Looking to 2024, we expect recurring revenues in our exchange segment to grow in the low single digits, driven by continued strong growth in futures exchange data, somewhat offset by growth in our listings business, with pressure on initial listing fees abating in the second quarter. Turning now to Slide 6, I'll discuss our Fixed Income and Data Services segment. Fourth quarter revenues totaled a record $563 million, up 4% versus a year ago, including transaction revenue of $116 million.

Warren Gardiner: Similar to last quarter growth in the number of customers consuming our global energy and environmental data was partially offset by the rolling off of initial listing fees related to the strong IPO market in 2021.

Warren Gardiner: It's worth noting that despite a slower year for ipos across the globe.

Warren Gardiner: <unk> led the industry in transfers for a second straight year, including a total of 32 transfers from other exchanges.

Warren Gardiner: Looking to 2024, we expect recurring revenues and our exchange segment to grow in the low single digits driven by continued strong growth in futures exchange data somewhat offset by growth in our listings business with pressure on initial listing fees abating in the second quarter.

Speaker Change: Turning now to slide six I'll discuss our fixed income and data services segment.

Speaker Change: Fourth quarter revenues totaled a record $563 million up 4% versus a year ago, including transaction revenue of $116 million.

Warren Gardiner: For the full year, transaction revenues increased 19%, in part driven by 23% growth at ICE bonds, which, since our acquisition of BondPoint and TMC, has grown at a CAGR of 11%, driven by growing institutional adoption and higher interest rates. Recurring revenues totaled a record $447 million and grew by 5% year-over-year in the fourth quarter. In our fixed income data and analytics business, record fourth-quarter revenues of $286 million increased by 4%, an acceleration from 2% growth in the third quarter for Pricing and Reference Data and a return to double-digit growth in our index business. Other data and network services grew 7% in the fourth quarter, driven by continued growth across our desktop, feeds, and derivative analytics offerings. Within our desktops business, we continue to see strong demand from energy and environmental-focused customers, as well as continued robust growth in our IceChat business.

Speaker Change: For the full year transaction revenues increased 19% in part driven by 23% growth at ice bonds, which since our acquisition of bond point and TMC has grown at a CAGR of 11% driven by growing institutional adoption and higher interest rates.

Speaker Change: Recurring revenues totaled a record $447 million and grew by 5% year over year in the fourth quarter.

Speaker Change: In our fixed income data and analytics business record fourth quarter revenues of $286 million increased by 4% an acceleration from 2% growth in the third quarter, driven by pricing and reference data and a return to double digit growth in our index business.

Speaker Change: Other data and network services grew 7% in the fourth quarter, driven by continued growth across our desktop feeds and derivative analytics offerings.

Speaker Change: Within our desktop business, we continue to see strong demand from energy and environmental focus customers as well as continued robust growth in our eyes chat offering.

Warren Gardiner: In our consolidated fees business, we continue to realize the benefits of past investments to enhance our platform, with a record 2023 contributing to a high single-digit revenue growth over the last three years. Looking to 2024, we expect that recurring revenues in our fixed income and data services business will grow in the mid-single-digit range, as we expect the aforementioned trends across fixed income, data, and analytics, as well as desktops and feeds, to continue. Please flip to slide 7, where I will discuss the results in our mortgage technology section. Please note that my comments on revenue growth are on a pro forma basis. Ice mortgage technology revenues totaled $502 million in the fourth quarter, slightly above the high end of our guidance range, with recurring revenues of $397 million, accounting for roughly 80% of total segment revenue. In addition, on a pro forma basis, operating income increased 7% year-over-year.

Speaker Change: And our consolidated feeds business, we continue to realize the benefits of past investments to enhance our platform with a record 2023 contributing to the high single digit revenue CAGR over the last three years.

Speaker Change: Looking to 2024, we expect that recurring revenues in our fixed income and data services business will grow in the mid single digit range as we expect the aforementioned trends across fixed income data and analytics as well as desktops and fees to continue.

Speaker Change: Please flip divides slide seven where I will discuss the results in our mortgage technology segment.

Speaker Change: Please note that my comments on revenue growth on a pro forma basis.

Speaker Change: Ice mortgage technology revenues totaled $502 million in the fourth quarter.

Speaker Change: Above the high end of our guidance range with recurring revenues of $397 million accounting for roughly 80% of total segment revenues. In addition on a pro forma basis operating income increased 7% year over year.

Speaker Change: We had a strong finish to 2023 registering one of the best quarters for new product sales, including 37, new encompass clients and for new MSP clients. This strong finish capped off what was the best year since 2018 for encompass and MSP sales and while these sales will take time to implement and thus recognized relate.

Warren Gardiner: We had a strong finish to 2023, registering one of the best quarters for new product sales, including 37 new Encompass clients and four new MSB clients. This strong finish capped off what was the best year since 2018 for Encompass and MSP sales. And while these sales will take time to implement and thus recognize related revenue, there is clear momentum across the industry as customers seek technology and data solutions that drive greater transparency and workflow efficiency. Shifting to 2024 guidance, consistent with the near-term outlook provided in our Black Night closing call in September, we expect total mortgage technology revenue growth on a pro forma basis to be in the low-single-digit to mid-single-digit range for the full year. The low end of our range assumes only a modest improvement in application and origination volumes, while the high end assumes a more substantial improvement in the double-digit growth range. It is worth noting that seasonality tends to benefit both the second and third quarters of each year relative to the first and fourth. Recurring revenues for the year are expected to be roughly flat, including a decline of roughly $5 to $10 million in the first quarter relative to the fourth quarter.

Speaker Change: Revenue there is clear momentum across the industry as customers seek technology and data solutions that drive greater transparency and workflow efficiencies.

Speaker Change: Shifting to 2024 guidance consistent with our near term outlook provided on our Black Knight closing call in September we expect total mortgage technology revenue growth on a pro forma basis to be in the low single digits to mid single digit range for the full year.

Speaker Change: The low end of our range assumes only modest improvement in an application in origination volumes, while the high end underwrites, a more substantial improvement in the double digit growth range.

Speaker Change: It is worth noting that seasonality tends to benefit both the second and third quarters of each year relative to the first and fourth.

Speaker Change: Recurring revenues for the year is expected to be roughly flat, including a decline of roughly $5 million to $10 million in the first quarter relative to the fourth quarter.

Warren Gardiner: We expect recurring revenues to improve sequentially thereafter as sales implement, with the year-over-year growth re-emerging in the second half. The sequential pressure and attrition that we expect in the first quarter is largely driven by two customers that were acquired, one of which was completed back in 2021. Moving to Black Knight Synergies, through the first five months post-close, we have signed annualized revenue synergies of roughly $30 million, or nearly a quarter of our $125 million five-year target. It is worth noting that these signings are not expected to have a material impact on our 2024 recurring revenues and will largely begin to be recognized in 2025 and thereafter.

Speaker Change: We expect recurring revenues to improve sequentially thereafter as sales implement.

Speaker Change: With year over year growth re emerging in the second half.

Speaker Change: The sequential pressure on attrition that we expect in the first quarter is largely driven by two customers that were acquired one of which was completed back in 2021.

Speaker Change: Moving to Black Knight synergies through the first months five months post close we assigned annualized revenue synergies of roughly $30 million for nearly a quarter of our $125 million five year target.

Speaker Change: It is worth noting that these signings are not expected to have a material impact on our 2020 for recurring revenues and will largely begin to be recognized in 2025 and thereafter synergies.

Warren Gardiner: Synergies have largely been driven by cross-sell success across our flagship and compass and MSP platform, as well as in data and analytics. Turning to expense synergies, we expect to realize approximately $135 million in annualized savings by the end of 2024, ahead of our original expectations of roughly $100 million by year end. I'll conclude my remarks on slide 8 with some additional guidance. We expect 2024 Adjusted Operating Expenses to be between $3.81 billion and $3.86 billion.

Speaker Change: To introduce have largely been driven by cross sell success across our flagship encompass and MSP platform as well as in data and analytics.

Speaker Change: Turning to expense synergies, we expect to realize approximately $135 million in annualized savings by the end of 2024 ahead of our original expectation of roughly $100 million by year end.

Speaker Change: I'll conclude my remarks on slide eight with some additional guidance.

Speaker Change: We expect 2024 adjusted operating expenses to be between $3, eight 1 billion and $3 86 billion.

Warren Gardiner: Similar to prior years, we expect to continue to invest in our people, our technology, including the enhancement of MSP, and various growth initiatives across our business. These investments are somewhat offset by expense synergies, which I noted are expected to reach approximately $135 million in annualized savings by the year end of 2024. Moving below the line, we expect non-operating expenses to be between $215 million and $220 million in the first quarter. And, depending on the future path of short-term interest rates, these expenses should decline slightly in subsequent quarters as we continue to pay down the outstanding commercial paper and term loan related to our Black Knight Act. We anticipate the full-year tax rate to be in the range of 24% to 26%, up slightly from 2023 due to the impact of a full year of higher UK taxes.

Speaker Change: Similar to prior years, we expect to continue to invest in our people our technology, including the enhancement of MSP and various growth initiatives across our business. These.

Speaker Change: These investments are somewhat offset by expense synergies, which I noted are expected to reach approximately $135 million and run rate annualized savings by the year end 2024.

Speaker Change: Moving below the line, we expect nonoperating expense to be between $215 million and $220 million in the first quarter.

Speaker Change: And depending on the future path of short term interest rates. These expenses should decline slightly in subsequent quarters as we continue to pay down the outstanding commercial paper and term loan related to our Black Knight acquisition.

Speaker Change: We anticipate the full year tax rate to be in the range of 24% to 26% up slightly from 2023 due to the impact of a full year of higher UK taxes.

Warren Gardiner: And finally, we expect full-year CapEx to be in the range of $600 million to $650 million, including approximately $100 million related to Black Knight, with the vast majority expected to be directed to various technology investments that Ben will detail shortly, and $100 million related to the new office space and expansion and improvement across New York, London, and Jackson. In summary, we delivered a very strong finish to another record year of revenues, operating income, free cash flow, and earnings per share. We grew our dividend, returning nearly $1 billion to our shareholders, while at the same time continuing to invest across the business to meet the needs of our customers and expand our mortgage technology network through the acquisition of Black Knight. As we kick off 2024, we're focused on once again delivering growth and creating shareholder value. I'll be happy to take your questions during the 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 nine.

Speaker Change: And finally, we expect full year capex to be in the range of $600 million to $650 million, including approximately $100 million related to black Knight.

