# Intercontinental Exchange, Inc. (ICE) — Narrative, Q3 2026

## Business

*Source: Annual Report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001571949-26-000004.*

Intercontinental Exchange sells market infrastructure, data and workflow technology to financial institutions, corporations and government entities. It earns money in three ways: fees on every futures, options and equity trade executed and cleared on its exchanges (including the New York Stock Exchange); subscriptions for fixed income pricing, reference data, indices, analytics and network connectivity; and software-as-a-service and per-loan fees from a platform that runs much of the U.S. residential mortgage process, from application through closing and servicing. In 2025 it generated $9.9 billion of revenues, less transaction-based expenses, of which 51% was recurring (data, listings and mortgage subscriptions), up from 34% in 2014; the balance is transaction revenue that rises and falls with market volatility and mortgage volumes.

ICE reports three segments but describes itself as operating one business that shares data and technology across them:

- **Exchanges** (2025: $5.4 billion of revenues, less transaction-based expenses; 55% of the total). ICE runs 13 regulated exchanges and six clearing houses in the U.S., U.K., EU, Canada, Asia Pacific and the Middle East. Its largest franchise is energy: the Brent crude contract anchors a network of more than 800 related oil products, alongside global natural gas benchmarks (including Dutch TTF), power and environmental markets. It also lists soft commodities (coffee, cocoa, cotton, sugar), interest rate futures (Euribor, SONIA, Gilts) and equity index futures on MSCI, FTSE and NYSE FANG+ indices. Through five registered securities exchanges it trades cash equities, ETFs and equity options. The NYSE listed about 70% of S&P 500 companies and 75% (roughly $10.1 trillion) of ETF assets under management at December 31, 2025. Exchange data and connectivity services and listings fees are largely recurring.
- **Fixed Income and Data Services** (2025: $2.4 billion of revenues; 24%). Evaluated pricing on over three million fixed income securities in about 150 countries, reference data, the ICE Data Indices fixed income index complex, analytics, the ICE Bonds electronic trading venue, and global credit default swap clearing through ICE Clear Credit (over 700 single-name reference entities and over 180 index instruments). The Data and Network Technology business includes the ICE Global Network, which connects to over 150 trading venues and over 750 data sources, plus consolidated feeds and desktop tools with an instant-messaging system used by over 130,000 people.
- **Mortgage Technology** (2025: $2.1 billion of revenues; 21%). Built largely through the 2020 Ellie Mae and September 2023 Black Knight acquisitions. Origination technology (including Encompass) is the system of record for the mortgage transaction, priced as a SaaS subscription plus success-based fees on loans above the subscription level. Closing solutions (including the MERS registry and Simplifile) are transaction-based. Servicing software (including MSP) is mostly recurring subscription revenue based on loans serviced, with a smaller default-servicing component driven by foreclosure volume. Data and analytics are mainly subscription-based.

Clearing is central to the model: each ICE clearing house acts as central counterparty to its members, and ICE has contributed $381 million of its own capital to the guaranty funds and also carries default insurance. ICE also holds a 40% interest in the Options Clearing Corporation, preferred and common stock in the prediction-market operator Polymarket, and a stake in Bakkt, and since May 2025 has operated a New York-regulated digital asset custodian, ICE Digital Trust.

The company had 12,844 employees at December 31, 2025, including 7,551 in the U.S. and 3,512 in India. It competes with other exchange groups (Nasdaq and Cboe in U.S. equities and options), alternative trading systems and internalizers, data vendors, interdealer brokers and mortgage technology providers. Its stated growth strategy is to expand its networks with new data and workflow tools (including artificial intelligence), invest in its own technology and risk infrastructure, and make select acquisitions.

