IntercontinentalExchange Group Stock

Hello, everyone. Thank you for joining us, and welcome to today's ICE Third Quarter 2026 Earnings Conference Call and Webcast. After today's prepared remarks, we will host a question-and-answer session. [Operator Instructions]

I will now hand the conference over to Steve Eagerton, Steve, please go ahead.

ICE's third quarter 2026 earnings release and presentation can be found in the Investors section of ice.com. These items will be archived, and our call will be available for replay. Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment and are subject to risks, assumptions and uncertainties. For a description of the risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2025 Form 10-K, our 2026 10-Qs and other filings with the SEC.

In our earnings supplement, we refer to certain non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You will find a reconciliation to the equivalent GAAP term in the earnings materials. When used on this call, net revenue refers to revenue net of transaction-based expenses and adjusted earnings refers to adjusted diluted earnings per share. Throughout this presentation, unless otherwise indicated, references to revenue growth on a constant currency basis. Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items.

Also, we'll be discussing our recently announced acquisition of Market Access. The statements made today do not constitute an offer to sell or buy or the solicitation of an offer to sell or buy any securities. With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardner, Chief Financial Officer; Ben Jackson, President, Lynn Martin, President of the NYSE and Chris Edmonds, President of Fixed Income and Data Services.

I'll now turn over the call to Warren.

Thanks, Steve. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 4. We Nine months into 2026, our business has been tested by 3 very different markets, acute volatility in the first quarter, receiving volatility in the second -- and in the third, renewed geopolitical risk in global equity, fixed income and energy markets as rate expectations moved higher across major economies. Each environment was different. And in each one, we grew. A direct result of building a portfolio customers turn to when the world becomes harder to predict.

Third quarter adjusted earnings per share were $2.02, up 18% year-over-year, the best third quarter in our history and the second best quarter we have ever reported behind only the first quarter of this year. Net revenues of $2.8 billion were up 15% year-over-year. Adjusted operating income grew 19% to $1.7 billion. Recurring revenues reached a record $1.4 billion, up 7% and transaction revenues grew 23%. That combination is the engine of the ICE model, steady compounding at the core and upside operating leverage when our markets are active.

Through 9 months, adjusted earnings per share of $6.27 are up 20% year-over-year. Adjusted operating expenses were $1.68 billion, right at the midpoint of our guidance. As anticipated, the year-over-year increase reflects incentive compensation, which tracks with our results continued investment in product and technology, including our data center and network capacity and higher depreciation. Importantly, these expenses were offset by better revenues. For the fourth quarter, we expect adjusted operating expenses to be in the range of $1.82 billion to $1.92 billion, which at the midpoint, places full year expenses at the top end of the range we provided in July.

Similar to the third quarter, the year-over-year increase is driven by further crystallization of full year performance-related compensation, investments in both product and technology as well as higher depreciation. We expect fourth quarter adjusted nonoperating expense to be between $175 million and $185 million, and the adjusted tax rate to be towards the high end of our 24% to 26% range. Capital expenditures were $226 million in the quarter and $664 million year-to-date. We now expect full year CapEx of approximately $1.5 billion. with the increase relative to July guidance, driven largely by our expected fourth quarter purchase of a new campus here in Atlanta and to a lesser extent, some additional data center and other real estate spend.

Adjusted free cash flow was $1.1 billion in the quarter, and a record $3.7 billion year-to-date, up 17%. We repurchased $400 million of stock in the quarter and paid $293 million in dividends, returning $693 million to shareholders. Year-to-date, we've returned $2.5 billion, more than 40% above the same period last year and a record for ICE. During the third quarter, we completed the financing for Market Access, issuing $3.75 billion of senior notes. Together with a $2 billion term loan in our commercial paper capacity, the financing is fully in place. Importantly, last week, we received approval from the Department of Justice. And as a result, we now expect the transaction to close in the first quarter of 2027, ahead of the first half time line we outlined in July.

We also repaid approximately $250 million of existing debt in the quarter. And excluding the prefunded market access notes, leverage ended the quarter at 2.65x, down from 2.8x in June and just over 2.9x a year ago. Turning to our segments, starting with exchanges on Slide 5. Exchange's net revenue was $1.5 billion, up 22%, a third quarter record and nearly 40% above the level of just 3 years ago. Transaction revenues rose 28% and every major asset class contributed. Energy grew 26%, interest rates 48% and agricultural metals 62%. At the NYSE, cash equities and equity options net revenue grew 25% to $132 million, a third quarter record.

Importantly, total open interest ended the quarter up 13% year-over-year giving us a strong foundation as we enter the fourth quarter and look to 2027. Exchange recurring revenues reached a record $422 million, up 8% and were led by a record $292 million in exchange data services up 10%. And as customers consume more of our futures and equities data across more of their workflows.

Our listings franchise continue to attract high-quality companies. Even as industry IPO activity slowed in the third quarter, the NYSE listed the quarter's only 2 IPOs to raise more than $1 billion, SeaSquare and Jersey Mics and year-to-date has facilitated $26.5 billion in IPO proceeds across 73 IPOs, already surpassing all of 2025 and our strongest year since 2021. 9 companies representing nearly $0.5 trillion in market capitalization have also chosen to transfer to the NYSC this year including AstraZeneca, Fifth Third, Kraft Heinz and Skydance, the largest annual total on record, and our retention rate remains above 99%.

Shifting to a few guidance items. Given the strong exchange recurring revenue through the first 9 months, we now expect full year exchange recurring revenue growth of approximately 9%, the upper end of the high single-digit range we discussed in July. And on OTC and other revenues, we anticipate fourth quarter revenues to be around $100 million, driven in part by lower regulatory fees. Moving to fixed income and data services on Slide 6. Fixed income and data services revenues were a record $674 million, up 9% year-over-year. Recurring revenues were a record $538 million, also up 9%. And Fixed income data and analytics grew 8% to a record $336 million.

Pricing and reference data grew 7% on strong consumption trends, net new subscription business and approximately $3 million of onetime items our index business grew 24%. Data Network Technology revenues grew 10% to a record $202 million, led by demand for low latency connectivity and colocation services. Transaction revenues grew 11% led by a record third quarter in CDS clearing, our revenues rose 13% to $102 million. Moving to guidance. This quarter's recurring growth was slightly ahead of the trajectory we outlined in July, driven by stronger consumption trends, net new sales and growth in index assets.

As a result, we now expect full year FIDs recurring revenue growth of approximately 8%, the top of our prior range. Shifting to mortgage technology on Slide 7. Mortgage Technology revenues were $549 million, up 4% with servicing and data and analytics each growing 6%. Recurring revenues of $405 million grew 4% and increased sequentially once you exclude the roughly $3 million of onetime items we noted in our second quarter results, driven in part by new customers coming online. Transaction revenues also grew 4% in a market that moved against this late in the quarter.

This quarter also marks 3 years since we closed our acquisition in Black Knight and the integration continues to deliver ahead of plan. We now expect to exit 2026 with approximately $270 million of annualized expense synergies. This compares to an original 5-year target of $200 million when we announced the transaction. Looking to the fourth quarter, while we expect mortgage technology recurring revenues to grow modestly from the third quarter, in light of typical fourth quarter seasonality and with mortgage rates elevated, we expect transaction revenues to decline from both the third quarter and the prior year.

Through 9 months, ICE has grown adjusted earnings per share 20% on 12% revenue growth while expanding margins, accelerating investment delivering a record return of capital to shareholders and making several strategic investments across our business. Our growth is driven by benchmarks, but the world relies on to price energy and interest rate risk and data and network services that are becoming core infrastructure for Super intelligence or SI driven workflows across fixed income and mortgages.

I'll be happy to take your questions during Q&A. But for now, I'll turn it over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 8. Several structural forces continue to reshape markets at the same time. Energy supply chains are being rebuilt, Central banks are evolving in different directions. Europe is investing heavily in defense, energy security and infrastructure, and SI is creating new demand for power, compute and data. .

Each of those trends creates uncertainty. Our customers need tools to price risk, transfer risk and manage that uncertainty, and they increasingly rely on ICE's markets, data and technology to do it. That dynamic was evident again this quarter. Futures and Options average daily volume was up 31%, a record for any third quarter and our second highest quarter ever, while total open interest finished the quarter up 13%. That momentum has carried into the fourth quarter with volume up 13% quarter-to-date.

Customers aren't just trading more with us they are also managing more risk with us. There's plenty of debate about how quickly energy demand will grow. What matters for our markets is that customers are managing a wider range of potential outcomes than they were in the past. On a year-to-date basis, our energy revenues compounded 12% annually over the last decade, while global electricity demand grew by less than 3% per year. The risk the world needs to manage has grown much faster than the energy it consumes. And if energy demand grows faster over the next decade, as the IEA and many others expect due to SI and industrialization. That's potentially significant upside for our energy business.

This is a time where a liquid benchmark matters most because customers need the ability to adjust positions as conditions change. Look at Europe as an example. The European Union now imports nearly 90% of the natural gas it consumes, helping turn TTF into a global benchmark. Europe has spent the last several years rebuilding its gas supply chain away from Russian gas, while Asia and the Middle East are establishing new supply chains following disruptions in the straight of Hormuz. There are more hydrocarbons in transit on more routes, more of the time, creating more exposures that need to be hedged.

Independent forecasts project global LNG electrification capacity increasing by roughly 40% by 2030. As new supply enters the market and trade flows continue to evolve, customers need tools to manage a growing network of pricing relationships that increasingly run through ICE benchmarks. The third quarter put those forces on full display. Qatari LNG exports remained under force majeure. All 3 principal LNG routes into Europe were disrupted at 1 point in the summer. And Europe entered the heating season with storage nearly 20% less than the 5-year average. Customers responded by coming to our benchmarks.

In the quarter, TTF volume increased 39% year-over-year. TTF online volume rose 72% and participation grew double digits to a record. JKM volume increased by 45% and Futures OI hit a record in August, while Brent volume was up 38% and participation grew high single digits. We built our platform for exactly this environment. Benchmark contracts at key intersections of geography and energy type supported by the regional contracts differentials and spreads customers use to hedge risk through a single clearing house.

Open interest and participation remain the clearest indicators of the health of our markets because they show what our customers are building and keeping positions with us. Energy OI ended the quarter at 66 million lots with options OI up 14%. Options represent 40% of energy OI and have more than doubled since the third quarter of 2021 reflecting growing customer demand to manage complex and longer-dated risk. Capital efficiency continues to reinforce that growth. ICE Risk Model 2 or IRM to return meaningful margin to customers, freeing capital they can put back to work in our markets.

Alongside those changes in global energy trade flows, data centers are creating a new location-specific source of energy demand. The IEA projects U.S. electricity demand growing roughly twice as fast through 2030 as it did over the previous decade. We don't need to predict how quickly they're built or which molecule fuels them. Whether projects accelerate or slow, our customers still need to manage the resulting power and natural gas exposures. If history is any guide, acceleration of electricity demand should lead to compounding additional growth in our corresponding power, gas and environmental markets enabling clients to trade the full clean spark spread in one place. That demand reaches our markets through both grid expansion and on-site power generation.

Utilities building capacity increasingly touch our power markets, while operators installing gas turbines near pipelines rely on natural gas basis markets we operate to manage fuel costs, and we're already seeing -- our North American financial gas markets delivered their strongest third quarter on record with volume up 15% NOI reaching a record of 13.4 million lots on July 1. LNG export demand new Permian pipeline capacity, summer heat and data center development are all creating greater regional basis risk, driving activity across our network of over 70 North American gas hubs, all exclusive to ICE.

Beyond power, SI is also creating demand for compute itself, and we see an opportunity to bring to it the same market structure that has supported energy for decades, transparent pricing, and risk management tools. The volatility across SI infrastructure this year shows why GPU rental rates can rise when capacity is scarce or fall as new supply comes online. Trusted indices and forward curves give builders, operators and investors a way to manage the price in both directions and over time lower the cost of capital behind it.

We're pursuing that opportunity through 2 partnerships. The Oran index tracks the rental price of specific chips, while the Nativexcoil index is energy normalized and designed to trade alongside our natural gas and power futures. Subject to regulatory review, Together, they will give customers a single platform and clearing relationship to manage both the energy required to produce intelligence and the compute required to deliver it. Agricultural markets also delivered a strong quarter with volumes up 57% and open interest up 43%, including record sugar OI of 2.5 million lots on September 11.

The same demand for risk management is evident in our financials franchise. Europe is entering a multiyear investment cycle in defense, energy security and infrastructure, much of it is financed through government borrowing. This creates additional demand to manage euro and sterling rate risk on ICE, your IBOR and Ester in the euro area, Sonia and Gilt in the U.K. At the same time, higher energy prices pushed central banks back toward tightening. And when rate expectations move, customers come to ICE to manage that risk.

This quarter, interest rate volume increased 49% with EURIBOR up 40% and Sonia up 63%. Activity accelerated further in September with total rates volume of 95% and your Ivor up 84% and Sonia up 119%. More risk is being managed at ICE than ever before. On September 10, we set records for futures OI in both financials at 17.5 million lots and interest rates at $15 million. Interest rate OI finished the quarter up 30% and your IBOR futures OI reached a record 6 million lots and Sonia OI was up 48%. Central banks are moving on different paths globally and customers can manage that rate risk across currencies and tenors from a single capital-efficient venue.

Clearing futures and options together provides meaningful offsets and capital efficiencies tend to drive additional activity. This month, we extended IRM2 to our rates franchise at ICE Clear Europe, further enhancing those benefits for our customers. Together, these dynamics continue to drive more risk management through our markets and reinforce the strength of our financials franchise. Please turn to Slide 9. The same borrowing driving activity in our rates markets is also expanding the universe of debt that must be priced valued and indexed every day. And when credit markets reprice, clients rely more heavily on independent pricing and clear protection. We've seen that throughout the year.

During the September index role, ICE Clear Credit cleared $2.7 trillion of notional in a single day and CDS clearing revenue grew 13%, its strongest third quarter on record. Much of fixed income has no continuously observable price, which is why our evaluated pricing covering millions of securities every day is the foundation for indices, analytics and risk management workflows. Around it sits a connected network of data, execution and post-trade services and every interaction adds to the proprietary data we own. Once the transaction closes, we expect to extend that network through the market access platform, which serves more than 2,100 client firms.

Those network effects helped drive another record quarter of recurring revenue. Because our indices are built on our own evaluated pricing, every new security we price and become a constituent in a benchmark. ETF assets benchmark to ICE indices reached a record $935 billion up 24%. We're taking the same path into private credit, a market that has grown quickly while the data infrastructure beneath it has -- in July with Apollo as our anchor partner, we launched ICE IDs, the first foundational identifiers for private credit. And in September, we added a reference data service on top of them, giving private credit the same infrastructure that public markets rely on.

Demand for proximity to markets also keeps growing. -- trading firms and increasingly the SI driven models they run, need to sit next to matching engines and data sources, and we sell that capacity through forward auctions that give us visibility into demand years out. We've doubled our global colocation capacity since 2020. And with our new data center, we're set to double it again. SI may commoditize models and interfaces, but not the proprietary data, methodology, context and permissions behind them, such as the evaluated prices for securities that rarely trade and can't easily be scraped from the Internet.

So we're meeting clients where they're moving, delivering our data through an MCP on an open standard built to work across SI platforms. Clients pay for the value of the data, not the compute. So our economics are tied to the data, not to which model wins. Please turn to Slide 10. In mortgage tech, our data does more than inform decisions because it sits inside the network of record for U.S. housing finance, where those decisions are carried out. Mortgage changes hands many times over its life, from lender to closing agent to servicer to investor and our network connects participants at each step, including roughly 3,000 lenders and more than 80,000 notaries.

Encompass, MERS and MSP are the systems of record where those handoffs take place. So loan data travels with the loan rather than being pulled out and reaudited at every stage. That lowers cost for customers who run more of the life cycle with us and every new participant makes the network more valuable for those already on. That network continues to deepen. Wells Fargo renewed its MSP agreement, extending a relationship of more than 35 years and is moving its home equity portfolio on to MSP, while also using ICE business intelligence. Freedom Mortgage signed on to MSP for its HELOC portfolio, bringing us to 5 new MSP clients year-to-date. Meanwhile, clients keep building on our platforms with our servicing business processing 11.6 billion API and web services calls in the quarter, up 36%.

Inside those systems of record, we and our customers are putting SI to work in 2 ways: First, our agents embedded in Encompass and MSP automate workflows that lower the cost to originate and service a loan and increase capacity for our clients with a human in the loop on exceptions in every step fully auditable. Second, as in FID, starting this quarter, customers will be able to deploy their own agents connecting to either Encompass or MSP through a model context protocol in a fully auditable way, and several of our clients are already engaging with us on this. Those agents work with the data, permissions and audit trail already live. An agent can draft text in seconds, but acting on a mortgage takes trusted loan data and regulatory controls. That's why every agent working inside MSP or Encompass makes the system of record more valuable with roughly half of U.S. loans on Encompass and MSP and 85% on MERS, our agents learn from a view of the market that's hard to replicate. And we hold them to the same standard as the rest of our critical infrastructure with internal audits confirming our alignment with GSE rules and independent assessments, including from EY, validating our governance and controls.

Stepping back, the third quarter proved what our networks do when the world needs more risk managed, more securities priced and more workflows automated. Customers manage record risk in our rates markets, extended their hedges across our energy curves, put more of our data to work in their SI workflows and deepened their use of our mortgage network. Whichever way these trends break, they run through our networks and every new participant, physician and data point makes those networks more valuable for the next.

With that, I'll hand it over to Jeff.

Thank you, Ben. Good morning, everyone, and thank you for joining us. Please turn to Slide 11. Since the pandemic, we've seen a clear rise in retail participation in markets, and that participation is becoming far more global. Increasingly, retail traders short duration exposures with the ability to move in and out of physicians quickly, often around the clock. This trend gained attention with digital assets, but now extends well beyond crypto into equities, commodities, foreign exchange and other real-world assets. and it's growing in conjunction with the institutional risk management growth that remains at the core of our markets.

We see this trend as an expansion of our opportunity set for risk transfer and price discovery. ICE has historically been a business-to-business company, built for commercial hedgers, institutional investors and other sophisticated market participants. Our futures product suite was designed around the risk management needs of those customers, which is why their composition is more than 99% institutional. Considering electric utility in Asia, contracting today for LNG cargoes that won't arrive until next year to price the electric power that it will sell, the utility needs confidence in what that gas will cost when these LNG cargoes land. That's why utilities rely on our futures markets to lock in prices or specific settlement dates along a forward pricing curve and why our customers tend to hold such positions for the long term.

As we shared last quarter, more than half of the open interest across our energy markets is over 6 months in duration. And these long-term commitments are reflected in the global scale of our markets. The perpetual futures market serves a different purpose because a PERP contract never expires. It does not lock in a price for future dates. Instead, it facilitates short-term exposure. This distinction clearly shows up in perpetual futures trading behavior. According to data published by the Pit network, the average holding period for a perpetual oil futures contract in September was just 12 hours, a hold much shorter than a single day and even shorter than a traditional financial settlement cycle.

We see these PERC markets as additive to our futures markets, not a replacement for them. That brings us to our recently announced agreement with Trade XYZ, under which ICE becomes the exclusive operator of Trade XYZ's regulated markets alongside a strategic investment in the company. Trade XYZ's become a leading deployer of real-world asset perpetual markets on the hyper-liquid blockchain, 1 of the largest decentralized derivative trading platforms and 1 that has attracted significant global retail participation. Hyper liquid manages the underlying technology for Trade XYZ, much like Pillar for the New York Stock Exchange while trade XYZ designs the products that customers seek to trade.

Together with Trade XYZ and subject to regulatory approvals, we intend to bring these markets into a U.S. regulated framework by combining Trade XYZ's retail market expertise with ICE's exchange, clearing and regulatory capabilities. Once approved, VERIFI customers are expected to access hyper liquid-based markets through futures commission merchants that will now perform know your customer and anti-money laundering screening, including distribution via our joint venture, FCM, with OK X. This retail-oriented blockchain-based trade XYZ business will operate separately from our institutional futures and clearing franchise. Commercial hedgers can continue to rely on customers futures markets our forward pricing curves and established trading and clearing infrastructure.

The retail perpetual futures opportunity will deploy blockchain technology and serve a customer base with unique trading and settlement demands. Earlier this year, we made a strategic investment in OKX, which has a global customer base of over 120 million accounts. And we've since announced a joint venture pending regulatory approval, that would provide a regulated framework for connecting this global retail customer base to securities and commodities listed on ICE and the New York Stock Exchange legacy technology platforms. As we build out this OKX joint venture, we believe communication and transparency will be critical to the development of the tokenized securities markets. This applies to our joint ventures tokenized securities venue, now known as a TV ad which will operate using OKX's wallet and its x layer blockchain.

We've chosen to publicize the securities identified for tokenization and we've elected to maintain an ongoing dialogue with issuers as this tokenized market develops. Some issuers have chosen not to participate initially, but we believe our engagement and transparency will help build the trust needed for tokenized markets to digitize within this newly regulated environment. With OKX and Trade XYZ, we now have relationships with 2 preeminent blockchain ecosystems. OKX is centralized and D5 blockchain platforms and with hyper-liquid where it's HP3 blockchain framework allows builders like Trade XYZ to deploy markets.

Our investment in trade XYZ complements what we're building with OKX, each of these relationships plays its own role in a broader ecosystem. OX provides distribution and access to ICE's existing platforms using its KYC and AML compliant wallet technology. Trade XYZ brings expertise in retail perpetual markets on the hyper-liquid blockchain, and ICE provides the regulated risk management oversight that ties them together. And with our relationship with Polymarket, we're bringing crowd-sourced probability assessments into institutional workflows, turning prediction market data into a new source of signals that complement traditional pricing and reference data sources.

We also continue to evolve traditional markets across ICE. At the New York Stock Exchange, we've introduced extended trading hours on our options markets and are looking forward to launching [indiscernible] trading on equities in December. An industry initiative that we have long led. We continue developing products that help customers manage event-driven risks, including our binary return derivatives, known as Birds and binary options tied to key performance indicators known as KPIs, both of which have now received necessary regulatory approvals. We've also introduced economic indicator futures tied to both Central Bank rate decisions and U.S. natural gas storage reports, giving customers exchange-traded centrally cleared instruments to express views on specific market moving economic events.

To support enhanced risk management and greater trading activity outside of traditional banking hours, we're partnering with our key global settlement banks to allow for commercial bank deposits to be moved to meet margin calls during weekends and holidays. So as markets evolve, participants still need to trust the price, trust the counterparty and trust capital moving when needed. That trust is what ICE has spent decades building and it's what we bring to every new market we serve while continuing to strengthen the institutional franchise at the core of our business.

Our strategy remains consistent. We invest behind long-term trends that expand participation, increase transparency and create new demand for our markets and data. Applied with discipline over time, that strategy compounds delivering growth on top of growth in varying environments. I'd like to end our prepared remarks by thanking our customers for their business and their continued trust. And by thanking my colleagues at ICE whose execution contributed to the best third quarter and the best year-to-date performance in our company's history.

I'll now turn the call back to our moderator, Jade, to conduct the question-and-answer section until 9:30 Eastern Time.

[Operator Instructions] Your first question comes from the line of Patrick Moley from Piper Sandler.

Jeff, I just wanted to follow up on the trade investment. You laid out the strategic logic there. So I'm more interested in how your view on real-world asset perpetuals as an asset class has maybe evolved over the last few months? And which underlying do you think are most relevant for a U.S. retail audience? And then separately, I think a lot of people in this space know trade XYZ is the platform that got the official S&P 500 license for a perpetual contract. So maybe just how important was that license in this decision? And is that a contract that you think you can help them bring onshore? .

Thanks for the question. I think stepping back, we heard about hyper-liquid gosh, well more than a year ago, I really just heard about its technology features. And we were able to track them down in Singapore, and I actually have a meeting with them well over a year ago to talk about working together. But it was really -- I was invited to a press conference in the White House and the President actually asked me to stand next to him when he was talking about the crypto bill and as he was doing the weave, I looked over and saw his script that he was going to talk about hyperliquid. And honestly, in that moment, I said, okay, the U.S. wants this platform to come and be regulated in this country. And so we redoubled our efforts to bring both founder groups together, both Trade XYZ and hyper-liquid to work with us.

These markets, as I mentioned in the prepared remarks, we believe are complementary because they don't have a forward pricing curve, they're very good short-term investments. They're very good for -- they are used by more than retail for very short-term periods. And we think it's complementary to what we do and that we shouldn't ignore them. And that, as I mentioned, that the U.S. government is going to bring these markets onshore and seek to regulate them, which is something we know a lot about.

In terms of which assets will go and what indexes will be on there. That's really up to trade XYZ. We're working with them on a number of different things in the background and have been for quite some time. But we need to get our regulatory approval and see what the CFTC is willing to allow -- right now, purpose are largely just crypto-related. But again, I'm taking a queue from the White House that our regulators don't want U.S. clients using VPNs to trade these markets unregulated overseas. And so I'm sure that, that regulatory compact will evolve as we go forward.

All right. Great color, Jeff. Congrats on the quarter. .

Your next question comes from the line of Alex Blostein from Goldman Sachs.

I wanted to ask you guys a question around fixed income data business. We've seen sort of multiple quarters now of above-trend growth. You guided to for the full year for FID. So taking a step back, what do you think has changed in the trajectory that you've seen relative to the last couple of years? What's been driving that? How durable do you think that ultimately is -- and if we could also perhaps incorporate how maybe some of the AI and agentic-related demands for data could further enhance growth in this business, that would be helpful. .

Alex, this is Chris. Thanks for the question. What I would say, and I said it a couple of quarters ago around client focus on making sure that they had the right vendors lined up. What is clear across the customer base at the moment is they're looking for fewer number of vendors that can provide them greater level of scale along the way. And we've been able to do that. And I think that's what you're seeing in the growth that we've shown in fit over the last few quarters. And we continue to focus on that to make sure that we have the right data assets, the right place delivered in a way that they need to engage as their businesses continue to evolve on a go-forward basis.

So it's really more of that staying -- it's amazing. If you listen to what your customers are telling you, and you can deliver that output, it tends to go pretty well. And I think that's what we're looking at here. I don't know Morino add anything on customer. Yes.

Your next question comes from the line of Chris Allen from KBW.

Just wondering if you could discuss the impact and future opportunities you're seeing from hyperscalers and data center operators across your businesses, specifically thinking energy trading the impact of their debt issuance and spread movements in CDS and then on the potential demand for new products such as compute futures.

Thanks, Chris. This is Ben. And the short answer is we're seeing a direct impact in many of our different markets. I commented in my prepared remarks on the strength of our basis markets -- and in addition to that, our North American financial gas markets, as I mentioned, we're up 15%. OI hit a record back in Q3 as well as our power markets are up 15% with a up year-over-year and since the end of last year. And the reason for all this is that one of the big inputs to this is that data centers, their costs highly rely on power and power at specific locations around the U.S. where we have the most robust regional power markets for clients to trade and then inputs into power are primarily gas and in particular, basis gas locations which is why I called out basis markets and how well our basis markets have done throughout the year because they're 100% trade on ICE.

The third input is that clients have to put a price on carbon, so in the U.S., many of the regions, people have to have a view of what the cost of carbon and carbon outputs are going to be, and we operate the vast majority of those markets to put a price on carbon, not only in the U.S. but around the world with over 95% market share. So to get a full clean spark spread, you need all those pieces, and we're the only place to get that. The other thing that we've seen interestingly over the last year is that we're seeing hyperscalers that are directly buying data subscriptions and also setting up trading desks. So we're seeing them become active participants in our markets as well.

And in terms of new innovation, we've announced and I said in our prepared remarks that we're launching our compute futures. We're excited about that. We think we're the best home for these to trade for all the reasons I just described that alongside that clean spark spread being able to trade compute futures efficiently all in 1 place the best way to do it. So we have our efforts with both Oren as well as Native X. We have a lot of customer engagement behind it. And while we wait for CFTC approval, we're already live with indicative settlements and reference data for clients to model around these -- around our first tranche of products.

You also asked about CDS. So with all the volatility that this is introducing into the fixed income markets and bond markets, it's been a positive for our fixed income and data services business. It's been a positive for our Fizz business as well as, we think, single-name CDS and as I alluded to as well in my prepared remarks, in the developed world over the last 10 years, we've seen very low growth, less than 3% in developed economies around electricity generation as well as demand. And at the same time, during that 10-year period, we grew our energy markets by a 12% CAGR in that low-growth environment. And with most analysts expecting an acceleration of both electricity demand and supply going forward that should bode well for us to further accelerate our growth over the next 10 years.

Your next question comes from the line of Craig Siegenthaler from Bank of America.

Good morning. Hope everyone is doing well. So we have 1 on mortgage tech. On prior calls, you said resetting contract minimums held back mortgage technology this year. but set up faster growth next year. Since then, rates have moved against you. So do you still think that mortgage tech revenue growth picks up next year? And how should we weigh the end of minimum resets against a tougher rate backdrop? .

Craig, it's Warren. So look, we'll give guidance for next year when we get to January, February when we when we report 4Q. But -- so what has happened on that front is as we said over the last couple of calls that we've seen some better trends on the renewal front over the last couple of years. It's gotten better each year. Really, as we've moved away from the 2020 and 2021 vintages when contracts were new in that period in the mortgage market was 3x what it is sort of currently today. And so we do have a little bit of that on '21 and even some '22 wasn't a bad year. It's still pretty decent year from that perspective. But do have a little bit of that to work through. But certainly, over the last couple of years, you've seen that improve. And I think we can continue to see that improve next year, even though rates have moved a little bit higher here in the last couple of months because again, I don't think you're moving that much.

You're not -- the environment that one might expect for next year, and I don't know what that's going to look like quite yet, but certainly, the delta between where we were in 2020 and 2021 is nowhere near that. So -- from that perspective, I think, yes, we can continue to kind of to grow that business as we have been over the last couple of years in what's been a challenging macro. And the important thing for that is -- we continue to invest in the -- Ben laid out several different initiatives that we're undertaking at the moment in this environment to put ourselves in a much better spot than we'd otherwise be. And so when that market does return and it will, we are going to be in a much better spot, and you'll see those revenues flow through.

So we'll continue to focus on the things we can control there. And as I said, we'll give you more of an update when we get to the fourth quarter next year.

Your next question comes from the line of Dan Fannon from Jefferies.

So was hoping to get the early customer feedback you've gotten on the Market Access deal, in particular, from the dealer community. And then curious also about how you're thinking about the competitive environment for this market post Brad Web's announced purchase of...

Yes, Dan, thanks for the questions, Chris. So the client feedback across the spectrum, -- and I would say across the globe, not just related to the U.S. has been very positive. My comment earlier -- on the earlier question about folks who are looking to do more with fewer number of vendors is still appropriate here. This is going to be focused on scale, scale of distribution, scale of content, including things like data scale of new products, what we're doing in private credit and the ability to interact with that in a user-friendly environment is what we're being asked to deliver along the way and what we're excited and really the foundation of our thesis when we entered into the transaction with market access.