Speaker Change: With the vast majority expected to be delivered or directed to various technology investments that Ben will detail shortly.

Speaker Change: And $100 million related to the new office space and expansion and improvement across New York, London and Jacksonville.

Speaker Change: In summary, we delivered a very strong finish to another record year of revenues operating income free cash flow and earnings per share.

Speaker Change: We grew our dividend returning nearly $1 billion to our shareholders. While at the same time continuing to invest across the business to meet the needs of our customers and expand our mortgage technology network through the acquisition of Black Knight.

Speaker Change: As we kick off 2024, we're focused on once again delivering growth and creating shareholder value I will be happy to take your questions during Q&A, but for now hand, it over to Ben.

Benjamin R. Jackson: Thank you Lauren and thank you all for joining US. This morning, please turn to slide nine.

Benjamin R. Jackson: We are pleased to report another record year for ice.

Benjamin R. Jackson: Our strong 2023 results were in part driven by a dynamic macroeconomic environment.

Benjamin R. Jackson: We are pleased to report another record year for ICE. Our strong 2023 results were in part driven by a dynamic macroeconomic environment. But more importantly, underpinning that performance are long-term secular tailwinds that will continue to drive growth across asset classes in a variety of macroeconomic environments. In our energy markets, the depth and breadth of our global platform not only drove records across volumes and revenues in 2023, but it positions us well to capture secular tailwinds across our energy complex. Including the globalization of natural gas and the clean energy transition.

Benjamin R. Jackson: But more importantly, underpinning that performance our long term secular tailwind that will continue to drive growth across asset classes and a variety of macroeconomic environments.

Benjamin R. Jackson: Across our energy markets, the depth and breadth of our global platform not only drove records across volumes and revenues in 2023.

Benjamin R. Jackson: But it positions us well to capture secular tailwind across our energy complex, including the globalization of natural gas and the clean energy transition.

Benjamin R. Jackson: In our oil markets, we've invested in building a global platform that positions us well to provide the critical price transparency across the energy spectrum that will help enable participants to navigate the clean energy transition.

Benjamin R. Jackson: In our oil markets, we've invested in building a global platform that positions us well to provide the critical price transparency across the energy spectrum that will help enable participants to navigate the clean energy transition. Most recently, ICE's Brent Benchmark underwent its latest evolution with the addition of Midland WTI to the Brent basket. This latest evolution contributed to record Brent volumes in 2023, surpassing the record last set in 2021 and demonstrating that the market depends on its ability to reflect global fundamentals. At the same time, our WTI contract reached record volumes and continues to gain shares. In addition, as trade dynamics evolve and become increasingly complex, customers are seeking liquidity in the major global benchmarks but also in products that provide greater hedging precision.

Benjamin R. Jackson: Most recently Ice's Brent benchmark underwent its latest evolution with the addition of Midland <unk> into the Brent basket.

Benjamin R. Jackson: This latest evolution contributed to record Brent volumes in 2023, surpassing the record last set in 2021 and demonstrating that the market depends on its ability to reflect global fundamentals.

Benjamin R. Jackson: At the same time, our WTO contract reached record volumes and continues to gain share.

Benjamin R. Jackson: In addition, as trade dynamics evolve and become increasingly complex customers are not only seeking liquidity in the major global benchmarks, but also in products that provide greater hedging precision.

Benjamin R. Jackson: This trend is illustrated by the record trading activity in our other crude and refined products in 2023 with volumes up 35% year over year.

Benjamin R. Jackson: This trend is illustrated by the record trading activity in our other crude and refined products in 2023, with volumes up 35% year over year. This strong performance has carried into 2024, with January ADV surpassing the record last set in March of 2020, and at the same time, open interest is up 36%. At International Gas Markets, we've adopted a similar playbook, building a global platform that spans benchmarks across North America, Europe, and Asia

Benjamin R. Jackson: This strong performance has carried into 2024 with January Adv, surpassing the record last set in March of 2020 and at the same time open interest is up 36%.

Benjamin R. Jackson: In our natural gas markets, we've adopted a similar playbook building a global platform that spans benchmarks across North America, Europe and Asia.

Benjamin R. Jackson: As energy supply chains evolve and globalize, the quality of our expansive range of benchmarks is evident, with our global gas business delivering record revenues in 2023, increasing 44% year over year. This strong performance was led by record volumes and participation in our TTF Benchmark contract, www.intercontinentalexchange.com. A similar dynamic is playing out in our Asian JKM complex, with volumes up 17% in 2023 and continued participation growth, including our highest fourth quarter In addition, we continue to see robust open interest trends through January, including a record total gas open interest of nearly 38 million lots on January 25th, surpassing the record set in 2012.

Benjamin R. Jackson: As energy supply chains evolve and globalize the quality of our expansive range of benchmarks is evident with our global gas business delivering record revenues in 2023, increasing 44% year over year.

Benjamin R. Jackson: This strong performance was led by record volumes and participation in our TTS benchmark contract, which we have positioned as the Brent of natural gas and plays a critical role in providing global natural gas price signals.

Benjamin R. Jackson: A similar dynamic is playing out in our Asian, JK EM complex with volumes up 17% in 2023 and continued participation growth, including our highest fourth quarter ever.

Benjamin R. Jackson: In addition, we continue to see robust open interest trends through January including record total gas open interest of nearly $38 million lots on January 25.

Benjamin R. Jackson: Surpassing the record set in 2012.

Benjamin R. Jackson: This strength continues to underscore the significance of our contracts to the price formation of global natural gas. We were also early to diversify and do environmental, recognizing the importance of carbon price transparency over a decade ago. As we look out over the longer term, governments, corporates, and market participants remain committed to environmental policy to reduce carbon emissions. As such, valuing externalities, such as placing a price on pollution.

Benjamin R. Jackson: This strength continues to underscore the significance of our contracts to the price formation of global natural gas.

Benjamin R. Jackson: We were also early to diversify into environmental.

Benjamin R. Jackson: Recognizing the importance of carbon price transparency over a decade ago.

Benjamin R. Jackson: As we look out over the longer term governments corporates and market participants remain committed to environmental policy to reduce carbon emissions.

Benjamin R. Jackson: As such valuing externalities, such as placing a price on pollution.

Benjamin R. Jackson: Carbon-free electricity, as well as carbon sequestration and storage, will continue to increase in importance. This is illustrated by continued growth in active market participants, up double digits in the fourth quarter. At the same time, 2023 marked another record year in our North American environmental markets with volumes of 7% year over year. Importantly, because ICE has one of the largest networks of environmental products, to value such externalities across the carbon cycle.

Benjamin R. Jackson: Carbon free electricity as well as carbon sequestration and storage will continue to increase in importance.

Benjamin R. Jackson: This is illustrated by continued growth in active market participants up double digits in the fourth quarter.

Benjamin R. Jackson: At the same time 2023 marked another record year in our North American environmental markets with volumes up 7% year over year.

Benjamin R. Jackson: Importantly, because ice is one of the largest networks of environmental products to value such externalities across the carbon cycle. This is a growth trend that we are uniquely positioned to capture.

Benjamin R. Jackson: This is a growth trend that we are uniquely positioned to capture. In summary, the globalization of natural gas and the energy transition are trends that we began investing in over a decade ago. And today, cleaner energy sources, including global natural gas and environmental, make up over 40% of our energy revenues and have grown 17% on average over the past five years.

Benjamin R. Jackson: In summary, the globalization of natural gas in the energy transition are trends that we began investing in over a decade ago and today cleaner energy sources, including global natural gas and environmental make up over 40% of our energy revenues and have grown 17% on average over the <unk>.

Benjamin R. Jackson: Past five years.

Benjamin R. Jackson: The strong performance has contributed to an average annual revenue growth rate of 9% in our energy platform over that period, including 28% growth in 2023. With our Brent crude oil contract serving as the cornerstone of our energy network, we've expanded the range of content that we offer to our customers. We have built and continue to enhance our global energy network that delivers comprehensive risk management solutions, provides capital efficiencies, and is positioned to grow alongside the continued evolution of global markets while providing the critical price transparency across the energy spectrum needed to navigate the energy transition. This large suite of energy risk management tools, combined with our AGS portfolio, which saw record volumes in 2023, and has hit consistent open interest records through January, makes up our global commodity network of more than 1,000 products and services Moving to our fixed income and data services business, market volatility, higher interest rates, and secular trends such as the need for increased automation.

Benjamin R. Jackson: This strong performance has contributed to an average annual revenue growth rate of 9% and our energy platform over that period, including 28% growth in 2023.

Benjamin R. Jackson: With our Brent crude oil contract serving as the cornerstone of our energy network. We've expanded the range of content that we offer to our customers. We have built and continue to enhance our global energy network that delivers comprehensive risk management solutions provides capital efficiencies and is positioned.

Benjamin R. Jackson: To grow alongside the continued evolution of global markets, while providing the critical price transparency across the energy spectrum needed to navigate the energy transition.

Benjamin R. Jackson: This large suite of energy risk management tools, combined with our AG portfolio, which saw record volumes in 2023.

Benjamin R. Jackson: And has hit consistent open interest records through January makes up our global commodity network of more than 1000 products and services to help our customers manage risks around evolving supply chain issues acts of nature and acts of man.

Benjamin R. Jackson: Moving to our fixed income and data services business.

Benjamin R. Jackson: Market volatility higher interest rates and secular trends such as the need for increased automation demand for flexible delivery solutions and growth in passive investing contributed to another year of record segment revenues in 2023 up 6% versus a year ago.

Benjamin R. Jackson: Demand for Flexible Delivery Solutions and Growth in Passive Investment contributed to another year of record segment revenues in 2023, up 6% versus a year ago. This strength was once again driven by both transaction and recurring revenue growth, highlighting the strength of our all-weather business model. Higher interest rates and our continued efforts to build institutional connectivity across our platform drove another year of record revenues in our ICE bonds business, up 23% in 2023, and that performance was on top of a nearly 100% increase in 2022. In addition, we continue to see returns on past investments we've made in our other data and network services business, where revenues grew 7% in 2023. Within desktops, the investments we've made to reduce friction across the workflow directly contributed to double-digit revenue growth in 2023.

Benjamin R. Jackson: This strength was once again driven by both transaction and recurring revenue growth highlighting the strength of our all weather business model.