## Risk factors

*Source: 10-K for the fiscal year ended December 31, 2025, accession 0001571949-26-000004, Item 1A. The Q3 2026 Form 10-Q (accession 0001571949-26-000015) reports no significant new risk factors; its regulatory updates are summarised at the end of this section.*

The 10-K's risk factors fall into a few groups that matter for value:

- **Dependence on volatility and volumes.** Trading volume is driven by price volatility in commodities, rates and equities; a sustained calm period would reduce transaction revenue and, because the cost base is largely fixed, net income. Reduced IPO activity or listings moving to other venues hurts NYSE revenue.
- **Mortgage cycle.** High mortgage rates and housing affordability have depressed origination volumes since 2022, hitting the transaction-based part of Mortgage Technology. Higher foreclosure activity helps default-servicing products but may not offset weaker lending. Changes to the roles of Fannie Mae, Freddie Mac or the CFPB could disrupt the market.
- **Clearing house exposure.** ICE held $81.2 billion of clearing members' margin and guaranty funds at December 31, 2025, plus $82.6 billion of non-cash collateral in sovereign treasury securities ($72.9 billion of it U.S. Treasuries). A member default, a fall in collateral values or a reverse-repo counterparty failure could cause substantial losses, including of ICE's own guaranty-fund capital. The SEC approved ICE Clear Credit's expansion into U.S. Treasury clearing on February 3, 2026. The 10-K says repo clearing was expected to go live in the fourth quarter of 2026 and warns that problems in the new business could spill into CDS clearing, which is run by the same legal entity.
- **Cyber and systems failures.** ICE considers itself a higher-profile target than most companies. It cites a June 3, 2024 software defect at NYSE subsidiary SIAC that produced incorrect price bands and trades that had to be reversed, and notes that compliance with Regulation SCI and the EU's Digital Operational Resilience Act is costly.
- **Regulation of fees and market structure.** The SEC reviews exchange market-data and connectivity fees, and a requirement to tie them to marginal cost would cut revenue. Other risks named include Basel III Endgame bank-capital rules that could raise the cost of client clearing and reduce mortgage lending, the EU's EMIR 3.0 active-account requirement pulling euro short-term interest rate clearing away from ICE Futures Europe, and EU access to ICE Clear Europe, which is currently allowed only until June 30, 2028. ICE also carries an approximately $88 million receivable for Consolidated Audit Trail costs that it may not recover, and administers the ICE Swap Rate as a U.K. "critical" benchmark.
- **Leverage.** Debt was $19.6 billion at December 31, 2025, and the 10-K warns that a downgrade could deter clearing customers and raise funding costs. Debt has since risen to $23.3 billion with the pre-funding of the MarketAxess acquisition (see Current quarter).
- **Acquisitions and investments.** Goodwill was $30.6 billion and other intangibles $15.4 billion at year-end 2025, both open to impairment. Black Knight integration continues under an FTC consent order. Strategic stakes in Polymarket and Bakkt carry valuation and reputational risk; Bakkt has disclosed that it is monitoring its ability to continue as a going concern.
- **Competition and technological disruption.** Many competitors are also ICE's largest customers. AI could commoditise evaluated-pricing products or let clients build in-house pricing. On-chain offerings such as tokenized securities and prediction markets, and demand for 24/7 trading, could disintermediate existing venues.
- **Other risks.** About a quarter of Exchanges revenue is billed in sterling or euros, so revenue moves with exchange rates. Holding-company dividends from regulated subsidiaries are restricted. Charter provisions limit any holder to 10% of voting power and 20% ownership. The digital asset custody business adds operational risk.

