Q2 2025 Intercontinental Exchange Inc Earnings Call

Warren Gardiner: $255 million of share repurchases. Through the first half, we have returned over a billion to shareholders through both buybacks and dividends. And we did this while also investing in our business and reducing leverage, which ended the second quarter at our target of three times EBITDA, ahead of our initial target when we closed the acquisition of Black Knight less than two years ago. Now let's move to slide five, where I'll provide an overview of the performance of our exchange segment. Second quarter net revenues sold at a record $1.4 billion, up 12% year-over-year and on top of 14% growth in the second quarter of 2024. Record transaction revenues of over $1 billion were up 15%, driven by a 20% increase in our interest rate business, record NYSE cash equities and option revenues up 10%, and another quarter of record energy revenues, which grew 25% year-over-year.

255 million of share repurchases.

through the first half, we've returned over a billion to shareholders through both BuyBacks and dividends

And we did this while also investing in our business and reducing leverage, which ended the second quarter at our Target of 3 times ibida ahead of our initial Target when we closed the acquisition of Black Knight less than 2 years ago.

Now, let's move to slide 5, where I'll provide an overview of the performance of our exchange segments.

Second quarter, net revenues, told our record 1.4 billion dollars up, 12% year-over-year, and on top of 14% growth in the second quarter of 2024.

Warren Gardiner: In addition, volumes in July continued to be strong, with energy ADV up 11%, interest rate ADV up 24%, our cash equity ADV up 54%, and our equity option ADV up 6%. And importantly, open interest continues to build, up 12% year-over-year, including 40% growth in global interest rates and 5% growth in our energy markets. Shifting to recurring revenues, which include our exchange data services and our NYC listings business, revenues totaled $378 million, up 5% year-over-year. Underpinning growth in our recurring revenues was our broader exchange data and connectivity services, which grew 6%, and was once again led by our futures data services. In our listings business, the NYSE helped to raise approximately $9 billion in new IPO proceeds in the first half and an additional $4.5 billion so far in July.

Record, transaction, revenues of over 1 billion dollars were up. 15% driven by a 20% increase in our interest rate business record, nyfc cash, equities and option revenues up 10%, and another quarter of record energy revenues, which grew 25% year-over-year.

In addition, volumes in July continued to be strong, with energy ATV up 11%, interest rate ATV up 24%, our cash equity ATV up 54%, and our equity options ATV up 6%.

And importantly, open interest continues to build a 12% year-over-year including 40% growth in global interest rates and 5% growth in our energy markets.

Shifting to recurring revenues, which include our exchange data services and our NYC listings. Business revenues total of 378 million up 5% year-over-year

Growth in a recurring revenues with our broader exchange data and connectivity Services which grew 6% was once again led by our futures data services.

Warren Gardiner: It is worth noting that only roughly half of new IPOs have met the NYSE's listing standards, and these high standards remain a critical component of our 99% retention rate. As a result of this strong growth, particularly across our futures data and connectivity solutions, we now expect full-year growth in our exchange recurring revenues to be approximately 4% to 5% compared to prior expectations for low single-digit growths. Turning now to slide six, I'll discuss our fixed income and data services segment. Second quarter revenues sold at a record $597 million, including transaction revenues of $114 million. On a year-over-year basis, revenue at ICE Bonds increased by 8%, driven by 28% growth in our muni business, which was in part driven by growing institutional adoption. In our CDS business, revenues increased year-over-year with lower member interests offset by clearing revenue, which increased by 25% year-over-year.

and our listings business, the NYC helped to raise approximately 9 billion dollars in new IPO proceeds in the first half and an additional 4 and a half billion so far in July

It's worth noting that only only only roughly half of new IPOs have met the nyc's listing standards and these high standards remain a critical component of our 99% retention rate.

As a result of this strong growth particularly across our futures data and connectivity Solutions. We now expect full year growth in our exchange, recurring revenues to be approximately 4 to 5%, compared to Prior expectations for low single digit growth.

During that aside 6, I'll discuss our 16 income and data services segment.

Second quarter revenues told our record 597 million including transaction, revenues of 114 million.

Our year-over-year basis Revenue at ice, bonds, increased by 8% driven by 28% growth in our immunity business, which was in part driven by growing institutional adoption.

Warren Gardiner: Recurring revenues sold at a record $483 million and grew by 5% year-over-year. In our fixed income data and analytics business, record second quarter revenues of $306 million increased by 4%, driven by growth in pricing and reference data, and our index business, which reached a record $743 billion in ETF AUM as of the end of the second quarter. Data and network technology increased by 7% in the first half and in the second quarter, an acceleration from 5% growth in 2024. Growth was driven by our ICE global network, continued growth in our consolidated seeds business, and strong performance across our desktop solutions as we continue to realize the benefits of investments to enhance our platform. Please flip to slide seven. We'll discuss our mortgage technology results. Second quarter revenues totaled $531 million, up 5% year-over-year. Recurring revenues totaled $395 million and increased on a year-over-year basis.

Within our CDs, business revenues increased year-over-year with lower member interests offset by clearing Revenue, which increased by 25% year-over-year.

During revenues total record 483 million and grew by 5% year-over-year.

In a fixed income data and analytics business records. Second quarter revenues of 306 million increased by 4% driven by growth in pricing and reference data.

And our index business, which reached a record 743 billion in each, Esau as the end of the second quarter.

Data Network Technology, increased by 7% in the first half and in the second quarter and acceleration from 5% growth in 2024,

Growth was driven by our high school Global Network continued growth in our Consolidated speeds business and strong performance across our desktop solutions that we as we continue to realize the benefits of Investments to enhance our platform.

Please set the slide 7. We will discuss our mortgage technology results.

Second quarter revenues total of 531 million up 5% year-over-year.

Warren Gardiner: The year-over-year improvement was largely driven by data and analytics and our servicing business. As we look to the second half, we anticipate the recurring revenues will remain around these levels, driven by the typical rolloff of inactive loans on MSP, which will impact the third quarter, M&A-related attrition, primarily driven by Mr. Cooper's acquisition of Flagstar and customers resetting their minimums on Encompass, which I'll note is paired with the benefit of higher transaction fees. We expect these items to largely be offset by revenue from new customer implementations and cross-sell expansions. Transaction revenues totaled $136 million, up 15% year-over-year, driven by double-digit revenue growth related to Encompass closed loans, merged registrations, and default management solutions within our servicing business. Before I turn it over to Ben, I will highlight a few third quarter guidance items.

Returns total of 395 million and increase on a year-over-year basis.

The year-over-year Improvement was largely driven by data and analytics and our servicing business.

As we look to the second half, we anticipate, the recurring revenues will remain around these levels, driven by the typical rolloff of inactive loans on MSP, which will impact the third quarter m&a, related attrition, primarily driven by Mr. Cooper's, acquisition of Flagstar and customers, resetting their minimums on Encompass, which I'll note is paired with the benefit of higher transaction fees, expect these items to largely be offset by revenue from new customer implementations and cross sell expansions.

Transaction revenues told 136 million up, to 15% year-over-year driven by double digit Revenue, growth related to Encompass closed loans. Ms, registrations and default Management Solutions within our servicing business,

Warren Gardiner: Third quarter adjusted operating expenses are expected to be in the range of $995 million to $1.5 billion. Relative to the second quarter, the increase is expected to be driven by higher customer acquisition costs at the NYSE as the IPO market rebounds, as well as higher technology spend related to our data center build-out and strategy. Lastly, moving below the line, adjusted non-operating expenses expected to be between $170 million and $175 million in the third quarter. In summary, we delivered record second quarter and first half results, including record revenues, adjusted operating income, and adjusted EPS, building upon our record 2024. We also, once again, achieved our leverage target ahead of schedule. As we look to the balance of the year, we're focused on a strong finish to a record first half and on setting ourselves up for continued success in 2026.

before I turn it over to Ben, I will highlight a few third quarter, guidance items,

Third quarter, adjusted. Operating expenses are expected to be in the range of 995 million to 1 billion, 5 million

Lastly, moving below the line, adjusted non-operating, expenses expected to be between 170 million and 175 million in the third quarter.

In summary we delivered record second quarter and first half results, including record revenues, adjusted operating income and adjusted EPS building Upon Our record 2024. We also once again achieved our leverage Target ahead of schedule

Warren Gardiner: I'll be happy to take your questions during Q&A, but for now, I'll hand it over to Ben.

As we look to the balance of the Year, we're focusing on. We're focused on strong, finish to our record first half and on setting ourselves up for continued success in 2026. I'll be happy to take your questions during Q&A, but for now hand it over to Ben.

Ben Jackson: Thank you, Warren, and thank you all for joining us this morning. Please turn to slide eight. Across our futures and options markets, we've worked for nearly three decades to build out the scope and depth of our multi-asset and multi-geography offering to allow for both flexibility and precision trading from wherever in the world customers choose to trade on ICE. As a result, a record of over 1 billion contracts have traded on ICE through the first half, including a record 673 million energy contracts and a record 462 million interest rate contracts. This record performance drove 19% revenue growth in our futures and options revenues in the first half and is strong evidence of the ever-growing need for global risk management as our customers continue to turn to ICE to manage risk across the thousands of contracts offered on our platform.