Benjamin R. Jackson: Higher interest rates and our continued efforts to build institutional connectivity across our platform drove another year of record revenues in our ice bonds business up 23% in 2023 and that performance was on top of the nearly 100% increase in 2022.

Benjamin R. Jackson: In addition, we continue to see returns on past investments we've made in our other data and network services business, where revenues grew 7% in 2023.

Benjamin R. Jackson: Within desktops investments, we've made to reduce friction across the workflow directly contributed to double digit revenue growth in 2023.

Benjamin R. Jackson: In our consolidated fees business, past investments we've made to elevate and enhance our offering led to a number of wins driven by displacements of larger multi-asset class incumbents, a key driver of the high single-digit revenue growth in this area in 2023. Finally, as we move forward, our enthusiasm is focused on continuing to expand and evolve the products and services that add transparency to both commonly understood risks as well as emerging risks that make up our fixed income and data services business. Our climate analytics, for example, leverage our strength in the fixed income market with third-party geospatial data to help market participants better manage climate risk as part of their overall investing and risk management processes.

Benjamin R. Jackson: In our consolidated feeds business past investments, we've made to elevate and enhance our offering led to a number of wins driven by displacements of larger multi asset class incumbents.

Benjamin R. Jackson: A key driver of the high single digit revenue growth in this area in 2023.

Benjamin R. Jackson: Finally, as we move forward.

Benjamin R. Jackson: Our enthusiasm is focused on continuing to expand and evolve the products and services, which add transparency to both commonly understood risks as well as emerging risks that make up our fixed income and data services business our.

Benjamin R. Jackson: Our climate analytics for example leverage our strength in the fixed income market with third party geospatial data to help market participants better manage climate risk as part of their overall investing and risk management processes.

Benjamin R. Jackson: Turning now to our mortgage business. Similar to the playbook, we operate across our global energy and fixed income business. In mortgages, we are leveraging market-leading technology, mission-critical data, and our network expertise to build innovative solutions that drive workflow efficiency. Our mortgage network spans from point of consumer acquisition all the way through to the secondary market, providing a true life cycle loan offering that positions us to lead the transformation of an industry that is moving analog to digital. In this regard, we're pleased to share that we closed 37 new Encompass clients in the fourth quarter and four new MSP clients, contributing to a record for new sales on Encompass and the highest in the last five years for MSP and Encompass combined. Building on the Encompass wins mentioned on the last call, such as M&T Bank, we added Raymond James Bank for their retail and correspondent channel.

Benjamin R. Jackson: Turning now to our mortgage business.

Benjamin R. Jackson: Similar to the playbook, we operate across our global energy and fixed income businesses and mortgages, we are leveraging market, leading technology mission critical data and our network expertise to build innovative solutions that drive workflow efficiencies.

Benjamin R. Jackson: Our mortgage network spans from point of consumer acquisition, all the way through to the secondary market, providing a true life of loan offering that positions us to lead the transformation of an industry that is moving analog to digital.

Benjamin R. Jackson: In this regard we are pleased to share that we closed 37, new encompass clients in the fourth quarter and four new MSP clients contributing to a record for new sales on encompass and the highest in the last five years for MSP and encompass combined.

Benjamin R. Jackson: Building on the encompass wins mentioned on the last call such as <unk> Bank, We added Raymond James Bank for their retail and correspondent channels. We also brought back Carrington, a significant non bank lender and servicer onto the encompass platform from a third party.

Benjamin R. Jackson: We also brought back Carrington, a significant non-bank lender and servicer, onto the Encompass platform from a third party. For MSP, building on the four wins we had in the fourth quarter, such as the fifth-third that was mentioned on the last call, we closed Capital Mortgage Solutions of Texas and an existing Encompass client, Cap-Ed Credit Union, to start 2024. As we enter 2024, we remain focused on the successful integration of Black Knight and executing on our strategy of relieving the pain points and inefficiencies that exist across the mortgage workflow. Importantly, our approach remains consistent with the blueprint we've applied across our other networks, one of investing in secular growth while enhancing the value proposition of our network. A near-term opportunity to drive greater transparency and efficiency includes integrating Black Knight data sets, such as our closing fee data, tax, flood, and valuation models, into our Encompass and MSP systems. Another near-term example is integrating our data and document automation platform into MSP, building a digital bridge from origination straight through to servicing, reducing costs, time, and errors to onboard loans to the MSP system. A third example builds upon our lead in providing compliance solutions fully integrated into every aspect of the mortgage origination process and moving towards servicing as well.

Benjamin R. Jackson: For MSP building on the four wins, we had in the fourth quarter such as fifth third that was mentioned on the last call. We closed capital mortgage solutions of Texas.

Benjamin R. Jackson: And in existing encompass client cap end credit Union to start 2024.

Benjamin R. Jackson: As we enter 2024, we remain focused on the successful integration of Black Knight and executing on our strategy of relieving the pain points and inefficiencies that exist across the mortgage workflow.

Benjamin R. Jackson: Importantly, our approach remains consistent with the blueprint, we've applied across our other networks one of investing behind secular growth, while enhancing the value proposition of our network.

Benjamin R. Jackson: A near term opportunity to drive greater transparency and efficiency includes integrating black Knight datasets, such as our closing fee data tax flood and valuation models into our encompass and MSP systems.

Benjamin R. Jackson: Another near term example is integrating our data and document automation platform into MSP.

Benjamin R. Jackson: Building, a digital bridge from origination straight through to servicing reducing cost time and errors to onboard loans to the MSP system.

Benjamin R. Jackson: A third example builds upon our lead providing compliant solutions fully integrated into every aspect of the mortgage origination process and moving towards servicing as well.

Benjamin R. Jackson: At the same time, our near term opportunity is our continued investment in our product and pricing engine further strengthening the mortgage ecosystem by providing additional options and greater efficiencies to lenders Servicers and partners.

Benjamin R. Jackson: At the same time, a near-term opportunity is our continued investment in our product and pricing, further strengthening the mortgage ecosystem by providing additional options and greater efficiencies to lenders, servicers, and partners. In parallel to these near-term opportunities just mentioned, we are executing on our investment commitment to continue to advance our market-leading SaaS-based MSP servicing platform, following a similar successful process that we have executed on with other companies that we have acquired. Simultaneously, we see an opportunity to advance our digital document vault service that is offered for documents such as e-notes and to extend this as a golden record for other origination and servicing documents to help reduce duplication, improve quality, and reduce costs for our customers.

Benjamin R. Jackson: In parallel to these near term opportunities just mentioned we are executing on our investment commitments to continue to advance our market, leading SaaS based MSP servicing platform.

Benjamin R. Jackson: Following a similar successful process that we have executed against with other companies that we've acquired.

Benjamin R. Jackson: Simultaneously, we see an opportunity to advance our digital document vault service that is offered for documents such as E notes and to extend this as a golden record for other origination and servicing documents to help reduce duplication.

Benjamin R. Jackson: Prove quality and reduce costs for our customers.

Benjamin R. Jackson: In summary, we are pleased to see that the value of our solutions delivered by our comprehensive technology platform is resonating in the marketplace.

Benjamin R. Jackson: In summary, we are pleased to see that the value of our solutions, delivered by our comprehensive technology platform, is responding in the marketplace. The demand we are seeing across our platform gives us confidence that we can grow a business that, at $2.1 billion in revenue today, is only a fraction of the $14 billion addressable market that's in the early days of an analog to digital conversion. With that, I'll turn the call over to Jeff. Thank you, Ben. Good morning, everyone, and thank you for joining us. Please turn to slide 10.

Benjamin R. Jackson: The demand we are seeing across our platform gives us confidence that we can grow a business that at $2 1 billion in revenue today is only a fraction of the $14 billion addressable market. It's in the early days of an analog to digital conversion.

Benjamin R. Jackson: With that I'll now turn the call over to Jeff.

Jeffrey Craig Sprecher: Thank you Ben good morning, everyone and thank you for joining us.

Jeffrey Craig Sprecher: Please turn to slide 10.

Jeffrey Craig Sprecher: 2023 was a unique year for the energy market. The year kicked off with a European ban on the import of Russian crude oil and a $60 Russian oil price cap imposed by the U.S., Japan, Canada, and Australia, all driven by the Ukrainian conflict and a forced realignment of the global energy supply chain. In October, a painful conflict with Israel erupted that is testing relationships within the energy-producing Middle East and which caused the U.S. House of Representatives to send a bill to the U.S. Senate imposing further sanctions on Iranian oil.

Jeffrey Craig Sprecher: 2023 was a unique year for the energy market.

Jeffrey Craig Sprecher: <unk> kicked off with a European ban on the import of Russian crude oil and a 60 dollar Russian oil price cap imposed by the U S, Japan, Canada, and Australia, all driven by the Ukrainian conflict and a forced realignment of the global energy supply chain.

Jeffrey Craig Sprecher: In October a painful conflict with Israel erupted that is testing relationships within the energy producing middle east and which caused the U S House of representatives to send a bill to the U S. Senate imposing further sanctions on Iranian oil.

Jeffrey Craig Sprecher: In November, terrorists began attacking ships navigating the Red Sea, causing the world's largest operators of crude oil tankers to modify their supply chain operations out of that region. And throughout 2023, OPEC Plus met to set quotas to cut oil production, attempting to drive oil prices higher for the benefit of Russia and Middle East producers. With this complex geopolitical backdrop, it would be reasonable to assume that we ended 2023 with oil prices pushing towards record highs. Well, that's not the case. Brent crude oil actually ended the year with prices lower than where the year started, marking the first annual price decline since the COVID collapse. Even the recent supply shocks and oil shift from the Red Sea failed to rally oil prices for more than a day or two.

Jeffrey Craig Sprecher: In November terrorist began attacking ships navigating the red sea, causing the world's largest operators of crude oil tankers to modify their supply chain operations out of that region.

Jeffrey Craig Sprecher: Throughout 2023, OPEC, plus net set quotas to cut oil production attempting to drive oil prices higher for the benefit of Russia and middle East producers.

Jeffrey Craig Sprecher: With this complex geopolitical backdrop, it would be reasonable to assume that we ended 2023 with oil prices pushing towards record highs well.

Jeffrey Craig Sprecher: Well, that's not the case, Brent crude oil actually ended the year with prices lower than where the year started marketing the first annual price decline since the COVID-19 collapse.

Jeffrey Craig Sprecher: Even the recent supply shocks and oil shipped from the Red Sea failed the rally oil prices for more than a day or two.