We've known all the players in this market for decades, both individually and the companies. We got to see all of those opportunities that were there. But as that scale of distribution and the long history of market access that made it the right fit for us. I believe that is resonating with the client base. We still obviously have a lot of things to deliver as we get through get through to close and begin to make changes of what that new ecosystem looks like. But I'd really focus you on what that new ecosystem is. It is something that is far different than what the historical piece is. And that's consistent what Ben said, what we've done in the energy markets as well, where we built an entire ecosystem that can service clients regardless of where their individual needs are that they can move in and out of that in a very capital efficient environment and that's what we will ultimately build in the next vision -- our next version of what fixed income execution looks like. That's what we're excited about delivering.

And I can say that since we've been on the call that -- we know that the market access shareholder vote has come to a close positively. So another step in moving in that direction for us to get going with it along the way. So I appreciate the question.

Your next question comes from the line of Brian Bedell from Dutch Bank.

Great I just want to come back to the trade plan with hyper liquid. Maybe a little bit of a multiparter here, but just how are you envisioning the role of OTX and ICE in this and then also then connecting to the platform, my understanding like hyper liquid will be the rails of it and trade XD, the deployer. So if you can maybe just talk about that distribution role on the JV perspective.

And then your vision of how other types of FCMs might connect into this. And then if you -- I know it's very early in this, of course, and it's all pending approvals. But if you can talk about how you're envisioning the economic structure of this retail segment for ICE. Is this something where you would typically get a transaction fee per volume or rather more of a participation in the chain fees?

It's a very good question, by the way. So thank you for that. The -- in order to be regulated as a exchange and clearing house in the United States. We are going to set it up in a -- with Trade XYZ in what I would call a relatively traditional format where we have a designated exchange and a designated clearing house, and that designated clearing house will be open to futures commission merchants. Third parties will be able to trade on the platform. And with our joint venture with OKX, we have been building an FCM together, and we have been building a broker-dealer that FCM and that broker-dealer will be able to hook to tray exchanges.

In other words, ICE exchanges, as you know them today and the New York Stock Exchange, as you know it today. and we'll also be able to hook to what we intend to build with trade XYZ. We really like the wallet technology that OX has because it's got KYC capabilities go into is that we know that the regulators are going to demand. And as you're stepping back and thinking about this, we are trying to basically, in a parallel manner, book a large retail population that is already doing business on chain through these companies that I mentioned and bring them onto our TAD exchanges.

At the same time, deploy markets on a blockchain both x layer with OX and hyper-liquid with Trade XYZ and bring those chains into a regulated environment. So it's a multi strong strategy. And honestly, these are 2 of the largest chain operators in the world. And we think the 2 that are most capable of bringing a DP ecosystem into a regulated environment where you have to know your customer and protect against money laundering.

Brian, it's Warren. -- on the geography, if you will. I think that was kind of your question of where you see these show up. So look, I mean, obviously, these will be small to start. I mean they're brand new, so they'll take some time to get off the ground. But as we do that -- as we get them off the ground and then certainly, as they start to become more material, we will certainly highlight those for you guys and break that out. But right now, we got to get them stood up and up and running. So sort of to be continued on that front.

Yes.

Close by saying we're not a venture capital firm. When we make these investments, it is really about an can the companies that we invest with be partners with us and work together to where we can help them and they can help us. And that's been the case with numerous investments that we've made in the crypto space, starting with our original investment in Coinbase years ago, starting and investing in a company called back. We have a handful of very active blockchain participants that we are working with, Circle, for example, securitize and trade XYZ and hype and poly market. So these are all entrepreneurs that are pushing the envelope on technology, and we want to be with them and at the table with them so that we can -- where appropriate in our business, we can incorporate some of the good work that they're doing. .

Your next question comes from the line of Alex Kramm from UBS. .

Yes, very -- this is primarily for Jeff, and it's another question on mortgage, but a little bit bigger picture. So you've been on this journey now for 5 years or so. I think longer, if you count Marc, -- and obviously, everybody agrees that there's a lot of structural opportunities on the mortgage business. But clearly, some of that has been slower to come and part of this is clearly the cycle. But at the same time, investors, I think, still overvalue this business in terms of spending 60%, 70% of the time on this, while pro forma this business is going to be 10% or so of earnings post market access.

So I think you made comments yourself that -- it seems like in your valuation, it gets like a negative valuation in this business right now. So the question I'm really asking is, -- do you still think you're the right owner for this? Some of your peers are spinning off businesses right now that are not core, and they're getting rewarded by it from the market. So I know it's a bigger picture question, but just wondering, since all this time you seem to be spending right now is on OKX and hyper-liquid market structure changes, and this business probably is not getting as much attention anymore.

Well, that's a good question. It's one, as you know, as a public company CEO. I can't answer directly. But what I will tell you is we really wanted to move into the fixed income and interest rate business. And we've made multiple -- and why? Because it was a huge void in our ecosystem. And some of those investments that people hated years ago like buying the New York Stock Exchange when it was massively out of favor. We did because we said we'd really like to get a European interest rate franchise. Today, that's like our -- 1 of our best businesses. And the market didn't like it 10 years ago and really likes it now, so do we.

And so as part of building an all-weather company is having a company that will do well when interest rates are rising and when interest rates are falling. And we don't want to be an episodic stock the reason that my prepared remarks ended on Slide 11 is that we continue to want to show you and others that are looking at the company, how we manage it, and we manage it for consistent growth in all environments. Warren started in his prepared remarks by saying, just this year, we've had 3 very different quarters that we've operated through.

And we've had parts of our business that have done well in all 3 and obviously led to record results for the company. So that being said, we're not married to anything. We're here as stewards of capital. Everyone that is in the room with me as a shareholder in this company. We are trying to drive value for our shareholders. That's why we get up every day. And if some of the parts doesn't work, then we'll find different parts. Like we really do want to do the right thing for our shareholders and ourselves. But you can't really look at the mortgage business and not look at the rates business and see that we're doing well in that complex.

Your next question comes from the line of Ben Budish from Barclays. .

Maybe another 1 on the data sales. You talked about the sustainability of your FIDs business a little bit earlier. I'm curious on the recurring exchange revenues. I think those have also been growing like low double digits for several quarters now, which is kind of a step-up from prior period. So -- just curious on your thoughts on the sustainability there. One of your other competitors, the other week was talking about always on market as more of a long-term driver and sort of use of data in AI. So I guess your thoughts there, how sustainable do you think the kind of current growth we've been seeing in that line item could be?

Thanks, Ben. It's Ben. And we've been very pleased. If you remember last quarter, we had a specific slide in our presentation deck that called out some of the long-term trends that we're seeing in particular in and around energy. And 1 of the things we called out was data subscriptions being up 70% over the last 5 years. And that, to us, as well as open interest and we talk about a ton as well as market participation growth are all the signs that we look for is the underpinnings of a very healthy market. .

And those statistics were over a 5-year period. But if you look at just the last year, you take a well-established marketplace like our oil business, data subscriptions are up 16% year-over-year. In gas, they're up roughly 12 and we're continuing to see more and more people buying our data, buying data subscriptions. Market participation continues across our markets to hit records on a year-over-year basis. So -- and given all the new products that we're launching, all of the new products like the GPU features that we just talked about earlier on this call and continuing to launch dozens and dozens of products every quarter.

We're doing that led by customer demand and customers asking for more and more precision in the ways that they're hedging and managing their risk. And as long as we stay close to customers, continue to innovate, launch new products, we see that demand for that recurring revenue, things like beta subscription is going to continue to grow.

At this time, we will turn the call back to Jeff Sprecher, Chairman and CEO, for closing remarks.

Well, thank you, Jay, for moderating the call, and we appreciate all of you joining us this morning. I hope you have a good day. .

This concludes today's call. Thank you all for attending. You may now disconnect.

Good morning. Thank you for attending today's ICE Second Quarter 2026 Earnings Conference Call and Webcast. My name is Mikayi and I'll be the moderator for today's call. [Operator Instructions]

At this time, I would like to pass the call over to our host, Steve Eagerton. Steve, you may begin today's call.

Good morning. ICE's second quarter 2026 earnings release and presentation can be found in the Investors section of ice.com. These items will be archived, and our call will be available for replay. Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment and are subject to risks, assumptions and uncertainties. For risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2025 Form 10-K 2026 Second Quarter 10-Q and other filings with the SEC.

In our earnings supplement, we refer to some non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You will find a reconciliation to the equivalent GAAP term in the earnings materials. When used on this call, net revenue refers to revenue net of transaction-based expenses, and adjusted earnings refers to adjusted diluted earnings per share.

Throughout this presentation, unless otherwise indicated, references to revenue growth on a constant currency basis. Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items. Also, we will be discussing our recently announced acquisition of MarketAxess, ICE MarketAxess and the respective directors and executive officers may be deemed to be participants in the solicitation of proxies from market access stockholders. These statements today do not constitute an offer to sell or buy or the solicitation of an offer to sell or buy any securities or solicitation of any vote or approval.

Investors and stockholders should review the statement and any other documents MarketAxess may file with the SEC in connection with the acquisition.

With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardiner, Chief Financial Officer; Ben Jackson, President, Lynn Martin, President of NYSE and Chris Edmonds, President of Fixed Income and Data Services.

I'll now turn over the call to Jeff.

Thank you, Steve. Good morning, everyone, and thank you for joining us today. This morning, we reported the best second quarter in our company's history. Warren and Ben will take you through those results shortly. I want to begin on Slide 5 with the announcement of our agreement to acquire MarketAxess, a step that will extend our track record of growth in the largest addressable markets in the world, the global fixed income market.

ICE was built on the conviction that opacity and inefficiency in markets are not permanent conditions. There are challenges that technology can solve. Since our inception, we followed a consistent strategy to bring transparency, efficiency and standardization to markets and to digitize the analog. Each market that we've taken on has grown more open and more electronic as a result.

Our acquisition of MarketAxess will continue this strategy within one of the largest markets in the world. We've been assembling and building a fixed income franchise. We've become one of the largest and most trusted providers of fixed income pricing, reference data and indices in the world, providing daily evaluated pricing on over 3 million securities. Our ICE indices serve as a benchmark for the global fixed income market with nearly $1 trillion in ETF assets benchmarked to them.

In clearing, we operate ICE Clear Credit, the industry's leading CDS clearing house and we run the ICE global network, connecting the financial community to our data, analytics and execution. On the execution side, ICE was built through our combination of BondPoint and TMC and it serves the trading desks of the largest wealth management firms in the country, names like Charles Schwab, Fidelity, Merrill Lynch and Edward Jones, with deep looking in price discovery across municipal bonds corporates, treasuries and agencies.

Having built strong distribution in the retail and wealth channel, we now see a clear opportunity to extend our reach into the Institutional Investors segment, where MarketAxess has a leading presence by bringing these liquidity pools together, the logic is simple. We're building a global fixed income network.

First, we connect the full spectrum of liquidity from retail to institutions. Second, we make our clients more efficient, improving their experience with a goal of reducing operating costs over time. And third, we turn the combined network into a compounding data and distribution engine.

Please turn now to Slide 6. More than 2,100 institutional firms participate on the MarketAxess network, using protocols that are recognized industry standards for institutional credit liquidity. We large asset managers, pension funds and insurance companies transact at different scale and through different protocols than the retail and wealth clients that we serve today.

MarketAxess is a leader in the institutional market with investment grade and high-yield corporate bonds in emerging markets across approximately 30 local currency markets and in Eurobonds with a growing portfolio. ICE Bonds is a leader in the retail and wealth channel a complementary liquidity pool with a unique client base, trade sizes and protocols.

Putting these 2 together creates a fully integrated front-to-back ecosystem spanning the fixed income market. Retail and wealth flow long separated from institutional flow will be able to connect into a deep institutional pool and institutional participants will gain access to the diversified order flow that retail and wealth channels bring. You've seen this broadening market trend in the U.S. equity securities market, which we believe we can now further extend into the fixed income securities markets.

And our offering of one of the most robust data sets in the world supports efficient price discovery across this broader channel. With fixed income markets, this matters more than most other asset classes. There are millions of instruments, most of which trade in frequently and the single greatest challenge to any investor is finding the other side for a true representation of fair value. Connecting these 2 pools should dramatically increase the probability that a buyer finds a seller and this discovery will benefit every market participant.

We want to offer our clients a common set of rails, whether a client moves upstream to institutional or downstream to retail, they will operate the same connected infrastructure creating real economies of scale. And MarketAxess will bring us the growing treasury rates trading platform, which we plan to connect directly into our newly approved treasury clearing system, extending our credit and fixed income network into the interest rate markets.

Our clear treasury futures franchise was our fastest-growing bucket in the last quarter, as Ben will discuss shortly. So we look forward to extending these capabilities.

Please turn to Slide 7. The A single connected network does more than deepen liquidity. It will simplify how our clients operate, reduce what cost it takes them to do so over time. We plan to collapse a fragmented stack of execution venues, data vendors and analytics providers into a single integrated workflow. Fewer connections, fewer reconciliations, fewer points of failure. The same should be true for our customers' technology spend.

Clients will have access to pricing, liquidity, execution and analytics through 1 platform and 1 connection. For generating alpha, a deeper, broader pool that means superior fills, tighter spreads and lower market impact. Layering ICE's real-time evaluated pricing and analytics into the workflow, should lead to improved decisions. The results for our clients is simple, better liquidity plus better data, equals better transparency and better returns achieved at a total lower cost.

Moving to Slide 8. The most powerful effect we're building is the classic ice flywheel. More liquidity generates more transaction data. Combined with our evaluated pricing, this makes ICE analytics more powerful. More powerful analytics attracts more users, more users deep in the pool and a deeper pool generates yet more data. Each turn of that wheel should compound the value of our clients and ICE. This is what produces the compounding cash flows that create values for our shareholders.

An expanded fixed income network is a direct channel to cross-sell ICE's evaluated pricing, reference data and index data including liquidity scoring, transaction cost analysis and predictive pricing into the workflow of more than 2,100 institutional clients who need exactly tools to better inform their execution.

Today, many of these market access customers consume ICE Data indirectly through third parties or not even at all. And the way our clients consume data is changing. Increasingly, they want data to inform their own models at the point of decision. Reaching them there is what our ICE Model Context Protocol or ICCP server was built to do.

Our first MCP release opened a new channel for expanding distribution of our nonproprietary data. Our newly expanded ICE MCP offering now offers ICE's proprietary data into our clients' AI workflows. And we didn't simply build an open data pipe. We built a client engagement channel that runs both ways. The MCP server connection is the easy part. What matters is what sits behind it. Organized data that arrives with its own meanings attached and which represents and respects our proprietary rights so that each client model are not left to guess what permissions govern who can see what.

We now offer a complete audit trail so that every output can be traced and trusted. In regulated markets, it is this governance and contextual foundation that turns a simple data connection into a resource that institutions can rely upon. The fixed income network that we're designing will not stop at public credit. We have a plan to use the same rails to connect private credit clients who we're going to bring in via our initiative with Apollo.

So public and private credit will increasingly be accessible on 1 platform. ICE spent its history turning fragmented analog markets into connected electronic networks then growing and compounding these networks. This is how ICE has grown. It's not by chasing 1 market or 1 cycle, but by building infrastructure that compounds through every market environment.

MarketAxess will make our network broader and deeper, and we'll advance the strategy that we followed from the start. This deal does not begin a new chapter for ICE. It deepens the story that we've been writing since our inception.

I'd like to now hand the call over to Warren.

Thanks, Jeff. Good morning, everyone, and thank you for joining us today. Please turn to Slide 9. As Jeff described, this transaction is a product of deliberate long-term view about where fixed income markets are going and the role ICE is uniquely positioned to play in that evolution.

Let me walk you through the financial terms and our path to value creation. Today, we announced we have entered into a definitive agreement to acquire MarketAxess for $167 per share, representing an enterprise value of $5.7 billion. The offer price represents a 33% premium to MarketAxess closing price as of July 29. And on a fully synergized basis, the transaction represents an adjusted EBITDA multiple of approximately 10.6x.

We anticipate the transaction will be immediately accretive to ICE's adjusted earnings per share in the first year post close, with accretion improving as synergies are realized and the combined platform scales. The transaction value we've announced and intend to underwrite is supported by MarketAxess' recent mid-single-digit growth trajectory. However, we believe that ICE's platform, our data, our network, our client relationships and our track record of deepening engagement over time when combined with market access can accelerate that growth trajectory.

Improving growth will take time and investment but expanding the revenue potential of acquired franchises is a core competency at ICE and the opportunity here is compelling. We expect to achieve approximately $100 million of annualized expense synergies with 1/3 realized in year 1 and year 2 and the full run rate achieved by year 3. These savings will be driven by the consolidation of corporate functions, real estate rationalization, vendor and technology overlap and more efficient use of shared infrastructure across the combined platform.

The transaction will be financed entirely in cash through a combination of newly issued bonds, a term loan and commercial paper. We expect the transaction to close in the first half of 2027, subject to regulatory approvals and customary closing conditions. Gross leverage is expected to peak temporarily around 3.4x pro forma EBITDA and we are targeting a return to 3x or below within 18 to 24 months.

Fully consistent with the pace of the entities have demonstrated following prior debt finance transactions. Our commitment to maintaining a strong investment-grade credit rating is unchanged. On capital return, alongside our deleveraging program, we expect to increase baseline share repurchases from $350 million to $400 million per quarter. Our Board has recently authorized up to $4 billion of share repurchases and we intend to deploy that capital in a manner that is disciplined, opportunistic and consistent with our obligations to creditors and our investment-grade rating.

We also expect to continue to invest in the organic growth of our business and grow our dividend. The combination of strong free cash flow and a clear capital allocation framework means we not have to choose between investing in growth and returning capital to shareholders.

In closing, this transaction represents the next logical extend it's fixed income strategy. We have spent years building the data, the network and the infrastructure that makes fixed income markets function more efficiently and transparently. Market access will bring the execution layer to that foundation. The result is a platform that serves the full workflow of global fixed income from you evaluated pricing and reference data through indices and analytics to electronic execution and post-trade processing.

We are building the fixed income market of the future, and we are doing it from a position of financial strength, operational discipline and a proven playbook for integration and value creation.

Now to the quarter. Please turn to Slide 10. Our first quarter was exceptional because all 3 segments fired simultaneously in a high volatility environment. Our second quarter was also exceptional for a different but equally important reason. The platform continued to produce record recurring revenue and strong earnings despite a moderation in episodic volatility. That durability compounding growth on top of growth in any environment is precisely the model we have built.

Second quarter adjusted earnings per share were $1.90, a second quarter record and the second best quarter in our history. Net revenues were $2.7 billion, up 5% and adjusted operating income was $1.6 billion. Recurring revenues were a record $1.4 billion, up 8%, underscoring the visibility and resilience of the ICE platform. These results also compound on top of 10% revenue growth in the second quarter of 2025 itself a record at the time.

On expenses, adjusted operating expenses were $1.038 billion, in line with our guidance range. Year-over-year growth was driven by performance-related compensation tied directly to the strength of our results, which is more than offset by revenues, accelerated technology investment in our data center footprint and incremental G&A from product development work across bids and mortgage technology. These are capacity building costs funded by the revenues they are generated.

Looking forward to the third quarter, we expect adjusted operating expenses in the range of $1.063 billion to $1.73 billion and our full year adjusted operating expenses are now expected to be between $4.190 billion and $4.230 billion, with the increase driven by further crystallization of performance-related compensation, our accelerated data center program and a product development investment, all of which I would characterize as investment in future growth.

CapEx totaled $262 million in the second quarter as we accelerated investments in hardware and our real estate footprint. Given our strong free cash flow generation, we've elected to pull forward some of our originally and 2027 CapEx into 2026, and we now anticipate full year CapEx of approximately $850 million. This acceleration reflects conviction in the growth trajectory ahead and our desire to be ready to serve incremental demand as it arrives. On capital return, in the second quarter, we repurchased $651 million of stock including an incremental $300 million executed when our shares again further disconnected from the fundamentals.

Including dividends, we returned $945 million to shareholders in this quarter and $1.8 billion in the first half, another record. While leverage ended the quarter at 2.8x within our target range.

Segments starting on Slide 11. In Exchanges, net revenue was $1.5 billion, compounding on top of double-digit growth in both 2025 and 2024. Our rates business once again delivered exceptional performance, growing 24% versus the year ago period as investors and institutions continue to expand and actively manage their duration exposure.

Total futures and options open interest was up 20% year-over-year, signaling the structural engagement we saw in the first quarter is carrying forward. And at the NYSE, transaction revenue was a record, up 15% year-over-year. Record recurring revenue of $416 million grew 10% with exchange data and connectivity services growing 12% as customers continue to embed our data into their workflows. Within listings, the NYC has led the industry and transfers year-to-date with nearly $400 billion in market cap having switched to the exchange, including the largest transfer in NOIs history, AstraZeneca and the largest bank transfer in exchange history with the bank.

As a result of this broad-based strength, we now expect exchange recurring revenues to grow in the high single-digit range for the full year 2026. Moving now to Slide 12. Fixed Income and Data Services net revenue was $645 million, up 8%, with record recurring revenue of $531 million, up 10%. Our CDS clearing business delivered the best non-role quarter in the franchise's history growing despite difficult year-over-year comparisons.

Within fixed income and Data Services, record revenues were aided by strong net new business and pricing and reference data, deepening consumption of our fixed income data sets including early signs of engagement by clients building AI-driven workflows and continued momentum in our index business, which ended the quarter with a record $922 billion in ETF assets under management, up 29% year-over-year. Results also included approximately $8 million of onetime items.

Data Network Technology revenues grew 11%, reflecting strong demand for our global network from both traditional and AI-driven workflows. As a result, we are raising our full year FIDs recurring revenue growth guidance to 7% to 8%, up from our prior mid-single-digit guidance. As a reminder, second half growth will likely tenant the lower end of that 7% to 8% range driven largely by timing and specifically the comparison period in the third quarter and fourth quarter 2025, which benefited from the sell-through of all side within our Milo data center. It is worth noting that we have already begun selling Hall 6 and anticipate that revenue will begin to be recognized in early 2017, with several additional halls providing further capacity behind it.

Shifting now to Slide 13. In mortgage technology, net revenue was $557 million, up 5%, and on a pro forma basis, inclusive of Black Knight, represented the strongest quarterly performance since the first half of 2022. Transaction revenue grew 11%, driven by Encompass closed loan revenues that continued to outpace industry volumes and growth in closing solutions. Recurring revenues totaled $406 million, reflecting continued product adoption, the normalization of Encompass contract renewals and the early benefits of new clients going live across both our original and servicing platforms.

Recurring revenues also benefited from approximately $3 million of onetime items. Accordingly, we anticipate third quarter recurring revenues will remain around current levels as core growth and the new client ramp continues to build.

The first half of 2026 has been the strongest in ICE's history. We are returning record capital accelerating investment and making an exciting strategic acquisition of MarketAxess to broaden our network. The structural forces driving our business are not fading. They are broadening. We are confident in our trajectory for the balance of 2026 and well beyond.

With that, I'll hand it over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Markets are always evolving and the breadth and depth of ours positions us to thrive in any economic or geopolitical environment. Our role does not change. We bring transparency and electronic liquidity to markets, and as those rise, participation grows, customers gain precise new data to hedge and trade with and the market deepens. You can see it in this quarter's results.

Total open interest across our futures and options business was up 20% year-over-year. Participation continued to broaden and our market data user base grew 10% year-over-year. Customers are relying on our markets more, not less. Financials had an exceptional quarter, driven by European and U.K. rates. The defining event was the reversal of the global easing cycle.

In June, the ECB raised rates for the first time since 2023, and the expectations for rates across major economies repriced sharply higher. When rates move like that, our customers come to us to manage the risk. In this quarter, you could see how much they leaned on us. In June, open interest in our rates franchise reached a record of 53 million contracts up over 50% year-over-year, and Euribor options OI set a new all-time high, passing a record that stood since 2010.

To put the scale in perspective, the total value of the positions that customers hold across our 3 main European and U.K. rates contracts, Euribor, Sonia and Ester reached $62.3 trillion in mid-June. That is roughly triple where it stood 3 years ago, and it now exceeds the comparable market tied to U.S. dollar rates for the first time. Simply put, more and more of the world's short-term interest rate risk is being managed in the markets we operate. What makes that durable is that some of the major central banks, the ECB, the Swiss National Bank and the Bank of England are increasingly moving in different directions. And our customers need to manage that risk across all of those currencies in 1 place.

Our multicurrency franchise lets them do exactly that. in a single liquid market with capital-efficient clearing and no one else can match that breadth. That strength runs across the portfolio. In Q2, Sonia average daily volume was up 39% year-over-year and Euribor up 12%, and the momentum has carried into the third quarter with financials open interest up 40%.

Please turn to Slide 14. Energy volumes were softer this quarter. But the more important story underneath is structural. Even against a very volatile second quarter last year, total OI across our energy markets was up 8% year-to-date because customers keep their risk on our books through the cycle rather than stepping away. We are in the middle of another reconfiguration of global supply chain this time centered on the Middle East and it coincides with the rewiring of European Energy to follow the Russia and Ukraine conflict.

Over the prior decade, the liberalization of global LNG trade had already turned our TTF contract into the global benchmark for natural gas following the same path, Brent set improved. Years later, that franchise is still compounding with TTF participation growing double digits on average over the last 5 years, in the number of customers subscribing to our TTF market data up more than 17% year-over-year in the second quarter.

That strength runs beyond TTF. Across our energy markets, OI has grown 9% on average over the last 5 years, and the energy behind that is options, where OI has grown 18% on average, more than 4x the pace of futures. Options now make up 40% of our energy OI, up from roughly 1/4 in 2021. This options growth matters because it is another sign of how deeply customers rely on us. Options are how they manage complex, longer-dated risk. And once that positioning is on our books, it tends to stay.

We have studied the durability of options positions versus futures and the result was clear. That options positions tend to be held for a longer term, often are held to expiry, and many clients hedge their delta risk with futures, providing a net benefit to the underlying futures market at the same time. Participation is broadened alongside it, with options participation growing 8% on average, double the pace of futures. That is customers building deeper and more sophisticated hedges, representing structural demand.

The reconfiguration means more complexity, not less. Trade routes redraw, new regional benchmarks emerge and basis risk multiplies across the system. More complexity means more risk to manage and that is exactly what a global all-weather benchmark platform is built for from Brent and seaborne crude to TTF and global gas flows, the JKM as demand shifts east, the shape of the curve makes the point.

Trading is naturally busiest in the prompt months, but OI, which is where our customers carry risk sits much further out. Across the energy complex, about 12% of OI sits in the front month and more than half sits beyond 6 months. That is the signature of a structural long-dated risk transfer, not front of the curve trading. The same forces are reshaping how the world prices oil and it plays to our greatest strength. As trade routes redraw global participants move to match their risks in the deepest, most trusted benchmarks.

With the backdrop of the Iran war and continued tensions in the Middle East, we have seen a combination of more risk to be managed but concerns around doing so with the physically settled contract as a result of uncertainties with the closure of the Strait of Hormuz. So we've seen a shift to our more liquid Dubai contract from our Murban contract to manage these risks. Brent anchors the global crude market in Dubai, which prices a basket of Middle East grades is growing to the key cash settled benchmark for the region, trading alongside Brent. With the breadth of the buy spread pricing the flows of barrels between East and West.

We believe that this consolidation of liquidity in one regional Middle East marker may be the result of a permanent shift, providing ICE yet another growing energy benchmark. Those sit within a broader network, we own that prices oil across the globe, from Brent to Houston, to Western Canadian crude, then connected to roughly 800 regional oil freight and NGL markers where we hold about 90% share. So very little of the world's oil trades without touching our markets. Demand for crude options, in particular, set new highs with our share of that market above 68% and Brent options volume up 46% year-to-date.

And as the energy mix evolves, we do what we've always done. Work with our customers to understand what they need and build the market for it. That is why the new fuels are landing here, too, with our RINs, futures and options and low carbon fuel standard contracts among our fastest growing. As the world develops alternative fuels, we keep proving we are best positioned to own those markets. The same playbook keeps extending into entirely new kinds of risk.

This quarter, we announced economic indicator futures on central bank rate decisions and U.S. natural gas storage, launching later this quarter, and GPU compute futures developed with on and native that bring price discovery and hedging to the fast-growing AI-driven compute market.

Please turn to Slide 15. The data our markets generate is the foundation of our fixed income and data services segment and its value is only increasing. It strengthens its depth, breadth and quality -- and in an era when models are only as good as the data they are trained and run on, data that cannot be scraped or synthesized and only grows in value. We are deliberate about how we license, permission and deliver it. So the clients access it through controlled channels and the value of the asset is protected. That combination drove another record quarter for recurring revenue with our fixed income data and analytics business growing 9% year-over-year. We are also turning that data into new products.

This quarter, we launched ICE Compass, and it solves a real problem for the buy side. In fixed income, investors have always traded at an informational disadvantage because every time they show interest in a bond, that signal is picked up by potential counterparties and used to shape the price quoted back to them.

Compass is an AI-powered pre-trade analytics platform that helps level that field. Before a trade, it gives an asset manager an estimate of the bid or ask they can expect from each potential counterparty and ranks those counterparties on how competitive they are likely to be customized to that specific client. It runs on pricing and transaction data that only we have in T-BrowPrice has signed on as our anchor client. Underpinning all of it is the infrastructure we own and control.

We are trusted with some of the most sensitive data in the financial system, and we hold and deliver it in our own secure governed environment rather than someone else's, which is a large part of why clients are willing to put that data in our hands in the first place. Demand for the ICE global network continues to grow on both long-standing secular trends and the new capacity that AI requires resulting in our data and network technology revenue up 11% year-over-year. Across this segment, the message is the same. AI is making our data more valuable, not less.

Please turn to Slide 16. Our mortgage business is where we run the data and AI playbook at full. ICE Mortgage Technology is the network of record for U.S. housing finance. Roughly 9 and 10 mortgages touch our network at some point and a loan rarely stays in 1 place. It's packaged into securities, its servicing rights are sold and it passes to the agencies. So the same loan crosses our network many times over its life. What makes this network unique is that at every step, we know who should hold when you permission and perform which task because access to data is deliberately segregated by role to protect the consumer.

Access to the intelligence layer or agents in our network is governed and controlled with the same security that we have today for data protection to protect the consumer. We have built a semantic or ontology layer on the data assets that we have assembled that maps the interconnected relationships and workflows across the entire industry, including lenders, servicers, investors and partners in our network. This provides insights for our agents to harvest and thus train and grow the intelligence layer to handle complex tasks and help avoid hallucinations. This intelligence layer has been built on decades of hard 1 expertise in 1 of the most regulated markets in the world and reinforced by the agency's insistence on a trusted, auditable data layer beneath any use of AI.

We are building that layer based on experience with thousands of lenders already on our network as well as expertise helping clients' workflows and processes comply with federal, state and agency guidance, a foundation, a competitor cannot simply code. That foundation is already at work in our products. ICE Aurora embeds this agentic AI directly and encompass in MSP with governance, audit logs and human approvals built in.

AI assists the human in high-risk decisions, such as underwriting, pricing and cash movement, escrow and remittance and doesn't autonomously make a call. We have continued to evolve ICE Aurora powered servicing agents and intelligence layer to add more workflows and exception handling agents that are being actively exercised by customers in production. In Encompass, we have added workflow agents to further automate service ordering, fee calculations generate disclosures, engage with settlement service providers as well as manage change in circumstances as part of the loan manufacturing life cycle.

