How Are Intercontinental Exchange’s Data Services Revenues Trending?

by Trefis Team
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Intercontinental Exchange (NYSE:ICE) entered into the data services business in 2003 with the launch of ICE Data to cater the information needs of the energy markets. With the acquisition of Interactive Data and Trayport in 2015, ICE diversified its business into two broad segments in 2016: Trading and Clearing, and Data and Listings. Since then, the Data Services and Listings segment has maintained its contribution of around 50% of total revenues. The Data Services revenues are largely subscription-based and therefore provide a stable, more predictable revenue stream in comparison to trading, where market volatility is pivotal.

Below we take a closer look at ICE’s Data Services revenues and how have they fared in recent years. You can view our interactive dashboard on What is Intercontinental Exchange’s Revenue Breakdown? to modify key revenue drivers, and see more of our financial services data here.

With the recent acquisitions of Bank of America’s Index business and Standard & Poor’s Security Evaluation business, ICE Data Services now offer Pricing and Analytics services, Exchange Data and Feeds services, and Desktop and Connectivity services.

Below we take a look at different services offered by ICE’s Data Services Segment.

  • Pricing and Analytics: In order to meet the needs of portfolio managers, traders, risk professionals and compliance officers, ICE offers a slew of services such as security evaluation, market indices, reference data, derivative pricing and more. This is the largest segment of ICE’s Data Services business, contributing 50% of Data Services revenues. Since inception, these services have reported the strongest growth supported by customer retention and distribution of BofAML indices. The revenues from these services increased from $858 million in 2016 to $1.04 billion in 2018.
  • Exchange Data and Feeds: In addition to real-time, historical data feeds of its exchanges, ICE provides equity market data solutions as proprietary data to its customers. The revenues from these services have grown at moderate 5-6% levels for the past two years, from $602 million in 2016 to $670 million in 2018, supported by strong customer retention and pricing increases.
  • Desktops and Connectivity: To access ICE’s exchanges, clearing houses and data centers, the company provides connectivity services through its ICE Global Network. The connectivity services include fiber networks, wireless networks, and colocation & hosting networks. The revenues from this segment have decreased over the past two years, from $518 million in 2016 to $402 million in 2018, due to the divestiture of Trayport and some Interactive Data businesses in 2017.

With the acquisition of BofAML indices and S&P Security Evaluation and the divestiture of IDMS and Trayport, we observe that the company is aligning its data services business towards pricing and analytics services in the long term.

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