Jeffrey Craig Sprecher: When we acquired the former International Petroleum Exchange of London in the early 2000s, its flagship product was a small futures contract on a then not well-known grade of oil called Brent. The Brent Oil Field consisted of four deep water oil platforms built in the 1970s in the middle of the North Sea between Scotland and Norway. The waters there are deep, and the working environment is hostile.

Jeffrey Craig Sprecher: When we.

Jeffrey Craig Sprecher: Wired the former international Petroleum exchange of London in the early two thousands its flagship product was a small futures contract on it than not well known grade of oil call Brent.

Jeffrey Craig Sprecher: The Brent oil field consisted of four deepwater oil platforms built in the $19 70 in the middle of the North Sea between Scotland and Norway.

Jeffrey Craig Sprecher: The waters, there are D and the working environment as hospital. So pipelines were built to move the oil to the remote Shetland Islands, where Brent was then loaded directly on the seaborne oil tankers.

Jeffrey Craig Sprecher: So pipelines were built to move the oil to the remote Shetland Islands, where it was then loaded directly onto seaborne oil tanks. One of the early challenges that ICE faced trying to grow the trading volumes of this Brent futures contract on our newly acquired exchange was the substantial underlying issue that the Brent oil fields were drying up, and oil production was deteriorating. We began working with the oil industry and drove a consensus to allow other grades of oil from locations away from the Brent oil field to make their way into a newly reconstituted ICE index, which we continued to call Brent. Over time, we've evolved the index, and we've added oil from fields called Forties, Heisenberg, Echofisk, and Kroll. And most recently, we added U.S. oil drilled in the Midland Basin of West Texas. The pipeline, rail, and trucking infrastructure serving the Midland Basin drives a large portion of this U.S. oil towards the Gulf of Mexico, where it becomes available for seaborne exports.

Jeffrey Craig Sprecher: One of the early challenges that ice space trying to grow the trading volumes of this Brent futures contract on our newly acquired exchange was the substantial underlying issue that the Brent oil fields were drawing up and oil production was deteriorating.

Jeffrey Craig Sprecher: We began working with the oil industry and drove a consensus to allow other grades of oil from locations away from the Brent oil fields to make their way into a newly reconstituted ice index, which we continued to call Brent.

Jeffrey Craig Sprecher: Over time, we've evolved the index and we've added oil from fields called <unk> <unk> Echo fifth CRO.

Jeffrey Craig Sprecher: <unk> and most recently, we added U S soil drilled in the Midland basis of West Texas.

Jeffrey Craig Sprecher: The pipeline rail and trucking infrastructure, serving in the Midland Basin drives a large portion of this U S oil towards the Gulf of Mexico, where it becomes available for seaborne export.

Jeffrey Craig Sprecher: And U.S. oil drillers in this region have been very sensitive to global supply and demand price signals. Their market-based responses have caused their U.S. oil exports to set the marginal price of the ICE Brent Index roughly half the time since its latest reconstitution, with other global oil grades setting the marginal price for the balance. The Brent oil field began decommissioning in 2006, and its first drilling platform ceased production in 2011, followed by the second and third platforms stopping in 2014 and 2021.

Jeffrey Craig Sprecher: In the U S oil drillers in this region have been very sensitive to global supply and demand price signals their market based responses have caused their U S oil exports to set the marginal price of the ice Brent index roughly half the time since its latest reconstitution with other global oil grades.

Jeffrey Craig Sprecher: Setting the marginal price for the balance.

Jeffrey Craig Sprecher: The Brent oil field began decommissioning in 2006 and its first drilling platform ceased production in 2011, followed by the second and third platform stopping in 2014 and 2021.

Jeffrey Craig Sprecher: The fourth and final grant platform has been repurposed to tap into another oil field. So today, it's safe to say that there is no longer any Brent in ICE's Brent Index. During our index evolution, ICE marketed the value of the Brent Index to the energy industry as the preferred way to hedge global energy prices. U.S. oil exporters are now leveling out the prices for global crude oil, and that's reflected in the Brent Index, making the difficult geopolitical shocks that I just highlighted less impactful on global oil prices. The record volume that ICE sees in our Brent Oil Futures Trading Complex is a direct result of this focused evolution of our ICE-Brent Index. I tell this story as an example of how we think about the industries in which we operate.

Jeffrey Craig Sprecher: The fourth and final Brent platform has been repurposed to tap into another oilfield.

Speaker Change: So today, it's safe to say that there is no longer any Brent in Ice's Brent index.

Speaker Change: During our index evolution ice marketed the value of the Brent index to the energy industry is the preferred way to hedge global energy prices.

Speaker Change: U S oil exporters are now leveling out the prices for global crude oil and Thats reflected in the Brent index, making the difficult geopolitical shocks that I just highlighted less impactful on global oil prices.

Speaker Change: The record volume that Ics in our Brent oil futures trading complex is a direct result of this focus evolution of our ice Brent index.

Speaker Change: I would tell this story is an example of how we think about the industries in which we operate we invest in and constantly work with market participants to transform industries to reflect changing environments.

Jeffrey Craig Sprecher: We invest in and constantly work with market participants to transform industries to reflect changing environments. We're following a similar roadmap with our entire energy complex, given the analogous macro backdrop of industrialized economies that are attempting to move away from carbon-emitting fuels, causing us to list over 1,000 commodity contracts versus just four contracts when we acquired the IPE. You may have seen our recent announcement that ICE is working with the U.S. Department of Energy to develop regional markets for hydrogen fuels as we continue to focus on medium to long-term cyclical trends and the next energy frontier.

Speaker Change: We're following a similar roadmap with our entire energy complex given the analogous macro backdrop backdrop of industrialized economies that are attempting to move away from carbon emitting fuels, causing us the list over 1000 commodity contracts versus just four contracts when we acquired VIP.

Speaker Change: You may have seen our recent announcement that ice is working with the U S Department of energy to develop regional markets for hydrogen fuels as we continue to focus on medium to long term cyclical trends and the next energy frontier.

Jeffrey Craig Sprecher: Similarly, by creating our ICE Data Services Division nearly nine years ago, we spotted the trend that the single most important asset associated with automation was trusted, mission-critical data and digitized information. We've invested in information acquisition, data dissemination, and index construction. You are witnessing our data services division extending the same playbook that we ran on Brent to transform global benchmarks for financial products in areas such as credit and interest rates, and these are increasingly making their way onto platforms around the globe, including our own, in the form of valuations, reference data, cash markets, derivative markets, ETFs, options, and equities.

Speaker Change: Similarly by creating our ice data services division nearly nine years ago, we spotted the trend that the single most important asset associated with automation with trusted mission critical data and digitized information.

Speaker Change: We've invested in information acquisition data dissemination and index construction and you are witnessing our data services division extending the same playbook that we ran on Brent to transform global benchmarks for financial products in areas, such as credit and interest rates.

Speaker Change: And these are increasingly making their way onto platforms around the globe, including our own in the form of evaluations reference data cash markets derivative market Etfs options and equities.

Jeffrey Craig Sprecher: Importantly, we're leaning into this blueprint to drive ICE's most recent expansion, with a goal to expand participation, facilitate information transparency, and spawn index creation in the U.S. consumer interest rate markets as we move the industry towards a SAS model on a widely distributed network, a blueprint that captures proprietary data and information that we can organize and disseminate to help our customers make better financial decisions in a world where automation In that vein, and shifting to our strong results, 2023 marked our 18th consecutive year of record revenues, record operating income, and record adjusted earnings per share, a record every year that we've been a public company. This record of growth reflects the quality of our strategy to diversify the business and position the company at the center of some of the largest industries undergoing analog to digital conversion. A strategy that's made ICE an all-weather name, which, through an array of macroeconomic environments, continues to deliver consistent and compounding growth for our stockholders.

Speaker Change: Importantly, we are leaning into this blueprint to drive Ics most recent expansion.

Speaker Change: With a goal to expand participation facilitate information transparency and spun index creation in the U S consumer interest rate markets as we move the industry towards a SaaS model on a widely distributed network.

Speaker Change: Blueprint that captured proprietary data and information that we can organize and disseminate to help our customers make better financial decisions in a world where automation and generative models are key to enabling future efficient workflows.

Speaker Change: In that vein and shifting to our strong results 2023 marked our 18th consecutive year of record revenues record operating income and record adjusted earnings per share a record every year that we've been a public company.

Speaker Change: This record of growth reflects the quality of our strategy to diversify the business and position the company at the center of some of the largest industries undergoing analog to digital conversions.

Speaker Change: Our strategy Thats made ice and all weather name, which through an array of macroeconomic environment continues to deliver consistent and compounding growth for our stockholders.

Jeffrey Craig Sprecher: As we look to 2024 and beyond, we're in a better position than ever to capitalize on secular and cyclical trends that occur across asset classes, and we remain focused on investing in and executing on the many growth opportunities in front of us. I'd like to conclude these prepared remarks by thanking our customers for their business and for their trust in 2023. And I want to thank my colleagues for their contribution to the best year in our company's history. And with that, I'll now turn the call back to our operator, Charlie, and we'll conduct a question and answer session until 9.30 Eastern time. Thank you. If you'd like to ask a question, please press star followed by 1 on your telephone keypad. If you'd like to withdraw your question, please press the star followed by 2.

Speaker Change: As we look to 2024 and beyond we are better positioned than ever to capitalize on secular and cyclical trends that occur across asset classes, and we remain focused on investing and executing on many growth opportunities in front of us.

Speaker Change: I'd like to conclude these prepared remarks by thanking our customers for their business and for their trust in 2023.

Speaker Change: And I want to thank my colleagues for their contribution to the best year in our company's history.

Speaker Change: And with that I'll now turn the call back to our operator, Charlie and will conduct a question and answer session until 930 eastern time.

Charlie: Thank you if you'd like to ask a question. Please press star one.

Charlie: One on your telephone keypad, if you'd like to withdraw your question. Please press star followed by two when preparing to ask a question. Please ensure you're on mute locally.

Craig William Siegenthaler: When preparing to ask your question, please ensure that you're unmuted locally. Please note that we will only take one question per person before moving on to the next questioner. If you'd like to ask a follow-up question, please return to the queue. Our first question comes from Craig Siegenthaler of Bank of America. Craig, your line is open; please go ahead. Good morning, everybody. I wanted to follow up on the client... Black. Flat Reoccurring Red, for a 5.

Charlie: Note that we will only be taking one question per person before moving onto the next questioner if you'd like to ask a follow up please return to the queue.