Thank you, Warren, and thank you all for joining us this morning. Please turn to slide 8.

Across our futures and options markets. We've worked for nearly 3 decades to build out the scope and depth of our. Multi-asset and multi geography offering to allow for both flexibility and Precision Trading from wherever in the world customers choose to trade on ice.

As a result, a record of over 1 billion contracts have traded on Ice through the first half.

Including a record 673 million energy, contracts, and a record. 462 million, interest rate contracts.

This record performance drove 19% revenue growth in our futures and options revenues in the first half.

And as strong evidence of the ever growing need for Global risk management.

As our customers continue to turn to ice to manage risk across the thousands of contracts offered on our platform.

Ben Jackson: Across energy, markets have grown more global, more interconnected, and more complex, shaped by shifting trade flows, regional dynamics, and growing complexity in how energy is transported, produced, priced, and consumed. We have continuously invested alongside this evolution, recognizing the importance of deep liquidity on our platform. Today, as a result of organic and inorganic investments, trading on our network is not tied to any single product or limited to any one region. Instead, we have built a diverse energy network that provides deep liquidity and price transparency across the spectrum of fuel sources, from oil and refined products to coal, natural gas, power, environmental markets, renewables, and ancillary products such as biofuels and their related credits.

Across energy, markets, have grown, more Global, more interconnected, and more complex.

Shaped by shifting trade flows, Regional Dynamics and growing complexity in how energy is transported produced priced and consumed.

We have continuously invested alongside this Evolution recognizing the importance of deep liquidity on our platform.

Today as a result of organic and inorganic Investments trading on our network is not tied to any single product or limited to any 1 region.

Ben Jackson: In essence, regardless of how the market evolves, whether driven by geopolitical change, shifting trade flows, or growing demand in the developing world, we have strategically positioned our platform to offer customers the tools they need to manage risk effectively. In the UK, for example, coal has been phased out of electricity generation, while across Asia, it remained a significant part of the mix to support rapid industrialization. At the same time, electricity prices are influenced by natural gas. Whether active in oil, gas, carbon, or a combination, by providing access to these contracts through a single platform, we provide the critical price transparency across the energy spectrum to help customers manage increasingly interconnected pricing dynamics. The value that our diverse, deep, and liquid energy markets provide to customers contributed to another record volumes across our complex, driving our ninth consecutive quarter of record energy revenues.

Instead we have built a diverse energy Network that provides deep liquidity and price transparency across the spectrum of fuel sources from oil and refined products to Coal natural gas, power environmental, markets, Renewables and ancillary products such as biofuels and their related credits.

in essence, regardless of how the market evolves, whether driven by geopolitical change,

Shifting trade flows or growing demand in the developing world. We have strategically positioned our platform to offer customers the tools they need to manage risk effectively.

In the UK, for example, coal has been phased out of electricity generation, while across Asia, it remained a significant part of the mix to support rapid industrialization.

At the same time, electricity prices are influenced by natural gas.

Whether active in oil gas carbon or calm combination by providing access to these contracts through a single platform. We provide the critical price transparency, across the energy Spectrum to help customers manage increasingly interconnected pricing, Dynamics,

The value that our diverse deep and liquid energy markets, provide to customers contributed to another record.

Ben Jackson: This strong performance is a testament to customers' continued confidence in ICE as the global energy hedging venue of choice, with energy revenues up 24% in the first half and growing 13% on average over the past five years. In our oil markets, Brent has become the world's most widely used benchmark, pricing roughly three-quarters of the world's internationally traded crude. Importantly, Brent stands as the cornerstone of a broader franchise that includes our Midland WTI, Platts-Dubai, and Middle East Mervyn grades of crude. These critical pricing relationships extend to refined oil products, where ICE's low-sulfur gas oil market similarly anchors price discovery for refined products globally. Together, these benchmarks form the foundation of a cohesive web of more than 800 related oil products developed by ICE, giving participants the ability to manage risk with precision across the oil value chain and around the world.

Volumes across our complex driving. Our ninth consecutive quarter of record. Energy revenues.

This strong performance is a testament to customers continued confidence in ice as the global energy hedging venue of choice.

With energy revenues up 24% in the first half and growing 13% on average over the past 5 years.

In our oil markets, Brent has become the world's most widely used benchmark.

Pricing roughly 3, quarters of the world's internationally traded crew.

Importantly, Brent stands as the Cornerstone of a broader franchise that includes our Midland WTI plats Dubai and Middle East bourbon. Grades of crude.

these critical pricing relationships, extend to refined oil products where Isis low, sulfur, gas, oil markets, similarly anchors price, Discovery for refined products globally,

Together, these benchmarks form the foundation of a cohesive web of more than 800 related. Oil products developed by Ice.

Ben Jackson: These innovations have enabled us to continue to serve our global customers, with record oil volumes in the first half increasing 25% year-over-year, including records across Brent, WTI, Midland WTI, Platts-Dubai, Mervyn, and Gas Oil. In our natural gas markets, we've adopted a similar playbook, establishing liquid markets in TTF, JKM, Henry Hub, and North American basis markets, offering a broad range of natural gas benchmarks with trading hubs across Europe, Asia, and North America. As global LNG flows have increased and price relationships between regions have deepened, our TTF benchmark has emerged as the global reference point for gas pricing, much like Brent has for oil. This dynamic is illustrated by JKM execution patterns, with roughly 60% of JKM volumes executed by the JKM TTF spread as participants draw assurance from TTF's deep liquidity to manage risk across an increasingly interconnected gas market.

Giving participants the ability to manage risk with Precision across the oil value chain and around the world.

Bourbon and gas oil.

In our natural gas markets. We've adopted a similar Playbook establishing liquid markets in ttf jkm Henry Hub in North American basis markets offering a broad range of natural gas benchmarks with trading hubs across Europe, Asia and North America.

AS Global LNG, flows have increased and price relationships. Between regions have deepened, our ttf Benchmark has emerged as the global reference point for gas. Prices pricing much like Brent has for oil.

Ben Jackson: In the second quarter, volumes in our global gas complex increased 14% versus the prior year, contributing to a record first half to deliver 27% revenue growth year to date, including 19% growth in the second quarter. The importance of the evolution of energy markets extends to our leading environmental markets, which work with our oil, natural gas, coal, and power markets to provide the price transparency across the energy spectrum. Year to date, record volumes in our environmental portfolio are up 9% year over year, including 37% growth in our North American markets. In summary, the guiding principle has been consistently to create a cohesive platform where customers can navigate complexity across markets. Our single platform model isn't just efficient; it's essential for navigating an increasingly dynamic energy landscape.

This Dynamic is illustrated by jkm execution patterns with roughly 60% of jkm volumes executed by the jkm ttf spread as participants draw. Assurance from ttfs, Deep liquidity to manage risk across an increasingly interconnected gas market.

In the second quarter volumes in our Global gas complex increased 14% versus the prior year.

Contributing to a record. First, half to deliver 27% Revenue growth year to date, including 19% growth in the second quarter.

The importance of the evolution of energy markets extends to our leading environmental markets, which work with our oil natural gas, coal and power markets to provide the price transparency across the energy Spectrum.

Year Day record volumes in our environmental portfolio are up 9% year-over-year. Including 37% growth in our North American markets.

In summary, the guiding principle has been consistently to create a cohesive platform where customers can navigate complexity across markets.

Ben Jackson: Participants can operate across markets with a broader view, using tools that were developed not just in reaction to trends, but often in anticipation of them. Turning now to our fixed income and data services business on slide nine. Driven by multi-year investments in both technology and data, our comprehensive platform continues to generate compounding revenue growth, delivering another quarter of record revenues, which grew 5% year over year. Our high-quality evaluated prices provide mission-critical transparency for over 3 million global securities daily. Across our reference data business, we've improved the precision of our underlying data, reduced the time to capture newly issued bonds, and have continued to add to our coverage, thus providing a truly comprehensive offering. As a result, clients of our evaluated pricing business are increasingly drawn to the quality of our reference data.

Our single platform model isn't just efficient. It's essential for navigating and increasingly Dynamic energy landscape.

Participants can operate a cross markets with a broader View using tools that were developed. Not just in reaction to Trends but often in anticipation of them.

turning now to our fixed income and data services business on slide 9,

Driven by multi-year investments in both technology and data are comprehensive platform. Continues to generate compounding Revenue growth, delivering another quarter of record revenues, which grew 5% year-over-year

To provide mission-critical transparency for over 3 million global securities daily.

Across our reference Data Business, we've improved the Precision of our underlying data.

Reduce the time to capture, newly issued bonds and have continued to add to our coverage. Thus, providing a truly comprehensive offering.

As a result clients of our evaluated pricing business are increasingly drawn to the quality of our reference data.

Ben Jackson: The quality of our pricing and reference data, combined with over 50 years of experience, serves as the foundation for what is today one of the largest providers of fixed income indices globally. Whether it's benchmark indices, analytics, or unique solutions like our custom indices, ICE serves the entire ETF ecosystem. Year to date, revenue on our index business is up double digits, with passive ETF AUM benchmarked to ICE indices growing to a record of $743 billion through the end of the second quarter. In our data and network technology business, revenues are up 7% in the first half, driven by our ICE global network as well as continued demand for our desktop and seeds offerings. The ongoing investments in our ICE global network business and resulting growth reinforce its position as the gold standard for resiliency, latency, and security.

