Last year was a record-setting one for Intercontinental Exchange (NYSE:ICE), or ICE. The global exchange operator's revenue rose double digits during the fourth quarter, pushing its full-year number up more than 7% to a record level and marking its 13th straight year of revenue growth. The company also generated a record amount of cash flow, $1.8 billion of which it sent back to shareholders, the highest level in its history.

Intercontinental Exchange results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change

Revenue, less transaction-based expenses

$1.3 billion

$1.15 billion


Adjusted net income

$536 million

$441 million


Adjusted EPS




Data source: Intercontinental Exchange. EPS = earnings per share.

What happened with Intercontinental Exchange this quarter? 

Trading and clearing continued to drive results:

  • Market volatility during the fourth quarter caused a spike in trading and clearing revenue, which surged 27% from the year-ago period to $657 million. That turbulence also hit the energy markets as crude oil plunged 40% from its peak in the quarter, driving a 13% spike in energy futures and options revenue, which came in at $257 million during the quarter. The company also saw huge increases in revenue related to financials (up 28%), cash equities and equity options (up 35%), and fixed income and credit (up 152%), with the later also driven by the recent acquisitions of BondPoint, TMC Bonds, and MERS.
  • Revenue from ICE's data and listings segment rose 4% to $651 million as solid organic growth offset the sale of Trayport in last year's fourth quarter.
  • Revenue for the full year rose 7.4% to nearly $5 billion, driven by a 14% increase in trading and clearing revenue, which offset a slower 2% growth rate in the data and listings segment.
  • Full-year adjusted net income, meanwhile, came in at $2 billion, or $3.59 per share, up 21% year over year.
  • ICE generated $2.3 billion in free cash flow for the year, up 32% year over year. The company returned nearly $1.8 billion of that money to investors, an increase of 23% from 2017, through $1.2 billion in share repurchases and $555 million in dividends. The company plans to continue returning cash to shareholders in 2019 by increasing its dividend 15% for 2019 as well as launching a new $2 billion repurchase program, which it expects to complete by the end of the next year's second quarter.
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What management had to say 

CEO Jeffrey Sprecher commented on the company's results, stating:

2018 marked our 13th consecutive year of record revenues -- a track record directly attributable to customer demand for our risk management solutions and the investments we've made to enhance our technology, expand our content, and broaden our distribution.

CFO Scott Hill followed those comments by stating, "in addition to record revenues, we generated record cash flows in 2018, enabling us to return nearly $1.8 billion in capital to stockholders, more than any year in our history." The share repurchases had a noticeable impact on adjusted earnings per share, which expanded by 20.9%, outpacing the 17.7% increase in adjusted net income.

Check out the latest Intercontinental Exchange earnings call transcript.

Looking forward 

"As we look to 2019, we remain focused on bringing mission-critical solutions to our customers and delivering value to our stockholders," stated CEO Jeffrey Sprecher. Data in particular remains an area of focus for the company, which leads it to forecast that data revenue will range between $2.19 billion and $2.24 billion in 2019, an increase of about 5% at the midpoint.

CFO Scott Hill said, "As we enter 2019, we remain committed to prudent capital management and a disciplined approach to investment to support continued growth and to enhance long-term stockholder value." While the company does plan to boost capital spending from $280 million last year up to a range of $290 million to $320 million in 2019, it should still generate significant free cash flow, which it intends to return to shareholders through dividends and stock buybacks.

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