Charlie: Our first question comes from Craig Siegenthaler of Bank of America. Greg. Your line is open. Please go ahead.

Craig William Siegenthaler: Hey, good morning, everyone.

Craig William Siegenthaler: We wanted to just follow up on the client attrition commentary.

Craig William Siegenthaler: Black Knight and the flat reoccurring revenue target that you provided in the prepared remarks.

Benjamin R. Jackson: And we're curious, where are the clients going? And why are they leaving? Thanks, Craig. This is Ben.

Craig William Siegenthaler: And we're curious where the clients going and why are they leaving just given your compelling value proposition with both MSP and conference under the same roof now.

Craig William Siegenthaler: Okay.

Speaker Change: Thanks, Craig. This is this has been answered.

Benjamin R. Jackson: In terms of attrition, so we saw a couple of our clients, that have been subject to mergers and acquisitions. On the same token, though, we see a benefit from it. And a couple of obvious examples would be JP Morgan buying First Republic, those moves, those loans have moved and are moving on to MSP. And then you also have Round Point and Two Harbors that have come together and have consolidated their loans on MSP. So when you see that type of, M&A activity on the servicing side, it's been pretty much a net-net. If you look across our overall mortgage segment, and just looking at the flat performance that we that we had last year in terms of recurring revenue, and the guide Warren gave this year, Underneath that, I think it's important that we're very confident that based on the sales success and the low attrition that we've had, that we're clearly gaining share against both proprietary systems, as well as third-party peers during this tremendous decline in market volumes, which in particular is on the origination side of the house, and you know, I'd be it's important to highlight as well that 2023 was a generational low in terms of, Mortgage Transaction Volumes.

Craig William Siegenthaler: Yes.

Speaker Change: In terms of attrition so we saw.

Speaker Change: A couple of our clients.

Speaker Change: That have been subject to mergers and acquisitions on the same token, though we see a benefit from it.

Speaker Change: And a couple of obvious examples would be JP Morgan buying first Republic. Those moves those loans have moved and are moving onto MSP. And then you also have round two harbors that have come together and have consolidated their loans on MSP.

Speaker Change: Do you see that type of.

Speaker Change: M&A activity on the servicing side, it's been pretty much a net net if.

Speaker Change: If you look across our.

Speaker Change: Overall mortgage segment and just looking at the floor.

Speaker Change: That performance that we that we had last year in terms of recurring revenue in the guide Warren gave this year.

Speaker Change: Underneath that I think it's important.

Speaker Change: <unk>.

Speaker Change: We're very confident that based on the sales success and the low attrition that we've had that we're clearly gaining share.

Speaker Change: Against both proprietary systems.

Speaker Change: As well as third party peers. During this tremendous decline in market volumes, which in particular is on the origination side of the house.

Craig William Siegenthaler: And.

Craig William Siegenthaler: It'd be.

Craig William Siegenthaler: It's important to highlight as well that 2023 was a generational low.

Craig William Siegenthaler: In terms of.

Craig William Siegenthaler: Mortgage transaction volumes, we went back to data that we see as far back to $19 91 to.

Benjamin R. Jackson: We went back, the data that we see goes far back to 1991, to find a year that was as bad, and it was actually 1991 that was even close, and even that year was better. So, to us, you know, markets revert to a mean. And if you look at the average from 1991 to 2023, the average was around 10 million loans. The mean was around eight.

Craig William Siegenthaler: To find a year that was as bad.

Craig William Siegenthaler: And it was actually 1991 that was even close and even that year was better.

Craig William Siegenthaler: So to us markets revert to a mean.

Craig William Siegenthaler: And if you look at the average from 1991 to 2023 the.

Craig William Siegenthaler: The average was around $10 million loans. The main was around eight and you can pull.

Warren Gardiner: If you put a conservative band around that, it's seven to 10 million loans. Given the market share gains that we've had and the significant customers that we're winning and implementing, you know, we believe this platform is spring-loaded for growth as we turn the corner. And, Craig, let me just add, too, on the flat guidance for recurring revenue, so on the implementation side, just to reiterate what Ben said, that we do have some good visibility into some of the MSP and Encompass sales that are coming online throughout the year, and those are the products that are going to really move the needle. On the erosion side, you know, absent, of course, the one that I mentioned around M&A, renewals on En We still expect some of that, but we've seen those trends start to stabilize and actually start to improve in the fourth quarter and into early this year. You know, what I obviously don't always have visibility into are some of those things like M&A activity, you know, related to our customers.

Craig William Siegenthaler: Our conservative band around that to $7 million to $10 million loans, given the market share gains that we've had.

Craig William Siegenthaler: The significant customers that we're winning and implementing we believe this platform is spring loaded.

Craig William Siegenthaler: For growth as we as we turned the corner.

Speaker Change: And Craig let me just add too on the flat guidance for recurring revenue. So so on the implementation side just to reiterate what Ben said that we do have some good visibility into some of the MSP and encompass sales that are coming online throughout the year and those are the products that are going to really move the needle on the erosion side absent of course, the one that I mentioned.

Speaker Change: On M&A renewals on encompass and customer engagement that is some of the sub debt pressures last year, we still expect some of that but we've seen those trends start to stabilize and actually start to improve in the fourth quarter and into early this year.

Speaker Change: What I honestly don't always have visibility into as some of those things like an M&A.

Speaker Change: Activity related to our customers, but overall, we feel pretty good about that guide and Ben touched on this too I think it's important to really note.

Warren Gardiner: But overall, we feel pretty good about that guide, and Ben touched on this, too. I think it's important to really note, you know, while, of course, those recurring revenues are important, a lot of these products are also going to have a transaction component. And as he noted, we're coming off the worst year for originations in a generation.

Speaker Change: While of course, those recurring revenues are important.

Craig William Siegenthaler: A lot of these products are also going to have a transaction component to it and as he noted were coming off the worst year.

Craig William Siegenthaler: For originations in a generation.

Warren Gardiner: But we've continued to add new customers, and the current customer base has continued to add additional products, and we've expanded that network so that when those transactions do normalize, you know, we're going to be really benefiting from that, not only on the recurring side but, I think, on the transaction side as well. Maybe to help frame that a little bit for you, I think if you were to see industry loan volumes in that $7 million to $10 million loan range, you know, again, with $10 million being the average over the last 30 years, we'd see a couple hundred million to nearly half a billion of incremental transaction revenue.

Craig William Siegenthaler: But we've continued to add new customers. The current customer base has continued to add additional products and we've expanded that network. So that when those transactions do normalize.

Craig William Siegenthaler: To be really benefiting from that not only on the recurring side, but I think on the transaction side as well and maybe to help frame that a little bit for you I think if you were to see industry loan volumes in that $7 million to $10 million 1 billion loan range with again with 10 million being the average over the last 30 years.

Craig William Siegenthaler: We'd see a couple hundred million to nearly $5 billion of incremental transaction revenue.

Warren Gardiner: And that would be a revenue that would be coming at really high incremental margins. So look, we're focused on investing in the platform, expanding the network so that we're in the best position for when this market normalizes. Thank you. Our next question comes from Simon Clinch of Redburn Atlantic. Simon, your line is open. Please go ahead.

Craig William Siegenthaler: And that would be revenue that would be coming at really high incremental margins. So look we're focused on investing in the platform and expanding the network. So that we're best provision best positioned for when this market normalizes.

Craig William Siegenthaler: Thank you. Our next question comes from Simon clinch of Redburn.

Simon Clinch: Atlantic Simon Your line is open. Please go ahead.

Simon Clinch: Okay.

Simon Clinch: Thanks for taking my question. I'm kind of interested in how you would frame, I guess, when we look at. Could you give us a sense of what the mortgage origination market was like in the fourth quarter, in terms of unit volume growth? And then, ultimately, just how you think about the potential for that spring-loaded recovery?

Simon Clinch: Thanks for taking my question.

Simon Clinch: I'm kind of.

Simon Clinch: Interested in how you would frame.

Simon Clinch: Frame I guess.

Simon Clinch: When we look at could you give us a sense what the mortgage origination market was like in the fourth quarter.

Craig William Siegenthaler: In terms of unit volume growth and then ultimately just how youre thinking about the potential for that spring loaded recovery. What are the what are the sort of mortgage rate conditions, you think we need to see.

Benjamin R. Jackson: What are the sort of mortgage rate conditions you think we need to see to see that kind of real inflection and acceleration start to come through? I'd be curious about your thoughts there. Thanks, Simon. In terms of composite estimates that are out there, so if you look at the industry bodies that put out industry volume estimates, the market was approximately down 11%. What our modeling shows, if you take a composite of the industry analysts, that's about where it is. I think in terms of, you know, a couple of data points I can share, as I said, there's no question in our minds that we're gaining share in terms of both proprietary platforms and third-party platforms. And a lot of those clients, because they're significant in size, are in the implementation phase.

Craig William Siegenthaler: To see that kind of real inflection and acceleration start to come through at the EQM Steve's thoughts FX.

Steve: Thanks Simon.

Steve: In terms of composite estimates that are out there. So if you look at industry bodies that put out industry volume estimates the market was was approximately down 11%.

Steve: What are what our modeling shows that if you take a composite of the industry analysts that's that's about where it is.

Steve: I think.

Steve: In terms of a couple of data points I can share is as I said.

Craig William Siegenthaler: There's no question in our mind that we are gaining share in terms of against both proprietary platforms and third party platforms.

Craig William Siegenthaler: And a lot of those clients because they are significant in size are in the implementation phase.

Benjamin R. Jackson: So the benefits we'll get from recurring revenues will take some time as we need to implement those clients. The other benefit that we get when those clients are implemented is that those are new loans on our platform that we'll get closed loan transaction fees on, and those loans will also interact. With the hundreds of third-party service providers we have on our network, so when you're ordering a credit report, for example, we get a fee for the efficiency that we provide in ordering those services on our network.

Craig William Siegenthaler: The benefits, we'll get from recurring revenues will take some time as we.

Craig William Siegenthaler: Need to implement those clients the other benefit that we get when those clients are implemented is that those are new loans on our platform that will get per closed loan transaction fees.

Craig William Siegenthaler: And those loans will also interact.

Craig William Siegenthaler: With hundreds of third party service providers, we have on our network. So when you're ordering a credit report for example.

Craig William Siegenthaler: We get a fee for the efficiency that we provide on ordering those services on our network. So those are additional.