The quality of our pricing and reference data combined, with over 50 years of experience, serves as the foundation for what is today one of the largest providers of fixed income indices globally.

Whether its Benchmark indices analytics for Unique Solutions like our custom indices. I served the entire ETF ecosystem.

Year to date revenue. And our index business is up double digits with passive ETF AUM, Benchmark, to ice indices growing to a record of 743 billion through the end of the second quarter.

In our data and Network Technology, business revenues are up 7% in the first half.

Driven by our ice Global Network as well as continued demand for our desktop and feeds offerings.

Ben Jackson: ICE global network securely connects participants to more than 750 data sources and more than 150 trading venues, including ICE and the NYSE exchanges. Within our desktops business, new clients are switching to ICE for the reliability of our service, the quality of our data, and the sheer range of data sources. Similarly, growth in our consolidated seeds business reflects investments we've made to elevate and enhance our offering. Firms continue to seek more high-quality data from a range of different sources in a cost-effective manner. At the same time, they want access to new unique content, and thus our competitive and comprehensive offering stands to benefit. We've also added features to give latency-sensitive clients additional confidence in the speed of our data. This suite of data services, together with its institutional customer connectivity, is highly complementary to our ICE bonds execution venues.

The ongoing investments in our ice Global Network business and resulting growth. Reinforced its position as the gold standard for resiliency latency and security.

Ice Global Network securely, connects participants to more than 750 data sources, and more than 150 trading, venues, including ice, and the nyfc exchanges.

Within our desktops business, new clients are switching to ice for the reliability of our service, the quality of our data and the sheer range of data sources.

Similarly, growth in our Consolidated, feeds business, reflects Investments. We've made to elevate and enhance our offering.

Firms continue to seek more high-quality data from a range of different sources in a cost-effective manner.

At the same time, they want access to new unique content and thus our competitive and comprehensive offering stands to benefit.

We also added features to give latency sensitive clients additional confidence in the speed of our data.

Ben Jackson: These venues, which offer our customers choice of protocols, including auction, click-to-trade, and request for quote, round out a broader fixed income offering. Year to date, revenues in our ICE bonds business are up 12% versus the prior year and have grown 9% on average over the past five years. In summary, when we combine the long-tail secular trends, such as the electronification of bond markets, workflow automation, and the shift to passive investing, our comprehensive beta offering is positioned to continue to deliver compounding growth well into the future. Shifting now to our mortgage business on slide 10. Consistent with our strategy to bring efficiencies to workflows, we are uniquely positioned to drive greater automation across the mortgage space. Such investments are critical not only to meet rising customer expectations for a digital-first experience, but also to drive long-term operational efficiency and competitive positioning in an evolving mortgage landscape.

This suite of data services, together with its institutional customer connectivity, is highly complementary to our ICE bonds execution venues.

These venues which offer our customers choice of protocols, including auction. Click the trade and request for quote, round out a broader fixed income offering

Ice bonds business are up 12% versus the prior Year and have grown 9% on average over the past 5 years.

In summary, when we combine the long tail secular trends such as electronic vacation of bond markets workflow automation and the shift to passive investing our comprehensive data offering is positioned to continue to deliver compounding growth well into the future.

Shifting now to our mortgage business on slide 10.

With our strategy to bring efficiencies to workflows, we are uniquely positioned to drive greater automation across the mortgage space.

Such investments are critical not only to meet rising customer expectations for a digital first experience, but also to drive long term operational efficiency and competitive positioning in an evolving mortgage landscape.

Ben Jackson: For nearly a decade, ICE has been building an end-to-end digital mortgage platform that spans from customer acquisition all the way through to the secondary capital markets. This enables efficiency gains for our clients and bridges critical gaps between disparate systems. Our unified mortgage technology suite aims to simplify mortgage origination and refinancing into a single-click process, streamlining processes for lenders while reducing costs, errors, and time. The opportunity for customers to acquire and retain more business starts with our industry-leading customer engagement suite. This end-to-end suite of sales, marketing, and borrower engagement solutions, unique to ICE and seamlessly integrated with our loan underwriting platform, provides mortgage lenders with an opportunity to scale their operations by efficiently identifying, attracting, and acquiring new customers while improving the ability to retain existing customers.

For nearly a decade ice has been building an end to end digital mortgage platform that spans from customer acquisition, all the way through to the secondary capital markets.

This enables efficiency gains for our clients and bridges critical gaps between disparate systems.

Our unified mortgage technology suite aimed to simplify mortgage origination and refinancing into a single click process streamlining processes for lenders, while reducing costs errors and time.

The opportunity for customers to acquire and retain more business starts with our industry, leading customer engagement suite.

This end to end suite of sales marketing and borrower engagement solutions unique to ice and seamlessly integrated with our loan underwriting platform provides mortgage lenders with an opportunity to scale their operations by efficiently identify attracting and acquiring new customers, while improving the ability to retain <unk>.

<unk> customers.

Ben Jackson: By enabling lenders to target borrowers with the right products at the right time, it reduces the time and cost of acquisition. Flowing directly into the next phase of the mortgage workflow, our leading loan underwriting platform provides significant operational efficiencies. Here, we collect borrower data in any form, we digitize and normalize it, and once harnessed, enable lenders to leverage our AI tools to quickly and efficiently verify credit, income, and collateral, as well as audit that the loan package meets underwriting requirements. This creates consistency, uniformity, and efficiency. We've also integrated our property tax, flood, closing fee, and compliance-related information for borrowers and lenders. These various automation capabilities integrated into our loan underwriting platform are designed to provide customers with a complete and automated underwriting process to help increase both frequency and velocity while reducing the cost of production.

By enabling lenders to target borrowers with the right products at the right time, it reduces the time and cost of acquisition.

Flowing directly into the next phase of the mortgage workflow are leading loan underwriting platform provides significant operational efficiencies.

Here, we collect borrower data in any form.

We digitize and normalize it and once harnessed enable lenders to leverage our AI tools to quickly and efficiently verify credit income and collateral as well as audit that the loan package meets underwriting underwriting requirements. This.

This creates consistency uniformity and efficiency.

We've also integrated our property tax flood closing fee and compliance related information for borrowers and lenders.

These various automation capabilities integrated into our loan underwriting platform are designed to provide customers with a complete an automated underwriting process to help increase both frequency and velocity, while reducing the cost of production.

Ben Jackson: This is one of the many reasons we continue to add new clients to our platform. And as evidence to this, we have signed 43 new Encompass clients through the first half, 23 of which came from the second quarter alone. As we move to the servicing stage of the loan, lenders have the opportunity to unlock additional value by utilizing ICE for their servicing technology needs. Our servicing platform has proven to be an industry standard and has a long history of dependability that servicers trust. Once originated, lenders can seamlessly transfer loans to our servicing technology or easily move loans acquired from other lenders that are on our technology, a functionality that has been enabled by the integration of our loan servicing technology with our underwriting system.

This is one of the many reasons, we continue to add new clients to our platform and as evidenced to this we have signed 43, new encompass clients through the first half 'twenty three of of which came from the second quarter alone.

As we move to the servicing stage of the loan lenders have the opportunity to unlock additional value by utilizing ice for their servicing technology needs. Our servicing platform has proven to be an industry standard and has a long history of dependability that Servicers Trust.

Once originated lenders can seamlessly transfer loans to our servicing technology or easily move loans acquired from other lenders that are on our technology.

A functionality that has been enabled by the integration of our loan servicing technology with our underwriting system.

Ben Jackson: Importantly, customers can trust the quality of the loan package through our automated quality control and audit capabilities, which enable servicers to quickly identify and remedy any critical information that may be missing from a loan file as the data and documents progress through the process. By integrating capabilities and data across mortgage origination and servicing, our platform creates opportunities for our lenders to provide more timely products to consumers. For example, lender servicers can now deliver a self-service home equity or refinance lending experience for their end consumer via an interconnected technology platform, effectively enabling them to quickly and efficiently compete for, recapture, and retain clients, which should also improve the overall consumer experience while lowering their costs by matching the client to the right product at the right time.

Importantly customers can trust the quality of the loan package through our automated quality control and audit capabilities, which enable servicers to quickly identify and remedy any critical information that may be missing from a loan file as the data and documents progressed through the process.

By integrating capabilities and data across mortgage origination and servicing our platform creates opportunities for our lenders to provide more timely products to consumers.

For example, lenders Servicers can now deliver a self service home equity or refinance lending experience for their end consumer by an interconnected technology platform.

<unk>, enabling them to quickly and efficiently compete for recapture and retain clients, which should also improve the overall consumer experience, while lowering their costs by matching the client the right product at the right time.