In servicing, we have AI agents live with clients handling the highest volume borrower work. One example is an agent that answers borrower questions on loans and payments on its own and a second is a voice assistant resolving common inbound calls before they reach a person taking cost out of the call center. The results bear this out. We continue to win new logos and take share in below origination environment. Another clear signal is how deeply clients are building on our 4 platforms within the network -- for example, our servicing business processed $10.7 billion API and web services call in the second quarter, up 39% year-over-year. That is also the answer to the view that a Frontier model will commoditize software like ours. It has the direction backwards. The model is the commodity.

The key is the Governor network of record its role-based permission map and behavioral data that only it holds, none of which a model owns and all of which it needs to be useful. AI does not shrink that advantage it widens the surface area where our network creates value. The technology will keep evolving, but the network it runs on and the trust and governance embedded in it is ours and it compounds with every cycle.

With that, I'll hand this back over to Jeff.

Thank you, Ben. Please turn to Slide 17. The through line here, MarketAxess included is the one that we follow from the start. We find markets held back by friction and opacity. We bring our networks, our data and our clearing deal, and we earn trust to operate at the center of them. That discipline is what lets us act on an opportunity like MarketAxess without ever reaching for growth that we've not earned. It's also why it forces are reshaping our industry from AI and automation to the changing needs of our customers and those work in our favor rather than us.

We do not build for a moment in time. We build where our customers are next going. Growth on top of growth, compounding through all conditions. That's what we've built this company to do and how we plan to create lasting value for our shareholders. I'll now turn the call back to our moderator, who'll conduct the question-and-answer session until 9:30 Eastern Time.

[Operator Instructions]

The first question comes from the line of Dan Fannon with Jefferies.

So I wanted to start with the acquisition. Curious why you are the best owner of this business? And what gives you confidence that you can improve what has been a declining market share in fee per million trends for market access for the last several years?

Thanks, Dan. This is Jeff. We were late to getting into the execution of fixed income securities. We saw market access and others that were in that space, and we decided to build around what those players were doing. That's why we built this big fixed income data business. It's why we've recently been expanding into private credit. That's why we built the treasury clearing house.

In other words, we looked for daylight where others weren't moving. But at the core is the actual transaction. And there's just with this moment in time when we think the 2 companies are ripe to come together to get together on 1 common network. And we think now with the product suite that they've built and the product suite that we've built and 2 different pools of liquidity that we both have been targeting, the combination will provide something that will really be unique in the industry.

Let me ask Chris who is going to run the business to ask a question.

Yes, Dan. Thanks, Jeff. What I would say is if you look at what's causing the pressure in the market across the entire segment is increasing number of friction points along the way. And as we said in the prepared remarks, this gives us an opportunity to consolidate some of those friction points and create greater economies of scale, which we believe will generate more opportunities to capture greater share over time as those economies of scale are realized and the operational cost and efficiency at the client side, become a better short for them to take advantage of.

The next question comes from the line of Ken Worthington with JPMorgan.

Jeff, you've been particularly enthusiastic about the private credit opportunity and the recent announcement with Apollo and Private Credit. And I believe the focus has really been on data. To what extent and how does the market access announcement further your aspirations and opportunities for ICE and private credit and market -- and does the MarketAxess transaction extend what you've talked about as a private credit data opportunity into private credit trading as well.

Question. So First of all, when we first sat down with MarketAxess -- excuse me, with Apollo, Mark Ron and I discussed MarketAxess. We discussed how if we were to build something together to better serve private credit markets, how would we, over time, distribute the work product that we were working on. And we felt, boy, if we could involve market access in these conversations, it would really accelerate where Apollo and Marc Rowan wanted to take their business.

And so it was definitely part of our thinking. Let me again ask Chris to give you a little more detail since he's been working with both parties on the transaction.

Ken, I think this is a content story at the end of the day. If you look at the opportunities that exist within private credit, everyone's on the same page as Apollo of where they see that market developing. They're all in different moments in time along the way. And for us, it doesn't really matter.

We have the ability with this distribution channel to serve each of those interested in that greater transparency opportunity within private credit to bring that to market at their timing and not ours. And so that's -- when we said in the prepared remarks and Jeff talked about it and in the first answer to Dan's question, what we're talking about is a common set of rails. We're putting that in place as the standard, both on the data side as well as the distribution side in order for everyone to have an opportunity to participate in the market as it continues to grow itself.

The next question comes from the line of Craig Siegenthaler with Bank of America. You may begin.

We wanted to see if you could go a little deeper into how ICE is embedding it agentic AI and both encompass with originations and MSP was servicing. So how does agentic AI improve your ability to grow revenues and take share longer term? And is there a benefit on the cost side too, as ICE MortgageTech can potentially run more efficiently with less people?

Thanks, Craig. It's Ben. I'll take this one. So I alluded to this in the back half of the comments I made in the prepared remarks. But to us, we have embedded directly into the systems of record, the systems of intelligence that we have. We've embedded in a safe way, a number of different AI models. And it's become apparent to us that the AI models are really a commodity at the end of the day. And what they need to be successful is the role-based permission map that I outlined in my prepared comments, the govern network of record to do this in a safe, auditable and governed way and then all the behavioral data that is in and around and flows through our systems in order to have a context and then also to meet the evolving guidelines that are coming out.

The GSEs, as I alluded to in last quarter's call, have come out with pretty strict guidance on how AI should or should not be used and we have gone through and audited our processes internally. I've also hired an external auditor to go through and look at how we use AI, and we're confident that the way that we're doing it is directly along with that and again, providing it in a full auditable governed way. That's why, at the end of the day, we say that AI widens the surface area where we can create value for our clients at the end of the day.

And to your revenue question, as we look to drive more and more efficiencies for our clients and how they use our platforms we will look for areas where we can monetize that. We have started to as clients have started to engage with some of the AI tools that we have embedded into both Encompass as well as MSP. We are starting to monetize those. And as clients are engaging with them, onboarding them, we're going to crystallize more and more just what is the actual value that's being driven for the end client, and that will inform going forward, how much we can charge for them.

But throughout Encompass, we're automating things like fee or automated service ordering fee calculations, generating disclosures, engagement with settlement providers. But the magic is knowing when does human need to be a loop. And when is there a potential for errors or hallucination in the model where a human needs to be in the loop and then on MSP, I talked about customer service things that we're automating in a number of different calls, but we've also been automating back-office workflows such as escrow, investor reconciliation, HELOC processes, et cetera. So we're very confident going forward on our position here and being able to drive efficiency for our clients.

This is Jeff. One other thing I'd mention is Warren mentioned that on CapEx, we've been buying additional GPUs and video GPUs and building them into our data centers. So what Ben and his team have been building with AI, we're able to run open source or open weight models against the client's data in our own data center and make sure that there's no data leakage, which we're finding increasingly is becoming important to the financial services industry.

The next question comes from the line of Alex Blostein with Goldman Sachs.

I was hoping to follow up on market access, and this is more of a longer-term question for you guys. But ICE historically has had a preference to more of a subscription type of businesses. And whenever you would acquire kind of an execution-only model, there was an opportunity to kind of pivot away towards more kind of recurring business model. So as you think about MarketAxess data, which is quite valuable and I don't think they monetize it as much today, how are you thinking about the mix and the revenue model evolving over time as you guys integrate this business?

Alex, it's Chris. I don't believe this will be any different than the other playbooks that we've run in the past. Certainly, there's an opportunity within the data that we'll be able to not only bring into our models, but also the opportunity for us. And as I said earlier, in the distribution channel, we think I think is on private credit, certainly lots of opportunity when we think about their treasury franchise and what we're doing on the clearing side of bringing those 2 together. Those are examples of where we're collapsing those points of friction in order to create a better user experience on a go word basis, all of which will be on the competitive side. All of which will give us different opportunities on both types of revenue structures as we go forward.

And Alex, it's Warren. I would just add to that, from our perspective on -- in terms of the data that we have today, we're a little bit undersized in EMEA and Asia Pacific. And as Jeff mentioned, they bring 2,100 customers. A good portion of those are international. And so there's an opportunity for us with the data we sell today to obviously sell a little bit more into those regions. So that's another component of this that we're excited about.

The next question comes from the line of Patrick Moley with Piper Sandler.

A lot of good ones on the deal so far. So maybe I'll pivot. Jeff, there's been a lot of attention on perpetual futures recently. You've seemingly been much more open to the idea of perps relative to your largest competitor in the U.S. you licensed Brent and WTI to OX during the quarter. So I would love to get your high-level view on purposes and asset class, the CFTC's push to bring them onshore and how meaningful of a growth opportunity you think for ICE on both the retail and institutional side going forward?

Sure. It's a good question. So first of all, it's a bit of a misnomer in my mind that they're called perpetual futures. The reality is we're looking at these as if they're really a competitor to leverage ETFs. And as we've mentioned in the prepared remarks and as Warren talked about, we continue to license our data to those ETFs, and we see an opportunity with perpetual futures to continue that because we honestly think they're a very similar product with a different distribution vehicle.

In other words, at least in the U.S., ETFs are distributed through FINRA for dealers and perps tend to be distributed through crypto blockchain-oriented companies and particularly widely distributed outside the U.S. The reason we don't -- we think it's kind of a misnomer that they're called futures is because they don't produce a forward pricing curve. And so there are very little use for hedgers so they tend to be a match of a speculator to a speculator, which tends to mean somebody wins and somebody loses.

So the long-term success of a speculator to speculator market has to be that people are either enjoying it for entertainment purposes or something else other than our traditional markets where we really lean into commercial hedging. I do think that the CFTC was right to a jurisdiction. It does appear that the CFTC is very open to perpetual futures for foreign exchange for FX type contracts. In other words, crypto, tokens, Bitcoin and Ethan what have you potentially gold and silver but you've now seen a real market pushback for ERPs moving into real-world assets.

Yesterday, a meeting with the ag industry at the CFTC suggested that they're very uncomfortable -- you've seen -- and if you look at the public disclosures of meetings that have been happening at the CFTC, you see a lot of energy companies that have been in visiting and the CFTC suggesting that 24x7 particularly weekend trading on small size is something that they want to spend more time thinking about and particularly whether or not these assets bleed into the price discovery of traditional futures.

And then similarly, I would expect we're highly regulated by the SEC. I'm sitting here next to Lynn Martin, who's smiling at me. We know them very, very well. We have an opinion that the SEC will assert jurisdiction over securities that are traded as perps because those are very likely security swaps under U.S. regulation. And so it's yet to be seen on how that will evolve. It's hard to imagine pre-IPO perps continuing to trade to U.S. clients unless they follow the same kind of pre-IPO disclosures and policies that exist in the equities market.

Post IPO, look alike, like I say, I think they have an allure similar to how leverage ETFs have been being organized. So we would expect that to potential to grow, particularly with economies that don't have good access to U.S. broker dealers.

The next question comes from the line of Brian Bedell with Deutsche Bank.

Great. I want to come back to market access. Just more on the deal accretion assumptions in the first year and then the plan over time. I think you said, are, you're assuming mid-single-digit growth. Just wanted to confirm, are you looking at consensus expectations for revenue and expenses in your deal accretion analysis or do you guys have your own model? And then over the longer term, in terms of accelerating that -- is that more on just the expense synergy set or you're contemplating material revenue synergies to do that?

And as you integrate the firms, as you plan to integrate firms, -- is it -- or is the plan to mostly retain what market access has built and some of the senior management team? Or do you plan on thinking about rearchitecting some of what they've built to try to tackle the market share issue a little bit more aggressively?

Brian, thanks for the question. So to answer the first one, I think you were asking about the deal accretion on that. So we use consensus EPS is the base for that calculation. So you can think about it that way. We for the synergy side in terms of accelerating them, or sort of the accelerated growth that I spoke to, that was in reference really to the top line. I think right now, what I was trying to say there was that in terms of what we paid for MarketAxess, the value that we underwrote, we assumed mid-single-digit growth, which is where they've kind of been a little bit recently.

But the target here will be to accelerate that revenue. It may take a little bit of time on that front, but the target here will be to accelerate that revenue for -- and we outlined many of the reasons why we think we can do that, but that's the way to think about that. So those will be sort of the revenue synergies you want to come. They have to quantify, obviously, given the transaction business. But -- but that's the opportunity, I think, for us to come in and really reinforce the plan that market access has laid out to you guys.

I think that they do have a solid plan in terms of getting to what they've talked to in terms of the high single digits. But I think a lot of the assets we bring to them will just really help reinforce that and help that growth profile. So hopefully, that helps.

The next question comes from the line of Ben Budish from Barclays.

I wanted to ask another one on MarketAxess, thinking maybe about some of the revenue synergies you talked about. I think earlier in the comments, you said some reducing frictions talking about operational scale and efficiencies having covered MarketAxess as most of us have for some time, the challenges have been things like new competition mix shifts, challenges in getting into things like portfolio trading.

So curious if you could talk about where is the current overlap between ICE Bonds and MarketAxess. You've had a joint venture with them, I think, since last year. Are there any kind of early learnings from that, that you could point to that would sort of indicate where things may be going. If you could unpack a little bit of that, that would be helpful.

Ben, it's Chris. I do believe that the relationship we had on the muni side and we were expanding the corporate side gives us a confidence in that road map going forward of how we can work together and expand for -- expand the opportunity ultimately for the client, and that is a reduction in the friction on that made a little bit earlier.

You also have to add on the other things that we bring to the table, both on the data side that I spoke about a little bit earlier, but on clearing and things of that nature that provide a much more holistic user experience that we believe can put us in an accelerated form as we make the investments that Warren just spoke to in the last question and to get that right and be at the right place at the right time, which has been our forte for the history of ICE and we'll continue to drive forward as we integrate the MarketAxess team and expertise here. And I want to concentrate on the idea of having institutional and the retail and wealth and available in a common set of rails opens up a lot of doors that historically in the space haven't been cater to because that's where you see the proliferation of all the different protocols in order to satisfy a specific niche of execution within the marketplace as a whole.

So we want to put that together in a common unified user experience and use that as a way to create more value and by creating that value earn more of that business.

Next question comes from the line of Alex Kramm with UBS.

Yes. Probably a follow-up to some of the questions on market access. But Jeff, you've been asked about market access and execution and fixed income -- cash fixed income for a long time. And I think your answer has consistently been that you thought transaction pricing is heading lower? And maybe some of the prior questions were kind of getting at that, but maybe I'll ask it more directly. So just wondering if you think times have changed. And obviously, given all the opportunities you have with this asset now.Do you think there's actually some room for stabilization? Or do you think in order to win given all you bring to the table, you're really going to be a price leader from here in credit?

It's a good question. And I think in fairness, it's been you, who's asked me over the last decade, this question. So you're true to form. Yes. It just feels like the right moment in time. We obviously admired the company. And when Rick McVay started the firm sat down and tried to figure out how we could work together and we've had that dialogue going for more than a decade, including with Chris Concannon. And it just feels like the right time. We've got this brand-new treasury clearing house that we've built. We've really done a good job building out our wealth management and retail channel and have pushed that very far.

And now we've got this movement into private credit, our index business is and fixed income ecosystem is doing very, very well with now $1 trillion, nearly $1 trillion of ETFs. And so it just felt like we've got this surrounding ecosystem that if we could put MarketAxess into it, that team could do better. And I would say they've got tough competition and many of their competitors have just been able to work in a larger ecosystem a broader pool of products that appeals to many of the major institutions and dealers. And I think we can help bring that back in line.

In terms of transaction pricing, yes, as was asked earlier on the call, we tend to like compounding subscription-type models. And again, I'm sitting next to Lynn Martin, if you look at her business, we have tried to take what comes out of the equity securities market and find as many opportunities as we can to move into recurring revenues. We can't do it with the current SEC rules on execution itself because executors have an obligation right now to find the best price and can't really consolidate their buying power into a subscription. That may change and certainly is being discussed by the SEC, and that might make its way over into fixed income securities as well over time.

The next question comes from the line of Chris Allen with KBW.

I think a lot of the questions asked and answered already. But maybe -- when we think about the opportunity to expand market access and share longer term, 1 of the things you noted was client relationships. So maybe you can touch on the opportunity there. And then maybe give us a little bit more details on how you think about the rates franchise from a longer-term perspective in the U.S.?

Yes, Chris, it's Chris. Thanks for the question. So certainly, between the 2 of us, we held a number of client relationships at various points of connectivity, various points of opinions in there is the strategic direction of the asset, and we think about that strategic direction going forward. So that will be a conversation that we have in the months to come and to get there.

But if you look at things like what we've talked about with with Apollo, like what we've done within the credit default swap business and all of the initiatives that we go through there. If you look at the kind of even back to the listing space with the Lynn's business there are points of connectivity or friction points around that, that we should be able to appropriately use in order to create a better, more valued experience by the users, and that's going to start with those relationships that you make reference to.

If you look at the rates franchise that Ben touched on in the prepared remarks, we know what we're doing in Europe there. And certainly, that no secret, we have we're starting from not a lead position here in the U.S., but one that we have begun to assemble the right points that in order to become a competitive opportunity there.

And we look forward to creating that value the right way with leveraging those relationships in order to create competition in that space, and that will be something that we look forward to doing in the coming weeks, months and years.

The next question comes from the line of Michael Cyprys, Morgan Stanley.

So you've spoken about tokenization Jeff, as an evolution of the market infrastructure rather than a replacement of today's exchanges. So as more securities move on change. Just curious over time, how you see industry profit pool is migrating what's most defensible? What areas might need to be defended more? Or might there be scope for new revenue opportunities for the industry, but also for ICE and then if collateral can just move instantly on chain, how much incremental trading activity or capital efficiency, do you think that unlocks -- and where might there be givebacks around that? Maybe you can remind us how much do you generate today from collecting interest on collateral?

Yes. It's a great question. I think we're somewhat thinking about it in 2 buckets, which is a bit how your question was phrased. The transaction side of the business, in other words, matching a buyer and a seller. The blockchain just doesn't have the capacity or the throughput to, let's say, replace what we have at the pillar system that runs the New York Stock Exchange. I mean we do trillions of transactions a day. And there's no chain that has that and no second level that anyone has built that can get that.

And it's also the nature of blockchain that people are writing to multiple nodes. So it has a built-in latency before title can transfer, which we don't have in conventional systems. But in terms of settlement and the way collateral can move we've been limited -- the industry has been limited by U.S. banking hours, really where the main security markets are. And as we go follow the sun around the world, we're having to figure out how we move collateral to these various banking jurisdictions. And that's what on chain collateral movement can do.

It's a bit scary to regulators and to market participants. Retail has embraced it, obviously, as you've seen. But for our traditional infrastructure, we have to deal with -- what happens if there's a financial crisis, what happens if there's a bankruptcy, what happens if a Silicon Valley Bank collapses? And what is in flight and who has titled to it and who what regulator can raise the walls to keep that collateral in the ecosystem that against the trades that are in the same ecosystem.

And so those are yet to be worked out, but as we've been doing, we've been working very closely with the Securities and Exchange Commission in the U.S. to try to move the New York Stock Exchange listed securities on chain. Obviously, others are doing somewhat local like securities around the world, and we think that there's obviously a market for the true securities.

And I also think that it will open once securities can be on chain, not only will collateral movement be easier. But I think for those that are buyers and holders of securities or on chain assets, they'll be able to be pledged and lended in ways that the crypto community is already doing with stable coins and other things, that will give better underpinnings to people that loan money and therefore, I think, unlock more of the economy because there'll be more certainty in the ability to provide capital.

So we're working on it. We're trying to do it within the regulated businesses that we run. We've mentioned a number of major institutions that we have existing agreements with that are all working together to try to solve some of the institutional problems that I just mentioned, but there's real work going on. And so I think later this year and early next year, you'll start to see some significant entities moving on chain.

At this time, we will now pass the call back over to Joe for closing remarks.

Great. Well, thank you, Mika, for moderating the call. And I appreciate you all joining us this morning and staying a little long into the market open so that we could answer all your questions. And we look forward to talking more about the exciting transaction and business that we're building in the future.

Thank you all. At this time, this will now conclude today's conference call. We appreciate your participation. You will be have an amazing day and you may now disconnect your lines.

Next up, we have Stuart Williams. Stuart is the Chief Operating Officer of ICE, the company behind the New York Stock Exchange, world's leading energy futures complex and a growing mortgage technology business. Lately, ICE has become one of the more aggressive traditional players moving into more innovative asset classes like prediction markets and digital assets through its investments in Polymarket and OKX as well as its own plans to build infrastructure for tokenized security. So Stuart, thanks so much for joining us.

Appreciate the invite. Good to be here, Patrick.

Yes. And I think the timing is good. We saw the announcement this morning that you're joining Anthropic's Claude Mythos Preview AI model and you're integrating that into your cybersecurity. So I wanted to -- just given the timing of that, maybe open up the floor, what went into that? How much of a focus is cybersecurity for you? And maybe just talk about that partnership.

Yes, sure. So good morning, everybody. Good to be here. Look, cybersecurity has been a key part of our infrastructure right from the outset when we started the company. And so it's been an area that we've invested in heavily because as you will imagine, given the assets that form part of our group, we are a natural target for cyber attacks. And so this is an area we've had a lot of innovation and a lot of investment in over the years. We've been leveraging AI ourselves, both in terms of our red team activities and leveraging models to attack our own infrastructure to identify vulnerabilities. But once Mythos was public, we approached Anthropic and we've been accepted into the Glasswing program. So yes, right now, the team is busy integrating Mythos into our cyber tools so that we can start looking for vulnerabilities right across our platform. And we'll then start to respond to that as we go along. But it is an important area for us, and so we're pleased to be a part of that program.

All right. Great. Thanks for touching on that. So I guess diving in from your operational seat, as we look across ICE's business and the momentum you're seeing today. How have some of the macro factors, geopolitical uncertainty, new Fed leadership, capital markets activity, how has that kind of shaped the activity and the conversations you're having with clients across the platform?

Yes. So look, we've just announced or recently announced the best quarter in our company's history. And I think one of the things that's really encouraging for us is the breadth of the sort of contribution to those records. So record energy volumes, record interest rate volumes, record clients on our mortgage technology platform. In fact, our mortgage technology platform had a record quarter since Q4 of 2022. And so when you see every component -- and record demand for our data center capacity, so when you see every component of the business responding and contributing to a record quarter, that's super encouraging for us. Now to your point about some of the things that are impacting the near-term drivers, and we'll get into some of the long-term drivers a little bit later, I'm sure.

But there's no question that the geopolitical uncertainty and some of the rewiring we're seeing of the energy supply chain as a result of that is driving a lot of volume in our energy markets. We went into the year expecting a number of rate cuts across all major currencies, and the market is now reconfiguring around new expectations of rate hikes later in the year. So we're seeing -- and we're also seeing a diverging set of expectations across the ECB and the Fed and the Bank of England and all of that's playing out in our markets. We're seeing AI, as I said earlier, driving increased demand for our proprietary data and for our data center capacity. And then on the mortgage technology side, we're seeing, again, continued demand for greater efficiency, leveraging of AI as we roll that out. So really right across the business, we're seeing good growth.

Yes. So let's just double-click there on the data center piece you mentioned. In Jeff's shareholder letter, your CEO shareholder letter earlier this year, he mentioned that you've doubled your data center capacity since 2020. As we see more AI-driven demand for low-latency data access, how do you think about the colocation business as a stand-alone revenue opportunity? And how does that fit into the broader data and infrastructure strategy for ICE?

Yes, it's a great question. Just backing up a bit, I think as many of you will be aware, our really strategic view of infrastructure was that, that was always something we wanted to control and own our own destiny when it comes to infrastructure. And so we, for a long time, have really lend into building a high availability, low latency network that really is the ecosystem around our core data centers. And so if you think about every new market that we launch, every new customer that joins ICE, every new data element that we generate, all of that increases the value of that data center ecosystem.

And our customers have consistently told us that they prefer the ICE ecosystem in terms of high availability, low latency on-prem infrastructure as a place for them to come and interact with our exchanges. And to your point, we've doubled our colo capacity since 2020. And we've sold out on Hall 5, which is the most recent hall to go out. Hall 6, we're busy selling at the moment. That will be complete by the early part of next year. And we've just completed the topping ceremony, which is an interesting ceremony when you finish the building on a second data center building next door to our existing data center building in the Mahwah campus. That's going to further provide a doubling of the capacity we have today. And then we're also about to announce a new colo facility in Chicago for our derivatives business.

So we're really seeing our customers join us on this journey. And obviously, they are becoming more hungry for more data. They're becoming more hungry for more compute. And of course, they want to continue to be proximate to our matching engines. So it really is providing that ecosystem. But to kind of wrap it all up, the real benefit of the colo business is that it becomes a multiplying effect on everything else we do because, as I say, it creates that network in every new data element, every new market we launch, the customers have got access to that from their existing location.

Sure. So you mentioned the scaling that you've done. How do you think about the appropriate level of data center footprint for the business? Like is this something where you feel like with these various locations, you have enough room to satisfy the demand that you're seeing right now? Or is it something where in 5 years, we may reassess this and you think that it's going to be even larger?

One of the first things we did as we started to see the increased demand in this part of our business was introduced the concept of forward auctions. We're a markets company. You've got a commodity that is in short supply, well, you create a market for it. So we've done that, which gives us good visibility of the demand our customers have for colo capacity 2, 3 years out. And so we're going to continue to monitor that. Right now, we feel pretty good about the investments we're making that we'll both be able to fulfill the revenue opportunity that those investments sure will unlock, but also we're keeping pace with growth as our customers' demand grows. So we'll keep an eye on that, but we've got good sight of the demand curve now going forward.

Okay. Switching gears back to the exchange business. I want to touch on energy. It remains one of the great open interest stories. It's up 8% year-to-date already. There's a lot going on in energy markets, as you mentioned. How confident are you in the sustainability of the growth we've seen so far? And then as we look ahead, what is the next leg of the energy story for ICE in your opinion?

Yes, it's a great question. You've heard Jeff say sometimes that he felt the need years ago to diversify the business so that we weren't just dependent on energy, and yet that is still our biggest grower. It is -- so I think an important place to start here is we -- the thesis for our energy business was never that we would just move from one geopolitical crisis to the next. It was really around building a product ecosystem that would have liquid benchmarks at all the key intersections between geography and energy type and then roll out around those benchmark contracts, a series of differentials and spreads and regional contracts that would allow participants to head both long-term risk as well as the more precise needs of near-term risk around particular geographies.

And so that's the ecosystem that we've built. And really, that thesis continues to play out. With every geopolitical crisis, we see a rewiring of some of the energy supply chains. When Russia invaded Ukraine, you saw within a year to 18 months, Europe significantly increasing the LNG regasification capacity because it needed to become less reliant on Russian pipe gas. We're now seeing right now with the closures of the Straits of Hormuz, a lot of investment going in. The UAE is building a new pipe that will come around the Straits of Hormuz, go straight to Fujairah. The Saudis are building additional pipe capacity to go out to the Red Sea. So every time there's a geopolitical crisis, more resilience gets built into the energy ecosystem.

What that means as a practical matter or as a -- from a market perspective is that ultimately, it's more hydrocarbons in transit over more trade routes more of the time. And all of that ends up being hedged through the markets that we've launched. And so that long-term tail effect, if you like, of geopolitical impact is that those reconfigured supply chains will add additional capacity and demand for our markets. Now on top of that, there is also the underpinning broad economic growth story, which over the next 20 to 30 years, most economists will forecast we need to just about double energy. just to meet the demand curve for both economic growth in Southeast Asia, but also the demand growth required for AI and data center capacity.

So all said, we see a strong growth in demand for the next 20, 30 years for our energy markets. And I also think, importantly, there's been a more realistic conversation around more energy from every type is needed in order to meet the forward demand curve that the world has for more energy. So all of that to say is that we're pretty confident and happy with where our energy markets are right now. We'll continue to innovate around that same philosophy of looking for any new intersections between energy type and geography and making sure we can build a liquid benchmark in that location.

All right. So sticking with the topic of energy. Earlier this year, we saw the Iran war breakout. There were people who are looking for access to energy exposure on the weekend, which is when the war broke out. And these perpetual futures markets, volumes kind of exploded. They're still very small in relation to yourselves in CME, but it's something that shined a light on demand for 24/7 trading in energy. Your closest futures peer has kind of took a hardline stance on their last earnings call saying that perpetual futures were something that they didn't believe should be traded in the U.S.

They were more of a speculative product. ICE has been more forward-looking, I think you announced with your partnership with OKX that you're going to launch perpetuals on crude oil, and those would be for overseas customers. But I would love to get your take on not only the opportunity that 24/7 energy trading could provide for ICE, but also just in general, what went into that decision to launch perps with OKX? And what are your just general thoughts on whether we see perps in energy markets in the U.S.

Let's start with the purpose question, and then I'll answer the 24/7 question second. So I think the jury is still very much out on what the economic purpose for perpetual futures is. There's no question that there's a retail desire for near-term speculative -- an ability to speculate in the near term on what's happening in Iran and with the Straits of Hormuz. And -- but whether that will continue once the energy market settle down is obviously to be determined. What I will tell you is, I referenced earlier, we spend a lot of time with customers on product development and looking at what new products they need. So we talk about Brent as if it's one contract. And when we talk volumes, we are talking about the main Brent futures contract.

But I'll tell you that there are 400, 500 other Brent derivative contracts that we've got in our complex that will average over the month, that will have balance of month, that will provide spreads between Brent and other contracts. So every time our customers identify a real economic need or an economic exposure that's not being fulfilled through the current contract set, we launch another contract. And so if the discussion around perpetuals gets to the stage where an institutional trader or a commercial customer says to us, "Hey, there's an economic reason to have that contract that isn't fulfilled with the existing contracts", we'll be best placed to launch that, and we could do that tomorrow. The infrastructure is in place, we could do that. The question is whether and what problem we're trying to solve beyond that near-term retail speculative desire.

Now all of that said, as a retail product, what we're excited about in the partnership with OKX is that there will be products of this nature that are interesting to retail traders that a commercial trader would never touch. But if that scales, we want the ability to participate in that and to get exposure to that. So the partnership with OKX and what we've announced with OKX around the licensing of Brent and WTI for retail-based perps on the OKX platform is a start in that direction. We'll learn a lot from that. We'll learn once the war ends, whether there is actually long-term desire for a contract like this or whether the attention goes somewhere else, but we'll have that optionality. And then the last comment I'd say is on the point of bringing perpetual futures or perps as an asset class or as a contract type, into the U.S.

It is going to require some changes to the way these platforms operate. And the convergence of innovation with regulation is something that we're seeing play out at the moment, and that has really been a sweet spot for us. If you look back in history, when the CDS market hit the financial crisis and something needed to be done to help unpick the complexity of that market and create clearing, we provided that. We're now 95-plus percent of that market. When LIBOR needed to be reconfigured and ultimately replaced, we entered that market and helped facilitate that. So really, when innovative markets start to grow up and start to come into the regulated environment, that really is a sweet spot for us and which is also part of the reason we've partnered up with OKS.

In the U.S., do you feel like this decision by the CFTC to grant a Bitcoin perpetual future for Kalshi, do you think it stops at crypto? I think that there is going to be pushback from a lot of people in the industry if you start putting perpetuals on real markets, if I could use that term. Is that something that concerns you from an operational standpoint? Or what -- have you had any talks with regulators about this?