Benjamin R. Jackson: So those are additional transaction revenues that we would also benefit from in that case. The other thing that I'd say is that if you look at closed loans on our platform, as we look at the closed loans that we saw on our platform, we're roughly mid-digit percentage points ahead of where the composite estimates are, which is further evidence that we're gaining share and spring-loading this platform for when market volumes stabilize. And Warren gave that range of a couple hundred million to a half a billion in his comments just a minute ago.

Craig William Siegenthaler: Transaction revenues that we would also benefit.

Craig William Siegenthaler: From in that case.

The other thing that I'd say is that if you look at closed loans on our platform as we look at the closed loans that we saw in our platform. We're roughly mid digit percentage points ahead of where the composite estimates are.

Benjamin R. Jackson: Which further as evidence that were gaining share in spring loading this platform.

Charlie: When market volumes stabilize and Warren gave that range of couple of hundred million too.

Craig William Siegenthaler: I have a $1 billion in his comments just to just a minute ago. So I think that helps to frame.

Benjamin R. Jackson: So I think that helps to frame, um, when we say that the business is spring loaded, what actually it means. Thank you. Our next question comes from Ken Worthington of J.P. Morgan. Ken, your line is open. Please proceed. Hi, good morning.

Ben Jackson: When we say the business is spring loaded what that actually means.

Benjamin R. Jackson: Thank you. Our next question comes from Ken Worthington of JP Morgan.

Ken Worthington: Open. Please proceed.

Benjamin R. Jackson: Okay.

Charlie: Hi, good morning, Thanks for taking the question.

Ken Worthington: Thanks for taking the question. I wanted to follow up on your comments on energy. First, Dutch gas, OI, has doubled over the last year. How much of the European gas market is on exchange at this point? And where does this go relative to sort of the OTC market? Where's that balance?

Ken Worthington: I wanted to follow up on your comments on energy.

Ben Jackson: Maybe first Dutch gas Oi has doubled over the last year.

Ken Worthington: How much of the European gas market is on exchange at this point and where does this go relative to sort of the OTC market, whereas that balance and an oil you called it the share shift.

Benjamin R. Jackson: And in oil, you called it the share shift to ICE and WTI. That seems to coincide to some extent with the reconstitution of Brent. What is driving the share shift to ICE and WTI? And how much further do you think there is to shift there? Hey, Ken, it's Ben.

Ben: To ice and W. Ti that seems to coincide to some extent with the reconstitution of Brent what is driving the share shift to Weiss and Ti and how much further do you think there is to shift there.

Benjamin R. Jackson: Hey, Ken it's Ben Thanks for the question so I'll start on.

Benjamin R. Jackson: Thanks for the question. So I'll start on TTF. So TTF, a lot of that volume is now on exchange and has transitioned over, the 10 plus years that we've seen that transition happening. I think the next step in the evolution of TTF that we see, and I alluded to this in my prepared remarks, is that this is becoming, and really has become, the global benchmark for natural gas around the world. And it's being used more and more as a proxy for when you're trading LNG, and that's being shipped around the world, which you can't underestimate, and you follow these markets very closely. You can't underestimate the impact that the liberalization of natural gas has had on really creating a global natural gas market.

Benjamin R. Jackson: On TTS so <unk>.

Benjamin R. Jackson: Tcf a lot of that volume is now on exchange and has transitioned over.

Benjamin R. Jackson: 10, plus years that we've seen that transition happening.

Benjamin R. Jackson: The next step in the evolution of TTS that we see and I alluded to this in my prepared remarks is that this is becoming.

Ben Jackson: And really has become the global benchmark.

Benjamin R. Jackson: For natural.

Benjamin R. Jackson: Natural gas.

Benjamin R. Jackson: Around the world.

Ben Jackson: And its being used more and more as a proxy for when you're trading LNG.

Benjamin R. Jackson: And thats being shipped around the around the world, which you can't underestimate and you follow these markets very closely you can't underestimate the impact of the liberalization of natural gas has had.

Benjamin R. Jackson: Two really creating a global natural gas market is no longer subject to being stockholder pipe of pipeline infrastructure and storage as it can be freely transport transported around the world and that is where we're seeing the growth in the TTS contract and that's why we constantly pointed out we're seeing new record double digit.

Benjamin R. Jackson: It's no longer subject to being, www.kenhill.com, Significant double-digit growth in terms of data subscriptions in TTF, TTFs up 100% in open interest year over year, 45% in ADV this year, as more and more clients are looking at global issues around the movement of LNG out of the U.S. going into Europe, they need to think about the longer-term implications of the White House recently announcing pauses on new U.S. LNG heading eastbound that goes through the Red Sea, and Jeff alluded to it in his comment about the impact that the attacks in the Red Sea have had on shipping there. You have US LNG going out of the Gulf and going to Asia. And when it's going westbound, it has to go through the Panama Canal.

Benjamin R. Jackson: <unk> in terms of market participants.

Benjamin R. Jackson: Significant double digit growth in terms of data subscriptions in TTS.

Benjamin R. Jackson: TTS up a 100% and open interest year over year, 45% in Adv This year.

Benjamin R. Jackson: As more and more clients as they are looking at global issues around.

Benjamin R. Jackson: The movement of LNG out of the U S going into Europe, they need to think about longer term implications of the white house recently announcing pauses.

Benjamin R. Jackson: New LNG exports going out.

Benjamin R. Jackson: U S LNG heading eastbound that goes through the Red Sea and Jeff alluded to it in his comments impacts that the attacks that <unk> had on shipping there you have U S. LNG going out of the golf going to Asia and when it's going westbound has to go through the Panama Canal, that's seen unbelievable dropped.

Benjamin R. Jackson: That's seen unbelievable drought conditions impacting that. These are all risks that people need to manage. And it's the TTF contract that they're doing that with. So we see a lot of growth in that as that continues to evolve, to be a global benchmark similar to what Brent is clearly today on WTI. Really, it goes to a lot of the investments we've made in the innovation we've made in the oil market around that HOU contract, which is Midland WTI basis Houston, a physically delivered contract that we launched a couple of years ago that's been growing significantly, which is pricing WTI oil basis Houston that's going into the Atlantic Basin and a lot of that being delivered into Europe. People that hedge and trade in those markets are trading those And then, as a package, they'll also trade WTI.

Benjamin R. Jackson: Conditions impacting that these are all risks that people need to manage and it's the TTS contract that they're doing that with so we see a lot of growth and that is that continues to evolve to be.

Benjamin R. Jackson: Our global benchmark similar to what Brent is clearly today.

Benjamin R. Jackson: On <unk>.

Benjamin R. Jackson: Really it goes to the <unk>.

Benjamin R. Jackson: A lot of the investments we've made and the innovation we have made in the oil market around that HEU contract, which is Midland WTS basis, Houston, a physically delivered contracts that we've launched a couple of years back that's been growing significantly which is pricing WTO oil basis, Houston thats going into the Atlantic base.

Benjamin R. Jackson: And a lot of that being delivered.

Benjamin R. Jackson: Being delivered into Europe people that hedge trade in those markets.

Benjamin R. Jackson: Our trading those off the cornerstone of brands are also using our <unk> contract and then as a packaged I'll also trade <unk> and for the efficiencies that they get trading in those spread markets across those three contracts, we're seeing more and more of that trading volume moving to our exchange. So that's on the second part of your question around <unk>.

Benjamin R. Jackson: And for the efficiencies that they get trading in those spread markets across those three contracts, we're seeing more and more of that trading volume moving to our exchange. So that's on the second part of your question about WTI. That's what we see is driving a lot of that growth in markets. Perfect, thank you.

Benjamin R. Jackson: So what we see is driving a lot of that growth in market share.

Benjamin R. Jackson: Thank you. Our next question comes from Ben <unk> of Barclays. Your line is open. Please go ahead.

Ben Herbert: Our next question comes from Ben Budish of Barclays. Ben, your line is open, please go ahead. Hi, good morning.

Ben Herbert: Hi, good morning, and thanks for taking the question I wanted to circle back to the mortgage segment just on the cost side Warren It sounds like you accelerated some of the cost synergies in 2024 and is there anything more we can read into that in terms of the potentially the total bucket of synergies identified or the pacing of the additional synergies beyond what you see this year.

Warren Gardiner: And thanks for taking the question. I wanted to circle back to the mortgage segment. Just on the cost side, Warren, it sounds like you accelerated some of the cost synergies in 2024. Is there anything more we can read into that in terms of the, you know, potentially the total bucket of synergies identified or the pacing of the additional synergies beyond what you see this year? And then one other question that sort of comes back along the same lines in terms of not so much cost synergies but perhaps things that ICE could do, now that you own Black Knight, that Black Knight was unable to do while the merger was sort of pending. Any update in terms of, you know, additional cost reductions that are not quite, you know, true M&A synergies but just other things you may be able to do there? Thank you. Yeah, sure, Ben.

Warren Gardiner: And then one other question that sort of come back along the same lines in terms of not so much cost synergies, but perhaps things that ice could do now that you own black Knight that Black Knight was unable to do while the merger was sort of pending any update in terms of additional cost reductions that are not quite true M&A synergies, but just other things you may be able to do there. Thank you.

Speaker Change: Yeah sure. So look I think it's a testament to.

Warren Gardiner: So yeah, look, I think it's a testament to the organization in the sense that we were very well prepared for this deal to close, and we really hit the ground running. And so, you know, not only is a testament to the ability for us to kind of get all of our ducks in a row, but also just flexing the muscle that I think we've shown over the last number of years that integrations like this, the, you know, it's definitely a skill set of ours. So I think, to some extent, it's very much a testament to do those two things.

Warren Gardiner: The organization in the sense that we were very well prepared for this to this deal to close and we really hit the ground running and so not only is a testament to the ability for us to kind of get all of our ducks in a row, but but also just flexing the muscle that I think we've we've shown over the last number of years that integrations like this.

Warren Gardiner: It's definitely a skill set of ours. So I think to some extent, it's very much a testament to do two things in terms of us being a little bit better than we initially spoke to when we announced the deal.

Warren Gardiner: In terms of us being a little bit better than we initially spoke to when we announced the deal, you know, around our year one synergies. So look, it does certainly make us feel comfortable about getting to our target of 200 million by the end of year five, you know, having come in as strongly as we are, you know, right out of the gates here. But as we move through this year, I think we'll, you know, we'll take the opportunity to see where, you know, see how that unfolds. And if there's any clarity on that, and, you know, if there's potential to increase those, we'll certainly let you know. But right now, look, we're five months into this thing, and things are going very well.