Ben Jackson: We also continue to find ways to leverage our industry-leading mortgage data to increase transparency in the secondary capital markets. For example, in April, we launched a new RFQ protocol for mortgage-backed securities, taking another step to improve the MBS market. This new functionality sits along ICE Bonds' existing MBS click-to-trade marketplace. Later this year, ICE Bonds plans to integrate pricing and analytics from ICE Mortgage Technology to help traders make more informed trading decisions. Also, in the second half of this year, we plan to launch the first version of our secondary whole loan trading platform. This is designed to automate and provide significant efficiencies to what is today a very analog process. The combination of IMT's data and community of customers provides us an opportunity to deliver unique innovations to our customers, such as our secondary whole loan trading and MBS execution on ICE Bonds.

We also continue to find ways to leverage our industry, leading mortgage data to increase transparency in the secondary capital markets. For example in April we launched a new RF <unk> protocol for mortgage backed securities taking another step to improve the MBS market.

This new functionality sits along ice bonds existing MBS click to trade marketplace.

Later, this year ice bonds plans to integrate pricing and analytics from ice mortgage technology to help traders make more informed trading decisions.

Also in the second half of this year, we plan to launch the first version of our secondary whole loan trading platform.

This is designed to automate and provide significant efficiencies to what is today a very analog process.

The combination of IMT data and community of customers provides us an opportunity to deliver unique innovations to our customers such as our secondary whole loan trading and MBS execution on ice bonds.

Ben Jackson: Lastly, in June, we launched the ICE Average Prime Offer Rates Index, or ICE APROR, which represents the annual percentage rates derived from average interest rates, points, fees, and other terms on mortgages that are offered to consumers. For lenders, consumers, and secondary market participants, the APROR is published by the Consumer Financial Protection Bureau and must be used to determine whether the loan meets certain regulatory requirements, which can impact the terms of a mortgage and whether the loan qualifies for securitization. With the CFPB's mandate and services under review, we launched the ICE APROR Index to provide another option for this service should the MBS market need an alternative. In summary, on behalf of our clients, we've assembled an end-to-end platform that is operated by a neutral, trusted third party in ICE, bringing together the key industry stakeholders from origination to final settlement in a single network ecosystem.

Lastly in June we launched the ice average prime offer rates index, or <unk>, which represents the annual percentage rates derived from average interest rates points fees and other terms on mortgages that are offered to consumers.

For lenders consumers and secondary market participants the APR is published by the consumer Financial Protection Bureau.

And must be used to determine whether the loan beat certain regulatory requirements.

Which can impact the terms of our mortgage and whether the loan qualifies for securitization.

With the Cfpb's mandate and services under review, we launched the ice <unk> index to provide another option for this service should the MBS market need and alternatives.

In summary.

On behalf of our clients. We've assembled an end to end platform that is operated by a neutral trusted third party and ice.

Together, the key industry stakeholders from origination to final settlement and a single network ecosystem.

Ben Jackson: We have a touchpoint to nearly every US home mortgage connected to more than 3,000 lenders, 48,000 settlement agents and closing attorneys, 2,500 county governments, the GSEs, 80,000 notaries, 100 loan servicing companies, 1,000 mortgage-backed securities investment firms, and thousands of third-party data and service providers who can now communicate with one another via a common data standard on a robust network operated under ICE's cyber overlay. Our comprehensive platform automates workflows throughout each stage of the mortgage lifecycle, resulting in lower costs to originate and service loans for our clients, who can then pass those savings on to the end consumer, all while helping lenders and servicers better recapture and identify new business opportunities. With that, I'll hand it over to Jeff. Thank you, Ben. Please turn to slide 11.

We have a touch point to nearly every U S home mortgage connected to more than 3000 lenders.

48, <unk> settlement agents and closing attorneys.

500 County governments, the Gse's 80000, notary 100 loan servicing companies 1000 mortgage backed securities investment firms and thousands of third party data and service providers, who can now communicate with one another by a common data standard on a robust network.

Operated under Ices cyber overlay.

Our comprehensive platform automates workflows throughout each stage of the mortgage lifecycle, resulting in lower cost to originate and service loans for our clients, who can then pass those savings on to the end consumer.

All while helping lenders and servicers better recapture and identified new business opportunities.

With that I'll hand, it over to Jeff.

Thank you Ben.

Let's turn to slide 11.

Ben Jackson: In the second quarter, amidst the dynamic macro environment, we once again grew revenues, grew adjusted operating income, and grew adjusted earnings per share, delivering the best quarter and the best first half in our company's history. Over the past 25 years, ICE has grown from a small Atlanta-based power exchange into a global data and technology company. The heart of our strategy has been to drive transparency and create workflow efficiencies for our customers. We do this by building and operating mission-critical digital networks that leverage our technology, data, and expertise to connect our customers to opportunity around asset classes and around the globe. We connect these customers to our liquid energy markets to help manage risk. We connect entrepreneurs to capital at the New York Stock Exchange. We connect people to our fixed income data to give them pre-trade and post-trade transparency.

In the second quarter amidst the dynamic macro environment. We once again grew revenues grew adjusted operating income and grew adjusted earnings per share delivering the best quarter and the best first half in our company's history.

Over the past 25 years ice has grown from a small Atlanta based power exchange into a global data and technology company.

Our strategy has been to drive transparency and create workflow efficiencies for our customers.

We do this by building and operating mission critical digital networks that leverage our technology data and expertise to connect our customers to opportunity around asset classes and around the globe.

We connect these customers to our liquid energy markets to help manage risk.

We connect entrepreneurs to capital at the New York Stock Exchange, we connect people to our fixed income data to give them pre trade and post trade transparency and we connect participants to one another in the mortgage space to create more efficient transaction workflows.

Ben Jackson: And we connect participants to one another in the mortgage space to create more efficient transaction workflows. As the world's leading energy marketplace, the breadth and diversity of our global commodity platform drives an important network effect, producing capital efficiencies for our customer base. In the second quarter, we saw record volumes and record revenues across our energy complex, contributing to an unsurpassed first half as market participants look to hedge exposures to geopolitical dynamics. Across our interest rate business, uncertainty on central bank policy, shifting trade policies, and ongoing geopolitical tensions drove demand for our interest rate risk management. As a result, in the first half, a record 462 million interest rate contracts traded on our platform, including records across our Euribor and Soniox markets. This strong performance contributed to a 19% increase in revenues year to date, including 20% growth in the second quarter.

As the world's leading energy marketplace, the breadth and diversity of our global commodity platform drives an important network effect producing capital efficiencies for our customer base.

In the second quarter, we saw record volumes and record revenues across our energy complex contributing to an unsurpassed first half as market participants look to hedge exposures to geopolitical dynamics.

Across our interest rate business uncertainty on Central Bank policy shifting trade policies and ongoing geopolitical pension drove demand for our interest rate risk management.

As a result in the first half a record $462 million interest rate contracts traded on our platform, including records across our Euribor and Sonya markets.

This strong performance contributed to a 19% increase in revenues year to date, including 20% growth in the second quarter.

Ben Jackson: At the New York Stock Exchange, our cash equity trading volumes increased 47% versus the prior year, while our equity options volume increased 5%. Similarly, in our credit default swap business, broad market volatility drove increased demand for credit protection, with CDS notional cleared increasing 42% in the second quarter versus the prior year. In summary, our record-setting first half results reflect the all-weather nature of our business model, where we've intentionally positioned the company to provide customer solutions in numerous geographies and economic conditions to facilitate all-weather results. I'd like to end our prepared remarks today by thanking our customers for their continued business and for their trust. And I'd like to thank my colleagues at ICE for their contribution to our best ever second quarter, following on the heels of our record first quarter, delivering an unsurpassed first half for the company.

At the New York stock exchange or cash equity trading volumes increased 47% versus the prior year, while our equity options volume increased 5%.

Similarly in our credit default swap business broad market volatility drove increased demand for credit protection with Cds notional cleared increasing 42% in the second quarter versus the prior year.

In summary, our record setting first half results reflect the all weather nature of our business model, where we have intentionally positioned the company to provide customer solutions in numerous geographies and economic conditions to facilitate all weather results.

I'd like to end our prepared remarks today by thanking our customers for their continued business and for their trust.

And I'd like to thank my colleagues at ice for their contribution to our best ever second quarter. Following on the heels of our record first quarter delivering an unsurpassed first half for the company.

Ben Jackson: I'd now like to turn our call back to our moderator, Drew, and we'll conduct a question and answer session until 9:30 Eastern Time.

I would now like to turn our call back to our moderator drew and we'll conduct a question and answer session until 930 eastern time.

Drew: Thank you. We'll now start today's Q&A session. If you would like to register a question, please press star followed by one on your telephone keypad. And to withdraw your question, it's star followed by two. As a reminder, please ask only one question, and if you have any further questions, rejoin the queue. Our first question today comes from Craig B. and Thaler from Bank of America. Your line is now open. Please go ahead.

Thank you, we'll now start today's Q&A session. If you would like to register a question. Please press star followed by one on your kind of think keypad and can withdraw you question is now followed by <unk>.

As a reminder, please ask only one question and if you have any further questions rejoin the queue.

Our first question today comes from Craig Siegenthaler from Bank of America. Your line is now Leighton. Please go ahead.