Yes. We're certainly very active in discussions with the CFTC and the FCA and the MAS and you pick elsewhere soup. We're speaking to all of the regulators about these markets. Again, if there is an economic purpose, if there is an economic problem we can solve with that contract, I feel confident that there's a path for them to be regulated and introduced. If there's not an economic purpose, then we probably don't end up going down that path. Obviously, we'll learn a lot through the Kalshi contracts as they get rolled out in the U.S. and conversations will continue. I do think, though, for commercial participants, the economic structure of a perp, which really reflects the daily spot price or in energy markets, actually, it's a derivative on a derivative. It looks very much like an ETF actually in energy markets, doesn't fulfill the need of a commercial hedger to understand a forward curve and on the basis of a forward curve, make decisions on investment.

So what customers are doing today is they're looking at what the Brent price is 5 years from now in order to make an investment decision on a particular field or a particular refinery. If I'm determining whether I'm going to move a cargo of oil from the U.S. Gulf Coast to Asia, I'm looking at the forward curve to determine what the price in Asia is going to be in a month's time, that's the journey time versus Europe. A perpetual market doesn't give you that. It is a daily spot market. It is not a forward curve. So it really -- that's why I say it's very difficult to see how a perpetual market creates anything that's useful for our current customer base. For retail, speculating on the outcome of war, sure. But for a commercial customer who's making forward investments based on a current view of those prices, it just doesn't fulfill that need. So it's a different use case.

Sure. No, I would definitely agree with you. I think it's more of a retail product and maybe some -- it's going to fill the role of a tool for speculative retail for the most part. And that seems like that's what it's been so far.

Right.

Okay. So moving on, I want to double-click though on Polymarket and OKX. How do you think about leveraging those 2 relationships kind of across the board outside of perps even things like retail distribution, data, market structure? And where do you see the most meaningful commercial overlap with those 2 partners?

So I think the commercial -- initially, the commercial overlap between those 2 is if you think about ICE and our business, we've been historically a B2B company. We've got a fantastic commercial network, fantastic institutional network. We don't have a retail distribution network. Both of these platforms have got great retail distribution. OKX has got access to 120 million crypto-native retail customers predominantly in Asia. That's not a network we have today. So in addition to that, though, what Poly brings is the whole notion of crowdsourcing a view on a particular outcome. I'm not talking about sports betting, yes, that's not the part of the business that we're particularly interested in.

The part of the business we're interested in is the non-sports betting side, the prediction market on particular economic-related events. That, we think, is an interesting concept. We think the idea of having markets on all manner of economic indicator is an interesting idea and could have real economic utility. And so from a Poly perspective, taking that data as the only distributor to a commercial audience of that data that we think is very interesting. So what we're doing right now is we're taking the Polymarket data, we're normalizing it, structuring it and pushing it through our consolidated feed to our commercial customers who, for years, have looked for alternative data sources to inform trading decisions, and this is yet another alternative data source that is of interest to that cohort.

The other thing on the OKX side, and of course, as we've said -- sorry, I'm going back to Poly, of course, on the Poly side, they've got a pure crypto native platform from execution through settlement that manages everything as part of those smart contracts, which we're learning a lot about along the way. On the OKX side, the -- we talked about the retail distribution that we've got there. And then, of course, the other interesting thing that OKX brings in addition to the retail distribution is the -- again, the crypto-native settlement capability that they've got, which, of course, we're looking at from a 24/7 perspective on the NYC to stitch together a Pillar, which is our execution platform with a blockchain native settlement layer that can facilitate 24/7 trading at the NYC.

Okay. I want to shift gears. You took an early lead with extended hours trading in equities on Arca alongside the DTCC. Where does the industry sit today on a path to genuine 24/7 trading in equities? And what are the operational lift items that ICE still needs to get solved to make that a reality?

Yes, it's a great question. So we -- obviously, yes, we took the lead on Arca, and that has extended hours already. In our derivative businesses, we already have some spot energy markets in Europe that operate on a 24/7 basis. So we already have 24/7 platforms...

For derivatives, sure.

Yes, is my point. Where we are now is engaging with our commercial customer base on where there's going to be interest in a kind of longer window for trading. So we already open on a Sunday evening. And so we're in discussions with the market right now on is there a benefit in us opening Sunday a wee bit earlier? Do we open Friday a little bit later? Where are the -- what are the pros and cons of those extended hours. And of course, that would require the market to also have operational staff available to support trading in those hours. So that conversation is ongoing. But of course, the technology and the operational capability to support 24/7 is there.

So I wanted to just make that point. I think the more interesting innovation, though, if we circle back around to the NYC, we've got extended hours on Arca. My point around taking the Pillar platform, which is a platform that is able to and today does handle north of 1 trillion messages per day at sort of a 10 microsecond latency and stitching that platform to a blockchain-native settlement layer, which is what will ultimately facilitate true 24/7 notional-based trading all around the world of the NYC equities. And so that is an area of a lot of innovation. We -- there are things we still have to do. There are some regulatory approvals we still have to get. There are some APIs and connectivity we still have to put in place, but all of that is manageable, and we're looking to complete that in the coming months.

All right. So we'll end on AI. It's transforming workflows across financial services. How is it showing up in ICE's business across mortgage, FIDS exchange business? And where do you see the biggest opportunity, I guess, to deploy it across the various businesses?

Yes, great question. So let me start with the infrastructure. I talked a little bit earlier about our data centers. So we've acquired a bunch of GPUs, and we're in the process of racking and stacking those within our data center. So what that -- that's going to give us the ability to run AI on-prem. We obviously have AI -- we have ability to run AI in the cloud, and we'll be able to move AI workloads between the cloud and on-prem. So we can optimize for speed to market and we can optimize for cost. That gives us some great levers in terms of ensuring that we can control the cost of running AI. In terms of the internal use cases at ICE, we've really centralized all of our AI capabilities under ICE Aurora that you've heard us talk about before. So we are using AI right now for coding use cases. All of our developers are using AI every day to write code.

And that's definitely one of the big reasons why we've been able to accelerate some of our move off the mainframe and some of our synergy execution on the post-Black Knight integration work. On the product side, we've got MCP servers that we've launched in Claude, and we're in the process of launching MCP servers as a channel. The way we think about AI from a FIDS' perspective is really as a channel. It's another distribution channel to get data to our customers and another way that customers can have the ability for AI to directly access the data and process that data within their workflows. So that is an area of innovation for us right now, MCP servers, hosted agents that we're busy rolling out across the fits plant. We're starting out with the nonproprietary data so that we can learn more about some of the controls that can be placed around that data.

But the idea is, over time, that will extend to a full set of data. And then on the mortgage side of the house, this is where we're seeing some real opportunities. And let me give you some examples. So we've launched 16 automated workflow or exception-based workflow AI agents. And what I mean by that is if you think about the mortgage workflow, which is incredibly manual intensive, the big opportunity for AI there is taking a lot of those manual workflows and translating them into exception-based workflows where the human just interacts at the point at which a human input is required. So there's an exception of a human being needs to go and have a look, check something, sign off and move on. And so we've already got 16 of those agents operating within servicing.

And if I take one of those, so one of the workflows, which has 46 touch points that normally takes 10 days is now down to 6 touch points over 2 days. That's real efficiency. And so we're continuing to roll out more of that. And we've got -- we've just launched in March chat and voice AI agents to support the customer support part of that business. And so we see this as a real opportunity. One thing I would say, though, on AI in mortgage, mortgage is one of the most regulated industries in the U.S. right? This is retail making one of the -- maybe the biggest investment they will make in their lives. And so there's a lot of concern around that. So 2 important things when you think about a heavily regulated industry. The first is there are like 1 million pages of regulations across federal regulations, state regulations, county regulations that need to be understood and triaged to make every decision.

So that is a perfect use case for AI. But at the same time, there's a plethora of requirements and new requirements that are coming out all the time for how AI is used. So the responsible rollout of AI is critical. And so we, again, are taking a very thoughtful approach in how we roll out AI. We're making sure that within those mortgage workflows, there is clear auditability. There is clear observability of all the decisions that are made along the way. And so that our customers can use that both to gain the efficiencies but also have the confidence that it's being done in a way that's secure. So there will be more to come on the mortgage side, but that is an area that we're already seeing a lot of gains.

All right. Well, I think that's all the time we have. Stuart, thank you so much for joining us. It's been great.

Thank you.

Good afternoon, everyone. We'll get started with our next session with Intercontinental Exchange. I'm delighted to have the Chairman, Co-Founder -- Chairman and Founder of ICE, Jeffrey Sprecher. This is Jeff's ninth year in a row at this conference. So hopefully, we can get to 10 next year. But as always, thank you for the time. It's always a pleasure interviewing you.

Great. Thank you, Christian. And thank you for those that are in the room here.

Good stuff. And as always, you can ask a question through the Pigeonhole system. I'll try and get to it if we have time. Maybe Jeff, let's just start with the -- just the overall company strategy. You call it the all-weather model. It's certainly delivering. If I look at sort of EPS, very, very strong. All 3 segments are growing. So by almost any measure, the business is firing all cylinders, yet the stock trades at a meaningful discount to peers. Kind of what is the market missing? And what can you do to help close the gap between performance and fundamentals?

Yes. Well, I feel like we're doing our job and you people in the room here need to lift up a little bit here, right? No, I do think we've been caught up a little bit in the SaaS apocalypse. A big part of the exchange and financial services businesses that we run are the distribution and sale of data. And similarly, we run a big network and software overlay for the U.S. mortgage industry. And I don't know, when we talk to investors, they're just unsure right now of what the future looks like in terms of how data is going to be consumed and paid for and how these networks that connect markets like the mortgage space will evolve in a world of AI.

We think -- and the numbers you just mentioned that it's -- those are tailwinds for us, not headwinds and are certainly building the business to take advantage of AI. We've been early and aggressive in adopting AI models ourselves and building AI models with and for our customers. And so I've been at this a while as the founder of the company. And from time to time, the performance of the company and the share price will disconnect. But we're markets people, and I ultimately put my faith in the market, and I know the market will eventually find our value. So it's really just for us, keep your nose down, keep doing the right thing and the value will find us.

Okay. Maybe on the same strategy topic, the one question we do get is around the fact that you have 3 different businesses and arguably, there might be a conglomerate discount to the stock. How do you think about the investment case about 3 businesses together? Why do they create more value than having them separately?

Yes. It's interesting because we have a common customer base that is consuming these businesses. And interestingly, when we bought the New York Stock Exchange, the market said, why would you ever want to own the New York Stock Exchange. It's a legacy business. I mean it's a real legacy business, right, 1792 and one of the oldest businesses in -- continuing in the United States. People were asking why would you want this?

Well, our client base uses the New York Stock Exchange, and it opens doors for us to sell all these other services and network connectivity. And it's a trusted source in terms of getting through your company's firewall and working with your IT department to be a part of our network. And so -- anyway, I give you that anecdote just because everything we do is very network-based and has a common customer base and the trust that we've built with that customer base has allowed us to grow all these segments.

Could they be separated? Maybe at some point, you've made the penetration, you've made the customer relationships and so on and so forth. But the reality is we -- when we started the business, we were an energy commodity exchange and because I came out of the electric power business, and that's what I knew. And I never in my wildest imagination, thought that in 20 years, you could still grow the energy business.

We were talking about using less fossil fuels. Anyone -- you and I as consumers will never consume or buy a barrel of oil. I thought anyone that bought a barrel of oil has an oil company and was already on the platform. Again, I mentioned that just because we continue to grow our customer base. So it's amazing how big the financial services markets continue to grow even after 20 years. And the core business, which we wanted to diversify, continues to be a growth driver for the company.

Okay. So a bit of energy, I think we'll shift there. To your point, 20 years old business. But over the last 3 years, it's almost doubled in revenues given the aftermath of Russia, Ukraine. As you think about Iran and Hormuz and some of the shifts in energy supply chains that come from that, is that -- do you think it's another catalyst for potentially significant revenue growth over the next couple of years?

Yes. And I think when you couple that with -- even on top of the current Middle East conflict, is different trade deals that have been going on where the U.S. in its most recent round of trade deals was trying to equilibrate the balance of payments and was already putting pressure, particularly on Asia to accept more U.S. energy. That's probably moved to the forefront now in terms of scarcity value.

So yes, and you also have the actions in Venezuela that to a certain degree, rewired the supply chains and potentially massive future rewiring as the Venezuelan assets are exposed to the world, particularly rewired in the Western U.S. as well. So you kind of have this duality of the East wanting more shipborne energy, be it natural gas or crude oil from new suppliers potentially and then the Western world bringing on massive U.S. exports, coupled with Venezuelan exports.

We just think that there's a lot more risk in the supply chains and differentiation in the supply chains and new players that are coming into those supply chains that are all looking to hedge and bring activity to our markets. And you can see it in our numbers, it's pretty astonishing. It's not just more volume, but we actually have more participants. And those participants in order to manage risk are consuming more data. So there's a flywheel effect that was probably accelerated by what's been going on in Iran.

Okay. So double revenues in the next 3 years?

Get my CFO up here, and let me listen to him.

All right. Just drilling on to your point around sort of supply chains and U.S. energy being the sort of dominant incremental source of price discovery. Just talk about how that's impacting benchmarks globally. We're moving towards more Houston from Cushing as the pricing mechanism and that's benefiting your ecosystem. Just talk about how you think about the different benchmarks over time and how that benefits you.

Yes. So one of the flagship products that we trade is Brent crude oil. Brent was a grade of crude that came out of the North Sea between the U.K. and Norway. And over time, the U.K. has shut in those oil fields. And while we have this thing we trade called Brent, there's actually no Brent crude in Brent. We basically took that index, if you will, and modified it and expanded it so that to a certain degree, it is the optimal price of oil on a ship moving around the world. And we did that partly because there was no more Brent in the Brent crude index. So we needed to reconstitute the index.

But then we caught this wave of U.S. energy dominance and oil exports and shipborne oil moving around the world. And then you couple that where we -- years ago, I asked my colleagues like there's a pipe that goes between the U.K. and Europe, and we were trading natural gas on the U.K. side. And I asked my colleagues what trades on the European side, and they said nothing. And so we created this index called TTF, which was just natural gas, Dutch natural gas that was really there in our minds to create a basis trade for this -- the other end of this pipe.

And because of a series of events, Europe is now a net importer of liquefied natural gas. And that marker has become the marker for natural gas at sea. Similarly, we have a marker called JKM, the Japanese Korea marker. And again, because of many of the trade deals and a rewiring of the energy markets, we really expect a lot from risk management around Asia natural gas. So we -- I don't know, WTI, which is the oil in the United States is actually oil in a pipe delivered to Cushing, Oklahoma.

And while we still talk about WTI and we still talk about the Dow Jones Industrial Average. The reality is, I think in the world of supply chain, it's export and import shipborne oil and natural gas that is really helping to manage risk. And the relevance of taking delivery of oil in Oklahoma has lessened even though there's still a lot of trading in the Dow Jones industrial average, and there's still a lot of trading in WTI. And I think it will continue. It's just these other grades, I think, is where the growth will be.

Okay. Let's switch over to digital assets and tokenization. Clearly, a lot of focus around tokenization today. You guys have an initiative to grow there. A lot of different players, traditional peer exchanges, crypto firms. Just talk through what you're doing, how that's different. And then ultimately, how do you think about like the revenue or the monetization here? Is it more volumes? Is it something else? I'd be curious.

Yes. So I think the end state in my mind for this, this is one person's opinion, right? But the end state in my mind is that we're going to exchange value over the Internet, and it will be tokenized effectively and it will be encrypted. And why will we do that? Well, the banking hours and the banking systems close. They have banker hours. And so we have -- what we just talked about was global supply chains, global energy movement, which we trade. We have 13 exchanges and 6 clearing houses around the world to do that.

So to a certain degree, we follow the sun. But the reality is that when banking hours close in a region, we basically have to close money movement. And so I think as we move to 24/7, 365 trading of things around the world, the capital is going to move on the Internet. The thing that could disrupt -- and I think that is -- that's already happening in the crypto world, and I think that's going to be institutionalized in the world of you and I sitting in this room.

The thing that could change that is if encryption could be broken, in which case, we may move to a world like that, and then it may move either encryption will get better and outlive quantum computers. And we all know and have read dozens and stories about crypto wallets that have been hacked and Bitcoin that's been stolen and what have you. If that's the case for traditional capital, then I think we'll move those tokens back on to some kind of private network banking system. But we will have gone 24/7, 365.

The other thing it's doing is that we're dollarizing the world because we have people around the world that want to own the Magnificent Seven, because that is dollar-denominated, people have figured out how to use Tether and USDC as stablecoin dollar-based collateral to buy these things. And so -- and other countries that have been slow to recognize the tokenization of money are being left behind. And so I really feel like we're just going to have global money movement.

What does that do for my company? It allows us to -- for people to trade 24/7, 365 and it allows us to -- instead of having excess collateral in our 6 clearing houses, we can keep, let's just say, excess collateral for an institution in one of our clearing houses. And as the trading moves, we can quickly transfer funds and always keep everything in balance. That's what I really think crypto and tokenization is doing. I think we're already working with 3 large banks who are tokenizing deposits. And so while we have stablecoins right now, and that's a very popular retail product for institutions like us, we may just be using a different set of wires to move the money that we already have in our accounts, and it may move a lot faster, a lot more efficiently and cheaper.

I've talked to senior people in the U.S. government, senior people in Europe and U.K. government about could you really extend the legacy pipes of the banking system? And the answer is no. The answer is those are controlled by government entities. They're slow to react. They kind of depend on closing the banks so that you can resolve a failing bank like a Silicon Valley Bank, they kind of like the idea that M&A and other things can happen over the weekend, and we can have Monday morning surprises. But I do think that, that attitude is going to be overtaken by the private sector, which it already is. And we've been, I think, aggressive and quick to embrace it, because I think it will yield better, faster, cheaper risk management. And ultimately, that will increase our volumes and our earnings and cash flow.

Okay. You took -- you have taken stakes or at least partnerships with 2 prominent digital players, OKX and then Polymarket. On OKX, just talk through the rationale behind that investment, what you're trying to get done, maybe your vision for that partnership.

Sure. One of the things we have done is we've applied to the SEC to tokenize stocks at the New York Stock Exchange. Now the reality is the market doesn't want us to tokenize stocks at the New York Stock Exchange. And so what we've done is we've set up a sister company, which they call an ATS, an alternative trading system. And we've asked the SEC to allow us to trade 24/7, 365 stocks. And we're well along that process of getting approval, and we think we will get approval, and we think we will -- we believe we can -- the SEC has the authority to approve this under existing U.S. law. It does not require the crypto bill called the Clarity Act to pass.

And assuming that we do that, on day 1, I would expect no one in this room would want to participate. There's a broad resistance to trading over the weekends and trading at night, and it's just not how the infrastructure has been set up, but there is a demand for it. And so we asked the question, well, how are we going to -- who's going to show up to distribute this? OKX is the second largest crypto exchange after Binance. Both Binance and OKX, they were brother sister, CZ, who started Binance, was the Chief Technology Officer of OKX and eventually left to start his own, but these are 2 Asia-based crypto exchanges.

And OKX got into trouble with the U.S. under the Biden administration, paid a large fine and agreed to a monitor and agreed to do KYC AML and really get to know their customers so that they could follow U.S. law. And we liked that about them, and we said, okay, they want to enter the U.S. lawfully and legally. We want to distribute tokenized 24/7 equities in Asia which is where that volume -- incremental volume would come from. So we'll help them effectively become a broker-dealer and FINRA regulated and with SEC oversight, and they'll help us by distributing into Asia. And you all can sleep and not worry about it and then wake up in the morning and see where -- what happened, I think.

Anyhow, and then similarly, we invested in the prediction markets into Polymarket because Polymarket is a true DeFi exchange. It, in its absolute form, has no oversight. The market determines what's going to happen, what products trade, how the things settle, their stablecoin collateral is algorithmically attached to each trade. The trades settle algorithmically. I mean, very different than what we do that has human oversight, human responsibility and has a clearinghouse as a separate entity that settles trades.

We're just interested in that technology. It doesn't fit with U.S. regulation. And we've been helping Polymarket and articulate like what could be modified to allow it to be U.S. compliant. And we've been spending a lot of time with the CFTC to talk about the core principles that legacy exchanges like we are subject to and how those might apply to a DeFi exchange. We're distributing their data to you all, the institutional market.

We do think that over time, a lot of what's being talked about is sports betting and even politics. But we do think that there's going to be a tremendous growth of economic data that gets benchmarked and traded in prediction markets and on legacy exchanges. It's going to bring institutional investors and retail investors together to discover prices and inputs. And we just want to be a part of it, and we wanted to fully understand the DeFi movement. So it was kind of a marriage of we'll help you, you help us, and let's see if we can move the market along.

Okay. Some of these crypto-native players are also coming after some of your markets. Hyperliquid has got a lot of attention in the energy markets. What do you make of that platform as a competitive threat? And sort of how do you think about being responsive to what they're doing?

Well, first of all, we know them well, and I've met with them a number of times personally and to talk about what they're doing, what we're doing, where there may be some common overlap that we can work together on. They have gotten attention because they've been trading oil on the weekends when our traditional oil markets are closed. And it just so happens in this time of conflict in the Middle East, there have been a lot of activity that happens, a lot of decisions and things happen on the weekend. So it's gotten a lot of interest.

I think the reality is it's going to go to the next level on -- they've listed SpaceX for trading -- or they've listed a derivative of SpaceX for trading. And I think it's going to be really interesting to watch on June 11 when SpaceX goes public, what this private market has discovered as the price and whether that price impacts the IPO. I think regulators and market participants are going to say either it was irrelevant or it was highly relevant.

And so to a certain degree, I guess I'll withhold judgment for another few weeks other than the people that have built that exchange are extremely smart. and that is a true DeFi exchange. And it's attracted a lot of market makers and other market participants, early adopter market participants that would ordinarily be in our traditional markets are there exploring this technology and this way of doing business.

It is on a blockchain. It is settled with stablecoins, algorithmically settled. It has very high margining. You can have up to 100:1 leverage, which is part of the allure. It means going back to SpaceX, depending on how much leverage is allowed, you're going to have retail essentially mathematically are going to be putting a lot of capital at risk on that IPO. It may -- depending how big this gets, it could be bigger than the IPO. So that's why I say I don't think you can ignore it. I don't know yet whether we embrace it or hate it, but I think we'll all have an opinion in June. And I salute these guys for doing it. I mean, these are some very, very smart people.

Maybe just on the energy and oil side, clearly, they've tapped into a demand. Is there anything ICE can do to at least help shape that demand and bring that volume back to you?

Yes. So we went to all the major oil companies and said, good news, we can stay open. We follow the sun. We have people around the world. So we can stay open on Saturday. Good news, and it wasn't very good news, honestly. And so the market hated it. So what you're going to see us do is stay open very, very late on Friday and open very, very early on Monday. And so essentially narrow down the window that there isn't traditional trading.

And I think it's a wake-up call for the industry because while most of our institutional clients are not trading on blockchain and they're not -- these are unregulated foreign entities and most of our clients don't even have the ability that internal controls don't give them the ability to trade on these things. They're all watching it, and they're watching the price discovery. And whether they admit it or not, it is being part of the zeitgeist of when our markets do open really, really early on Monday.

And so in that sense, they're important. And we would -- we just think that like it or not, markets are -- have become much more global, much more dollarized. And there's been a -- just like the equity markets that many of you participate in here, the rise in retail and the equity markets is phenomenal, and that's happening in all markets. And I think we're just going to have to get used to the interplay of retail and professional trading 24/7, 365.

Okay. It sounds like you're a founder. It sounds like you have some at least admiration for those founders.

I love that. I wish I was younger and doing it. By the way, the number of billionaires that are being created doing this. This Hyperliquid that we're talking -- if you haven't heard about it, it's bigger than NASDAQ, okay? It's 11 people. You look at it, you're like, wow, that's pretty something.

Right. There's been some reports and then yourselves and CME have raised some concerns with regulators around the risks of this type of liquid venue. I guess how do you answer skeptics? Well, what are the risks that you see one? And how would you answer skeptics that think or simply say is regulation to slow down a fast-growing...

Yes. There was an article written where it had us in the headline that we were all freaked out about it. We're not freaked out about it. We're actually talking to these people and learning about it. They're learning what we're doing. We're helping them understand our world. They're helping us understand their world. So in that sense, a joint admiration.

But what we are saying to the regulators is can we do that? Like, why are we -- why are you prohibiting us from doing this when it's already happening? And can't we have a level playing field. And by the way, this stuff is global. So -- and the U.S. is very -- under this administration is very pro-digitization. And so how do we square that circle? Because we'd like to do more of it if you think it's lawful. And if you don't think it's lawful, then how come they're not getting the same nasty letters that you send us.

The thing that is trading right now, which you'll hear a lot about is a thing called a perpetual future. In our world, it's called a swap. And in our world, Dodd-Frank was passed and Dodd-Frank says exactly how swaps are reported to the government and what -- who is a swap dealer and how much you can margin and how these things get liquidated. And Title VII of Dodd-Frank is a whole multipage set of laws that was designed specifically after the financial crisis to prevent the trading of swaps. And so now we call these things perpetual futures and they're highly levered and very liquid.

And the regulators have a choice to make, which is do they create some new category of regulated perpetual future? Or do they call them swaps and suck them into Dodd-Frank and EMIR in the EU and there's similar regulation in Japan. And we don't know the answer to that. I'm not sure the regulators know the answer to that right now. On the one hand, people want there to be innovation. They want there to be competition. On the other hand, the incumbents like us, we want to make sure that we understand the rules and that it's fair competition. And I think the next few months and maybe the SpaceX IPO will -- I think people will start to settle around a common view of this stuff.

Okay. Just quickly on just how you think about strategy and attacking this whole digital asset space. It seems like it's been very much about taking equity stakes. But as we roll forward 3 to 5 years, is there a vision of ICE having its own on-chain platform, et cetera, as opposed to sort of a stakes approach?

Yes. So we have already hooked the New York Stock Exchange to a blockchain market for settlement. We're running that in our own data center. It's not public, but we proved we can do it. And so I think -- like I say, I think as we digitize collateral, I think we're ready to go. We understand what to do. What I said to you, though, is we hooked the New York Stock Exchange market to a blockchain because we do 1.7 trillion transactions a day, like it's the volume on the New York Stock Exchange is like staggering. It's more than Google Search, I think. And there's no chain that can handle the kind of volumes that we do.

Second thing is that on a blockchain, the way it's decentralized is you have proof of stake or proof of work, but basically, you have to have multiple Oracles that -- or multiple validators that agree that title has transferred, and that takes time. And we all live in a world where algorithmic traders are in microseconds, making markets on our platforms. And they don't -- I don't think the market wants to go back in time on latency. I think the market wants -- has figured out how to deal with fast speed, but it wants the kind of digital settlement that I described earlier against that speed.

And I think blockchain as it exists today, even the best chains are good enough to net positions relatively quickly and move collateral near instantaneously, but not at the same speed that -- and the same velocity that trades are being done. And I think that will be a relatively easy and painless transition for most people because collateral movement against the positions that you all take is done by your back office. It's well understood how to move capital. I think this is just a different set of pipes. The big banks that are working with us are going to accommodate that wiring and network. And I think eventually, most people will coalesce around a single chain and -- or multiple chains that can talk to each other. And I think it will happen pretty organically, but relatively quickly.

Okay. Let's move from digital assets and instant settlement and speed and innovation to mortgage technology. It can't get more different than that. On mortgage, maybe just firstly, more of a macro question. I think there are certainly hopes of rates coming down this year, that sort of flipped. The business seems like it's beginning to turn around irrespective of the macro. But just talk through how changing rate expectations impact sort of how you think about the business over the next year or so.

Yes. We have an interest rate franchise in the company and what we didn't have was consumer rates, which is really, let's call it, the cash market. We have a lot of derivative markets. We wanted to have a counterweight to our business in order to create an all-weather name. We thought as interest rates, if they were to go down, home mortgage volume would go up and derivatives volume would go down. The opposite has happened. Interest rates have stayed high. Our -- the best product we have at our company and the fastest-growing product we have are the interest rate derivative markets. The all-weather strategy has worked. It's just frustrating that there's this one leg there that we all had -- we thought it was going to go the other way, and it hasn't.

So -- but what we have been doing in the interim, we run this network, pretty much everybody in the U.S. mortgage industry touches our network, probably over 90% of all mortgages at some point go across our network. And when they go across our network, we're gathering the data and distributing mortgages -- people don't -- lenders don't write mortgages and then hold the mortgage on their books for 30 years the way maybe they did in the 50s. Mortgages are either packaged and sold into mortgage-backed securities. The servicing rights can be and often are stripped off and sold and mortgages are packaged in different ways or they're given to Fannie and Freddie, who then Ginnie Mae and who then turn around and repackage them and put them into other kinds of government-backed securities. So these mortgages are moving around, and we run this network.

And what we're finding now in a world of AI is that, that is a foundational layer for which everybody is interested in improving the velocity of executing a home mortgage. But because they change hands, the data set also has to change hands and has to be auditable. And the government has -- Fannie and Freddie have now come out and said, we do not want mortgages that AI is underwritten because we don't know what's underneath those mortgages. We want a foundational data layer that is auditable. We don't care if you use AI to help automate some of your workflow, but the mortgage itself has to have this foundation layer.

So we've been working with -- around with the government and with major market participants to put AI heads on top of this network to streamline the way things flow. The most amazing thing that we discovered, which AI has helped us do is that we have this amazing topology on our network because we see pretty much everybody and everybody's data. We know who does business with who. We know where the mortgages go, how they originated, where they go. We know in a company, which employees have access to which data because data is segregated depending on what your role is in a company in order to protect the consumer.

And so we've now been working using Claude and Anthropic to create a topology layer that is, we think, going to be really valuable to help automate the workflow, not just inside a company, but across the whole industry, and knowing who does business with who and where the mortgages went and how to reconstruct them. And if there is a default or a foreclosure, what the origination of that mortgage was and who's liable for the sharing of the pain. So anyway, kind of the opposite, I think, of what people thought about that business that maybe that everybody would just go write their own code and write their own platform. And the reality is that data -- foundational data piece, we think, is very, very valuable.

Okay. To your point, the data piece and your platform Encompass is a dominant loan origination system. There are a couple of new AI native players. One particular Vesta has been pretty visible with a couple of competitive wins from your platform. Again, how real is this threat from the sort of players? Is there anything you're doing in your business to sort of neutralize that threat?

Yes. Well, first of all, I would say there's a lot of experimentation going on around with AI, including in my own company and the way we're using it for our own needs. But there are start-ups that are running out and saying, look, give me 10 loans and let me show you how my thing works. And most of this stuff is very, very good if you're dealing with vanilla ice cream. But what you find in the mortgage space is we're a very diverse population with a very, very diverse housing set and very, very diverse outcomes on what happens with a mortgage. And the edge cases are the ones that regulators care about, honestly, and the ones that catch people by surprise.

And going through a foreclosure, for example, is a legal process. If you -- for those that are of my era, remember that during the financial crisis, lenders were showing up with loan documents in court that had what they call robo signatures. In other words, they were not the original wet signature, and the courts would not honor the foreclosure. And our system of dealing with the resolution of mortgages is very, very deeply ingrained in the legal process, and there's a process in every state and jurisdiction on what has to happen and an AI model, maybe that helps a lawyer, deal with that better. But the reality is it is very -- it is not something that the courts want to see automated. Everybody learned that in the financial crisis with these robo signatures.