The Q3 2026 10-Q highlights regulatory developments since the 10-K:

- The SEC has proposed amending Regulation NMS Rule 611 (order protection) and Rule 610(e), which ICE calls potentially one of the most significant changes to U.S. equity market structure in decades.
- An SEC "Innovation Exemption" would allow on-chain trading of tokenized U.S.-listed securities outside exchange registration.
- Federal appeals courts are split on whether CFTC-registered sports event contracts (prediction markets) are swaps; New Jersey has asked the Supreme Court to decide, and the CFTC has sent two rulemakings for White House review.
- CFTC actions treat crypto perpetual contracts as futures, which CME Group is challenging in court.
- The SEC is considering restructuring the Consolidated Audit Trail.
- The Basel III Endgame re-proposal (March 2026) dropped the client-clearing capital charges ICE had warned about.
- ESMA sees early but limited migration of euro short-term interest rate clearing to EU CCPs.
- The European Commission has proposed revising the EU Emissions Trading System, and the U.S. is exploring a temporary diesel export ban; either could affect energy and emissions volumes at ICE Futures Europe and ICE Endex.

## Management's discussion — fiscal 2025

*Source: 10-K for the fiscal year ended December 31, 2025, accession 0001571949-26-000004, Item 7.*

2025 was a record year. Revenues, less transaction-based expenses, rose 7% to $9,931 million, with transaction revenue up 10% to $4,875 million and recurring revenue up 5% to $5,056 million. Operating expenses rose only 1% to $5,002 million, lifting operating income 14% to $4,929 million and the operating margin to 50% from 46% (adjusted: 60% from 59%). Net income attributable to ICE rose 20% to $3,315 million and diluted EPS rose 21% to $5.77 (adjusted diluted EPS $6.95, up 14%). The 2024 comparison included a $160 million gain from the PennyMac arbitration award. Operating cash flow was $4,662 million and free cash flow $3,871 million.

- **Exchanges.** Net revenues rose 9% to $5,411 million and operating income 10% to $3,982 million (74% margin). Energy futures and options revenue grew 16% to $2,182 million on 14% higher volume: oil +12%, global natural gas +18% (North American gas volatility and growth in the TTF complex), and environmentals and other +12%. Interest rate futures volume grew 18% on diverging central-bank paths. Agricultural and metals revenue fell 10% as supply constraints and elevated prices in cocoa and coffee reduced activity. Cash equities volume rose 40%, but net cash equities revenue grew only to $313 million from $307 million because market share and capture fell. Data and connectivity revenue grew 9% to $1,031 million. Average daily futures and options volume was 9.3 million contracts (+14%), and year-end open interest was up 17%.
- **Fixed Income and Data Services.** Revenues rose 5% to $2,419 million and operating income 11% to $933 million. Fixed income data and analytics grew 5% (pricing, reference data and index AUM growth), data and network technology grew 9% (ICE Global Network), and execution grew 8%. CDS clearing revenue fell 1% because lower rates reduced interest income on collateral, even though cleared notional rose to $24.9 trillion. Annual Subscription Value reached $1.990 billion, up 8.3%.
- **Mortgage Technology.** Revenues rose 4% to $2,101 million, driven by origination volumes, price increases, new implementations and default transactions. Transaction revenue grew 13% and recurring revenue 1%. The segment swung to operating income of $14 million from a $170 million loss, as other operating expenses fell 7% and acquisition-related transaction and integration costs (mainly Black Knight) fell to $66 million from $104 million. Adjusted operating margin rose to 41% from 36%.
- **Below the operating line.** Interest expense fell to $803 million from $910 million as ICE continued paying down Black Knight acquisition debt. Equity method income was $79 million, mainly from OCC. The effective tax rate was 22%.
- **Capital.** ICE resumed buybacks in 2025, repurchasing 7.7 million shares for $1.3 billion, and paid $1.92 per share in dividends. It invested $1.0 billion in Polymarket preferred stock, funded in part with commercial paper. Debt ended the year at $19.6 billion, down from $20.4 billion. The Board authorised $3.0 billion of repurchases effective January 1, 2026.