Craig Siegenthaler: Hey, good morning, everyone. Hope you're all doing well. We have a follow-up on some of your mortgage tech commentary on your efforts to improve your competitive positioning. So we're curious on how you're looking to upgrade your product, especially with new technologies like AI and blockchain that could improve your efficiency and also your client experience. And do you see new opportunities to employ both technologies in the future too?

Hey, good morning, everyone hope, you're all doing well.

We have a follow up on some of your mortgage tech commentary on your efforts to improve your competitive positioning. So we're curious on how you are looking to upgrade your products.

New technologies like AI, and blockchain that could improve your efficiency and also our client experience.

And do you see <unk>.

New opportunities to employ both technologies in the future.

Chris Edmonds: Thanks, Craig. This is Ben. So we, and we've alluded to this in our comments, that a lot of the innovation in technology that we're providing to the industry first starts with integrating for the first time all of these systems to create a front-to-back lifelong platform for our clients. That in and of itself is going to help to drive better analytics for customers that have a servicing book to understand the client base a lot better, to be able to predict when they're going to be ripe for a refi or a home equity line of credit, create that signal and enable the customer themselves to have a self-service platform in our consumer web portal to be able to engage with them or for the client to reach out proactively to them.

Thanks, Craig.

This is Ben so we.

And we've alluded to this in our in our comments that a lot of the innovation and technology that we're providing to the industry first starts with integrating for the first time.

All of these systems to create a front to back life of loan platform for our clients.

That in and of itself is going to help to to drive better analytics for customers that have a servicing book to understand the client base a lot better to be able to predict when they're going to be ripe for a refi or a home.

Equity line of credit.

Create that signal and enable the customer themselves to have a self service.

Platform in our in our consumer web portal to be able to engage with them or for the client to reach out proactively to them and then once they engage a lot of the details around that client our auto loaded into encompass can flow straight through to an electronic closing and then back into into servicing seamlessly so thats going to create a ton of efficiency.

Chris Edmonds: And then once they engage, a lot of the details around that client are auto-loaded into Encompass, can flow straight through to an electronic closing and then back into servicing seamlessly. So that's going to create a ton of efficiency. And we're well on the way to executing that. As it relates to AI, we are leveraging AI in a number of areas today and see a number of areas in the future where we can continue to enhance the experience for our customers in utilizing our technology suite. So one area, and I alluded to this in my prepared remarks, is in the data and document automation platform that's automating certain parts of the checking process of the underwriting of a loan. And we already have the capabilities utilizing AI to do things like credit income, collateral verification, and then have expanded it as well into audit.

And we're well on the way to executing that as it relates to AI.

We are leveraging AI and a number of areas today and see a number of areas in the future where we can.

<unk> to enhance the experience for our customers and utilizing our technology suite. So one area and I alluded to this in my prepared remarks.

As in the data and document automation platform, that's automating certain parts of the checking process of the underwriting up alone.

And we already have the capabilities utilizing AI to do things like credit income collateral verification, and then have expanded as well into audit.

Chris Edmonds: So basically being able to provide real-time audit on the loan package as it's underwriting to make sure that it's meeting the underwriting criteria of the loan. And then when the loan is transferred to servicing, being able to audit that loan package at that point too to make sure that the data and documents include everything that the package needs to meet servicing criteria. The second area that we're leveraging it heavily is in our call center and for the customer experience, being able to mine data within our servicing system to understand why a client may be calling, to be able to provide a better experience for the consumer, a more efficient call center experience for both the client and a more efficient experience for the customer themselves that's servicing that client. And then the third area is really in compliance.

Being able to provide real time bought it on a loan package as its underwriting to make sure that it's meeting the underwriting criteria alone and then when alone users.

Transferred to servicing being able to audit that loan package at that point to to make sure that the data and documents include everything that the package needs.

To meet servicing criteria.

Second area that we're leveraging it heavily is in our call center and for the customer experience being able to mine data within our servicing system to understand why why a client may be calling to be able to provide a better experience for the consumer more efficient.

<unk>.

Call Center experience for both the client and a more efficient experience for the for the customer themselves that's servicing that.

That client.

And then the third area is in Israeli and compliance so we run.

Chris Edmonds: So we run a platform called AllRegs, which basically has all the underwriting criteria for loans around the United States. It's got millions of pages of documents. Using natural language models put on top of that, you can put natural language questions into our Ask Reggie platform that sits now on top of AllRegs, and it'll come back and mine that millions of pages of data that's out there and give you efficient real-time answers back to the end customer of ours. So that's a handful of areas where we're utilizing it today and we're innovating. And then outside of AI, I also mentioned things like connecting our mortgage data to the capital markets with examples such as our MBS RFQ capabilities, as well as secondary whole loan trading later this year and MSR trading as well coming into the future.

Platform called all regs, which basically is all of the underwriting criteria for loans around.

Around the United States, It's got millions of pages of documents using natural language models put on top of that you can put natural language questions into.

Our <unk> platform that sits now on top of all rigs and it will come back and mine that millions of pages of data that's out there. It gives you efficient.

Real time answers back to the back to the end.

The end customer of ours, so that's a handful of areas, where we're utilizing it.

And we're innovating and then outside of AI out of outside of AI also mentioned things like connecting our mortgage data to the capital markets with examples such as our MBS are a few capabilities.

As well as secondary whole loan trading later, this year and MSR trading as well coming into the future.

Drew: Our next question today comes from Ben Buddish from Barclays. Your line is now open. Please go ahead.

Our next question today comes from Ben <unk> from Barclays. Your line is now open. Please go ahead.

Various Analysts: Hi. Good morning, and thank you for taking the question. You know, Warren, you mentioned in your prepared remarks that your leverage level is now down to your target three times. I'm just curious if you could share any updated thoughts on capital allocation and wondering if you can comment on some of the recent media headlines around a potential M&A transaction. I know that news didn't come from you guys, but is there anything you could share there? And otherwise, how should we think about capital priorities now that you're at your target leverage level? Thank you.

Hi, good morning, and thank you for taking the question.

Warren you mentioned in your prepared remarks that your leverage level is now down to your target three times I'm. Just curious if you could share any updated thoughts on capital allocation and I'm wondering if you can comment on some of the recent media headlines around.

Potential M&A transaction I know that news didn't come from you guys, but sort of any anything you can share there and otherwise how should we think about capital priorities now that youre at your target leverage level. Thank you.

Chris Edmonds: Sure. Hey, Ben, thanks for the question. So, right, we did reach the target leverage ratio in the quarter. We did do it ahead of our scheduled target when we announced the deal. So pleased with that. We did repurchase 250 or so worth of stock during the quarter. You know, I'd expect as you moved into the second half, we'll tick that up a little bit higher from where we were, but we still will probably chip away a little bit at that CP balance that we have, albeit probably not as much as we were previously, of course. So that's kind of how we're thinking about the capital return profile of the company at the moment as we move through into the second half.

Sure Hey, Brian Thanks for the question. So right we did reach the target leverage ratio in the quarter. We did ahead of our scheduled target when we announced the deal so pleased with that.

We did repurchase 250, or so worth of stock during the quarter.

I'd expect as you've moved into the second half, we'll tick that up a little bit higher from where we were but we still will probably chip away a little bit of that CD balance that we have albeit probably not.

Not as much as we were previously of course, so so thats kind of how we're thinking about the capital return profile of the company at the moment as we move through the second half in terms of broader capital allocation. Obviously the priority. One here is to invest in the business and you've seen us do that.

Chris Edmonds: You know, in terms of broader capital allocation, you know, obviously the priority first here is to invest in the business, and you've seen us do that. You know, I think from the perspective of some of the headlines you may have seen out there, I mean, we don't really comment on M&A. Rumors are out there. So I think, you know, look, we're obviously always looking. We've done that from the beginning of the company. So I think from that perspective, you know, I'll leave it at that. But right now, the focus for us is obviously just kind of having gotten to the leverage target, starting to kind of tick up the buyback and continue to chip away at that CP balance.

I think it was from the from the perspective of some of the headlines you may have seen out there I mean, we don't really comment on M&A.

Rumors are out there. So I think look we're obviously always looking.

We've done that.

Beginning of the company, so I think from that perspective.

I'll leave it at that but but right now the focus for US is obviously just kind of having gone with the leverage target starting to kind of pick up the buyback and continue to chip away at that CP bounds.

Drew: Our next question today comes from Ken Worthington from JP Morgan. Your line's now open. Please proceed with your question.

Our next question today comes from Ken Worthington from Jpmorgan. Your line is now open. Please proceed with your question.

Various Analysts: Hi. Good morning. Thanks for taking the question. In IMT, origination and closing solution revenue both jumped nicely this quarter, and I'm trying to get a better sense of what we're seeing here. Can you give us a sense to what extent the jump was driven by new relationships onboarding versus sort of higher industry activity versus just plain seasonality?

Hi, good morning, Thanks for taking the question.

<unk> origination and closing solution revenue, both jumped nicely this quarter and I'm trying to get a better sense of what we're seeing here can you give us a sense to what extent the jump was driven by new relationships onboarding versus sort of higher industry activity versus just clean seasonality.