So those are areas where we just don't think the incumbents understand. We -- like I say, I don't think people were prepared for Fannie and Freddie to say we're not going to underwrite those kinds of mortgages. You can understand why they're saying that, like this could be the next financial crisis if we don't understand what the algorithm is doing or what data it's using or is it hallucinating and is it discriminatory? It's just a highly regulated area and the most important decision that a consumer will make that has a lot of empathy by lawmakers to make sure that they're treated fairly and properly, and that's very hard right now to automate.

We can do little workflow things to make sure that the people that are in charge are doing it fast and efficient. But I think people are overestimating, putting AI into regulated markets. I think there are other markets where you could do AI and have it adopted. Regulated markets are tough. I'm telling you. We run regulated markets, and we have a lot of expertise, and we get dinged all the time and every one of our lenders gets dinged all the time. And we have 3,500 lenders that are on this network, and that thing is completely audited from soup to nuts -- every lender is audited on the behavior on that network. And so it's something that is -- puts us in a very strong strategic position, if you will.

Okay. Let's switch over to your fixed income and data business. Pretty interesting launch you had on private credit data, I think with Apollo as the anchor. Just talk about how that came about. How do you ultimately take what is, I guess, a single partnership into an industry standard? And any thoughts on sort of the vision for this over time?

Yes. I think, first of all, a lot of credit to Apollo, Marc Rowan and Apollo. They are one of the leaders in the private credit space. And in talking to Marc starting maybe 1.5 years ago or more, they felt like the market was not appreciating the quality of the loans that they had originated and their ability to put their own credit standards on things that. And so now with the sort of recent downturn in share prices for people in the private credit space, Marc and the team there wanted to provide more transparency into what they've done because they think the market has overreacted. So how do they want to do that?

So we've set up a relationship with them where they've -- so far, they've given us -- we've been working on this for over a year, but so far, they've given us about 12,000 loan documents that cover about 1,100 loans. And we've been going through their loan documents and essentially building a data set of 350 unique qualities that we jointly agree sort of define a loan. And of those 350 attributes, there's about 65 in our mind, somewhere around there, that if you were going to buy a loan from them or have a loan on your books, you would be interested in those 65 attributes. And to the extent that there's a change in credit quality, like what has happened to those 65 attributes. And there's probably 20 or 25 of those attributes that if you were actually going to do secondary trading of a loan, you'd want those updated all the time so that you could see the real value of that loan.

So anyway, we're starting with just -- let's just get transparency into what these loans are, how they're constructed. And Apollo, on its choosing will allow certain of its limited partners to have access to that data set. So as Apollo marks these to market, those people that are on the receiving end have some visibility into what are the attributes that are in that loan and what are the attributes that Apollo is looking at when they're coming up with the marks. We've been talking to most of the other major private credit entities who are all interested in what we're doing and are in various stages of determining whether or not they want us to do that for them.

But if I had to guess, I think a lot of the LPs will like having more visibility because these things are on their books. And I think there'll be -- I don't know, my experience is that it's hard to get transparency. Floor traders didn't want to give up their position on the floor and people like dark pools because they don't want to see -- have people think that they can see what they're doing in a lit market when in reality, dark markets have the same participants as lit markets. I'm not sure there's a lot of difference. And over time, we've all kind of gotten used to, okay, I'm going to be more transparent. I think that will happen to the private credit market. And kudos to Marc and the team at Apollo for wanting to take a leadership role there.

Okay. A quick question on just your infrastructure. You've chosen unlike your peers to own your own data centers. And there's certainly been -- from the revenue side, that's been a great decision in the last -- at least in the last year or so. Remind us again why you chose that? And then how you think about just demand sustainability for access to your data centers, et cetera, over the next couple of years?

Yes. So there was a period maybe, I don't know, 10 years ago when everybody was moving to the cloud, and we have a lot of business in the cloud, and we work with all of the major cloud providers. And for you all that do business with us, we're cloud agnostic. You can show up with your own cloud, but you will pay for it. And what we figured in the early days of cloud is we couldn't control the expenses for the cloud, like our people were using more and more and more of it and the price was going up and up and up. And we were like, well, this -- as a manager, it's like this is not a good situation.

So we said, we run the New York Stock Exchange [indiscernible]. Like, we have everybody and their brother in finance wants to take data and information from us. we should have our own data center network. And we should -- beyond that, we should build our own network. We should have our own pipes and wires and create our own cloud. And so we have a thing called the ICE Cloud, which is how many, many financial services companies take data and information from us. There's been a demand -- as we move from floors to screens, from mouses to algorithms, there's been more and more demand to be located in our data centers. And we created a concept of you give us your hardware -- you pick your hardware, you give us your hardware. We'll put it in our data center, and we'll manage it for you. And we'll co-locate it, and we will guarantee that no one has priority over anyone else by literally down to microseconds, making sure that the data distribution is even across all players.

And -- anyway, that caused us to start building data center capacity. And then kind of NVIDIA took off maybe a couple of years ago. And we decided maybe we should get some of these GPU chips and maybe we should maybe build more data center capacity, and we need to get electric power and cooling and everything else. And so we luckily, I guess, sort of beat the curve. And so we've got a brand-new data center that sits next to the -- New York Stock Exchange data center is still not built completely full. We're going to fill it up here pretty soon.

And now we've got a second data center about the same size that's sitting next to it that will allow us to expand for years. And so we run auctions for space for people that want to be a part of that data center. And now with our -- with all the AI stuff that I mentioned to you, we can use the cloud if people want to use a cloud for running inference and learning or we can use our own GPU stack. So I don't know, we're in a really good position. And as Christian is alluding to, we have a lot of clients that are like, okay, that sounds good to me. How do I get into it?

Great stuff. We're almost out of time, but I wanted to just squeeze in one last one and you have 1 minute, Jeff, on this one. So it's just the next 5 years or so in the company, if I think through the last 10 years or so, you've added a new big segment. It was fixed income and data, then mortgage. What's next? What's the next big step?

Well, I mean, to a certain degree, we talked about we're moving into private credit. We're moving into tokenized collateral. We're moving into 24/7, 365 access to everything we do. Without doing anything other than the organic growth that I just mentioned to you, I think it's going to transform the company.

Great stuff. As always, always a pleasure. Thank you very much, Jeff.

Great. Thank you, Christian. Thank you.

Hello, everyone, and thank you for joining us on today's ICE First Quarter 2026 Earnings Conference Call and Webcast. My name is Drew, and I'll be the operator on the call today. [Operator Instructions]. With that, it's my pleasure to hand over to Steve Eagerton to begin, Head of Investor Relations. Please go ahead, when you are ready.

Good morning. ICE's first quarter 2026 earnings release and presentation can be found in the Investors section of ice.com. These items will be archived, and our call will be available for replay.

Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment and are subject to risks, assumptions and uncertainties. For a description of the risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2025 Form 10-K, 2026 First Quarter 10-Q and other filings with the SEC. In our earnings supplement, we refer to certain non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You will find a reconciliation to the equivalent GAAP term in the earnings materials, when used on this call, net revenue refers to revenue net of transaction-based expenses, and adjusted earnings refers to adjusted diluted earnings per share. Throughout this presentation, unless otherwise indicated, references to revenue growth are on a constant currency basis. Please see explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items.

With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardiner, Chief Financial Officer; Ben Jackson, President, and Chris Edmonds, President of Fixed Income and Data Services. I'll now turn over the call to Warren.

Thanks, Steve. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 4 with our first quarter results, which represented the strongest quarter in ICE's history. First quarter adjusted earnings per share were $2.35, up 37% year-over-year. Net revenues reached a record $3 billion, up 18%. Adjusted operating income totaled a record $1.9 billion, up 26%, with meaningful contributions from all 3 of our operating segments. This is the product of a deliberate strategy, disciplined execution and a platform built for precisely this environment. These results build on an already strong base.

In the first quarter of 2025, we delivered 8% revenue growth and 16% adjusted EPS growth, which were both records at the time. That compounding dynamic is what distinguishes ICE. Our business deepens with use, our recurring revenues compound over time and our expense discipline creates the capacity to invest in future organic growth by simultaneously delivering strong operating leverage and free cash flow. On the topic of expenses, adjusted operating expenses totaled $1.035 billion, in line with the midpoint of our updated guidance range. The update reflected performance-related items such as license fees and compensation directly tied to the strength of our results, with these costs more than offset by revenues. Looking to the second quarter, we expect adjusted operating expenses to remain consistent with the first quarter and be in the range of $1.030 billion to $1.040 billion.

Adjusted free cash flow generation was a first quarter record $1.2 billion, a figure that speaks to the quality of our earnings and the capital efficiency of our model. In the first quarter, we repurchased approximately $550 million of our own stock including an incremental $200 million executed during mid-February when the market price of our shares further disconnected from the fundamentals of our business. And in total, including dividends, we returned nearly $850 million to shareholders during the quarter.

Let me now turn to Exchange segment on Slide 5. First quarter exchange net revenues reached a record $1.8 billion, up 27% year-over-year. Critically, these results compound on top of 12% growth in 2025, an 11% growth in 2024. Transaction revenues grew 33%. Our interest rate complex grew nearly 70% versus the year ago period as investors and institutions increasingly seek to manage duration risk. In Energy, our global oil complex increased 47% year-over-year, reflecting the continued primacy of ICE's energy benchmarks as a reference point for global capital flows. Natural gas and environmental products, which represent half of our Energy revenues grew 37% a testament to the structural reality with the multi-decade evolution of the global energy mix is increasing the need for sophisticated risk management tools. I want to offer some important context on our volume composition for those who may be wondering about sustainability.

March was exceptional for our Energy business, but the underlying momentum was well established before those events. In addition, energy open interest through April remains up 6%, and that persistence is what matters. Customers are not simply reacting to headlines. They are building long-term exposure. Meanwhile, interest rate open interest stands 63% above year ago levels, signaling structural expansion and the breadth of how our customers are managing rate risk. In fact, total future and options open interest reached a new record just this week up 23% year-over-year, further underscoring that the activity we saw in the first quarter is carrying forward.

Our recurring revenue streams, Exchange Data Services and our NYSE listings franchise reached a record $405 million, up 10% year-over-year, with Exchange Data and Connectivity Services growing 13%. These revenues grow as more participants embed ICE's data into their workflows, creating network effects that make us more valuable, the more widely they are used.

At the NYSE, we continue to set the standard for quality listings globally. In the first quarter, we welcomed 25 new operating companies, facilitated the largest transfer in our history with AstraZeneca and maintained a retention rate above 99%.

Turning to Slide 6. In our Fixed Income and Data Services segment, we delivered another quarter of strong broad-based execution. First quarter revenues totaled a record $657 million, up 9% year-over-year. Transaction revenues grew 14% to a record $143 million, performance was led by our CDS Clearing business, where revenues increased 18%, driven by elevated global macroeconomic volatility, while recurring revenues reached a record $514 million, growing 8%. Within Fixed Income Data & Analytics, we achieved record revenues of $322 million, up 7%, aided by strong net new business trends in our pricing and reference data offering and continued momentum in our Index business, which ended the quarter with a record $829 billion in ETF AUM, up 21% year-over-year. In total, there is now approximately $2 trillion in assets benchmarked to ICE indices, roughly double the amount tracking this franchise when we acquired the BofA Merrill Indices less than 9 years ago, a trajectory that reflects the power of our Data platform.

Data & Network Technology revenues increased 11% in the first quarter, reflecting strong demand for our ICE global network, consolidated feeds and desktop solutions. Private global data center network connecting over 750 data sources and 150 trading venues across 24 countries is a physical infrastructure asset that cannot be replicated quickly or cheaply, and it continues to benefit from secular demand trends, including higher messaging activity and AI-driven demand for capacity.

Please turn to Slide 7 for our Mortgage Technology segment. First quarter revenues totaled $539 million, up 6% year-over-year. On a pro forma basis, inclusive of Black Knight, this represents our strongest quarterly performance since Q4 2022. The broader mortgage origination market remains well below its long-run normalized potential, and yet we are growing, which speaks to the strategic value of what we have built. Recurring revenues totaled $401 million, reflecting continued product adoption and the beginning of normalization and Encompass contract renewals. Recurring revenues also benefited from roughly $4 million of onetime items. Accordingly, we anticipate second quarter recurring revenues will remain around current levels. Transaction revenues totaled $138 million, up an impressive 22% year-over-year, driven by a significant increase in Encompass closed loan revenues, which materially outpaced industry volumes as customers increasingly exceed their contractual minimums and by the double-digit growth in Closing Solutions, supported by strong refinancing activity.

The strategic logic of the Mortgage Technology segment is increasingly evident. The integration of our Encompass Origination System with MSP has transformed what was once a collection of stand-alone products into a true end-to-end mortgage platform, processing a loan from initial contact through origination, servicing and secondary market execution, a unique offering in the industry. We have the cost structure, the customer base and the network in place for when the market normalizes, and we are investing through the cycle to ensure that opportunity is captured.

In closing, we operate at the intersection of markets that respond to different forces. By connecting those forces through our Exchange infrastructure, our Data Network, and our Mortgage platform, we have built a model that is designed to perform through cycles not around them. This quarter demonstrates what this platform can deliver when all 3 segments are executing well simultaneously. But even when they are not all in sync, as has been in the case in prior quarters, the model still compounds. The forces that are driving our results are structural, the irreversible digitization of financial markets, the global expansion of risk management needs, the growing reliance on proprietary and institutional-grade data by AI systems and human decision-makers alike and the analogic digital conversion underway in the U.S. mortgage market. We are confident in our trajectory for the balance of 2026 and beyond as the forward opportunity set remains as large as it has ever been.

I'll be happy to take your questions during Q&A. But for now, I'll hand the call over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 8. Across ICE's Derivatives platform, we've built technology that evolves with our customers' needs combining deep liquidity, global participation and transparent price discovery into a single connected marketplace. The first quarter was a clear validation of how we've built and scaled our markets. In environments that test liquidity, capital efficiency and operational resilience at the same time, the value of integrated global market technology becomes visible very quickly. This quarter, our platform was used exactly as intended to absorb complexity, facilitate price discovery and allow customers to manage risk at scale. That translated into significant activity across our markets.

March marks the highest monthly volume in ICE's history, exceeding the prior record set just 2 months earlier by more than 70%. For the quarter, total average daily volume increased 45% year-over-year with records across interest rates, global commodities and energy. In addition, looking forward into Q2, total open interest across futures and options hit new records over the past week alone, growing more than 20%. As we have consistently said, open interest is the leading health indicator of our markets, and rising open interest alongside record volumes signals that customers are building and maintaining positions, not speculating and exiting.

As market shifts directly impacted inflation expectations, demand for interest rate risk transfer accelerated sharply. At the start of the year, SONIA futures were pricing 2 U.K. rate cuts. By mid-March, the outlook had reversed to rate hikes, driving a rapid reset in short-term pricing. Customers responded by turning to our markets in size with SONIA ADV increasing more than 120% year-over-year and open interest more than doubling as participation broaden.

Similar dynamics played out across our European Rates Complex. Euribor futures and option delivered record volumes as expectations for ECB policy shifted. On March 3 alone, ICE traded over 9 million lots of Euribor futures, underscoring the depth of liquidity our platform provides when markets shift materially.

Another contributor to our strong performance is the deliberate method that we have developed for our Global Energy franchise. Our approach has been consistent, establish a trusted benchmark with deep liquidity then surrounded with differentials, spreads and regional contracts, creating network effects and giving customers increasingly precise tools to manage exposure. We applied that blueprint to Brent and crude oil, ICE gas oil and refined products and to TTF in global natural gas. As participation grows, those network effects compound not only through new products and customers, but also as existing participants deepen their activity across the platform. Historically, participants who come on to our platform during period of heightened volatility, stay once conditions normalize, and we expect this cycle to be no different.

Importantly, performance was already strong in January and February. Before the Iran conflicts escalated in late February, Energy ADV was up double digits, and open interest was also up in both months. As disruptions on energy infrastructure and trade flows emerge, energy markets repriced rapidly, and our platforms easily facilitated the global demand. In oil, record Brent ADV increased 60% year-over-year with record participation up 10%, positioning the benchmark as the primary venue customers turn to, during periods of stress.

In our global natural gas markets, TTF delivered record ADV up 61% year-over-year with record participation up 12%. TTF set a new single day volume record of 2 million lots on March 3 and by the end of March, year-to-date volume was already at 46% of the full year 2025 total.

In Asia, JKM hit both volume and open interest records as drone strikes on Qatar's facility representing 17% of the country's LNG exports reinforce the critical role of Asian gas benchmarks in managing supply disruption risk. JKM also achieved record participation up 9% from last year. This strength extended to our environmental markets, where record first quarter average daily volume grew 30% year-over-year and participation here has grown double digits on average over the last 5 years.

Supporting markets at this scale requires more than liquidity. It requires margin frameworks designed for volatility. ICE Risk Model 2 is now deployed across more than 1,000 energy contracts, improving portfolio margining efficiency so volumes can scale while appropriately increasing capital requirements. Even through recent periods of heightened volatility, margin calls were met without disruption, markets stayed orderly and risk managers have remained comfortable with the resilience of the system. Underpinning all of this market activity is the data and connectivity infrastructure that allows participants to operate with confidence.

Please turn to Slide 9. We built the Fixed Income and Data Services business with the understanding that high-quality data, governance and secure distribution are foundational to how modern markets operate. That conviction matters even more today as workflows become increasingly automated and model driven. In the first quarter, FIDS delivered a record quarter, with both total revenues and recurring revenues at their highest levels to-date up 9% and 8% year-over-year, respectively. Pricing and reference data formed the foundation of the business. Each day, we evaluate approximately 3 million illiquid instruments across more than 150 countries. It is important to highlight that only a small percentage of municipal and corporate bonds trade on any given day. Stated simply, this is not data that can be scraped, inferred or generated synthetically. Our evaluated pricing methodologies have been built and refined over more than 3 decades and are deeply proprietary. They feed directly into regulatory, compliance, valuation and risk processes across the global financial system. These data sets are embedded in client workflows and switching providers typically requires a board-level decision for fund managers.

That same pricing foundation supports our Index franchise. During the quarter, ETF assets under management tracking ICE Indices reached record levels, up more than 20% year-over-year. The Indices business also achieved a record quarter with revenues growing at a double-digit rate. Because our Indices are built on top of ICE's own evaluated pricing, the defensibility compounds over time. Shifting from data advantage into delivery and access, our Data and Network Technology business is an increasingly important growth driver within FIDS, led primarily by the ICE Global Network. Demand across this business continues to be driven by clients' needs for reliable, low latency connectivity to reference data, consolidated feeds and execution venues.

As clients scale their data consumption, and deploy real-time valuation engines, proximity to reference data sources becomes critical. This favors ICE's owned and operated infrastructure where data, compute and connectivity sit together, rather than in public cloud environments. ICE owns and operates its data centers, and we're building additional capacity as client demand accelerates, delivering operational security, data protection, cost predictability, and the low latency performance our clients' workflows require.

Turning next to our CDS Clearing business. It delivered a record revenue quarter with growth approaching 20% versus last year. driven by elevated activity across index, option and sovereign CDS products, which delivered a record of $2.7 trillion in notional cleared on March 20. We invested in this business coming out of the great financial crisis, and continue to innovate as the market evolves. Treasury Clearing is now operationally live following SEC approval in February, and we are actively building the repo rule book well ahead of the regulatory mandate.

A meaningful development during the quarter was the launch of ICE Private Credit Intelligence with Apollo as our anchor partner. This initiative builds directly on ICE's strength in fixed income data, analytics and market infrastructure extending those capabilities into the private credit market, one of the fastest-growing asset classes. Private credit participants are increasingly operating alongside public fixed income markets in portfolios and risk systems and ICE Private Credit Intelligence is designed to support that convergence. By leveraging our existing data science, analytics, and secure distribution capabilities, we are positioning ICE to play a central role as private credit continues to institutionalize and scale.

Across FIDS, we continue to expand the breadth and relevance of our data sets to complement our traditional market data. During the quarter, we launched our Polymarket Signals and Sentiment product, which normalized prediction market data for institutional workflows and is available exclusively through ICE Feeds. We are also incorporating additional correlated data sets, including Reddit and Dow Jones content to provide broader context around market sentiment and information flow. As these data sets scale, the ways in which clients use our data continue to expand, whether powering automated workflows, AI models or real-time decision-making, every use case requires high-quality proprietary inputs and we believe ICE controls the most comprehensive and institutionally trusted data sets across these markets.

Importantly, customers are embedding our proprietary and secure real-time data for inference in their workflows and not simply consuming it to train models and then move on. As these use cases deepen demand for ICE's proprietary data increases rather than decreases. The dynamic of growing client engagement is also evident in our Mortgage Technology business where we continue to advance the platform to support clients across origination, servicing and capital markets.

Please turn to Slide 10. The opportunity in mortgage remains significant, and our platform is positioned to capture it across market cycles. The business continues to execute against its core thesis, helping clients automate connect and scale in a highly cyclical environment. In the quarter, revenues grew 6% year-over-year, driven by double-digit growth in both Origination Technology and Closing Solutions. Manual intervention still exists across parts of the mortgage workflow, and we see a long runway to continue automating and delivering real savings for our clients. Because this is a highly regulated market that requires a deep understanding of risk, audit and governance before deployment, we embed AI directly into the systems of record, reinforcing ICE's role as a neutral trusted platform that does not compete with its customers. That approach is especially relevant as the GSEs publish updated guidelines around AI usage.

Our clients should take comfort in the fact that ICE Mortgage Technology operates under one of the most comprehensive and risk appliance frameworks in the industry. This includes enterprise technology risk assessments built for multiple regulators, annual GLBA reviews, independently audited stock reports shared with clients, application level compliance and data privacy assessments and former quarterly risk reports to an independent risk committee. Our AI capabilities are deployed within that same framework, not outside of it, which means the governance auditability and controls our customers rely on extend fully to every automation we deliver. Our client's interaction with our platforms continues to evolve, and what we're seeing is not displacement, but deeper integration.

In March alone, our Servicing business processed approximately 4 billion API and web services calls up nearly 20% year-over-year driven by increased use of our AI and Business Intelligence tools, a signal that our infrastructure is becoming more embedded in client operations, not less. On the product side, platform modernization remains a core priority. In February, we launched our enhanced MSP user experience and the efficiency gains are already measurable. Take escrow as an example. What was previously a 46 touch-point process spanning 10 days, now requires just 6 touch points over 2 days.

At our ICE Experience Conference in March, we unveiled AI-powered Voice and Chat Agents for Mortgage Servicing to handle routine borrower inquiries, execute common loan management actions and help servicers manage fluctuating call volumes. We also launched 16 exception-based automation agents for complex servicing workflows, including escrow management, investor reporting and disaster-related processes. Our MERS eRegistry surpassed 3 million registered eNotes in the quarter, which are the work product of a fully digital closing. Leading lenders are now registering between 30% and 80% of their originations digitally.

I'm also excited to announce that this month, we signed an Encompass deal with a large superregional bank that is also an existing MSP customer. A great example of the cross-sell flywheel between origination, servicing and data that continues to drive growth across the business. Stepping back, what ties together ICE's best quarter in our history is the breadth of our model and the discipline behind it. Each of our businesses contributed, whether through record exchange and clearing activity or continued momentum in data and workflows that compounds over time. The integration across our segments remains a competitive advantage, one that we will continue to execute on.

With that, I'll hand it over to Jeff.

Thank you, Ben. Good morning, everyone, and thank you for joining us. Please turn to Slide 11. 25 years ago, I started with a single idea that opacity and inefficiency in markets were not inevitable conditions. They were problems that technology could solve. That conviction is the foundation upon which our technology [ rests ] and it's never been more reman than it is today. This was a record quarter. In fact, the strongest quarter in our company's history. This milestone is not the product of one favorable market environment. It's the compounding output of an all-weather business model that's been deliberately constructed, one that's designed to grow in all conditions.

Since inception, ICE has built markets that bring efficiency and transparency to an increasingly complex, regulated and constantly evolving world, a reality that is intensifying, not receding. Global systems are more interconnected. Capital moves faster, and expectations for oversight and transparency continue to rise. Our role has never been to forecast which scenario will emerge, but to build the technology that allows markets to function across all of them, essentially a picks and shovel strategy. This is why we've intentionally placed ICE at the intersection of markets influenced by both physical dynamics or the Acts of God and those shape by policy and human decisions or the Acts of Man.

During periods of volatility, we see participants turning to our futures platforms to manage risk, with increasing demand for trusted fixed income data and evaluated pricing. At the same time, our Mortgage Technology business benefits from structural tailwinds as the digital modernization continues to advance. We do not build point solutions for moments in time. We build mission-critical systems that operate through cycles across jurisdictions and under regulatory oversight. Artificial intelligence fits squarely within that strategy. It accelerates the way regulated workflows are processed by embedding intelligence directly into our systems of record, preserving governance and audibility and while improving speed and insight.

Importantly, as automation increases, value shifts towards workflow outcomes rather than [ seat ] pricing. We recognized that early on that pricing on workflow outcomes would be the preferred pricing model. As AI is incorporated into these workflows, that pricing model remains durable and stands to benefit us. Internally, we're already deploying AI and production across our organization. Teams are using it to undertake code writing, enhanced pricing workflows, accelerate index calculations, support client interaction and earlier identified loan servicing issues. These are not experiments. Our data team is actively transforming our proprietary and nonproprietary financial, market and commodity data into AI-ready formats. And they themselves are internally integrating AI technologies into ICE to enhance data utility, extraction and analysis for our clients.

ICE now offers an AI model control protocol server or MCP server located in our data center, and available on the ICE proprietary cloud, to ease access to ICE's nonproprietary data. And we are actively engaged with major AI model vendors to explore the development of additional server protocols and topology for further access to and the protection of ICE's proprietary data. The nonproprietary data in ICE's MCP server recently launched and is being offered under existing license agreements to some of our customers to see if this type of delivery has benefits versus traditional data connectivity methods. And you can see from our quarterly results that the revenue from ICE's Data and Data Infrastructure showed very strong growth.

New technologies such as tokenization and prediction markets are drawing increased attention. We approach these developments from first principles. How is risk managed? How does settlement function? From where does trusted data originate and how do participants gain regulated access?

Those questions matter regardless of the form that risk transfer takes and they are are questions that ICE has spent decades learning how to answer. At the New York Stock Exchange, we're putting this into practice. We're building a tokenized securities platform that combines our high-velocity pillar matching engine with blockchain-based distribution and settlement designed for 24/7 trading. We are pursuing regulatory approval under existing federal law, and this initiative is not dependent on any pending legislation. We've also signed a memorandum of understanding with Securitize, naming them as the first digital transfer agent to support the tokenize security issuance and life cycle management on our platform.

Our partnership with Polymarket and OKX reinforced these initiatives from different angles. Polymarket continues to deliver strategic value through differentiated event-driven data that we've begun distributing to our institutional clients. And Polymarket's engineering team is collaborating with us concerning on-chain settlement and 24/7 capital movement. OKX, which serves more than 120 million users globally is working with us to connect its crypto-native audience to ICE's regulated markets, including U.S. futures and NYSE tokenized equities, while giving us a pathway to launch regulated crypto futures tied to OKX spot crypto prices. These initiatives complement our core franchises, as our center of gravity remains the technology that supports global risk transfer, price discovery and capital formation.

Last month, with Apollo as our anchor partner, we announced the launch of ICE Private Credit Intelligence. The private credit asset class has grown into one of the largest in the world, yet it still operates without the standardized reference data framework that is foundational to the transparency in traditional fixed income markets. No consistent reference data layer currently exists, and there's no common foundation for assessing risk across portfolios. We're beginning with the data layer, establishing common reference data governance and permissioning from the outset. This is the same playbook we followed with publicly listed fixed income instruments where reference data, evaluated pricing and indices became essential market utilities over time. The objective is to introduce comparability and consistency into workflows that it increasingly requires. We've navigated similar development cycles before.

European natural gas once lacked benchmarks, holding broad participation and confidence. We invested early, built the foundational capabilities, and today, our European TTF natural gas market serves as the cornerstone of a global natural gas franchise. This Private Credit Intelligence initiative follows a similar playbook and the intent is to build upon our reputation as one of the leading providers of pricing, reference data and indices to bring greater transparency to an asset class currently in need of such industry standards.

To close, this was a record quarter for ICE with adjusted earnings per share growing 37% year-over-year. More importantly, our performance reflects choices we made years ago, investments that were integrated and built for durability. The world is more complex and more volatile than when we started. That complexity is not a headwind for ICE, it's a condition that our business is designed for. And this perspective continues to guide how we think about the next phase of growth.

I'd like to conclude today's prepared remarks, thanking our customers for their continued business and their trust, and I'd like to thank my colleagues at ICE for their execution and commitment that made another exceptional quarter possible. I'll now turn the call back to our moderator, and we'll conduct a question-and-answer session until 9:30 Eastern Time.

[Operator Instructions] Our first question today comes from Chris Allen from KBW.

I wanted to dig a bit deeper on the health of the energy marketplace. OI is holding in, growing year-over-year. We recognize that. But given the recent pullback in volumes, we're getting a lot of questions on whether we have tilted into bad volatility territory or are now in a period of market exhaustion or some major depths or sideline post meaningful losses to start the year. So I was hoping you could provide some additional color to address these concerns in the energy marketplace.

Thanks, Chris. It's Ben. As you alluded to in the way you framed your question, our markets were doing and performing very well even before the Iran conflict broke out. Obviously, there's a component of major issues around the world that clients are managing risk around even prior to this with trade and tariffs, geopolitical issues, weather sensitivity, concerns around energy supply security, tight energy supplies and growing demand for energy and power, and throughout all that last year and even at the start of this year, OI, market data subscriptions and market participants all remain strong. Then the Iran war broke out, and obviously, there's new risks that people need to manage. And the key things that we look at for the health of the market are, and you highlighted one of them is that our open interest right now is higher than where it was at year-end for futures and options, for energy, for oil, for Brent, for gas and TTF. And even over the past week, open interest hit all-time records across futures and options.

At the same time, when you set our [indiscernible] sideline, et cetera, we're seeing market participation across a whole bunch of our markets, in particular, across energy as well as data subscriptions, are all at or near all-time records in highs. So we're seeing more and more participation coming into the market. And we've also seen some particularly strong growth in our options market with options OI up 40% across our options franchise. And for oil, gas and environmental, all are up about 25%. And as many people know, options tend to be the most capital-efficient way to to hedge and manage risk around a range of outcomes as well as tail risk.

If you expand out and just look at it from a longer-term perspective, there's no doubt that global energy supply chains today continue to be rewired. And virtually, every leg of that rewiring runs through our global energy franchise and through our contracts. And if you use just one particular -- one particular example of many would be that Asian buyers right now are already lining up for alternative sources of fuels, refined products and LNG, all of which are primarily our markets where we have the most deep and liquid markets, but it also means there's going to be longer-haul trade routes, more demand for freight, oil, fuels, all markets where we hold near 100% share. So there's no doubt that there's more hydrocarbons that are in demand around world, more supply routes that are being established. All of this means there's more risks for people to manage long term. And this isn't a single event. It's a multiyear structural repricing across energy, and our franchise is no doubt the only one that can truly support this for our clients.