## Current quarter — Q3 2026

*Sources: Form 10-Q for the quarter ended September 30, 2026, accession 0001571949-26-000015; Q3 2026 earnings release furnished on Form 8-K, accession 0001104659-26-119880; MarketAxess merger 8-K, accession 0001193125-26-324909.*

ICE called Q3 2026 the best third quarter in its history. Volatility tied to the Middle East conflict, weather-driven commodity supply concerns and shifting rate expectations pushed futures volumes sharply higher, and the pending $6.0 billion MarketAxess acquisition reshaped the balance sheet.

**Results.** Revenues, less transaction-based expenses, rose 15% to $2,765 million. Transaction revenue grew 23% to $1,400 million and recurring revenue 7% to $1,365 million. Operating expenses rose 10% to $1,355 million. Acquisition-related costs within that rose to $49 million from $9 million, mainly bridge-facility expenses for MarketAxess and higher Black Knight integration costs. Operating income rose 20% to $1,410 million and the operating margin to 51% from 49% (adjusted: 61% from 59%). Net income attributable to ICE was $940 million (+15%), diluted EPS $1.67 versus $1.42 (+18%), and adjusted diluted EPS $2.02 versus $1.71. Non-operating expense widened to $168 million from $93 million on higher interest expense ($222 million versus $192 million) and lower other income, including lower equity income from OCC.

For the nine months, revenues rose 13% to $8,408 million and diluted EPS rose 37% to $5.85. Net income was boosted by $452 million of non-cash fair value gains on equity investments, mainly a $389 million first-quarter gain from remeasuring ICE's Polymarket Series D stake at the price of its $600 million Series E investment, plus a $62 million Bakkt gain. Nine-month operating cash flow rose 32% to $4,486 million and free cash flow to $3,822 million.

**Segments (Q3 2026 versus Q3 2025).** All three segments grew revenue:

- *Exchanges:* net revenues rose 22% to $1,542 million and operating income 27% to $1,152 million (75% margin). Energy revenue rose 25% to $603 million on 18% higher volume. Brent drove oil (+19%) on Middle East supply uncertainty, and global natural gas volume rose 17%, led by TTF. Agricultural and metals revenue jumped 62% to $83 million as sugar volume rose 75% and coffee and cocoa volume rose on price volatility and weather-related supply concerns. Financial futures revenue rose 37% to $190 million on 45% higher volume, led by Euribor and SONIA. Net cash equities revenue rose to $96 million from $69 million on a higher capture rate despite 2% lower volume, while equity options revenue was flat at $36 million. Section 31 fees, which the SEC reinstated in April 2026, were $283 million in the quarter versus none a year earlier; they pass through and do not affect net income. Data and connectivity revenue grew 10% and listings 4%. Total futures and options average daily volume was 10.5 million contracts (+31%), and open interest at September 30 was 115.5 million contracts (+13%).
- *Fixed Income and Data Services:* revenues rose 9% to $674 million. CDS clearing grew 12% on $8.8 trillion of notional cleared (versus $7.0 trillion), fixed income data and analytics grew 8%, and data and network technology grew 10%. Operating income was flat at $245 million, and the GAAP margin was 36% versus 39%. Segment operating expenses included $27 million of acquisition-related costs (versus $2 million), and the adjusted margin rose to 46% from 45%. Annual Subscription Value was $2.107 billion at September 30, 2026, up 7.7%.
- *Mortgage Technology:* revenues rose 4% to $549 million, with servicing software and data and analytics each up 6% and origination technology up 1%. Operating income fell to $13 million from $22 million, while acquisition-related costs rose to $21 million from $7 million. Adjusted operating income was $219 million versus $224 million.

**Balance sheet and capital return.** At September 30, 2026, debt was $23.3 billion: $22.3 billion of senior notes, with a 12-year weighted average maturity and 3.9% average cost, and $1.0 billion of commercial paper. Restricted cash rose to $4.5 billion because the August note proceeds are held for MarketAxess. Clearing margin deposits and guaranty funds held in cash rose to $113.3 billion from $76.8 billion at year-end on higher volatility. In the first nine months ICE repurchased 10.5 million shares for $1.6 billion (2.7 million shares for $400 million in Q3) and paid $1.56 per share in dividends ($0.52 quarterly, up from $0.48). In July the Board raised the repurchase authorization to $4.0 billion, leaving $3.6 billion available at quarter-end. In March 2026 ICE also agreed to buy a stake of under 1% in OKX's parent for $200 million.