Chris Edmonds: Again, it's Ben. Thanks for the question. It's a mix of all those elements that you just mentioned. You know, we have been very explicit around the number of wins that we've been having each quarter since we closed on the Black Knight acquisition and continue to have great success in terms of winning new clients. And you know, those clients, because these are complicated implementations, they take some time to work through. But now we're at a stage where some of these clients are starting to come online. In fact, in the second quarter, we had one of our large regional banks come online on Encompass. But that success continues. We continue to have a great funnel of new client activity. This past quarter, I mentioned we had 23 wins on Encompass.

I can spend thanks.

Thanks for the question.

<unk>.

It's a mix of all of those elements that you just that you just mentioned.

We have been very explicit around the number of wins that we've been having.

Each quarter since we closed on.

The Black Knight acquisition and continue to have great success in terms of winning new clients.

Yes, those clients because they're complicated implementations they take some time to work through but now we're at a stage where some of these clients are starting to come online in fact in the second quarter we had.

One of our large regional banks come on will come online.

An encompass that success continues we continue to have a great.

Paul.

New client activity. This past quarter I mentioned, we had 23 wins on encompass for those wins by the way our clients that are on either MSP for that sub service through somebody that's on MSP.

Chris Edmonds: Four of those wins, by the way, were clients that are on either MSP or that subservice through somebody that's on MSP. And in addition, we had two wins on the MSP side, one of which was the beginning of the second quarter that I mentioned on the last call, which was United Wholesale Mortgage, an existing IMT client. And then we had another MSP win as well last quarter from an existing IMT client. So we're continuing to see really good success on the sales front. We're seeing clients on the MSP side continuing to look for an independent, well-capitalized, neutral technology provider that doesn't potentially compete with them. And that's what's leading to either sales directly through us of clients moving to the MSP platform.

And in addition, we had two wins on the MSP side, one of which was at the beginning of the second quarter that I mentioned on the last call, which was United wholesale mortgage.

And existing IMT client and then we had another MSP win as well last quarter from an existing IMT client. So we'll continue to see really good success on.

The sales funnel fronts, we're seeing clients on the MSP side, continuing to look for an independent well capitalized neutral technology provider.

That doesn't potentially compete with them and that's what's leading to either sales directly through us of moving clients moving to the MSP platform, but we're also seeing independent sub servicers most of which are on MSP are also having a lot of activity with clients as well as some.

Chris Edmonds: But we're also seeing independent subservicers, most of which are on MSP, are also having a lot of activity with clients as well as some of those clients that are subservicing with others that could potentially be perceived to compete with them are reevaluating those relationships. So that's a big piece of it. But obviously, the backdrop of the environment starting to improve definitely helped with areas like our closing solutions, where that is a very transaction-oriented part of the business. Our MERS business is doing very well. In fact, we've heard from one of the large depositories that traditionally has not used MERS is intending to start using MERS for the first time later this year. Simplify continues to do well as well. So it's really a mix of those elements.

Are those clients that are our sub servicing with others that could potentially be perceived to compete with them are reevaluating those relationships. So that's.

That's a big piece of it but obviously the the backdrop of the environment starting to improve definitely helped with areas like our closing solutions, where that is a very transaction oriented part of the business.

Our <unk> business is doing very well in fact.

We've heard from one of the large depository is that traditionally has not used birth is intending to start using <unk> for the first time.

Later this year simple file continues to do well as well so it's really a mix of those elements.

Drew: Our next question comes from the line of Alex Gleistein from Goldman Sachs. Your line's now open. Please go ahead.

Our next question comes from the line of Alex Bluestein from Goldman Sachs. Your line is now open. Please go ahead.

Various Analysts: Hey, good morning. Thank you for the question. I wanted to ask you guys something that doesn't come up a whole lot on these Q&A sessions, but you spend more time talking about it recently, which is around data centers. You seem to continue to build out capacity there and maybe help us understand a little better how they could translate into either new or improved revenue opportunities for ICE as a whole. Thanks.

Hey, good morning, Thank you for the question.

I wanted to ask you guys something that doesn't come up a whole lot on these Q&A sessions, but you spend more time talking about our recently, which is around data centers.

You you seem to continue to build out capacity, there and maybe help us understand a little better how that could translate into either new or improved revenue opportunities for ice as a whole. Thanks.

Chris Edmonds: Alex, it's Chris. So we have a footprint that we have continued to invest in. As you recognize, we've built out on the footprint that we have today about half of our capacity that sits out there today. We have a great line of sight into what that looks like on a go-forward basis and continued engagement with the clients as to what their needs are and a very scheduled process of how we will bring that online as power and things begin to become available and our CAPEX associated with that. I'll let Warren comment on that if he needs to. But you know, it's our proprietary network that we have forever talked about having, you know, Jeff's made reference to ICE Cloud and things like that.

Alex It's Chris.

So we have.

A footprint that we have continued to invest in as you recognize.

We've built out on the footprint that we have today about half of our capacity that sits out there today.

We have great line of sight into what that looks like on a go forward basis and continued engagement with the clients as to what their needs are and Theyre very scheduled process of how we will bring that online is power and things began to.

Become available and our Capex associated with that I will let Warren comment on that if he needs to but.

It's our proprietary network that we have forever talked about having jeff's made reference to ice cloud and things that we want to control that experience and our clients have adapted to that very well and continue to come to us to fulfill those needs. So we have runway there through early 2000, <unk> that we will continue to develop.

Chris Edmonds: But we want to control that experience, and our clients have adapted to that very well and continue to come to us to fulfill those needs. So we have runway there through early 2030s that we will continue to develop in conjunction with the needs of our clients over that time base.

In conjunction with the needs for our clients over that time base.

Okay.

Drew: Our next question comes from Kyle Voight from KBW. Your line's now open. Please proceed.

Our next question comes from Kyle Voigt from <unk>. Your line is now open. Please proceed.

Various Analysts: Hey, good morning. I think they've asked me a slight follow-up, but staying on the fixed income segment, ASD growth accelerated to 6% year on year. You noted a couple of tailwinds there, but it seems like most of the acceleration has been in data and network technology. Just wondering if you could unpack the drivers of that acceleration a bit and what you're doing to drive that. And then on the fixed income data and analytics side, we're seeing growth that's still closer to 4%. Are you seeing ASD accelerate in that business as well? and is there a pathway to get back to kind of a 5% to 6% organic revenue growth rate in that business, do you think?

Hey, good morning.

I think if you'd asked me a slight follow up but staying on the fixed income segment.

ASE growth accelerated to 6%.

Year on year, you noted a couple of tailwind there, but it seems like most of the acceleration has been in data and network technology.

Wondering if you could unpack the drivers of that acceleration of that and what youre doing to drive that and then on the fixed income data and analytics side, we're seeing growth that's still closer to 4% are you seeing ASC accelerate in that business as well.

They are a pathway to get back to kind of a 5% to 6% organic revenue growth rate in that business do you think.

Chris Edmonds: So I'll try to break that down. Certainly, in the network piece, you look at our consolidated feeds, a business that we have there, and the pricing that comes along with that, that gives us an opportunity as we continue to add new unique sets of content that we will distribute across that feed business along the way. And also on our desktops in there. So those are two drivers that you would see there. If you look at our index business and how we've continued to build out the custom indices and the offering that we see there, you look at the proliferation of our ETF ecosystem along with the fixed income ecosystem. I think what you're seeing is those two things coming together and people taking advantage of those two things in a single point.

So.

I'll try to break that down certainly.

And our and the network piece you look at our consolidated feeds business that we have there and the pricing that comes along with that that gives us an opportunity as we continue to add new unique sets of content that we will distribute across that feed business along the way.

And also on our desktops in there. So those are two drivers that we'd see there. If you look at our index business and how we've continued to.

Build out the custom indices and the offering that we see there you look at the proliferation of our ETF ecosystem, along with the fixed income ecosystem I think what youre seeing is those two things coming together and people taking advantage of those two things in a single a single point those will both drive future business and both are evaluated.

Chris Edmonds: Those will both drive future business in both our evaluated pricing and and reference data opportunities as we continue to grow that over time. And certainly, the business that Ben referenced in his prepared remarks, and so did Warren, around the increasing of our passive AUM is evidence of that growth. Yeah. Colin, the only thing I'd add to that too is just on the fixed income and data analytics business. We did actually exit the quarter in that particular business line at a 5% ASD. We had a record quarter for PRD within that. And so business trends are really strong there as we kind of head into the second half here. So I feel good about that. Part of the reason we were around 4% this quarter for that line was also the index business.

Pricing.

And reference data opportunities as we continue to grow that over time and certainly the business.

Ben referenced in his prepared remarks.

So did warrant around the increasing of our passive <unk> as evidence of that growth.

Yes, Collin the only thing I'd add to that too is just on the fixed data analytics business. We did actually exited the quarter in that particular business line at a 5% <unk>, we had a record quarter for <unk> within that.

So business trends are really strong there as we kind of head into the second half year. So feel good about that part of the reason we were around 4%. This quarter for that line was also the index business, while it grew it.