We also have the most diversified franchise, where as supply and demand dynamics change, as volatility increases, what we see is that it brings in more participants into the market. And when those market participants come in, they tend to stay, which is another really good sign. And then lastly, we've talked about our portfolio margining capabilities with ICE Risk Model 2. That enables us the combination of the things I said before, as well as the portfolio optimization that we're able to provide and the capital efficiencies that we're able to provide to clients to manage these risks is another thing that we point to as a long-term sign -- positive side for the growth of these markets and risk management tools for our customers.

Our next question comes from Ken Worthington from JPMorgan.

I wanted to build on Chris' question on the cyclical to one on the secular. Can you talk about the Energy Trading business and how Gulf oil is posed to expand? Maybe you can start by sharing or highlighting your share in Gulf oil and talk about the transition the market is seeing in the physical delivery from Cushing to physical delivery of Midland. And then lastly, what is happening in the capacity to ship to Asia and what this all means for ICE?

Thanks, Ken. It's Ben again. You hit on a very interesting part in the way you asked that question because the thing I would start with when you think about market share in the Gulf. To us, what's most important is the commercial use of these -- commercials that are in there using these markets for the core utility that they provide, which is risk management. And I've alluded to this on prior calls that the physical deliveries, the number of barrels that are actually going to deliver into these futures contracts on HOU versus our peer at Cushing. HOU has been anywhere 2x to 3x the number of deliveries that Cushing has seen. And if you look back at just March alone of this year, our HOU contract had 9 million barrels that went into delivery, and Cushing had 1.6 million. So I think that tells you the commercials and the commercial interest in what we've developed as a risk management tool with HOU is an important -- is an important development for the -- an important sign for the future development of that market.

The other thing to point out is that within Brent some time ago now, WTI oil is flowing into that specification. In that WTI oil that's been flowing into that is based in Houston. So our HOU contract is the best price point for people to manage that risk and really think about oil that's hitting the water and going into the Brent spec. And if you expand out even further into what is the spot market, the spot market is dated Brent. And that is the spot price for the pricing of oil moving around the world, and that 100% ICE's market.

And then when you think about the Iran situation that's going on with the effective closing of the Strait of Hormuz, we see that as, again, a rewiring of supply chains that I just referred to and the answer to Chris' question a minute ago, and that should lead to a tremendous amount of more opportunities for us to help clients manage risk. And another perfect example is that Asian buyers right now are lining up for alternative sources of crude fine products and LNG, all of those are on us. And as I mentioned before, these longer haul trade routes, demand for freight, fuel oil and marine fuels, [ they are ] 100% of our of our markets. So we see this as a development that's a multiyear re-structural repricing across the energy supply chain and that our end-to-end solution is the one that clients are going to go to.

Our next question comes from Michael Cyprus from Morgan Stanley.

I wanted to ask about tokenization, just curious to get your latest views there and if blockchain-based settlements reduce settlement times to near instant? Just curious how you think about that impacting Clearing revenues and collateral economics across your platform? And more broadly, curious your views on any sort of gating factors, regulatory technology or client readiness as you think about what determines whether tokenized security scale over the next couple of years versus more of a 10-plus year time frame?

Michael, that's a very good question. This is Jeff. So I think embedded in your question is the view that we have, which is the main benefit of tokenization is going to be a rewiring of the movement of money and value and that essentially, it's going to allow that to happen on the Internet, as opposed to the conventional banking wires. And as your question suggests, it's going to allow that to happen quickly with barrier instruments and will change your ability to custody, sell custody or work with third parties very quickly to provide custodial services. And all that to us means that there'll be more volume of trading and transactions.

When you make something easier, people do more of it. And as you've probably seen, the equity markets when the equity markets simply went from T+2-day to T+1-day settlement, look at the volume growth in equities, I attribute much of the volume growth over the last year plus because it's been cheaper for people to trade equities. If you just look at ICE launching our IRM2 Clearing Model, and look at the volumes of trade that we just reported, I don't think it's coincidental but making it better, faster and cheaper to move capital against trading positions, results in increased volumes. So I think over time, people -- and it's partly why we're doing this, people that are adopting settlement and capital movement on-chain will benefit from increased activity.

The one wrench that may be thrown in that is that none of us may want to put our work on the Internet if somehow the encryption can be broken by quantum computing or hacking or any other technology that would suggest, hey, we should stay on a private banking network. I do think that the incumbent participants in the market, including not just exchanges, but banks and brokerages and other third parties will all benefit. There'll obviously be new actors, there are new actors and there will be new actors that will embrace these technologies faster that can take share. But I think the reality is we're going to probably end up with tokenized bank deposits, tokenized trades on ICE and our peers. And that we, ICE, are in a good position.

You heard us talk about we built an MCP server that is there for AI, whether or not that becomes an Oracle for reference data, which will be in demand for people trading on chain. Obviously, in our data center now, we settle and transfer title in conventional ways. I suspect that we will become a validator on-chain and similarly have that business. And as we've talked about right now, our model is to hook our conventional trading platforms to the chain so that -- because our platforms are so high-velocity, and have so much inter-connectivity with the market that we do think that matching will still happen on conventional technology. But title transfer and custody and capital movement will move via the Internet through encrypted tokens.

So anyway, that's at a high level, how we're thinking about it and embracing it because I think it's coming and as long as we can get the encryption right, this will open up new opportunities prior volumes and more activity on our conventional platforms.

Our next question comes from Brian Bedell from Deutsche Bank.

Maybe switching over to Fixed Income Data and Data and Tech. Just noticing the really straight-line improvement in growth here, FIDS overall recurring revenue going up 5%, 6%, 7%, 8%, now 9% on a year-over-year basis, the last 5 quarters, and it looks like that contribution is coming both from FIDS and Data and Network Technology with Data and Tech, obviously, now in the double digits. So can you just talk about what have been the two or three so biggest drivers organically for that and an outlook throughout 2026? I assume the Polymarket initiative is going to be included in this area. And then I guess, just overall, I guess, the punch line is just the mid-single-digit revenue growth guidance in FIDS recurring revenues seem conservative given the really strong momentum here?

It's Chris. I'll take the first part of that and may kick it to Warren for your last part of your question. Certainly, the appetite for data across the entire segment with some of the comments that Jeff made around AI and things that we're doing that. There are real -- three real components that we have in the portfolio, a very large segment of proprietary data. that is very well versed in the regulatory community. And what I mean by that, customers across the entire space depend on this data in order to meet certain regulatory requirements they have in their business. So as the market continues to grow and the proprietary data that we produce continues to be used in more fashions, whether it be coming across an MCP server in the future or things of that nature, that opportunity at the end of the day, gives us a much broader path of engagement with the clients.

The delivery mechanisms of choice or the flexibility for you to consume that data across the portfolio is also something that we are one proud of, and two, continue to expand upon a long way. So we can meet the customer exactly where they are. And so really, it's a confluence of these events have a greater need, a greater portfolio that we continue to invest in on a consistent basis, based on specific client demand. I'll point to your part of your question around Polymarket and the other sentiment pieces that we have out there is a prime example of that interest and further demand and our ability to deliver that in a way that is not disruptive to the current operations of the clients that depend on us daily for that activity. So it's really those three things working together and providing the protection of intellectual property that gives us the opportunity to continue to expand with our clients as their needs continue to develop over time as market changes.

Brian, it's Warren. And then on your question around the guidance. It was obviously a really good start to the year. And so that gives us a lot of incremental confidence in the targets that we set towards the higher end of the mid-single-digit range. For the full year. I think one -- two things I would just point out around that is one of the benefits we've had over the last couple of quarters and shifted through the first half of the year -- of this year was selling [indiscernible] in our data center within our [indiscernible] data center, we've largely done that and we will build out that hall.

And so as we get to the second half of this year, those comps do get a little bit tougher. But that said, Hall 6 is coming right behind it next year and Hall 7 behind that. And so that's really just -- it's nothing structural there. That's just timing. But that will probably lead to a little bit lighter growth on the Data Network Technology line as you get to the second half of this year.

And then again, it is still a little bit early in the year, but the one thing I can't predict is what markets are going to do. So some of the AUM revenues within our Index business could fluctuate, of course, as we move through the year. They've obviously had a great start to the year. But that's just one thing we can't really predict. So maybe being a little conservative around that. So ultimately, I think the quarter just gives us a lot more confidence so we can hit those targets that we set to you guys -- set for you guys back in February.

Our next question today comes from Alex Blostein from Goldman Sachs.

I wanted to touch on Mortgage seeing a decent improvement here recently. Obviously, the overall base is still relatively low, but the momentum seems to be building a bit. So I was hoping you could speak to what you're seeing with respect to, I guess, the recurring revenue improvement sequentially, where that sort of is coming from? And as you think about the opportunity to start charging on overages if volume picks up, where you guys are in that process, kind of how far away are we to start to see some of those benefits?

Thanks, Alex. This is Ben. So what you see is a combination of different factors. So we did have, as we've talked about many times, some headwinds on subscription revenues with clients that have renewed or signed on to the platform back in '20 and '21. And we've worked through the vast majority of those renewals. But recall that when we were doing those renewals, any time we had pressure on subscription, we were increasing the closed loan fee on those loans, which would put us in a position to benefit from the volume environment when it returns with getting higher per transaction fees, and we've seen that come through.

This past quarter on the legacy Encompass business, and Closing business alone were up approximately 30% in terms of our transaction revenues there. So that's really good, and we'll continue to work through. And as I said, we've worked through a lot of the cohorts that come in that high volume environment. So very well positioned there.

We're also seeing the benefit of clients, all the sales success that I've mentioned in past calls, we have [ more ] clients that are going live on platform, both across our Servicing business as well as on the Encompass business, and we continue to have great sales success. If you look at MSP alone, we're at a record number of clients that are on the platform. We have more that are implementing. We closed 6 new MSP deals last year. We closed another 1 here in the first quarter. We obviously now have UWM United Wholesale Mortgage now live on the platform and building loans. And then also on the Servicing side, from a macro perspective, there was a lot of fear from a lot of our banking clients around how the Basel rules were going to be implemented and that there would be a potential for punitive capital treatment for holding MSRs on their books. And all signs are that, that's going to change substantially. And we're already seeing and that there'll be incentives for banks to get back into the MSR business. And we're already seeing a lot of that activity with some of the banks start to step in and buy MSR portfolios. So that's a positive.

And then on the Encompass side, we closed 90 deals last year, 90 deals on Encompass last year, 30 in the fourth quarter. Some of the deals that we closed late last year, 1 of them is with one of the largest correspondent lenders in the United States that's already on MSP and they're now implementing. We closed one of the largest HELOC lenders in the U.S. that is on MSP that's now implementing. And as I mentioned in the prepared remarks, the large superregional bank that we've closed here in April is Huntington Bank. So they're already on MSP and one that we're going to be in the process of implementing, and we've had a number of clients go live. So you have JPMorgan that continues to ramp, we have an M&T go live. We've got [ Howard Hannah ] go live and a number of others. So to me, it's all those things that are feeding into a lot of the tailwinds we're seeing now on the Mortgage side.

Our next question comes from Dan Fannon from Jefferies.

So Jeff, I was hoping you could talk about your appetite for M&A currently. And how that weighs against share repurchases here in the short and medium term?

Sure. This is Jeff. I would refer you a little bit to Warren's prepared remarks that one of the big M&A transactions that we did in the quarter was to buy back our own stock, which we think had disconnected from the fundamentals of the company, and we had the flexibility and obviously, cash flow generation to do that. We continue to generate tremendous cash flow, free cash flow and -- and if you look at us today, we're buying back more stock. Our dividend is at an all-time high. We've been able to reinvest in the business with many of the initiatives that, that Warren and Ben talked about in their prepared remarks and invest in things like Polymarket and OKX and a few other AI-related investments that we've been making.

So we're in a very good spot right now. We always look for should we buy versus build if we need to in terms of moving forward, valuations are complicated right now. Some people look to be undervalued, other people seem to be massively overvalued. And so as you probably are aware, when we do look at M&A, we're looking at the terminal value and whether or not there's something that ICE can do to some third-party business, that would -- that, that management team is not able to do on their own. And if we find those opportunities, we'll weigh those against the M&A of buying our own shares back and whether or not the ROI is better in that case versus -- and would accelerate future cash flow faster than us continuing to buy back our stock.

Thank you. With that, unfortunately, we have run out of time. So I'll hand back over for closing remarks.

Well, thank you, Drew, and thanks for moderating the call, and I appreciate all of you joining us this morning. We'll be back to update you again soon. And meanwhile, we're going to continue to innovate to build an all-weather business model, to generate growth on top of growth. And with that, I appreciate your participation in the call, and hope you have a great day.

Thank you all for joining. That concludes today's call. You may now disconnect your lines.

This is Craig Siegenthaler, North American Head of Diversified Financials at Bank of America. And I'm joined on stage by Eli [indiscernible], who specializes in the U.S. exchanges, and he's on my team. But we're very pleased to introduce Warren Gardiner from Intercontinental Exchange. Warren has served as Chief Financial Officer since May 2021. And for the prior 4 years before that, Warren also ran ICE's Investor Relations team. Warren, thank you for joining us.

Thank you, Craig. Thanks, Eli.

So ICE is a leading global futures exchange with a large data and software offering in the fixed income and U.S. residential mortgage markets. In an industry where most of its competition are over a century old, ICE is the new kid on the block with just over 20 years of history. ICE has gone from an idea to a $100 billion futures behemoth by pioneering electronic trading in financial markets.

In addition to futures, it is also the major player in mortgage technology with the largest servicing and the largest origination software offerings in the United States. So let's start with a macro one. Between Ukraine, Iran, Russia -- sorry, between Ukraine, Iran and Venezuela and the constellation of trade disputes, the geopolitical environment has been very dynamic lately, and that's been a big boon to your futures business. But with your year-to-date futures volumes now up 60% plus from 2023, we were often asked how much of this growth is sustainable. Warren, do you think you can keep growing off of this higher base here?

Yes. And thank you, Craig, for having us. Thank you, Eli, for having us here today. And so it's a good place to start, and I appreciate the introduction. I think you covered what ICE is very well in terms of all the different areas that we're in. And energy, of course, being the -- if you want to call it legacy business, it's a bit tough given the growth numbers that you just outlined that are correct in terms of where it is, but it's our oldest business, if you will, and it's what ICE was founded on at the end of the day, and we continue to see very robust growth across that platform and not just in a few contracts, really across the suite of energy products.

And one of the things that we very intentionally and deliberately did years and years ago was before we started with a few handful of benchmark contracts in a few areas of energy and intentionally expanded to different sources of energy and intentionally expanded different areas and regions around the world where we're offering those risk management contracts. And so we're in a position today that when volatility that Craig outlined strikes in different areas and regions of the world, we're positioned for that.

And you've seen that to some degree, whether it was some of the more recent events or a few years ago where we've -- there's always something going on in the world, and our energy business is positioned to chase that growth, if you will. But I think that to really the core of the question is, can that continue? Look, the thesis behind our energy business was never let's -- hopefully, the next hurricane or the next conflict is bigger than the next.

That has never been how we have thought about driving growth in the business. It's really been through product creation. It's been through understanding the pain points that our customers have across that risk management workflow. And it's riding some of these structural trends of -- within all of that of global energy markets becoming more complex, consumption of different sources of energy growing and being the risk management go-to platform for people across all these different sources of energy.

And so when you do get bouts of volatility, that certainly helps that can juice some of the volumes and the revenue related to that. But you've seen us grow this business through an array of macroeconomic environments over decades. Oftentimes when there wasn't a lot of going on in the world, there wasn't a lot of volatility, and we'll continue to do that. So yes, I do think that we can continue to grow off of this base as we've done for several decades here so far.

So let's talk about growth. Zooming out, what does your leadership team want the business to look like in 5 to 10 years? And which businesses do you anticipate being the largest contributors to incremental revenue growth between now and 2030 plus?

Yes. I think when you think about what we're trying to do and energy is really a good example, too, because, again, I said it was our sort of oldest business, if you will. And so what you've seen us do there, as I said, let's grow from a few benchmarks into thousands of contracts, really listening to the customer and understanding the pain points, as I said.

And so ultimately, what we want to kind of be there is the connective tissue within these financial markets across all these different asset classes, look for opportunities to leverage our expertise and data services and technology to bring efficiency and transparency to these workflows. And so ultimately, that is what we are looking for as we think about the next 5 to 10 years is what are the opportunities across the business to leverage the technology we have, the expertise we have into sort of adjacent opportunities and growth opportunities.

And so when we think about what that could be, I mean, certainly, data in a world of AI is going to be, I think, in high demand. Quality data is going to be very much in high demand, and we have that in spades across our futures business, our equities business, across our fixed income segment, even within our Mortgage Technology segment, it's really high-quality proprietary data in real time that a lot of investors and other market participants use in a lot today to inform risk management.

But I think with the advent of AI and things and the evolution of those models, it will be something that will be an important fuel for that. So we're thinking about that and how we can best position the business for what's coming on that front and building tools around that as well that I think will be beneficial to people's workflows as well. We also launched some -- or announced recently some initiatives around tokenization on the equity side. Again, that's a very sort of a new space, but we've been able to leverage the technology that we have today of our pillar technology that underpins the New York Stock Exchange matching engine as well as some blockchains that we've been built that -- such that we can launch a new venue with very de minimis incremental costs there that could have some real opportunity over time as that asset class matures.

And then some other areas within -- just to kind of touch on some different areas of the segment. We also got approval for treasury clearing from the United States -- in the United States that should come into effect later this year and part of next year. And again, similar to the tokenization initiative, something that we had a lot of that technology and infrastructure in place that we were able to leverage and can offer this to our customers as that regulation comes into place.

And as you know, the treasury market is a pretty big one at the end of the day. So that could be a reasonably sized opportunity for us as well. So it kind of comes back to, as I said earlier, taking a lot of the data, the technology, that infrastructure that we have in place and leveraging into adjacent opportunities and really driving scale and creating shareholder value over time as a result.

Warren, before COVID, Ellie Mae pretty dependably put up double-digit annual revenue growth, while Black Knight grew mid-single digits. Are those still attainable growth rates? Or do you need to catch a break with benchmark interest rates?

So we don't -- I don't really think about them separately. It's been a couple of years since we acquired Black Knight. At this point, it's been almost 5 years since Ellie Mae. And so we've -- but what we've done over that period of time is really bring those platforms together and integrate them to create really a new solution that the market has not really seen before. Those were core stand-alone products before with Black Knight on the servicing side and Ellie Mae more on the origination side.

And what we've done over the last couple of years is bring those together and start to really enhance the technology underneath those platforms such that we can bring efficiency for our customers. It costs $11,000 today or so to originate a mortgage. We think we can take a couple of thousand dollars out of that through these kinds of efficiencies and these kinds of tools as well as creating an opportunity to extract more data and extract more data from those platforms quickly that will bring some more transparency, not only to the primary market, but also the secondary market, the capital markets as well, MBS pools that still today are pretty sort of vague in terms of what's going on underneath the covers for people.

So bring some real-time unique proprietary data to that will be, I think, important over time. But to directly answer your question, so I think we've talked about growth for that combined platform of being in a normal environment, which I would define as more 7 million to 10 million loans at an industry level, being into the single -- the high single digits as being the potential.

We've been more in the low to mid-single digits over the last couple of years. And that's just really because we've had -- the last 3 years have been the 3 worst years from a mortgage origination standpoint at an industry level. And so importantly, it's gotten better each of the last 3 years. And I -- based on what we can see now, it should get a little bit better this year. So that will help. And you have seen us grow through that environment, and we've had some good sales results despite the headwinds at a macro level.

And I think the power of the platform that we're building is really resonating with a lot of customers, particularly large banks, medium-sized banks that have traditionally been more on their legacy internal technology and increasingly appreciating the value of having a third party that can really scale and really focus on that. So that's been one of the things that the combined platform has, I think, done a good job of driving synergies on at least on the top line basis. And we're actually at a point now where we've achieved $100 million of revenue synergies, which is a double of where we were only just a year ago, and a lot of that's coming from people recognizing the importance of having these 2 platforms come together and all the other ancillary products that we've been building around it that will be integrated.

Got it. You announced some very significant Tier 1 bookings over the past few years. I'm thinking of JPMorgan, Citizens Bank, M&T and Fifth Third. Are you recognizing a meaningful amount of revenue for these deals yet? What is the timetable for monetizing them?

So maybe I stole your question my answer a little bit there. But yes, so we've started to absolutely see -- these are long technology implementations. On average, it will take 12, 18 months, if not 2 years. Some have taken several years beyond that when they've implemented something like an MSP servicing platform. So it's a bit dependent on the bank's priorities or the customers' priorities in that case in terms of the time line there.

But we have, as I said earlier, signed $100 million of revenue synergies. A lot of those is MSP and Encompass that those kind of longer tail implementations to some degree. And right now, we have a little over 1/3 of that, that's in the run rate. So we are getting to a point where you're starting to see it come into the revenue and certainly still some ways to go. And we have a target actually of $125 million for revenue synergies by 2028. So there's still some room to go there relative to where we are today. So I think we're doing -- getting -- making some progress there, and it's starting to come into the run rate, as I said.

And I think you'll see some more of that come in next year and the year after that. And I think some of these banks, too, to just keep -- be cognizant of is once they implement, they also then sort of start to ramp. So it tends not to be this big stair step from one quarter to the next as somebody implements, but definitely seeing some progress on that front.

So your Data and Network Technology segment was a real area of strength in 2025. Can you help us unpack what the drivers of growth were in that business?

Yes. Thank you for that question, too, because that's an area of our business that I think maybe increasingly is getting some focus because of the strong growth, but up until recently had not and it's been a great area for us. And so you look about -- think back to 2024, that business grew about 5%. In the first half of '25, it was growing 7%. And then the second half of '25, we were into the double digits.

And we think that we can put up another year of high single-digit growth in 2026 for that business line -- business unit. And so what's been going on there, it's a couple of key lines within that or a couple of key businesses within that business reporting line. So we have our desktop business, we have our feeds business. Those have pretty steadily grown in the high single-digit range to the low double-digit range the last couple of years.

Those were actually IDC businesses that we acquired when we acquired IDC back in 2015 largely and ones that we have intentionally invested in over the last couple of years to enhance the quality and bring them to a higher tier. And so we've been able to win new business and win new business from, I think, some of the legacy or maybe incumbent providers that are out there in those business today, and that's been a good thing for us, of course, but helpful for the growth.

But as I said, that's been the case for a couple of years now. And so the inflection that I outlined as I started the answer to the question has really been driven by our ICE Global network, which is a connectivity business that we offer to people. And over the last several years, you started to see a lot of demand for data, for message volume for bigger pipes to consume all of this and to trade through. And that's one of the unique things that we're able to provide to people.

We have our own data center footprint that we manage and operate. And as demand for bigger pipes, if you will, and more connectivity has increased, we've been investing in that to offer that to our customers. And that's one of the things you really started to see flow through towards the second half of this year that I think it can carry us through for a couple of years here because we've got a lot of capacity left to build out. Part of our CapEx this year is actually to go build out a new building on that -- on one of the existing campuses that we run and operate. And so we're getting ahead of that.

We have plenty of room in the existing building to build out as well. And so there's a nice runway with a lot of visibility, frankly, into that demand from our customers who are looking out into the future in terms of what they're going to need. And not only has been the explosion you've seen in volumes and messaging and demand for good quality data have been important, but also somewhat, I think, connected is just the AI and demands that, that's going to put on people for power and for data and things of that nature.

And so that's one of the things, too, that's been part of the conversations we've been having in terms of what that -- what's driving that demand from our customers. So we feel very good about the growth in that business and how it will continue to support a strong recurring revenue growth in the fixing and Data Services segment into next year and beyond.

So Warren, you just sort of hit on that, but generative AI data consumption, I assume that's a big future growth driver. Is it in the current numbers yet? And also, do you sell a material amount of data to the LLM providers for training yet?

So it's something that we've been having conversations with, and we're just being very cognizant about wanting to be sure we're protective of the data we have. We have a lot of value in the data that we have. It's very proprietary to us. And so we've been having those conversations around that. I think in terms of some of the use of AI or expected use of AI being coming into the revenue run rate, it's hard to parse that out because you're talking to customers about all the different reasons they want to have more capacity and using some of these data.

So I think so to some degree, but it's hard to sort of quantify and put a number on it, frankly, but it seems to be a propellant of how people are thinking about the future for sure. And I think will be somewhat helpful to us this year and into several years beyond as well. So a tough thing to quantify, but it seems to be a driver for sure.

So let me ask the M&A question. So what is your criteria for future M&A? Are you mostly looking at bolt-on strategic opportunities days? Or is there a reasonable likelihood that you could do something of size?

So I would say that we have nothing has changed in terms of our approach to M&A. I've been in our deal committee on almost 9 years now, and I don't think we've ever sit there and said, we need a big deal or a small deal or necessarily one in a different area or something that does XYZ or one that has recurring revenue or transaction revenue.

We've always looked at what's the best opportunities for the business and assessed what the adjacent opportunities are, where we can leverage our expertise and technology to either improve an asset or in some cases, can that asset help us improve. And so we've always thought through it on that lens. It's -- so look, we're in a position that we can do an array of things. We can do investments, we can do partnerships. We're at a leverage level today of 3x EBITDA, where is sort of the top end of our range of 2.75 to 3.

So I think I would call that in the range. We've been buying back stock. I think that's been an attractive opportunity for us given some of the drawdowns that you've seen in markets broadly over the last several months. So we've been happy to do that as well. And so I think, look, if the opportunity comes along that meets the criteria that we've set and makes the returns we've set, we can get the synergies out that we want to get out. It's a 1 plus 1 is 3 kind of a combination one way or the other.

All those stocks, that's something we'll look at. If that opportunity does not present itself in the near term or medium term or longer, we are very happy to just keep buying back stock certainly at these levels and higher, frankly, from where I sit today, that's a good use of our capital for sure. We will probably chip away at the debt a little bit. We've got a little bit of CP. We want to chip away at that, too, but largely will be weighted towards buybacks in the absence of an M&A or investment opportunity.

It's been a little over a year since you integrated ICE Bonds and MarketAxess's liquidity pools. Can you share your perspective on how that collaboration has gone? Are there other areas where it might make sense to work together?

So it's gone really well. At the end of the day, it wasn't ever meant to be an initiative that was going to supercharge the growth of our platform or theirs, but it is something that certainly made sense to bring what were complementary retail and institutional and muni versus corporate customer bases together. And I think the combined entity is better than it was stand-alone, if you will, so stand-alone and stand-alone entities.

And so we've been happy with that agreement. I don't think it's really moved the needle a tremendous amount for us in terms of what you've seen on the revenue side. But again, that's not a bad thing that was expected for us. And it's just -- it was an obvious thing to do. So we've been happy with that. And so I think our focus really here today is really continue to advance that platform in the ways we have in the past. And so we'll continue to refine and improve some of the underlying protocols that we have there. And we have several these days that we're working on.

And then also importantly, within that, continue to build out the presence within the institutional channel, which has been an important initiative since we purchased that platforms several years ago. They were largely, if not entirely retail when we purchased them. And we've made a real effort leveraging some of the connectivity that we have at broader ICE to bring more of an institutional presence into the corporate and the municipal bond areas that we operate on that platform. So those are kind of the main goals for us. It's really -- it's business as usual, invest in the platform, invest in the technology and continue to penetrate those channels that were sort of undersized for us at the outset.

So I wanted to hit on blockchain tech. So you made a strategic decision last year with your $2 billion investment in Polymarket. And Jeff has talked about the building blocks with blockchain technology that could make your core futures business potentially more efficient. So I want to drill down on this a little further. What exactly is your vision for blockchain across your businesses at ICE?

So I think -- let me extend it a little bit too, because it's blockchain and it's tokens and stablecoins and all these kinds of things that are obviously within that whole world. And so we found -- we were an early investor in Coinbase several, several years ago. We put $10 million in, we exited at $1 billion valuation. So it worked out quite well for us on that front.

But part of that was to learn a little bit more about blockchain and better understand it. And sort of years ago, when we made that initial investment, it was still at a point where the processing speed wasn't really where it needed to be. And I think still today, it is somewhat in that way, although certainly, there have been advancements and improvements with Layer 2 chains and things of that nature that can speed things up. But we are seeing some opportunity.

We talked a little bit earlier about the tokenization initiative at the New York Stock Exchange, where we will have a tokenized exchange to trade securities in that way and a blockchain that we have built will be underpinning the settlement of that initiative. Obviously, I mentioned earlier that our filler technology will be a key component of that as well. So we're finding use cases here and there for it. We are thinking about ways on the clearing and collateral side where stablecoins can -- or tokenization can be used within the clearinghouse to help reduce the need for excess collateral or at least maybe not as much excess collateral, probably only want a little bit to be safe, but to have a token that can move across some of those clearing houses as opposed to going through the traditional financial rails that don't operate 24/7 and have some friction in it.

It could be something that at least within the ICE ecosystem where we have 6 clearing houses can bring some efficiency to our customer base that today does have a little bit of friction. Now what we've seen in the past is that when you are able to reduce some of those collateral levels in the clearinghouse that people will deploy that back into trading and it helps with trading volume. And so -- and we've actually seen that more recently. We recently launched IRM2, ICE Risk Model 2, which is a part of our clearinghouse technology infrastructure that helps manage that collateral for people. People that have appropriately hedged portfolios within our clearing house will get capital benefits, efficiency benefits from that risk model.

And it's actually helped a pretty decent amount on reducing collateral all it's equal for people. And we think it's hard to really parse it out and quantify it, but we think it's been a helpful thing for our trading volumes. And I think something like a stablecoin or some kind of token that again can unlock some of the collateral for people would also be a benefit. You've seen this in a lot of other markets, equity markets, too, from reducing settlement times, things of that nature that just makes it -- obviously, opens up more capital to be deployed towards trading.

So those are kind of the main initiatives right now that we're thinking about. I mean, obviously, things can evolve over time. And I think we do have the core technology and expertise now in-house to deploy those -- deploy towards those opportunities as they evolve, but that's where we've been really focused at the moment is those 2 areas.

So I think there's about $400 billion of collateral in the ICE clearing houses today. So I don't know if you've thought about it or looked at it like this, but by applying blockchain technology, have you thought about how much downside to that collateral there could be driving efficiencies to your clearing members?

Well, so we have to sort of see how this all evolves at the end of the day. And so I think at the end of the day, there is some excess collateral that is in there. I wouldn't say that people are running massive, massive amounts of that such that you're talking about hundreds of billions of excess or anything along those lines. So I think it helps.

It probably helps a little bit on the margin in terms of bringing some efficiency. People, I'm sure, have different levels, don't get me wrong. But I think it's a benefit in terms of quantifying it into what it would mean for trading volumes is a little bit tough. But I think most banks aren't -- you're not running massive, massive excess at the end of the day, I think -- but still some is in there, of course. And some is in there because there's some friction in the system that you need to be careful about if you need to move that money around. So it will be a help, but I don't know that it's dramatic ultimately.

Near term, you're going to start clearing treasuries in 2026, you're going up against the CME and DTCC here, both of which are already sitting on billions of U.S. rates collateral that they can leverage for portfolio margining. So what's ICE's right to win here?