Warren Gardiner: Around our year, one synergies so look it does certainly make us feel comfortable about getting to our target of 200 million by the end of year five.

Warren Gardiner: Having coming in.

Warren Gardiner: As strongly as we are right out of the gates here, but as we move through this year I think we will take the opportunity to see.

Warren Gardiner: That unfolds and if theres any clarity on that.

Warren Gardiner: If there is potential to increase those you know, we'll certainly let you know, but right now we will look for five months into this thing things are going very well.

Benjamin R. Jackson: And, you know, we're really just making progress towards those targets. And Ben, I'll pick up on that on other things that we're seeing. We've mentioned on prior calls things like our proprietary cloud being something that we're very proud of in terms of the scalability, the architecture, the operational resiliency, the cyber capabilities that we have there. So we see, you know, an opportunity over time to move some of the core technology platforms there to our proprietary cloud, and we're planning around that right now, and there are a lot of benefits our clients will get from that. Another thing that we see is, you know, we're enhancing the MSP platform. So that SaaS-based platform that MSP has, we're continuing to enhance it, leveraging our experience in upgrading technology. The analogy we've used in the past is that you have to upgrade the technology while the cars are driving over the bridge.

Warren Gardiner: We're really just making progress towards those targets.

Benjamin R. Jackson: And Beth I'll pick up on that on on other things that we're seeing.

Benjamin R. Jackson: We've mentioned on prior calls things like our proprietary cloud being something that we're very proud of in terms of the scalability. The architecture. The operational resiliency the size of the capabilities that we have there. So we see an opportunity over time to move some of the core.

Benjamin R. Jackson: Technology platforms, there to a proprietary cloud and we're planning around that right now and Theres a lot of benefits our clients, we will get from that.

Benjamin R. Jackson: The other thing that we see is we're enhancing the MSP platform. So that SaaS based platform that MSP as we're continuing to enhance it.

Benjamin R. Jackson: Leveraging our experience and upgrading technology. The analogy we've used in the past you have to upgrade technology, while the cars are driving over the bridge. We've done this time and time again and lens business.

Benjamin R. Jackson: You know, we've done this time and time again in the lens business at NYSE and with our ice data services. So leveraging our expertise in scalable, distributed architectures are all things that we're going to apply towards the enhancements of MSP and making it as efficient an enhancement as possible. And then the last thing I'd say is we've moved our Black Knight data team, which is coming over, in particular the product team, over to our ICE data services division. And the reason we did that is we think there are going to be two benefits from that. Number one is on the technology side. Are there technological capabilities within ICE data services or Black Knight that both parties can take advantage of?

Benjamin R. Jackson: At NYSE and with our ice data services business. So.

Benjamin R. Jackson: So leveraging our expertise and scale scalable distributed architecture is all things that we're going to apply towards the enhancements of MSP and making it as efficient.

Benjamin R. Jackson: Of an enhancement as possible and then the last thing I'd say is we've moved.

Benjamin R. Jackson: Our black Knight data team that's come over in particular, the product team over to our ice data services Division.

Benjamin R. Jackson: And the reason we did that is we think theres going to be two benefits from that number one is from the technology side.

Benjamin R. Jackson: Are there technology capabilities within ice data services or Black Knight that both sides can take advantage of and the early returns are yes. There are and then number two is product innovation.

Benjamin R. Jackson: And the early returns are, yes, there are. And then number two is product innovation. There are a number of data sets within Black Knight that are highly applicable to the capital markets space.

Benjamin R. Jackson: A number of datasets within Black Knight that are highly applicable to the capital markets space and we believe that with our capital markets expertise within ice data services. There is a lot of new product innovation that we can we can we can put out there that will generate benefits both short and medium term.

Benjamin R. Jackson: And we believe that with our capital markets expertise, within ice data services, there's a lot of new product innovation that we can, we can put out there that will generate benefits both short and medium term. Thank you. Our next question comes from Brian Bedell of Deutsche Bank. Brian, your line is open. Please go ahead.

Benjamin R. Jackson: Thank you. Our next question comes from Brian Bedell of Deutsche Bank, Brian. Your line is open. Please go ahead.

Benjamin R. Jackson: Okay.

Brian Bedell: Great. Thanks. Good morning, folks.

Brian Bedell: Alright, great. Thanks. Good morning, Thanks for taking my question, maybe to focus on the revenue synergy side.

Warren Gardiner: Thanks for taking my question. Maybe to focus on the revenue synergy side of mortgage tech, I think you said you've signed $30 million of the $125 million total so far in just five months. I know the $125 is a five-year target, and it seems like you're tracking well ahead of that. And then maybe just sort of correlating that with the commentary you had on the $300 million of revenue synergy opportunities that you've identified. I'm trying to see if the 30 is part of that 300, and I guess the broader question is, do you feel like you're also tracking ahead, maybe well ahead, on the revenue synergy side as you are on the, Thanks, Brian. And yeah, so you categorize that $300 million that I outlined before.

Warren Gardiner: In mortgage check.

Warren Gardiner: Thank you said.

Warren Gardiner: You've signed $30 million.

Warren Gardiner: The 125 total so far in just five months.

Warren Gardiner: The 125 year.

Warren Gardiner: Targets. It seems like you are tracking well ahead of that and then maybe just.

Warren Gardiner: So you are accelerating that.

Warren Gardiner: The commentary you had also been on.

Warren Gardiner: $300 million.

Warren Gardiner: Of revenue synergy opportunities.

Warren Gardiner: Alright.

Warren Gardiner: Trying to see if the 30 as part of that 300.

Warren Gardiner: I guess the broader question is do you feel like you are also tracking ahead, maybe well ahead on the revenue synergy side.

Speaker Change: You are on mute.

Speaker Change: Thank you.

Speaker Change: Thanks, Brian.

Speaker Change: And yes.

Warren Gardiner: So you categorize that $300 million that I outlined before.

Benjamin R. Jackson: I think what we're seeing is that the clients, one, they appreciate and have had a lot of experience working with ICE and our capabilities of running highly, you know, efficient utility-type technology infrastructure for them, and that we do this in very efficient ways, and we have deep relationships with all of these clients, which I think has really accelerated our ability to hit these revenue synergies targets and get ahead of that as quickly as we have only been five months If you look at the three categories I outlined there, there's one of cross selling encompassed into roughly 40 of the top 100 MSP clients. And, you know, right out of the gates, we had a big win there.

Warren Gardiner: I think what we're seeing is that the clients.

Benjamin R. Jackson: One they appreciate and have added a lot of experience working with ice and our capabilities of running.

Benjamin R. Jackson: Highly efficient utility type technology infrastructure.

Benjamin R. Jackson: For them and that we do this in very efficient ways and we have deep relationships with all of these clients, which I think is really.

Benjamin R. Jackson: Accelerated our ability to hit these revenue synergy targets.

Benjamin R. Jackson: And getting ahead of that as quickly as we had only being five months. After we've done the deal. If you look at the three categories I outlined there theres one of cross selling encompass roughly 40 of the top 100 MSP clients.

Benjamin R. Jackson: And right out of the gates, we had a big win there we mentioned JP Morgan Chase in 2023 that we obviously have big relationships with across all of ice and then in the fourth quarter, we added MNT bank.

Benjamin R. Jackson: We mentioned JPMorgan Chase in 2023, which we obviously have big relationships with across all of ICE. And then in the fourth quarter, we added M&T Bank, you know, very quickly after we close. So those are some great examples that fit into that first category that take time to implement. The second category is cross-selling.

Benjamin R. Jackson: Very quickly after we close so those are some great examples that fit into that first category that take time to implement.

Benjamin R. Jackson: The second category is cross selling.

Benjamin R. Jackson: MSP into our ice mortgage technology client base, we have thousands and thousands of lenders that are in the ice mortgage technology client base that are leveraging various pieces of technology from us.

Benjamin R. Jackson: MSP into our ice mortgage technology client base. We have thousands and thousands of lenders that are in the ice mortgage technology client base that are leveraging various pieces of technology from us. And, you know, right out of the gates, we had some significant wins in the fourth quarter.

Benjamin R. Jackson: Why out of the gates, we had some significant wins in the fourth quarter fifth third bank another big Superregional Bank.

Benjamin R. Jackson: Fifth Third Bank, another big super regional bank, is in the process of moving to MSP, so that was a great win. I mentioned Black Hills Federal Credit Union in the fourth quarter. They're an ICE Mortgage Technology client, as well as Mortgage Solutions of Colorado.

Benjamin R. Jackson: As in the process of moving to MSP. So that was a great win I mentioned Black Hills Federal credit Union in the fourth quarter, there and ice mortgage technology clients as well as mortgage solutions of Colorado and then in my prepared remarks I also mentioned.

Benjamin R. Jackson: And then in my prepared remarks, I also mentioned Cap Ed Credit Union. So they're an existing Encompass client, as well. And they're adding MSP, seeing the vision of us pulling together this complete front-to-back network. In the third category, this is expanding our network while cross-selling a lot of our technology platform, ancillary products, and data solutions. And here we've also seen some great success.

Benjamin R. Jackson: You mentioned Capex credit Union. So they are an existing encompass client as well so they are adding MSP.

Benjamin R. Jackson: And the vision of us pulling together this complete front Tabak network.

Benjamin R. Jackson: And the third category. This is expanding our network, while cross selling a lot of our technology platform ancillary products and data solutions and here. We've also seen some great success. So we've cross sold a lot of our Black Knight datasets alongside our deal with fifth third bank and MSP. We've included our.

Benjamin R. Jackson: So we've cross-sold a lot of our Black Knight data sets alongside our deal with Fifth Third Bank and MSP. And we included our data and document automation platform with the M&T Bank deal that we closed in the fourth quarter. I think some other areas that we're just now, because we had to do some near-term integration work that we're just now positioned to start to cross sell. Another important thing to highlight as we, one of the first things we integrated is we took our Simplifile platform and the incredible network that Simplifile has with all of the local counties around the US, and we've embedded that network into really the backend workflow of MSP, our servicing platform. And we're now utilizing that to automate lien releases.

Benjamin R. Jackson: Data and document automation platform with the <unk> Bank deal that we closed in the fourth quarter.

Benjamin R. Jackson: Some other areas that were just now because we had to do some near term integration work that we're just now positioned to start to cross sell.

Benjamin R. Jackson: <unk>.