Chris Edmonds: While it grew, it didn't grow in the double-digit range because we did have a bit of a market pullback there earlier in the quarter. So that business, of course, as you know, will ebb and flow with markets to some degree. But as we exited the quarter there, you know, again, we were in pretty good footing from that perspective. So I feel good about the trajectory of that business as we head into the balance of the year. And then similarly, on the data network technology business, also seeing some continued strength there as we head into the second half. Pretty broad base as well across ICE Global Network, our desktops business, and then our feeds business, as Chris mentioned as well.

It didn't grow in the double digit range, because we did have a bit of a market pullback there earlier in the quarter. So that business of course, as you know will ebb and flow with market to some degree, but as we exited the quarter. There again, we were in pretty good footing from that perspective, so I feel good about the trajectory of that business as we head into into the balance of the year and then similarly on the data.

Network Technology business also seeing some continued strength there as we head into the second half.

Pretty broad based as well across ice global network, our desktop business and then our feeds business as Christopher mentioned as well.

Drew: Our next question comes from the line of Chris Allen from Citii. Your line is now open. Please go ahead.

Our next question comes from the line of Chris Allen from Citi. Your line is now open. Please go ahead.

Various Analysts: Yeah. Morning, everyone. Thanks for taking my question. I want to kind of go back to mortgage technology. We've got a lot of imbalances in the current revenue trajectory here. You noted some of the factors that were keeping things down. I think Flagstar was about a 1% impact. I'm just wondering, is there a geography issue too here? You mentioned customers reaching a minimum. Does that translate to higher transaction fees? And we'll kind of think about the overall guide where industry activity is trending. Like, how are you thinking about where the guide is kind of setting up for the rest of the year?

Yes, good morning, everyone and thanks for taking my question.

I kind of go back to mortgage technology.

It bounces from their current revenue trajectory here you noted some some of the factors.

I'm, keeping things down to plateau, but a 1% impact I'm. Just wondering is there any geography issue too here you mentioned customers receive minimums.

Lead to higher transaction fees, and what I'm trying to think about the overall guide.

Industry activity is trending.

Are you thinking about was where was it.

Just kind of setting a fuel for the rest of the year.

Chris Edmonds: Yeah. So look, I'm very comfortable with the guidance range that we gave at the beginning of the year, low to mid-single digits at this point. I do think on the recurring revenue side, importantly, we will grow this year. You know, I did mention a couple of the headwinds that we do expect in the second half. Flagstar, of course, that's on an annualized basis, about 1% of total revenues. You know, that will happen early in the fourth quarter. We do have the inactive loans that roll off. You know, we have that every year. And that's more of a third quarter event. And then on the minimums, as I mentioned too, you know, we continue to see people, you know, resetting some minimums, particularly customers from vintages back in 2020 and 2021, a little bit of 2022.

Yeah, So look I'm very comfortable with our with the guidance range that we gave at the beginning of the year low to mid single digits. At this point I do think on the recurring revenue side importantly, we will grow this year.

I did mention a couple of the headwinds that we do expect in the second half flagstar of course, but thats on an annualized basis about 1% of total revenues that will happen early in the fourth quarter. We do have the inactive loans that roll off we have that every year.

And that's more of a third quarter event and then on the minimums as I mentioned too we continue to see people.

Resetting some minimum particularly customers from vintages back in 2020 in 2021, a little bit of 2022, I will say we've moved through.

Chris Edmonds: I will say we've moved through, you know, most of that or a lot of that. And we are seeing the discount, if you will, to the prior minimum narrow pretty significantly relative to where we were last year. And so we're seeing an improvement in that. So ultimately, we've got, you know, probably less of the headwind than we had last year, which has been helpful. And then on the revenue side for recurring, we've got obviously customer implementations. We've been a bit better on that front this year. You know, I will say, though, these take a long time. You know, we've talked about revenue synergies, which I can give you an update on today as we're around 80 million now. You know, but only about a fifth of that is actually in the run rate.

Most of that or a lot of that and we are seeing the the.

If you will to the prior minimum narrow pretty significantly relative to where we were last year and so we're seeing an improvement in that so so ultimately we've got probably less of a headwind than we had last year, which has been helpful. And then on the on the revenue side for recurring we have got obviously customer implementations, we've done a bit better on that front this year.

I will say, though these take a long time.

We've talked about revenue synergies, which I can give you an update on today is where around $80 million now, but only about a fifth of that is actually in the run rate. So we are working through those and those can take some time to implement particularly larger ones that we're seeing some improvement there at the end of the day and so you've got a little bit better of a tailwind a little bit less of a headwind versus last year and while I think we can.

Chris Edmonds: So, you know, we are working through those, and those can take some time to implement, particularly larger ones, but we're seeing some improvement there at the end of the day. And so you've got a little bit better of a tailwind, a little bit less of a headwind versus last year and why I think, you know, we can continue to grow on the recurring revenue side, you know, as we move through this year. In terms of the overall guidance, I mean, look, that's, you know, that's tough to predict. I mean, obviously, the first half of the year was good. In the second quarter, you know, we saw some strong loan growth. It's hard to know what the second half would necessarily look like.

Continued to grow on the recurring revenue side.

As we move through this year.

In terms of the overall guidance.

That's tough to predict I mean, obviously the first half of the year was was good in the second quarter, we saw strong loan growth.

It's hard to know what the second half of necessarily look like but I think again I think based on what we're seeing at the moment, we're comfortable that we'll be within the guidance range. We gave for the overall business.

Chris Edmonds: But I think, you know, again, I think based on what we're seeing at the moment, we're comfortable that we'll be within the guidance range we gave for the overall business.

Drew: Our next question today comes from the line of Ashish Sabadra from RBC Capital Markets. Your line's now open. Please go ahead.

Our next question today comes from the line of Ashish Sabedra from RBC capital markets. Your line is now open. Please go ahead.

Various Analysts: Hey, good morning, guys. This is Bill Key on Ashish Sabadra. I appreciate you guys taking that question. Maybe just to follow up on the mortgage tech, great to kind of see that margin expansion there. Could you maybe touch on what's kind of driving that discipline of expense management? And I'll take a follow-up later.

Hey, good morning, guys.

So chi on questions about your appreciate you guys, taking my question maybe.

Maybe just a follow up on the mortgage.

Great. Thanks.

Margin expansion there can you maybe touch on what's kind of driving that disciplined expense management.

And I will take a follow up it later.

Chris Edmonds: Sure. So it's two things. The first, we did do through part of the integration that we're obviously still ongoing here. We moved a significantly, most of that is really in the operations technology group, moving those over to ICE Inc. A little bit of corporate. And so there was a bit of a reallocation, if you will, you know, of the expenses across the segments that occurred as part of the integration, all planned in terms of how we've done that. So we did that actually a couple of quarters ago, and that's why you're seeing from a year-over-year perspective some benefit. And then the second part of that too is really on the, you know, on the synergy side, as you've heard us talk about. And so we did raise the synergy target at the beginning of this year.

Sure.

Two things.

The first we did.

Part of the integration.

There were obviously still ongoing here, we will move to significantly.

Most of that is really in the operations technology group moving those over to ice Inc.

Little bit of corporate and so there's a bit of a reallocation if you will.

The expenses across the segments that occurred as part of the integration all planned in terms of how we've done that so we did that actually a couple of quarters ago, and thats, what youre seeing from a year over year perspective, some benefit.

And then the second part of that too is really on the.

On the synergy side as you've heard us talk about and so we did raise the synergy target at the beginning of this year youre starting to see those flow through and I feel very comfortable that we will reach that target as we exit this year. So I think those two things are combination together.

Chris Edmonds: You know, you're starting to see those flow through, and I feel very comfortable that we will reach that target, you know, as we exit this year. So I think, you know, those two things are a combination together with, you know, a typical strong expense control that we've always been good at is really why you're seeing that, you know, that margin expansion at the end of the day for that segment. But I would encourage you really to look ultimately and zoom out always at the overall business and just note, because again, those expenses will move from segment to segment when you have those allocation changes. We did grow margins two points this quarter. You know, we had pretty solid incremental margins on top of that.

A typical strong expense control that we've always been good at is really why youre seeing that.

That margin margin expansion at the end of May for that segment, but I would encourage you really to look ultimately zoom out always at the overall business and just note because again those expenses will move from segment to segment. When you have those allocation changes.

Did grow margins two points this quarter.

Pretty solid incremental margin on top of that so I would encourage you to also zoom out and look at the broader expense base. If you will in terms of how we're performing on that front.

Chris Edmonds: So I would encourage you to also zoom out and look at the broader expense base, if you will, in terms of how we're performing on that front.

Drew: Our next question comes from Simon Clinch from Rothschild. Your line's now open. Please proceed.

Our next question comes from Simon <unk> from Charles Your line is now open. Please proceed.

Various Analysts: Hi. Thanks for taking my question. I wanted to pivot to the gas markets and the strength that you're seeing as TTF is sort of establishing itself as a global benchmark for gas. How should we think about the scale of the future opportunity here? I mean, could you perhaps talk about TTF and the concept of its share of total gas volumes across the US and Europe and where that might go to, for example, and comparing that perhaps to Brent within oil? Thanks.

Alright, Thanks for taking my question I wanted to pivot to the gas markets.

And the strength that.

Are you seeing as TTS as sort of establishing itself as a global benchmark for gasoline.

How should we think about the scale of the.