So the expertise we have there is we have 6 clearing houses across the world and across different asset classes. We were the first to launch CDS clearing post crisis and really built that up from scratch. And so I think when you start to bring the expertise we have across asset classes, the connectivity to the customer bases that we have within that particular asset class because it's a similar one. And importantly, the technology that we have that underpins all those clearinghouses, I think we have a real competitive advantage versus some of the others that are out there.

And over time, I think we'll be able to leverage some of the areas that we have -- some of the other areas that we have in fixed income clearing, if you will, if you want to call that, to be helpful in that space. But I also think at the end of the day, you're going to want to -- the customer is going to want some options as well. And so I think we have a very good opportunity to be a leader in that space. But ultimately, even if you're ending up with a reasonable chunk of it and aren't a leader, like that's still very big market that I think could be sizable and meaningful for us in terms of its revenue contribution.

And at the same time, I think as I alluded to in some of the opening questions, we didn't -- we have a lot of that infrastructure in place. Like ICE Clear Credit has been around for a long time. We were able to leverage a lot of that technology into launching this initiative. And so the incremental cost of it isn't terribly significant for us. So the risk reward is kind of a no-brainer from that perspective. So looking forward to that regulation coming into place. And I think we have a very good chance of being a pretty meaningful player over time.

Let's talk about IPOs. So the pipeline, first, how does it look for 2026? And then to what extent is ICE able to monetize its relationships with all these new issuers beyond the initial listing phase, so more of a cross-sell?

Yes. No, that's a good question and one we haven't really been asked, but it actually happens a fair amount and is an important part of the NYSE value proposition. So let me start with the backlog though. So I think as you probably heard from some others that operate in that space, whether it's some private equity firms or even some other listing venues, the backlog and the expectation for the IPO market this year is pretty strong. Now they all said that maybe before Tuesday, right, of last week where we had a little bit of a sell-off.

But I think at least talking to the team over the last couple of weeks, that hasn't necessarily done a whole lot in that sense. And I think you'll still see a strong year as we move through. Those tend to be the things that maybe have put some things on pause, but people are still going to go public. And so the backlog there is really strong and encouraged by the return that we're seeing on the capital markets side after a good year last year, frankly. So pleased with that.

So we'll just sort of have to see how it unfolds. But in terms of that, what that brings to us, it works both ways. We have a lot of mortgage customers. We have a lot of data customers. We have people in our futures business that are also listed on the New York Stock Exchange. And that's helped us whether someone was already listed on the New York Stock Exchange has given us connectivity at a higher level within that company to go discuss a mortgage product or a fixed income data services product or some of those things.

And so it's actually -- and vice versa where we've had people that are mortgage customers that have come to list on the New York Stock Exchange. And so it's been an important kind of network for us of thousands of companies, some of the biggest and most important companies in the world that are in that network that we have a direct connection to that can certainly and have been beneficial to other areas of our business as a cross-sell to us. So it's -- I appreciate the question because it's something we think about a lot when we're going to talk and pitch a new customer, whether it is on NYSE or whether it's one of the other customers that -- or one of the other products that we're speaking about.

Great. So I think we are out of questions here, but maybe just take to see if there's one in the audience.

Sure.

If anyone has a question, we have one here in the second row. We get a mic up here. No, it's almost there. So there we go.

Mitch Ross with Allspring Global. Just with the Anthropic news, what differentiates the software companies that don't have a walled garden proprietary way to outsmart AI from the segments or businesses that are able to layer in with AI more effectively, maybe aren't as susceptible to AI taking away their business. I think it particularly fits with this question.

Yes, sure. So I'll start with our mortgage business and so let people sort of appreciate what that is. And so you've heard us call this for several years before AI was really a big thing, but it's a core -- very core system of record for our customers. And that includes the loan origination software that we have as well as the MSP and servicing software we have, where you've got highly regulated industries, a lot of data that is stored in those platforms and stored for years in those platforms. You've got money flows running through those platforms. And it's really what helps people do their job.

It is core to everyday use. It's what guides you through the mortgage origination process. It's what guides you through the servicing process and the distribution of capital out of -- from mortgage payments to MBS pools to escrow payments. It's what is the foundation of any kind of audit trail that needs to be created related to regulatory inquiries and things of that nature that happen, obviously, a very regular basis in what is a highly regulated industry.

And so from our perspective, that's about as durable as it gets in software before or after or during AI. I mean that's what we've always looked for is these mission-critical platforms, and that's what we've got. And I think the opportunity for us in mortgage is really to take those core systems of record that today really are widely used by the industry and our networks that connect a lot of our industry participants to build AI tools on top of and bring greater efficiency than I think we otherwise would have been able to.

I mean that was always the core mission before AI really started to come on to the mainstream here was to bring efficiency to the mortgage workflow through integrating these platforms and automating the different and the several, several tasks that exist across these different workflows. And AI, I think, is just going to help us do that better than we could have done before. And so that's really the goal. If you listen to some of our recent earnings call, a lot of what we've been talking about is the AI tools that we're going to integrate with those core systems of record to really drive the efficiency across the platform.

So I think from that perspective, we're in a really good position in an AI world. The other component of that, and it carries over to the data side is, I mentioned earlier that these are networks that really span a vast majority of the industry. We've got a ton of real-time data that is very unique and proprietary to us that sits in those systems of record that we can create products out of that are really unique or feed into models for people that is really unique and you can only get from us.

And so I think in a world where these models are really as dependent on the data they consume as anything else, that kind of real-time data that is unique to us, proprietary to us is just going to be that much more valuable as we advance forward. And it's the same thing in our fixed income and data services business, where that's largely proprietary data, decades of price history that we've created that has proven to be of the highest quality across the industry that those models and people's analytics are going to really demand to get the best output at the end of the day.

And so I think when we think about the opportunity for us, it's -- we're very well positioned. It's always been core to ICE to -- again, before AI, it was always -- we wanted proprietary data. We wanted unique data sets. We didn't want somebody else's data. We have some of it through some of the acquisitions that we've done, it's come with it. It wasn't the main reason for the acquisition. But largely, we're proprietary data, and that's always been kind of a guiding North Star for us when it comes to acquisitions and it comes through organic growth initiatives as well. It's always kind of what we focus on. So we're very excited about that opportunity on the AI front. I think it's something that could be a real propellant for our existing business and new products as well as we kind of move forward. Sure.

Great. With that, we will wrap it up. But Warren, on behalf of all of us BofA, thank you very much joining us.

Thank you, Craig. Thank you, everyone. Appreciate it.

All right. Let's move on here. Thanks for being here again. I'm Alex Kramm, Senior Research Analyst at UBS, covering the U.S. exchanges and business services company. Delighted to have once again, I think for the last 2 years, you were here, Warren, to have ICE here at Intercontinental Exchange at this conference for the third time in a row since it's been a UBS conference.

So why Warren, aren't we just going to dive right in. As you know, I'd like to start these conversations -- discussions a little bit more of a high level, followed ICE for 20 years or so. The company has certainly changed over that time frame. It's a very diversified company, 3 segments, a lot of different drivers, volatility, commodity prices, interest rates, AI is obviously a big topic at this conference. So as you as a manager or as the management team thinks about the outlook for the company here over the next few years, what gets you excited about ICE, how you're positioned for attractive growth?

Okay. Well, that's a good place to start, a broad place to start, but that's a good place to start. And thank you for having us again, and happy to be here. Happy to be back in sunny Miami. So I think, look, when we think about the next couple of years and what we're excited about, I think it's probably good to sort of ground yourself on what ICE is and what we look like. And now it's alluded to it a little bit, but we're a $10 billion revenue company with 60% operating margins. EBITDA, a little bit over $6.5 billion, about $4.2 billion of free cash flow for 2025.

So -- and importantly, spread across a number of very important asset classes, equities, mortgages, interest rates, commodities, really the main asset classes across the world. And importantly, within that, we're operating mission-critical businesses in technology and data services that are really the picks and shovels for the people that operate in those asset classes. And so when we think about our outlook and the business mix that we have, we really like -- we're 50% recurring revenues, 50% transaction revenues. The transaction business is really spread across all those different asset classes. So a really diverse set of transaction revenues across different asset classes that help us.

And ultimately, what that helps us do is we've got a business that's very durable and has grown through many different market cycles, many different market environments that allows us to really look forward and invest in the future and continue to compound that growth through time. And so we've leveraged that diversity to do that. And as I think about the next couple of years, we'll continue to do those things. I think we'll dig into some of them in more detail later, but there are really a ton of opportunities across the different areas of our exchange business. There's certainly a lot of opportunity with AI and our data services. We're largely proprietary data in terms of what we offer across mortgage, fixed income and our exchange business. And so I think a lot of opportunity there with AI and the need for data services and data sets that will -- quality data sets that will feed into those large language models over time.

And so we're really ultimately trying to figure out where the puck is going to go and invest in those areas. And so I think we'll dig into a little bit more. But ultimately, that's kind of what we're thinking about in terms of where the business is going at the moment.

Excellent. Cool. Yes, let's start digging in and starting with the largest franchise still today, which is energy trading. Very good year last year. actually very good start to this year as well, but that certainly makes people worry that comps are going to be tough, growth has to inevitably slow down. So why does it have to slow down or why not?

I think you asked me this question last year and the year before that, too. But...

Is that your answer?

No, no, no. But -- and I think it's been exceptional growth. It's been exceptional growth for the last couple of years. And actually, if you look past over the life of that energy business, the cumulative average growth rate has been sort of high single digits, now kind of edged into the double digits because of the recent trajectory. But certainly have been strong well before this recent bout of strong volumes that really underpinned by a couple of secular things. I mean I think what you've seen around the world is continued globalization of energy as an asset class.

LNG has been, of course, an important part of that as more gas is getting on a boat, moving around the world. We are the critical provider of risk management tools for that. We have a contract called the TTF contract that's really becoming and really has become the key benchmark for gas for people to price off of as they move LNG around the world. We have several contracts that hang off of that benchmark, whether it's our Japan-Korea Marker or some of our U.S. contracts that really are important kind of tools within that product suite that help people manage risk as they move gas around the world.

We have a similar product suite over in our oil business. It's obviously the cornerstone of that is our Brent contract where we have hundreds of other contracts that hang off of that contract that allow people to risk manage oil moving around the world from different locations. And so as that globalization is that and that complexity of the supply chains and things of that nature increase, that's been a real benefit for our platform. And as new ones pop up or new opportunities pop up, we are really well positioned to create those risk management tools and leverage the position we already have.

And so that's been a real important thing for us. Obviously, as we talked about a little bit earlier, but artificial intelligence becomes more of a consumer of power and electricity and things of that nature, I think it will be just another leg of growth. I mean without that, energy looks like it's poised to grow quite nicely in terms of consumption, global consumption over the next several decades. But of course, you add something like that, and I think it's just a further propellant.

So we feel really good about that platform, and it's its prospect for growth. And as we're entering -- well, we're in February now, but I think open interest is up nicely even after that strong month of volumes. And we continue to see that compound through all this volatility, which is a really good sign for the near, medium term, if not longer.

Okay. I'm not sure if this is a short-term, near-term question, but I want to touch on some geopolitical events for -- and the impact on that business. I know there's a few things going on, and you talked about it on the call. The one that I had spent more time on and thought about is what's going on in Venezuela. Now I'm not an energy market expert. But to me, it sounds like it's changing the game of global energy markets and oil.

So wondering if you see that, what kind of impact it has to your business? But then also specifically, you just mentioned Brent and all these other contracts. Is that something where you will then have to launch a new contract if those markets become more open? Or is your product set already well or even better positioned than others out there?

Yes. So I think -- look, that's a great example of what I was alluding to a little bit earlier, where you have shifting -- potentially shifting here supply chains around the world within a -- obviously a very important commodity or asset class.

And so when we've seen things like this before, I mean, you go back a little bit to Russia and Ukraine to some degree, where Europe was consuming 40% of their gas from Russia. And now all of a sudden, that war breaks out and now Europe has to shift to consuming their gas and LNG from a bunch of other areas. You had a shifting supply chain dynamic. And so when that happens, it certainly creates demand for risk management tools and can be a long-tail demand for risk management tools as a result of that.

And so it's obviously very early days in all of this. I think should we or could we create a product, I mean, we could. I think what we've always done at ICE is really follow the customer demand and what their pain points are. And so to the extent we see that opportunity and the customers are looking for that, that's a product I think we can easily develop and fit into our product suite as we have done many times in the past and work with them on how to best design that. And so I mean that's been core to how we've built the business today that's got thousands of contracts across energy has been really following the need of the customer and looking for the pain points that are within their workflow and then developing contracts around that.

And so I think to the extent that, that does evolve that way, that's something we can absolutely do. I'll say, too, on this point as well we have several Canadian crude contracts as well that have benefited because they actually do -- they are somewhat similar to Venezuelan crude in terms of the quality and type and things of that nature, the grade quality and things of that nature. And so we've seen a little bit of benefit as people are using some of those to manage some of the risk that's out there today in that market and probably could be a beneficial thing for us to kind of build off of, if you will, depending on how that Venezuelan market evolves over time. But certainly a potential opportunity that we've proven in the past, we can capitalize on.

Fair enough. Rounding it out on the derivatives trading side then, I mean, energy gets all the attention all the time, and it has been the growth engine for sure. I think I mentioned earlier about 14% growth in the last 5 years. But there are a few other businesses in there rate, et cetera. Any -- which have put on some decent growth as well, I think the mid- to high single digits. Anything that you are watching there? Anything new that you're doing in those marketplaces, in particular as it relates to maybe 2026 and again, tough comps with last year?

Yes. No, it's a good question. I think we don't get asked a lot about it. But yes, I mean, look, open interest in our interest rate business, for instance, I think up to almost 50% or so right now, and it's been really -- in particular, our SONIA business -- sorry, our SONIA business, sorry, that's doing really well.

So we've been happy with that performance. I think that in terms of a near-term benefit, that certainly portends for good volumes in the near term. I think in terms of interest rates broadly, you asked about futures, but we did get approval for U.S. treasury clearing very recently last week. And so that's an area, too, that we've been able to leverage a lot of the technology and expertise we have in clearing across a lot of different asset classes, but in this case, particularly within our CDS business to bring this offering to market. It won't be something that necessarily near term is helpful. I think a lot of those regulations don't come into place toward the end of this year, early next year to begin with. But certainly, I think a big market, the U.S. treasury market is obviously significant in size.

And so we think with our -- the quality of the offering that we can bring to market, the expertise we have in clearing and all that, that we can certainly be a meaningful player within that space. And so that's -- I guess, I'd classify that somewhat interest rates, but an exciting area for us as we move into '27, '28 for sure.

Okay. Good. And then maybe just finishing up on the trading business. There's been a lot of discussion around tokenization, even one of the fireside I hosted earlier. It was a big topic. So -- and that's not just equities, but there's some other asset classes. But for you specifically, you made that announcement last week -- sorry, recently, 2 weeks ago, was it? Something like that. On the NYSE. And so maybe you can just help us with what you're doing, what it means, any time lines? And then as I mentioned, there are other asset classes that could maybe benefit from tokenization also on the custody clearing side. So yes, where -- what are you doing on the NYSE? And what else are you thinking about?

So it's probably helpful to kind of start with what made us sort of decide to do this to some degree. And so we've obviously been hearing a lot about, and we've been studying tokenization and stable coins and that asset class broadly for quite a while now. And there's a clear interest from certain customers around the world for trading tokenized securities. And so we'll start with ETFs, and we'll hopefully broaden that as the platform evolves.

But what we'll be doing there is, I think, somewhat unique in that we'll be operating under the current regulatory overlay. So that's an important thing. Obviously, we bring the New York Stock Exchange brand and technology to all that. That's an important customer value proposition for us and others. And so I think as we think about how the world could evolve, we'll see. But certainly, as it sits today, the goal is to operate under the current regulatory overlay, which I think is an important thing relative to maybe some other offerings that might be out there.

And so in addition to that, we'll bring, as I said, the New York Exchange Pillar Technology being the underpinning technology stack there as well as some blockchains that we've built that have in-house. And so I think importantly, we have all the infrastructure, the technology infrastructure in place to do this. And so it really becomes a pretty insignificant kind of incremental expense. These are all pillar for what it's worth is what underpins the New York Stock Exchange. You all know today. So that's not a new thing for us. And so the incremental expense there is pretty limited. And so like things we like to do at ICE, we're looking for adjacencies where we can leverage the existing technology stack and expertise into these kind of customer opportunities. And so we'll see how this all evolves.

Like I said, there's certainly some interest from some customers around the world. And I think it can bring potentially some efficiency and settlement. It's obviously got around-the-clock trading. You can trade in notional, although things of that nature that certainly certain customer sets or customer channels are looking for. And so at the end of the day, we'll see how that all evolves, but it's certainly something that we were able to do with some existing technology infrastructure and not a lot of incremental expense. And if it ends up being in a big thing, then I think it's good to have been somewhat of a first mover here in that sense and catch that tailwind versus waiting for it.

And so in terms of timing, you asked that within that question, it's a bit of -- I got to wait and see here because we do have to work through with regulators to help them understand what it is we're trying to do, and we'll do that over the next couple of months and hopefully get somewhere soon.

Fantastic. All right. And then moving, I guess, to the nontrading side of the businesses -- of the business, which is really the feeds business on the data side, 80% of the business recurring and very good acceleration over the last few quarters. So can you talk about what's driving that? If the growth is sustainable? You just gave guidance. And I think you made some comments that even you're trending towards the higher end of that range. So maybe talk a little bit more about what can get it to the higher end or if I look at my model, maybe even beyond that at some point.

Right. Yes. So it's been a bunch of different components of that business that have been driving that growth. And so in our fixed income data and analytics business, it's our end-of-day pricing continues to trend well. I think the electronification of fixed income, shift to passive fixed income, of course, all those trends that have been around for a while, continue to proliferate throughout that ecosystem. We've been seeing benefit and demand for our pricing data, our real-time pricing data. Our indices have been a double-digit grower for quite a long time, and that, of course, has helped that business as well. And so all of that has really continued and been the case for a couple of years now.

Within our data and network technology business, our desktop business, our feeds business have been growing high single digit to low double digits. Our feeds business has been benefiting from demand for our data service, high-quality data, as you're probably all aware. And then our desktop business has actually really benefited from our energy business. We have a big specialty energy component of that. And so that's been an area that's been benefited as well. And so all of those have actually been drivers of the growth you've seen over the last couple of years.

What's happened more recently within that growth is that our data center business, you hear us call it ICE Global Network. It's really connectivity to our exchanges. It delivers data to people. It's -- people are buying capacity. And what they want at the end of the day, and we're seeing increasingly want is bigger pipes effectively, more demand for data, more demand for -- to put volumes through or messaging through those pipes has increased significantly over the last couple of years. And so we've been investing in that data center footprint that we've had for quite a long time at Mahwah is really the data center that came to us with the New York Stock Exchange acquisition. We've built out some of it, but we have a lot of empty space within that building, and we're actually going to be building another building on that campus this year to bring more capacity.

And so as that demand has come for more space, we've been investing in building out that space. And so you've seen that data and network technology business within our fixed income data services business go from 5% in 2024 to 7% and now -- or more 7% in the first half last year and now into the 10% range in the second half of last year. And so I think that can be kind of a lumpy business to some degree, like you sell out some of the capacity and then you got to reload, but it's something that we've been consistently looking at and investing in.

And so I think as we think about the next couple of quarters here, it's got a good outlook. It's got a good outlook for the year. We think we can be in the high single digits for that business. And it's been a core part of, I think, a differentiating part of our strategy to kind of own that data center space has been an important part of what we've been able to accomplish. So I have a good outlook for that business. And I think the other ones continue to do what they've done is why you can get to those kinds of ranges. And we'll see if we can do a little bit better. But right now, it feels pretty good.

All right. Good. Excellent. And then staying on the data business for a second here. Last time we did a chat like this, actually not that long ago, you had just done the Polymarket investment. And I think at that conference that we talked, you talked about why you did this investment. We don't have to rehash all that. But what I was actually interested in more is the maybe near-term tangible commercial agreement you have with them. I mean, I think there is -- you're going to be -- I don't want to call it data reseller, but you're basically going to try to help them basically bring data to the marketplace.

So can you give us an update on when you think this is coming? How we should be thinking even about the demand side of this obviously very strong growing marketplace in prediction markets. And then you're doing something similar with Reddit right now in some other places. So I don't know if there's any read-throughs yet, but I know this is all very new. But as I think about kind of little things that are new and maybe have a broad audience, I obviously want to understand like what that could be.

Yes. No, it's a great question. And so these are data sets that I think we're increasingly finding and hearing from our customers that they're interested in us bringing together. I mean it's all a bunch of raw data at the end of the day, and this is where ICE's expertise is that we can help bring and harness and effectively create a product out of and then go and sell that to our institutional customer base, which are -- those are the 2 things that maybe Polymarket or Reddit don't have as much of in terms of being able to kind of create the product for the institutional investor and then obviously distribute it to those people.

And so those are -- that's where we come in and we can really provide a value to that partnership. And so with Reddit, it's -- probably you can guess. I mean it's sentiment and sort of signals that we'll be able to harness out of all the data that comes off of that platform and put it in a way that someone can kind of get a sense for what may be happening in equity markets or other asset classes as well. Polymarket is sort of what a similar thing in that a lot of what you -- if you've been on their website, a lot of what they're posting is real-time probabilities for events that are, in many cases, very adjacent to financial markets, commodity markets, markets that we operate.

And so with that investment in that product, what we spent a lot of time talking to customers about things that they were doing. And in some of those conversations, we understood that Polymarket was something that some of our investors -- or sorry, some of our customers were utilizing to inform risk management strategies on their -- in their firms. And so we made this investment. We agreed to do a data deal. We've been working on that. I think we should have something soon in terms of getting it launched. But really, what it is, is it's going to be institutionalizing that data and delivering it to a way that those customers are used to consuming that kind of data and be able to effectively use it to risk manage better than they can today where they're kind of scraping it off the website.

And so I think it -- that's a lot of the value add. And then over time, being able to combine these data sets with other data sets to really drive some interesting insights that you wouldn't be able to do if you didn't have all this stuff in one place. And so that's kind of the next step of this thing. But again, it's about kind of creating -- in this case, it's not necessarily proprietary, but it's certainly in partnership, it is in that way, and we have some exclusive on it. So creating those kinds of data sets that can really be differentiated for our customers is really what we focus on, and this is just another example of that. So we'll see where it gets to. I think on a $2 billion-plus recurring revenue business line that we have today in fixed income data services, I don't know that it's moving the needle this year, not much. But certainly, over time, it all has to start from 0, and I think it could be material over time. So we'll see.

Before I get to the next question on feeds, just to clarify, I think when we talked about the guidance, I think you might have said at the end, high single digits, but I think it's mid-single digits, but the higher end.

All right. Let me clarify.

And hopefully, higher. I think I'll give you a chance.

So total recurring revenue, we said mid-single digits towards the higher end of that range. And then what I was referring to was the data and network technology business within that, which we think will be in the high single digits.

Okay. Just making sure we're on the same page. And then on the transaction side of the business, that business doesn't get a lot of attention, but it's doing better, right? Now I know there's -- I think it's very heavy on the muni side, but some other credit businesses you've been building out. So maybe just give us a little bit of an update and how we should be thinking about 2026.

And then look, it's a business that within the ICE portfolio is smallish and you're not the market leader like you are in other parts of your business, generally speaking. So the question, of course, is, do you still have ambitions to get there? Could M&A fit into that equation? How do we think about that business?

Yes. Well, let me start with how it's done. And so it was -- I believe it was a record year for that business or the combined business in that way. And it grew for the year. And we saw some really good strength across our municipal bond platform. It tends to be more retail in nature, munis in general tend to be more retail in nature. But also within our corporate business, we had a really strong year, and those are the 2 key components of that business.

And I think one thing that we've tried to do over the last couple of years and to your question about what's sort of new and what we're working on there, we'll continue to refine protocols within that business. We've refined our RFQ protocols. We do have click-to-trade. That's been -- that was kind of the core of those businesses when we purchased them about 8 years ago or so, I think, somewhere in that range. And so we've been developing new protocols around some of these asset classes as well. We continue to do that. That somewhat connected to the continued growth within our institutional channel. Those platforms when we bought them had really no institutional presence. And we've slowly but consistently grown that exposure and grown that customer channel, both in munis and in corporates. And so that's another, obviously, key initiative that we'll be focused on as we move into the next year.

And so I say all that with -- and end this question with, we're very happy with how that business has been doing. I think it's a helpful business to have relative to the data businesses that we have, we've been able to kind of cross-sell across -- it's helped to have the data business to sell institutional customers on the trading and vice versa. And so all those things have been synergistic in that way. And so I've been happy with the performance. I don't feel as we necessarily need to do anything else in that sense. But look, if the ever opportunity, then I would say that's across any area of our business, if the opportunity arose that something that made sense from an M&A perspective or a partnership or whatever it may be across or some form of investment, you see us do a bunch of those things over the last couple of years, then that's something that we would evaluate at the time. But as I said, happy with how it's doing.

Okay. Okay. Great. All right. Shifting to mortgage tech, which gets sometimes outsized attention for the fourth for the size of the business, I'm saying. But look, I'd say the last couple of years have obviously been challenged in that business, both on the recurring side and on the transaction side as well, although that's getting better a little bit here.

So can you talk about how much of that business -- all those challenges have been really cyclical. Any other factors at play? And then look, you just gave obviously an outlook for this year. Maybe you can talk a little bit more about the puts and takes. There's a lot of ins and outs, new customers coming in, some rolling off. So as we think maybe about the cadence and go through the year, anything you would highlight so we don't get too surprised as we kind of hopefully step up from these current run rates?

Yes. Well, so I would say that -- and we've seen the growth improve over the last year or 2 relative to what we saw. So we were more in the -- closer to the mid-single-digit range this year for that business overall and 5% in the fourth quarter. So we ended the year on, I think, a reasonably strong note. Obviously, that was helped a little bit by the boom in refi -- mini boom in refi in the fourth quarter. And in January, I can tell you, it continues to be pretty good. But you don't know where that's going to ultimately go as rates move around as you move through that course of the year.

And so I think we're very happy given the fact that we're still in a mortgage market that last year was probably the third worst year in the last 30 with the 2 worst years before that being the year before and the year before that. So we're coming out of the depths of that sort of challenging market for sure at a somewhat reasonably slow pace, but certainly improving each year. And so I think that's been helpful, obviously, to the -- sort of our revenue to some degree because we get a little bit more transaction revenue, but I also think it's been helpful from just the customer sentiment and the customer investment standpoint, too.

And so throughout these last couple of years, we've continued to see some strong sales, things of that nature. And so we're growing the network. Customers are buying more Encompass product and buying more of our analyzers. We're adding customers to MSP. And so we're expanding our network, which is ultimately what we are really focused on at the end of the day, not necessarily what the mortgage rate is going to be next month. We figure if we can continue to grow this network through an environment like this, we'll be able to probably grow better in a better environment.

But when that environment does come, we'll be that much better off because we'll have that more -- that expanded network. And so as we think about next year, that will be the goal for us to continue to expand that network. We can't control interest rates. We can't control those kinds of things. And so -- but as we think about the next year and -- or this year, I should say, in terms of what we expect, we do expect another year of low to mid-single-digit growth overall. I think towards the higher end of that range, you probably get an environment where it's sort of low teens kind of origination market growth. That still probably puts you in an abnormally low mortgage market relative to what you've seen historically, but certainly improving and heading in the right direction. And then towards the lower end, you probably have more flat to modest kind of origination growth.

And so -- and within that, we do expect our recurring revenues to grow, which is somewhat of a proxy, not a perfect one for us, what I said earlier, which is us growing that network. And so -- and setting us up for when that normalization does come. So we feel good about the progress we've made on that front. I think it will be a solid year ultimately. I can't predict what the market is going to look like, but I think ultimately, it looks like it will be a solid year, and I think we'll continue to make progress in that way.

And then on the -- staying on the mortgage business, when it comes to new client wins, again, a lot of excitement when you had JPMorgan because it's obviously a large, large client. There's been some other wins, and I think you just had the best quarter of new Encompass signings. So it seems to be moving in the right direction, but I think everybody is waiting for these huge household names that I think we expected with ICE running this business and leveraging relationship that we're going to see more of that.

So anything you can talk about how the pipeline is looking, how discussions with those larger players are? And then I need to ask about the other side, anything else we should be mindful of where maybe something chunkier could be, for whatever reason, M&A, et cetera, could be getting lost.

Yes. Well, so on the big bank question, if you will. So yes, we've absolutely added several of those, and I would extend that into some of the medium and small-sized banks as well. And that was really a huge opportunity for the -- for ICE Mortgage Technology as we were acquiring Black Knight in 2023 is when we closed, but we announced in 2022 was because the legacy Ellie Mae product Encompass, the loan origination system had largely almost entirely been nonbank customers. And so it was a customer channel, banks, this is was a customer channel that we weren't really -- we hadn't really tapped into.

And one of the things that Black Knight brought us was the servicing platform, MSP, which had a ton of banks on it. And so we've been able to, I think, successfully cross-sell not just a large bank like JPMorgan, but a lot of the medium and smaller banks as well. And I think that's been a helpful thing for us. And now one thing is that a lot of times, particularly the larger ones, it can take 18 months, it can take a couple of years to implement those. And of times, that's not because we're slowing things down. It's because the bank wants to go at a certain pace for whatever reason it may be, and we're happy to facilitate that. And so these can take a long time, and that's some of the reason I think maybe you're speaking to it in that way.

And so as we look to next year, we'll see more of that start to come on. We've got now $100 million, roughly speaking, of revenue synergies that we've announced. That's -- that's up from $55 million when we announced them last year or we gave you an update last year. I would say about 1/3 or a little over 1/3 of that $100 million is actually in our revenue run rate right now. And so over the next couple of years, not only will that $100 million continue to go higher as we cross-sell, but more of that current $100 million will start to come into that run rate, and I think will, of course, be beneficial for us.

So -- but again, it can take some time to start the implementation. It could take some time to ramp that implementation once it is installed, and then that's a little bit what we're seeing. So I think we feel good about how things are coming on the implementation of the sales front for sure.

On the attrition component, we haven't really seen -- the customers don't really leave unless it's for M&A consolidation or maybe if they go out of business. And so we've got a very high retention rate on that standpoint. But to Alex's question, there has been some M&A, some pretty unique M&A in the space the last year or so that will have an impact on us as we move through this year. It's probably 2 points on our recurring revenue or so that you can think through that -- we've talked about this a couple of times in the past, so it's not really new information on that front. But certainly, a bit of a headwind that I think is unique in the space.

And with some of these sales coming through and the implementations coming through, as I said, also, we expect some of the minimums in our Encompass contract. We expect the headwind from those that we've seen in the last couple of years to dissipate a little bit or we'll still have some headwind, but it will be much less than what we had in prior years. So all that kind of comes together even with some of the headwinds from M&A that should lead to some growth in recurring revenue this year on top of what we saw last year.

All right. And then quickly to round it out on the maybe other side of the income statement, can you just for everybody's benefit, talk about your long-term expense philosophy. You are the CFO of the company, right? I think that's in your department. So look, what are the biggest investment areas over the next couple of years we should be thinking about? You obviously just gave your 2026 cost guidance. So any particular items you would point out in that regard?