**Pending acquisition of MarketAxess.** On July 29, 2026, ICE agreed to buy MarketAxess Holdings Inc., which operates electronic trading platforms used by about 2,100 institutional investors and broker-dealers in more than 90 countries. The price is $167 per share in cash, a 33% premium, for an equity value of about $6.0 billion and an enterprise value of about $5.7 billion. That is roughly 10.6x MarketAxess's last-twelve-month EBITDA pro forma for synergies. ICE targets $100 million of annual run-rate expense synergies within three years and expects the deal to add to adjusted EPS in the first full year after closing. It projects gross leverage of 3.4x at closing, falling to 3.0x or below within 18 to 24 months, and raised its baseline buyback to $400 million per quarter from $350 million. ICE is paying entirely in cash. Funding comes from new senior notes and a term loan, together with commercial paper, revolver borrowings and cash on hand:

- $3.75 billion of senior notes issued August 20, 2026: $1.25 billion of 4.70% notes due 2029, $1.1 billion of 4.90% notes due 2031, $650 million of 5.15% notes due 2033 and $750 million of 5.40% notes due 2036. Net proceeds of about $3.7 billion are held as restricted cash. The 2033 and 2036 notes must be redeemed at 101% if the deal does not close by the outside date.
- A $2.0 billion delayed-draw term loan, undrawn at quarter-end.
- An amended $3.9 billion revolving credit facility. $3.67 billion of the commitments now run to August 20, 2031, and a new $1.5 billion class within the facility may be drawn for the acquisition.

Once this permanent financing was in place, the 364-day bridge commitment (up to $6.25 billion) was cut to zero. MarketAxess would owe ICE a $148.8 million termination fee in specified circumstances, and ICE would owe MarketAxess a $327.4 million regulatory termination fee if antitrust conditions block the deal. The outside date is July 29, 2027, with up to two six-month extensions.

**Guidance (Q3 earnings release).** ICE updated its outlook for the full year and the fourth quarter:

- 2026 recurring revenue growth of 9% in Exchanges and 8% in Fixed Income and Data Services.
- Q4 2026 operating expenses of $1.317 to $1.327 billion GAAP, or $1.082 to $1.092 billion adjusted.
- Q4 2026 non-operating expense of $170 to $180 million GAAP, or $175 to $185 million adjusted.
- 2026 capital expenditures and capitalized software development costs of about $1.050 billion combined, up from $740 to $790 million on the same basis in the 10-K. The 10-Q, filed the same day as the release, states the same combined measure as approximately $1.1 billion.
- Q4 2026 weighted average shares of 558 to 563 million.

## Subsequent events

*Source: Form 10-Q for the quarter ended September 30, 2026, accession 0001571949-26-000015 (Note 3, Note 17 and Item 2); Q3 2026 earnings release, accession 0001104659-26-119880.*

ICE's subsequent-events note (Note 17) states that no events after September 30, 2026 required recognition or disclosure in the financial statements. Elsewhere, the 10-Q and the earnings release disclose these post-quarter developments:

- **MarketAxess antitrust clearance.** On October 21, 2026, the Department of Justice and the Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period, which satisfies the U.S. antitrust condition. The merger still needs MarketAxess stockholder approval and other required regulatory approvals. ICE now expects it to close in the first quarter of 2027, earlier than the first-half-2027 timeline announced in July. No acquisition or divestiture closed after quarter-end.
- **Dividend.** On October 29, 2026, ICE declared a fourth-quarter dividend of $0.52 per share, payable December 31, 2026 to stockholders of record on December 16, 2026.