The future opportunity here I mean could you perhaps talk about TTS and the concept of its share of total gas volumes across the U S and Europe and where.

Where that might go to for example, comparing thats, perhaps Brent within oil.

Chris Edmonds: Sure. Thanks for the question. So as we've talked about on prior calls, and I was in my prepared remarks as well today, our overall energy market's doing fantastic. There are a number of different reasons for that and tailwinds for it. And I'll just delve specifically into natural gas trends as an example. So one development that we see is going to continue to create a long tailwind for the growth of natural gas globally is just the resolution to the tariffs and trade discussions that have been going on. As in many of these settlements, you're starting to see energy being in US energy and forward commitments to purchase US energy as a key element to it. Examples of that are the settlement that just happened in the last 12 hours with South Korea, including a commitment around future purchases of gas.

Sure. Thanks for the thanks for the question.

So as we as we talked.

<unk> talked about on prior calls and in my prepared remarks as well today.

Our overall energy market is doing fantastic there are a number of different reasons for that and tailwind for it and I'll just delve specifically into natural gas trends.

As an example.

One one development that we see is going to continue to create a long tailwind for the growth of natural gas globally is just the resolution to the tariffs and trade discussions that have been going on.

And many of these and many of these settlements.

Darting to see energy being in U S energy and forward commitments to purchase your U S energy is a key element to it.

Examples of that are the settlement that just happened in the last last 12 hours with South Korea, including.

Our commitment around future purchases of gas, Japan last weekend had the same thing both of those are highly complementary to our.

Chris Edmonds: Japan last weekend had the same thing. Both of those are highly complementary to our JKM contract. And JKM also trades oftentimes the package to TTF. So as that LNG hits the water, that JKM contract is the Japan-Korea marker and is very, very well positioned to be the pricing point for that gas. In the EU settlement this past week, gas and oil commitments for future purchases are a part of that coming out of the US. We see that as tailwinds as well as oil that leaves the Gulf heading towards Europe is priced via Brent in our HOU contract. And gas that's destined for Europe is a tailwind to TTF. So we see a number of tailwinds. That's one example. Obviously, the geopolitical situations have reset supply chains, and US gas is flown around the world as a result of that, in particular into Europe.

<unk> contract and <unk> also trades oftentimes a package to TTS. So is that LNG hits the water at JK M contract is the Japan Korea marker and it's very very well positioned to be the pricing point for that gas in the EU settlement this past week.

Gas and oil commitments for future purchases are a part of that coming out of the U S. We see that as tailwind as well as oil thats.

That leads to golf heading towards <unk>.

Europe is priced by our brands and our <unk> contract and gas.

And for Europe is a tailwind to Tcf.

So we see a number of tailwind. That's one example, obviously the geopolitical situations at reset.

Fly changed in U S gas is flowing around the world as a result of that in particular in <unk> into Europe, and those supply chains will be hard to reset you also have energy demand through the roof not only in the U S, but around the world with power demand in data center demand.

Chris Edmonds: And those supply chains will be hard to reset. You also have energy demand through the roof, not only in the US but around the world with power demand and data center demand and AI. As it relates to the back part of your question around how much more growth is there, just to use some relative metrics, so TTF is doing very well, up more than 30% this year off of very strong growth last year. If you look at TTF relative to Brent in terms of active market participants, it's roughly half. So you have the world's global benchmark for oil is roughly double the number of active market participants than TTF has as the global benchmark for the movement of natural gas around the world. So a big tailwind there as it relates to Brent.

Hi.

As it relates to the back part of your question around how much for growth is there just just to use them.

Relative metrics. So TTS is doing very well up more than 30%. This year off of very strong growth last year. If you look at TTS relative to Brent in terms of active market participants, it's roughly half. So you have the the worlds global benchmark for oil is roughly double.

The number of active market participants.

Tcf has as the global benchmark for the movement of natural gas.

Around around the world.

No.

Big Big tailwind there as it relates to <unk>.

Chris Edmonds: But then also, if you look at open interest in ADB and compare TTF to Henry Hub, it's roughly 15%. So again, points to a long tailwind of growth. And another thing I'll point out is we've said time and time again that there's an opportunity in the transition to cleaner fuels, so moving from coal as a fuel source to natural gas. And the size of that opportunity in the Asia-Pacific alone is the size of the North American energy demand across all sources. So that's a huge opportunity there. The settlement on these tariff issues that I had mentioned is one input into it. We're seeing India continuing to grow in terms of LNG demand. Canada has an LNG facility coming live on the West Coast that's also being designed to transport LNG to Asia, which is another good fit for our JKM and TTF contract.

Brent, but then also if you look at open interest and Adv and compare Tcf to Henry hub, it's roughly 15%. So again points to a long tailwind of tailwind of growth and another thing I'll point out is we've we've said time and time again that that there is an opportunity.

In the transition to cleaner fuels. So moving from coal is a few source to natural gas and the size of that opportunity in Asia Pacific alone.

Is the size of the North American <unk>.

Energy demand across all sources. So that's a huge opportunity there the settlement on these tariff issues that I had mentioned.

Is one input into it we're seeing India continuing to grow in terms of of LNG demand, Canada has an LNG facility coming live on the West Coast. That's also being designed to transport LNG to Asia, which is another good fit for our <unk> and CTF contracts.

Final today.

Drew: Our final question today comes from Dan Fallon from Jeffries. Your line's now open. Please go ahead.

Our final question today comes from Dan Fannon from Jefferies. Your line is now open. Please go ahead.

Various Analysts: Thanks. Jeff, I was hoping you could expand upon Warren's comments and just talk about your appetite for large-scale M&A, given where your business sits today, your stock valuation, and all the other factors that go into it.

Thanks, Jeff I was hoping you could expand upon Warren's comments and just talk about your appetite for large scale M&A, given where your business sits today your stock valuation and all the other factors that go into it.

Jeff Sprecher: Sure. I don't, first of all, I don't think, as we sit today, anything has changed over the DNA of the company, which is we do feel like companies need to evolve. We want to be an all-weather name. So we care deeply about the mix of the businesses that we have and making sure that we can rationalize that in various geographies and various economic conditions that we can continue to deliver growth. So that's at the core of how we're planning the company going forward. And we meet regularly on strategy and look at our ability to buy into businesses to accelerate that strategy or to invest organically to move into these various strategies. And we're disciplined about how we do it in terms of what's the best way to deploy capital.

Sure.

I don't first of all I don't think.

As we sit today anything has changed over the DNA of the company.

Which is.

We do feel like.

Companies need to evolve.

We want to be an all weather name so we care deeply about.

<unk> of the businesses that we have and making sure that that we can rationalize that and in various geographies in various economic conditions that we can continue to deliver growth. So that's at the core of.

How were planning the company going forward.

And we meet regularly.

On strategy and look at our ability to buy.

Into businesses to accelerate that strategy or to invest organically.

To move into these various strategies and.

And we are disciplined about how we do it in terms of both.

What's the best way to deploy capital.

Jeff Sprecher: And always in that mix is a conversation about share buybacks and dividends and return of capital to shareholders as the highest value use of funds. So nothing has changed there. I think, you know, what is unique is that Warren has pointed out that we've hit our leverage ratio targets. We're very diligent about the last large acquisition that we did, which was the acquisition of Black Knight and paying down the debt that we borrowed ahead of schedule to put ourselves in a position where we have maximum flexibility under these market conditions to execute a long-term strategy. A long-winded way of saying nothing changed, but the same discipline exists within the company to make sure that we can be trusted as a management team to deliver the highest value that we're capable of delivering to shareholders.

And always in that mix is.

Conversation about share buybacks and dividends and return of capital to shareholders.

As the highest value use of funds. So nothing has changed there.

I think.

What is unique is Warren has pointed out that we've hit our leverage ratio targets.

We.

We're very diligent about the last large acquisition that we did which was the acquisition of Black Knight.

And paying down the debt that we borrow ahead of schedule.

To put ourselves in a position where.

Where we have maximum flexibility.

Under these market conditions to execute our long term strategy.

So long winded way of saying nothing changed but the same discipline exists within the company.

To make sure that.

We can be trusted as a management team to deliver the highest value that we're capable of delivering to shareholders.

Drew: Thank you. With that, we have no further questions in the queue. So that concludes the Q&A portion of today's call. I'll now hand back over to Jeff Sprecker for some closing remarks.

Thank you with that we have made by other questions in the key so that concludes the Q&A portion of today's call I'll now hand back over to Jeff Sprecher presentation remarks.

Jeff Sprecher: Well, thank you, Drew, and I want to thank all of you for joining us this morning. And we continue to look forward to updating you soon as we build out these innovative solutions that I mentioned and continue to drive an all-weather business model that we're designing for growth. With that, I hope you all have a good day and look forward to seeing you soon.

Thank you drew and I want to thank all of you for joining US this morning and we.

Continue to look forward to updating you as soon as we build out these innovative solutions that I mentioned.

And continue to drive an all weather business model that we're designing for growth.

With that I hope you all have a good day and I look forward to seeing you soon.

Drew: That concludes today's call. You may now disconnect your line.

That concludes today's call you may now disconnect your lines.