Benjamin R. Jackson: As another important thing to highlight as we one of the first things we integrated as we took our simplified platform and the incredible network that simplified as with all of the local counties around the U S.

Benjamin R. Jackson: And we've embedded that.

Benjamin R. Jackson: That network into the really the backend workflow.

Benjamin R. Jackson: MSP our servicing platform.

Benjamin R. Jackson: And we're now utilizing that to automate lean releases, so when a loan is paid off.

Benjamin R. Jackson: So when a loan is paid off, on the MSP platform, we can leverage the simple file rails to make it highly efficient, effective, and very quick to actually affect that lien release, which will be additional transaction revenue for us. I mentioned in my prepared remarks that we've integrated our data and document automation platform into MSP. So this is on the front end of the MSP process; we now have our first real integration between Encompass and MSP where we're taking that digital loan file as it's compiled and can map that now directly into MSP and automate the onboarding of loans.

Benjamin R. Jackson: On the MSP platform, we can leverage leverage the simple file rails to make it highly efficient effective and very quick to actually effect that lean release, which will be additional transaction revenue for us I mentioned in my prepared remarks that we've integrated our data and document automation platform.

Benjamin R. Jackson: The MSP. So this is on the front end to the MSP process that we now have our first real integration between encompass and MSP, where we're taking that digital loan file as it is it's compiled and can map that now directly into MSP and automate the onboarding of loans.

Benjamin R. Jackson: And then we've also completed a significant amount of the integration work needed for our proprietary data sets, such as closing fees, valuations, tax, and flood, and now have the ability to cross sell all of these data sets that we've not historically had a proprietary solution on our Encompass platform. We can now cross sell that to our client base. So we've had a lot of great wins.

Benjamin R. Jackson: And then we've also completed a significant amount of the integration work needed for our proprietary data sets such as closing fees valuations tax and flood and now have the ability to cross sell all of these datasets that we've not had historically.

Benjamin R. Jackson: Our proprietary solution of our encompass platform, we can now cross sell that to our client base. So we've had a lot of great wins those are a lot of great successes and an update on that but also some things you'll be hearing about more in the future.

Benjamin R. Jackson: Those are a lot of great successes and an update on that, but also some things you'll be hearing about more in the future, as we are now able to start to distribute. Thank you. Our next question comes from Dan Fannon of Jeffrey's. Dan, your line is open. Please go ahead. Thanks. Good morning.

Daniel T. Fannon: As we are now able to start to distribute this.

Benjamin R. Jackson: Thank you. Our next question comes from Dan Fannon of Jefferies. Your line is open. Please go ahead.

Daniel T. Fannon: Hi, Thanks, Good morning, Warren just a question on the balance sheet.

Daniel T. Fannon: Warren, just a question on the balance sheet. I think you said 700 million debt pay down quarter over quarter. It's probably a bit elevated.

Daniel T. Fannon: You said $700 million debt pay down quarter over quarter.

Daniel T. Fannon: Probably a bit elevated but what is the reasonable kind of quarterly pace.

Warren Gardiner: But what is a reasonable kind of quarterly pace? And as you think about that progress? Also, do you anticipate being able to buy back stock as you kind of get towards the latter part of this year or early next year? What's a reasonable timeframe to think about the capital return story improving?

Warren Gardiner: As you think about that progress also do you anticipate being able to be to buy back stock as you kind of get towards the latter part of this year or early next year, what's a reasonable timeframe to think about the capital return story improving.

Speaker Change: Sure. Thanks, Dan So I think look we don't give sort of forward free cash flow guidance, but we certainly did just reported a strong year of $3 2 billion of free cash flow with only about a quarter or so of black Knight in there. So.

Warren Gardiner: Thanks, Dan. So I think, look, we don't give sort of forward free cash flow guidance, but we certainly did just report a strong year at $3.2 billion of free cash flow, with only about a quarter or so of Black Knight in there. So, you know, that coupled with growth, I think it's fair to assume that it'll be better than that in 2024. And as we've said at the moment, our plan is to return the vast majority of that, not return it, I should say, our plan is to use the vast majority of that to pay down the outstanding debt that's out there today. And so I think as I'm thinking about that in the go forward here, I still think we're on track here as we've talked about what we think for that pay down schedule being sometime in 2025.

Warren Gardiner: That coupled with growth could you I think it's fair to assume that it'll be better than that in 2024.

Warren Gardiner: At the end of the day and as we've said at the moment. Our plan is to return the vast majority of that not return I should say our plan is to to use the vast majority of that to pay down the outstanding debt. That's out there today and so I think as I'm thinking about that and the go forward here.

Warren Gardiner: I think we're on track here as we've as we've talked about where we thought for that paydown schedule being sometime in 2025, but it.

Warren Gardiner: But, you know, depending on the performance of business, it could be a little bit earlier than that as well. So we're going to have to just sort of see how the year plays out ultimately. But as I said, very much on track to where we thought we'd be and where we would be in terms of our de-leveraging pace. Perfect, thank you.

Warren Gardiner: Depending on performance of the business could be a little bit earlier in that as well. So we're going to act as a sort of see how the year plays out ultimately, but as I said very much on track to what we thought we'd be and where we would be in terms of our deleveraging pace.

Speaker Change: Thank you our next question comes from.

Kyle Voigt: Our next question comes from Kyle Voigt of KBW. Kyle, your line is open, please proceed. Hi, good morning.

Kyle Voigt: Okay VW Kyle your line is open. Please proceed.

Kyle Voigt: Hi, good morning.

Warren Gardiner: So last year in May, you increased futures transaction fees for the first time in many years. Meanwhile, some of your competitors have announced pricing changes again for 2024. So I just wanted to circle back on how those pricing changes in May were digested by the market. And can you provide some updated thoughts on how you're thinking about pricing across the futures complex at this point and whether anything is planned for 2024? Sure, Kyle. It's Warren.

Kyle Voigt: So last year in May you increase futures transaction fees for the first time in many years. Some of your competitors have announced pricing changes again for 2024. So I just wanted to circle back on how those pricing changes in may were digested by the market and can you provide some updated thoughts on how youre thinking about pricing across the futures complex at this point and.

Warren Gardiner: Whether anything is planned for 2024.

Warren Gardiner: Sure Charles Horn, So as we said in the past we were back in May you're right. We did increase a couple of contracts across our oil business that.

Warren Gardiner: So, as we said in the past, you know, back in May, we did increase a couple of contracts across our oil business that, you know, something we hadn't done in a number of years. And I'd say that it went pretty well. I mean, you saw the impact on RPC to some extent as we moved through the year. And obviously, the volumes were at record levels and will continue to be so in January of this year as well.

Warren Gardiner: We haven't done a number of years and I'd say.

Warren Gardiner: <unk> pretty well I believe you saw the impact of RBC to some extent as we move through the year.

Warren Gardiner: And obviously the volumes were were record levels and continues to be so in January of this year as well so I would say that that was.

Warren Gardiner: So I would say that that went well. You know, as we've said to you all in the past, our philosophy is to really look across the platform and look for areas where we have created value and where we can then go capture value. And so we do that every year, and we think about it in different ways or use it in different ways.

Warren Gardiner: That went well.

Warren Gardiner: <unk> said to you all in the past our philosophy is to really look across the platform in and look for areas where we.

Warren Gardiner: We have created value and where we can then go capture value and so we do that every year and we think about it in different ways.

Warren Gardiner: Utilize it in different ways.

Warren Gardiner: And, you know, as we think about this year, what we've done, you know, within the futures business, we did make some adjustments to the exchange data fees. We've done some price adjustments around some of the energy contracts outside of our oil business. And then we also made, you know, some adjustments and collateral fees at the clearinghouse, which, you know, in aggregate, actually, were pretty similar to what the impact would have been or was, I should say, from the changes we made to the oil contracts last year. So, again, we've done a similar exercise, but executed it in somewhat of a different way. And I think that's part of the opportunity we have going forward as we think about the futures business and ICE broadly in terms of a pricing strategy standpoint.

Warren Gardiner: As we think about this year, what we've done.

Warren Gardiner: Within the futures business, we did make some adjustments to the exchange data fees, we've done some price adjustments around some of the energy contracts outside of our oil business and then we also made.

Warren Gardiner: Some adjustments on collateral fees at the clearinghouse, which in aggregate actually were pretty similar to what the impact would have been or was I should say on from the from the changes we've made to the oil contracts last year. So again, we've done a similar exercise, but executed it in somewhat of a different way and I think thats, our part of the opportunity we have going forward as we think across thinks about the.

Warren Gardiner: The futures business and ice broadly in terms from a pricing strategy standpoint.

Jeffrey Craig Sprecher: Thank you. This is all the time we have for questions today, so I'll hand back over to Jeff Sprecher, Chair and CEO, for any closing remarks. Well, thank you, Charlie, for managing the call for us this morning. Before we leave, I wanted to mention that every quarter for the last 10 years, both before and after these earnings announcements, we receive a call and input from a shareholder named Jack Willens. And we didn't hear from Jack this week, so we did some outreach and learned that he had recently passed away at age 88. And I just wanted to acknowledge the fact that his family and friends and colleagues that we also miss hearing from him. And we're going to go back to work after this call to continue to build this all-weather business model. And that's what he would have wanted us to do, and so today we will do it in his honor. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thanks for watching!

Warren Gardiner: Thank you. This is all the time, we have for questions today, So I'll hand back over to Jeff Sprecher, Chairman and CEO for any closing remarks.

Jeffrey Craig Sprecher: Yes.

Jeffrey Craig Sprecher: Well, thank you Charlie for managing the call Force. This morning, before we leave I wanted to mention that.

Jeffrey Craig Sprecher: Every quarter for the last 10 years, both before and after these.

Jeffrey Craig Sprecher: Earnings announcements, we receive a call and input from a shareholder named Jack <unk>.

Jeffrey Craig Sprecher: And we didn't hear from Jack This week. So we did some outreach and learned that he had recently passed at age 88, and I just wanted to acknowledge the fact that.

Jeffrey Craig Sprecher: To his family and friends and colleagues that we also miss hearing from him.

Jeffrey Craig Sprecher: And.

Jeffrey Craig Sprecher: We're going to go back to work.

Jeffrey Craig Sprecher: After this call to continue to build this all weather business model.

Jeffrey Craig Sprecher: That's what he would have wanted us to do and so today, we will do it in his honor.

Jeffrey Craig Sprecher: Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines.

Jeffrey Craig Sprecher: Yeah.