Data Services, Higher Trade Revenues Lead To A Profitable Q1 For ICE
IntercontinentalExchange Group (NYSE:ICE) announced its first quarter fiscal 2016 earnings on Wednesday, May 4, reporting a 32% year on year (y-o-y) rise in revenues. The primary contributor to this growth was the data service segment, rising inorganically to $400 million, due to ICE’s acquisition of IDC and Trayport (~65%). Moreover, the company said that it is looking at other acquisitions – Standard & Poor’s Securities Evaluations, Inc. (SPSE), a provider of fixed income evaluated pricing, and Credit Market Analysis Ltd. (CMA), a provider of independent data for the OTC markets – to further boost its data service revenues.
In terms of the bottom line, higher compensation and acquisition-related costs led to a rise in operating expenses, causing the company-wide EBITDA margin to remain largely flat at 46.8%.
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As per our expectations, transaction revenues grew 11% y-o-y in the period, driven mainly by financials (+15% y-o-y), and agricultural and metal derivatives (+17% y-o-y). Financial derivative revenues were up due to a spike in interest rate contracts trading caused by the uncertainty around Fed’s actions, and the general volatility in the financial markets at the beginning of the financial year 2016. Correspondingly, increased price volatility (related to weather and production levels) was responsible for the rise in agricultural trading volumes in Q1.
See the links below for more information and analysis about ICE:
- Intercontinental Exchange Sees Robust Volumes In February, Led By Financial Derivatives
- Intercontinental Exchange’s February Equity Option Volumes See Growth
- IntercontinentalExchange’s February Cash Equities Volumes See Growth
- IntercontinentalExchange Sees Growth In Volumes Commodity & Financial Derivatives In March
- IntercontinentalExchange’s Equity Option Volumes See Robust Growth In March
- IntercontinentalExchange’s March Cash Equities Volumes See Growth
- ICE Earnings Preview: Trade Volumes, Data Service Segment To Drive Q1 Results
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