Intercontinental Exchange(ICE) The Motley Fool·2025-02-06 18:04Core Insights - Intercontinental Exchange (ICE) reported solid growth and an earnings beat, with shares rallying 4.5% following the earnings announcement [1][3] - The company has achieved its 19th consecutive year of growth, demonstrating resilience in its business model that combines recurring subscriptions and trading activity [2] Financial Performance - In Q4, Intercontinental Exchange's revenue grew by 5% to 1.52, surpassing analyst expectations [3] - Core Exchange revenue rose by 9%, driven by significant increases in energy and interest rate derivative trading, which grew by 16% and 30% respectively [4] - Fixed income revenue increased by 3%, with recurring analytics subscriptions growing by 5%, while mortgage technology revenue saw a modest increase of 1% despite a slow housing market [4] Future Guidance - The company did not provide full-year revenue guidance but projected low-single digit growth for Exchange recurring revenue, mid-single digit growth for Fixed Income and Data Services recurring revenue, and low-to-mid single digit growth for Mortgage Technology recurring revenue [5] Valuation - Intercontinental Exchange appears expensive on a GAAP basis at 40 times earnings, but adjusted earnings may better reflect the company's true earnings power due to significant amortization of intangible assets from prior acquisitions [6] - The adjusted earnings for 2024 were reported at $6.07, an 8% increase, resulting in a more reasonable P/E ratio of 27.8 times trailing earnings, indicating it is a high-quality compounder at a reasonable price [7]