Well, I mean, it's -- maybe it's a little -- it's a -- it's business as usual for us. I mean -- and so we always are constantly and continuously investing in the business, whether it's some of the new opportunities, we talked a little bit about tokenization. We talked a little bit about U.S. treasury clearing. Those are pretty small incremental investments because we've got the existing infrastructure in place. But we're continuously doing that. So we never have to catch up at one point. We don't get caught off guard. So we're always going to be investing in the business. That's part of what we do every year and what we budget for.

Investments will change a little bit each year, of course, as we kind of -- as things come up and whatnot. And so as we think about this year, I think one thing to call out that maybe is a little bit -- that is increasing a little bit, but not is AI. And so obviously, we've talked a lot about some of the products that we're supporting on the mortgage side, whether it's some of the customer service products or some of the analyzer products that help with your origination workflow and help automate those workflows. Those are investments we're making. But we're also making -- we haven't talked as much about this, but investments in terms of employee productivity, bringing some of these models to our -- rolling out across our employee base to really drive increased productivity across it. And so that's certainly an area that we're investing in. It's a little different than maybe a few years ago.

And then also -- and I alluded to it a little bit earlier, but our data center footprint is, of course, an area that we're investing in as we build those out. further. Again, we had a lot of the real estate already, but bidding those out and then operating those costs a little bit more, of course, as you get bigger in that space. And so -- but those are, of course, investments that we're more than happy to make. I mean that's a business, as we said a little bit earlier, is growing in the double digits right now. So that's kind of a no-brainer.

So I'd say in addition to all the regular way investments that we do, obviously, invest in our people and broadly across technology, I'd say those are probably 2 areas that are maybe -- I don't know if I call them unique because they've probably been with us for a while here, but certainly a little bit different than maybe the last couple of years.

And then finishing up with capital allocation, of course, you obviously delevered. You've been buying back more stock already here in the last couple of quarters. So not sure if there's much else to talk about. But yes, look, is that the cadence that we should be expecting on the buyback side? M&A is always something that fits into the ICE strategy. We know that. So look, anything that you would point to areas that you're excited about on the M&A side in particular?

Yes. Well, look, I'd say the way we think about it is we -- as I said, we did $4.2 billion of free cash flow. So we're going to invest in the business before we do anything else. So that's the first thing is CapEx side, obviously, and other investments. And then we'll pay our dividend, of course. And we do like to grow that dividend. And over time, we like to be kind of more in the -- have been more in the double-digit range in terms of growth, maybe not every single year, but on average. And so that's an important component, I think, of the story for us.

And then after that, yes, Alex mentioned earlier, I mean, we will look for M&A, and we are always looking for those opportunities. They have to meet the right criteria for us. And so it's got to generate the right returns. We got to make sure we can get those synergies out. We want to make sure that we can grow that business or it grows our business faster than we otherwise would have grown. So the 1 plus 1 is 3 kind of a scenario. So all of those things at a high level are really kind of the strategic boxes we want to check at the end of the day. And if we can do that, that's something we're going to take a closer look at that.

Absent something on the M&A front, we've been happy to return the balance of that excess cash or capital to shareholders through buybacks. And more recently, we've also -- we are at 3x leverage. We do have a little bit of CP. CP is 4 and change in terms of where it's running right now in terms of a rate. That is something that we're happy to pay down a little bit, chip out it a little bit, but I'd say more of the balance will go to buybacks at the moment given where our stock is.

So again, caveat being if we find investments or M&A opportunities or things like that, we'll obviously -- we'll divert capital that way. But absent those, I think it's what we've done historically, which is really return all of that to shareholders through buybacks, dividends.

Amazing. We probably have time for one question in the room. If anybody has anything pressing, you can do it through the iPad or app, but I'm happy to take a question in the room. We have mics.

Common occurrence, everybody. Did we get to everything? Look, I'll ask one more question real quick. And I think you -- well, you did talk about AI a little bit throughout the conversation. But anything you would talk about in terms of biggest opportunities for you on the revenue side or maybe also on the cost side? And then look, it's been very topical around disintermediation, Again, you saw that last week. Your stock did get caught up in that as well, I think, a little bit. I think people are mostly focused on the feed side, maybe a little bit on the mortgage side as well. You talked about it a little bit, but anything you can help us with in terms of how you're positioned to win but also to defend in that component?

And maybe that's one answer, right, because it's -- you kind of can't do both. But -- so look, if you think about the feeds business that we have, like it's largely proprietary data. It's that -- and it's high-quality proprietary data. I mean we've always seen -- we are not the cheapest offering out there. We have seen for years, people try to come in with much lower cost offerings. And the market, the pendulum shifts back to the quality ultimately when you have volatility. And so -- and you've seen us obviously grow that through a number of different cycles. And we have 50-something years of history across 3 million bonds that is just really difficult to replicate.

And the secret sauce of that is the algorithm that we use to produce those prices and the reliability of those prices that you know they're right. I don't know that you can have that confidence with maybe an AI model or something along those lines. And you certainly don't want to have to rip all of those correct prices and history of prices out of your models that you're using today and compliance models, all those kinds of things that are critically important. So as we think about what that means, it means that all these LLMs and all these AI tools are going to need and want, obviously, high-quality data. And I think that's going to be where we play a role as we can provide that.

And so I think we're thinking about this as a big opportunity for us from that perspective from a proprietary data side on fixed income side, but then also potentially on the mortgage side, too, where we have a lot of proprietary data as well. And so that's an area that we're excited about. I think it's still kind of early days in terms of us being an input there, but certainly an area that we've seen some interest and are excited about.

And so I think other than that, I think on the mortgage side, the opportunity for us is this is really a core system of record that we're offering people is a highly regulated business. You've got money flowing through these systems. They're core to people's operations. It feels pretty defensible at the end of the day from that perspective. And what we're ultimately trying to do here for people is create more efficiency in their workflow. And again, I think we're going to be building, and you've heard us talk about the last couple of quarters, a bunch of AI tools that we're going to be plugging into those networks, those core systems of record that people operate across their businesses to really bring the greater efficiencies than we were already bringing before. And so when we look at AI as an opportunity for that business to bring more efficiency than what we've seen and I think really help advance the industry in terms of what we've been trying to do in the last couple of years.

Okay. Fantastic. Good place to end. So Warren, thanks for coming again, and please help me thank him.

Thanks, everybody.

Good morning, everyone, and thank you for joining us on today's ICE Fourth Quarter 2025 Earnings Conference Call and Webcast. My name is Drew, and I'll be the operator on the call today.

[Operator Instructions]

And with that, I'll hand over to Steve Eagerton, VP of Investor Relations, to begin. Please go ahead, when you're ready.

Good morning. ICE's fourth quarter 2025 earnings release and presentation can be found in the Investors section of ice.com. These items will be archived, and our call will be available for replay. Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment and are subject to risks, assumptions and uncertainties. For a description of the risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2025 Form 10-K and other filings with the SEC. In our earnings supplement, we refer to certain non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance.

You will find a reconciliation to the equivalent GAAP term in the earnings materials. When used on this call, net revenue refers to revenue net of transaction-based expenses, and adjusted earnings refers to adjusted diluted earnings per share. Throughout this presentation, unless otherwise indicated, references to revenue growth are on a constant currency basis.

Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items. With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardiner, Chief Financial Officer; Ben Jackson, President; Lynn Martin, President of the NYSE; and Chris Edmonds, President of Fixed Income and Data Services. I'll now turn over the call to Warren.

Thanks, Steve. Welcome to the call. I'm glad to have you leading Investor Relations for us going forward. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 4 with our exceptional full year 2025 results, which demonstrate the strength of our diversified business model and the consistency of our execution. 2025 was a landmark year for ICE. We delivered record adjusted earnings per share of $6.95, a 14% increase year-over-year, marking the best performance in our company's history. This achievement reflects both the resilience of our franchise and our team's relentless focus on operational excellence. Full year net revenues reached a record $9.9 billion, up 6% year-over-year, with balanced growth across our platform, including 5% growth in recurring revenues, providing durability and visibility and 8% growth in transaction revenues, which demonstrate robust customer engagement and growing demand for risk management tools. Our disciplined approach to expense management continues to drive operating leverage.

Adjusted operating expenses totaled $3.9 billion, reflecting our commitment to cost discipline while also investing strategically. I'm particularly pleased to report that an annualized expense synergies from our 2023 Black Knight acquisition exited the year at an annualized rate of approximately $230 million, exceeding the updated $200 million target that we set early last year. Based on this momentum, we now expect total expense synergies to reach $275 million by the end of 2028, a $75 million increase or nearly 40% above our initial commitment when we announced the transaction back in 2022. This outperformance underscores our integration capabilities and our proven ability to identify incremental value creation opportunities. These results drove record adjusted operating income of $6 billion, up 9% year-over-year demonstrating the quality and scalability of our business model.

Turning to capital allocation. Our record operating performance generated $4.2 billion in adjusted free cash flow, which we deployed strategically to enhance shareholder value. We repurchased $1.3 billion of stock, increased our dividend by 6% and reduced our leverage ratio from 3.3x at year-end 2024 to 3x as we close 2025, all while funding strategic investments across our business. This balanced approach reflects our confidence in both our core operations and our ability to capitalize on future growth opportunities.

Moving to Slide 5. Let me walk you through our strong fourth quarter performance, which provides excellent momentum as we enter 2026. Fourth quarter adjusted earnings per share totaled $1.71, up 13% versus the prior year. Fourth quarter net revenues of $2.5 billion increased 7% year-over-year. The transaction revenues growing 8% and recurring revenues advancing 6%. Fourth quarter adjusted operating expenses totaled [ $1.10 billion ], coming at the midpoint of our guidance range and reflecting our continued focus on balancing cost discipline with investments in future profitable growth.

Now let's turn to Slide 6 for our Exchange segment, which delivered outstanding results. Our Exchange business achieved record fourth quarter net revenues of $1.4 billion, up 9% year-over-year. Notably, this compounds our 9% growth in 2024 and 14% growth in 2023, demonstrating sustained business momentum. Transaction revenues grew 8% led by global oil complex, which increased 12% year-over-year. Our natural gas and environmental products, which represent nearly half of our energy revenues, grew 10% in the quarter and 15% for the full year, reflecting strong structural demand for energy risk management and the ongoing energy evolution. Importantly, these positive trends accelerated into January. We saw record monthly volumes up 23% year-over-year including a record month for Energy ADV. Further supporting momentum into February is robust open interest, growing 19%, including 7% growth in global energy and 48% growth in our interest rate complex, reflecting heightened volatility, increased hedging demand and the mission-critical nature of our markets.

Our recurring revenue streams comprised of our exchange data services and our NYSE listings franchise. We see a record $391 million, up 11% year-over-year. Growth was driven by a 16% expansion in Exchange data and connectivity services. After adjusting for a onetime true-up in Q4 '24, Exchange data services grew 11% in the quarter as customers increasingly rely on our comprehensive market data and technology. Our NYSE listings business continues to attract the highest quality companies from around the globe.

While only about 40% of global IPOs met our rigorous listing standards in 2025, the NYSE facilitated $25 billion in new IPO capital formation, welcoming 71 new operating companies, including 7 of the top 10 IPOs. In addition, our retention rate remained above 99%. While we also welcome several transfers, including Virtu, Etsy, in the largest transfer in NYSE history, AstraZeneca, who officially transferred to the NYSE this week. This performance reflects the enduring value proposition that combines the NYSE brand with our leading-edge technology.

Looking to 2026, we expect Exchange segment recurring revenues to grow in the mid-single-digit range, driven by continued growth in Exchange data services and expansion in our listings franchise.

Turning to Slide 7. Our fixed income data and Services segment delivered another quarter of strong execution. Fourth quarter revenues totaled $608 million, including $101 million in transaction revenues. Within ICE bonds, continued growth in municipal bond revenue was offset by lower retail corporate and treasury activity, while strong CDS clearing results were offset by lower member interest income following the FOMC's rate reductions in 2025. Importantly, recurring revenues reached a record $507 million, growing 7% year-over-year. Our fixed income and data and analytics business achieved record revenues of $318 million, up 5% and driven by our pricing and reference data offering, which posted its best quarter for net new business since 2020. And our index business, which ended the year with a record $794 billion in ETF AUM tracking ICE indices, up over 20% versus last year.

This growth reflects the increasing adoption of our data and indices as well as the quality of our benchmark products. Data Network Technology reached record revenues increasing by 10% in the fourth quarter, reflecting strong demand for our ICE global network, consolidated feeds and desktop solutions. As customers integrate artificial intelligence into their workflows and require ever-increasing volumes of high-quality data, we're uniquely positioned as a critical technology provider. For 2026, we anticipate fixed income and data services recurring revenue growth in the mid-single-digit range, with growth expected to trend towards the high end of that range, underpinned by another year of high single-digit growth in our data and network technology business.

Please turn to Slide 8 for our Mortgage Technology segment results. Fourth quarter mortgage technology revenues totaled $532 million, up 5% year-over-year. On a pro forma basis, including Black Knight, this represents our strongest quarterly performance since 3Q '22. Recurring revenues totaled $391 million and were in line with our expectations. As we discussed in prior quarters, some customer renewals came in at lower minimums. Importantly, these renewals are paired with higher per transaction pricing that becomes increasingly beneficial as origination volumes normalize. The impact from lower minimums was largely offset by strong implementations and product expansions, particularly within origination technology. Transaction revenues totaled $141 million, up an impressive 20% year-over-year. This was driven by a significant increase in transaction revenues from Encompass closed loans as customers increasingly exceed their minimums in an improving origination environment along with double-digit growth in MERS registrations, which was supported by strong fourth quarter refinancing activity.

Turning to 2026 guidance. We expect total mortgage technology revenues to grow in the low to mid-single-digit range. The high end of our range assumes the number of loans originated across the industry grows in the low teens, while the low end assumes flat to modest growth. Importantly, at both ends of this range, we anticipate continued growth in recurring revenues in '26. Several factors underpin this confidence: First, revenue synergies have nearly doubled from $55 million at year-end 2024 to approximately $100 million at year-end 2025 with further runway ahead. Second, we substantially worked through the 2020 to 2022 vintage contract renewals, reducing, but not yet eliminating the headwind from Encompass minimum adjustments. And third, we continue to see strong product adoption and implementation momentum. These positives will be partially offset by previously disclosed client attrition related to certain M&A activity in 2025.

Please return to Slide 9 where I'll provide additional context on our 2026 guidance and outlook. We expect 2026 adjusted operating expenses to grow between 4% and 5% between [ $4.075 billion ]and [ $4.140 billion. ] This includes approximately $25 million in accelerated stock-based compensation related to adjustments to our compensation plan. As a result, we expect less incremental stock compensation expense in both '27 and '28. Additionally, we currently expect depreciation in the Euro and Pound to add roughly $15 million to $20 million. So note is more than offset by incremental revenue. Excluding these items, expense growth is expected to be in the 3% to 4% range, driven primarily by annual merit increases, reflecting our commitment to rewarding employees for their exceptional contributions and strategic technology investments across our platform.

Among several other initiatives, these investments include expanding our data center footprint to meet growing customer demand and developing new artificial intelligence tools that will drive future productivity and innovation.

Regarding capital expenditures, we expect 2026 investments to be between $740 million and $790 million. This includes installing AI infrastructure such as GPUs, storage and network equipment designed to handle AI and data-intensive workloads. Importantly, CapEx also includes elevated investment in real estate of approximately $250 million as we build revenue-generating data center capacity and new office space in Jacksonville, Dallas, Washington, D.C. and India. These are all strategic growth-enabling investments that position us for long-term success.

In closing, 2025 was an exceptional year for ICE. We delivered growth across all key metrics: revenues, adjusted operating income, free cash flow and adjusted earnings per share. We exceeded our synergy targets, invested strategically in our infrastructure and technology and returned significant capital to shareholders while also strengthening our balance sheet. As we begin 2026, we have tremendous momentum. Our diversified business model, market-leading positions, recurring revenue base, and operational discipline give us confidence in our ability to deliver another year of profitable growth and shareholder value creation.

I'll be happy to address your questions during Q&A. But for now, I'll turn it over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 10. Across ICE's derivatives platform, we've built technology that scales with our customers' needs, combining deep liquidity, global participation and transparent price discovery into a single connected marketplace. 2025 was another record year for our global derivatives markets with 2.3 billion futures and options contracts traded, surpassing the prior record set in 2024 by 13% and record average daily volumes of 9.3 million contracts, up 14% year-over-year. This momentum translated into our 13th consecutive year of record futures revenue in 2025, which grew 11% for the year and 8% in the fourth quarter. Performance was broad-based across our multi-asset and geographically diverse platform, reflecting the depth of liquidity and participation on our platform. Building on that breadth, our energy complex continued to lead in 2025 with strength across oil and gas.

Volumes increased year-over-year in Brent, up 11%, WTI up 9% and gas oil up 8% each setting full year records in 2025, while our global natural gas markets advanced with record TTF in Japan, Korean Marker, or JKM, volumes up 21% and 36%, respectively. This strength has continued into 2026 as January marked the strongest month for trading activity in our history and trading in energy achieved record average daily volume, up 27% year-over-year.

At the core of this strength in our energy business is our oil complex, which gives customers precise tools to manage exposure across grades, regional flows and the spread relationships between them. In crude oil, ICE operates the most liquid futures benchmarks across every major producing region in the world. From West to East, that includes the only Canadian crude futures market, ICE WTI at Cushing, the only physically deliverable Midland WTI contract in Houston, which itself is deliverable into the Brent benchmark and our 2 leading Middle Eastern benchmarks, ICE [indiscernible] and Ice Dubai. Surrounding these benchmarks is a deep set of differential contracts, allowing market participants to price dislocations across grades and locations globally.

In an environment shaped by Iran-related tensions, uncertainty around Venezuelan production, ongoing Russian sanctions and broader geopolitical flashpoints. This global network has proven essential for managing supply risk, arbitrage flows and price volatility. Second, in refined products, ICE provides an equally integrated global complex. U.S. heating oil and gasoline linked directly into ice gas oil, the most liquid middle distillate futures contract in the world with further connections into Asia and the Middle East. These markets spanning diesel, jet fuel, gasoline and petrochemicals are tied back to crude through our refining margin and crack spread futures, enabling refiners to lock in margins amid volatile feedstock and product demand.

Third, as the energy mix evolves, ICE continues to lead in renewable fuels and renewable credit markets. As regulatory frameworks broaden and renewable adoption accelerates, our ability to offer a unified risk management ecosystem across traditional and renewable energy remains a powerful structural growth driver.

Turning to natural gas. Our Blueprint has built a benchmark-led complex where TTF's deep liquidity and price transparency attract a diverse mix of physical and financial participants providing reliable price signals and serving as the leading benchmark for global gas pricing that influences LNG contracts and hedging strategies. Against that backdrop, December was the strongest month of the quarter for TTF with ADV up 30% and OI up 18% year-over-year. That strength has carried into 2026 with elevated January participation evident, as OI was up 16% year-over-year and average daily volumes doubled versus 2024.

Finally, with global energy demand rising, driven in part by the rapid expansion of data centers, electrification and AI infrastructure, capital efficient risk management is critical. Thus, we delivered another significant milestone last year through the rollout of our ICE Risk Model 2 margin methodology across more than 1,000 energy contracts extending a VAR based portfolio approach that captures relationships across oil, natural gas, power, emissions and freight. IRM2 is designed to be resilient against stress events and correlation breakdown as well as adjusting for seasonality where appropriate, which in turn allows us to offer customers greater margining benefits when the portfolio is diversified or hedged.

As a result, customers have seen collateral efficiencies across hedged portfolios. In combination, these factors geopolitical complexity, rising demand and the need for sophisticated risk management continue to play to the strength around our energy franchise for sustained growth in the years ahead. Beyond commodities, our global interest rate franchise also delivered strong results in 2025 as participants responded to shifting policy pads and cross-market signals. Activity across our rates complex reached record levels in 2025, in which ADV was up 19% and OI was up 54% at the close of the year, reinforcing how customers use a single technology platform to align exposures across assets.

The output of our markets, high-quality price signals and liquidity also become inputs in our Fixed Income and Data Services segment. The platform's compounding engines were proprietary data, indices and network connectivity power customer decision-making and automation.

Moving now to our Fixed Income and Data Services segment on Slide 11. 2025 was a milestone year. Pricing and reference data remains our foundation and our index franchise continued to scale alongside ETF adoption and customization driving record index AUM of $794 billion at the end of 2025. We continue to expand our differentiated offering through new data partnerships, including our recent deal with Reddit. Here, we are now offering real-time historical signals and sentiment scores integrated with our data sets to enhance market insights and risk management capabilities. In turn, on covering new investment opportunities for clients. Our fixed income workflows, electronic execution and clearing set new records at 2025, validating our role helping clients manage risk.

On execution, ICE bonds saw record revenue with our secondary MBS trading growing well year-over-year. And in clearing, CDS volumes reached record levels across index, single name and options. Underpinning this is our ICE global network which provides secure, low-latency connectivity and data distribution that customers rely on as they modernize their trading workflows. Demand for connectivity and colocation also remains strong as we've more than doubled capacity since 2020 as client demand continues to grow. More broadly, the growth of AI continues to be an enabler. Our ICE Aurora platform paired with our high-quality proprietary data with controlled secure distribution into customer workflows is where ICE differentiates. We provide fit-for-purpose data sets delivered securely and integrate it directly with customer decisioning tools.

In practice, that includes ICE Aurora AI-assisted capture and validation of reference data, enhancements to evaluated pricing, and secure entitlement-based access into valuation, risk and regulatory systems. This way, customers can adopt AI with confidence in the quality and permitted use of the data powering their models where FIDS turns market data into workflow intelligence, Mortgage technology applies those capabilities across the life of a loan.

Moving to our mortgage business on Slide 12. Mortgage Technology is another expression of ICE's core capability, automating complex regulated workflows through high-quality data, secured delivery and governed automation. In 2025, we continue to execute on reducing inefficiencies across the mortgage workflow. Automating legacy workflows for our customers through applying state-of-the-art technology and innovation has been foundational to ICE since inception. The application of AI with agents that automate multistep manual workflows is driving our engagement with our clients across ICE mortgage technology. So here, just as in FIDS, AI is an enabler and an accelerator to deliver workflow efficiencies. Both Encompass and MSP as core systems of record for lending and servicing of mortgages today, support modern access and data delivery options that are plugged into the AI layer. These systems of record understand the data ontology and orchestrate highly regulated compliance laden business processes in a trusted manner as errors have a near 0 level of tolerance. Applying our ICE Aurora platform and agents to workflow automation remains the most effective lever, moving manual steering compare tasks to exception-based workflows where people focus only on what needs human judgment.

This enables us to deliver efficiencies to maximize productivity for full-time employee, reduced cost per loan and enable scale without proportional headcount increases. We are in the process of rolling out the following ICE Aurora, AI-enabled agents for our IMT business in the first half of this year. First, we've extended our ICE business intelligence capabilities by accelerating cycle times and improving loan quality with our agents analyzing data, identifying errors, in highlighting bottlenecks and inefficiencies in our clients' workflows. Second is the launch of our virtual and text-based agents in servicing, capable of executing real actions such as payment scheduling, so borrowers can self-service within our servicing digital application as well as resolving issues, answering questions and interfacing directly with borrowers to reduce the need for a call. This capability is already in beta with a handful of clients.

Third, AI-powered customer service agents that shorten turnarounds, improve customer satisfaction and lower costs by summarizing notes, predicting call context, and responding to questions to help representatives resolve increase and close tickets faster.

Fourth, business intelligence and exception handling agents used by processors, underwriters and servicers that can respond to ad hoc queries in natural language in real time and facilitate exception handling with approved steps in guardrails. These capabilities also permit executives and line of business owners to derive actionable insights from their data real time rather than using ad hoc queries, thus reducing overhead associated with research and reporting.

We continue to see strong customer adoption with wins and implementations that reflect the value of standardizing data and automating workflows across origination and servicing. In Q4, we had our best quarter of the year with 32 new Encompass logos signed.

Moving to Servicing. Our focus on driving client efficiency helped lead to 2 new MSP wins, including a cross-sell into an existing Encompass clients. Last month, United Wholesale Mortgage went live on MSP approximately 9 months after signing. We are proud of the focus from our internal teams as well as the collaboration from UWM to deliver a rapid implementation.

In summary, as ICE continues to enhance our leading technology, we do so with both the client and end consumer in mind. We're delivering solutions that automate legacy manual workflows and throughout each stage of the mortgage life cycle, resulting in raising workforce productivity, improving loan quality and expanding team capacity, all of which lowers the cost to originate and service loans and can be passed on to the end consumer. Before I close, I'm pleased to share that my long-time colleague, Bob Hart, has been appointed President of ICE Mortgage Technology. Bob's 20-plus years of mortgage and real estate experience will help us accelerate this strategy as we continue to modernize mortgage workflows and deliver value for our customers.

With that, I'll hand it over to Jeff.

Thank you, Ben. Good morning, everyone, and thank you for joining us. Please turn to Slide 13. For over 2 decades, ICE has been built around the simple idea that markets function best when their infrastructure is trusted, neutral and engineered to work in all environments. Our job has never been to predict outcomes or to direct capital. It's been to build and operate the systems that allow capital to move efficiently, allow risk to be transferred and allow price discovery to occur regardless of market conditions. As a result, we've deliberately placed ICE at the intersection of markets that respond to different forces.

Some react to acts of God, such as weather events or energy supply disruptions. Others react to acts of man, including central bank policy and regulatory frameworks. By operating across both and by connecting them through technology and clearing infrastructure, we've built an all other model that performs through cycles rather than around them.

In 2025, that model once again proved its resilience. Market participants across asset classes continue to turn to manage risk, allocate capital and access trusted data as they navigated geopolitical tensions, rate uncertainty and evolving regulatory landscapes. While the macro environment remains dynamic, our performance reflects the value of our mission-critical networks that customers rely upon. Over time, we've consistently invested in areas where markets were operating with friction, opacity or manual workflows. We did this in energy markets, where global pricing lack transparency in fixed income markets by building institutional grade data and analytics that brought structure to historically fragmented markets and again, in consumer credit markets by digitizing core workflows throughout the home mortgage ecosystem.

Across each of these, the common thread has been the same, combining technology, data and operating expertise to rewire critical financial infrastructures that customers can rely upon. We're taking the same approach into the next phase of market evolution. Last month, we announced the development of a tokenized securities platform for NYSE following our investment in distribution partnership with Polymarket.

While tokenization has attracted significant attention across the industry, our approach is grounded in the same principles that have guided ICE since our inception. We are not pursuing tokenization as a novelty or as a substitution for how markets operate today. We're exploring tokenization as a potential evolution of existing market infrastructure, one that could further improve capital efficiencies, broaden access and advanced settlement processes, such as our recent announcements with BNY and Citi to accept tokenized collateral, all while preserving the safeguards, governance and neutrality that institutional markets require and that ICE is known for.

In fact, ICE plans to apply for regulatory approval for NYSE tokenization from the U.S. Securities and Exchange Commission under existing federal law and existing XCC authorities and ICE plans to seek foreign distribution under our existing securities passporting relationships. This NYSE tokenization initiative is not dependent on the passage of the U.S. Clarity Act or any other foreign legislation.

Our intent is to tokenize regulated securities that attach contractual rights and interest to their holders just as they occur under existing securities laws, such as ownership rights, dividends and voting privileges. Importantly, tokenization is not a stand-alone initiative. It sits alongside the infrastructure that we already operate across exchanges, clearinghouses, data platforms and our networks.

Our experience running global markets, managing collateral and supporting trillions of dollars in daily notional activity gives us a clear view on how new technologies may be integrated into the financial system. We believe this approach positions us well to support innovation while maintaining the stability that customers and regulators expect from ICE operated venues. Just last week, I received approval from the U.S. Securities and Exchange Commission to launch a new clearing service for U.S. cash treasuries, almost a year in advance of the January 2027 treasury clearing mandate. This is another example of our ability to position ourselves to meet the needs of an evolving market. Importantly, this approval is accretive to our existing fixed income clearing services, where we have provided global leadership since the great financial crisis.

We're excited about the fixed income market evolution and the choice that this initiative will provide to our clients. Looking ahead, we continue to see secular forces reshaping global markets. The digitization of financial markets is ongoing. Regulatory frameworks continue to evolve. Capital moves globally even as policy is set locally. Against this backdrop, the need for trusted infrastructure that can perform under stress becomes more important. ICE's role is to remain a trusted operator through this change, investing in technology where it removes friction, expanding our networks where it creates efficiency and maintaining discipline in how we allocate capital.

That consistency is what has allowed us to grow through every business cycle. And it's what underpins our confidence as we look forward. I'd like to conclude today's prepared remarks by thanking our customers for their business and for their continued trust. And I want to thank my colleagues at ICE for their efforts that contributed to yet another record year at ICE. I'll now turn the call back to our moderator, Drew, to conduct the question-and-answer session until 09:30 Eastern Time.

[Operator Instructions]

Our first question today comes from Craig Siegenthaler from Bank of America.

I hope you're doing well. Our question is on the mortgage technology outlook, and it's actually a 2-parter. But first one is, can you update us on the health of the mortgage industry and how the recent rebound in refi activity is influencing demand trends. And we're especially looking beyond 2026 because you already provided us some guidance for this year. And just as a follow-up on the tech side, can you update us on the opportunities to modernize your mortgage technology, tech stack, whether it's through blockchain enabled capabilities at MERS or even AI tools that could improve efficiency at Encompass or MSP?

Thanks, Craig. It's Ben. So I'll hit both of these. In terms of the overall mortgage, the backdrop on the health of the overall mortgage market, we feel good on how it's improving and I'll pack it in a couple of different areas. So one, in terms of just the refinance market, if you look at where rates are today, and we obviously had a nice pop in volumes and refis in the fourth quarter last year. If you look at where rates are today, there's approximately 4 million loans that are in the money to refi, which means that the rates that they were set at at the time, the rates today are 75 basis points lower than where the customer's rate is locked out.

And if you get just another 25 basis point move from where we are now, that number goes up to 5.5 million. And if you get a 50 basis point move, it goes up to 7.5 million to 8 million loans in the money. So that's a good sign. And obviously, the backdrop now is also encouraging a rate environment that would continue to come down. So that's a positive. On the purchase market, affordability from the metrics we've been looking at is better than it's been in approximately 4 years. So that's improving. And obviously, the administration has been very vocal about stimulating housing starts to get that going.

And even there's policies that are out there potentially being discussed around increasing capital gains exemptions, et cetera. So we see looking in '26, '27 beyond that the overall health of the market is showing signs of improvement.

The second part of your question was around the technology opportunity and I deliberately talked about in my prepared remarks that both Encompass and MSP, one of the first things we did with both of those deals is make sure that we, in a very secured way, open access to both of those platforms to be able to tap into newer technologies in AI, artificial intelligence, agentic AI, et cetera. And we have been accelerating, bringing to market different solutions in and around those tech stacks. We have -- went through a bunch of the agents, agentic AI initiatives that we have coming into this year. Those are the result of initiatives that we had this year and solutions that we brought to market, both across Encompass as well as in servicing and Encompass. We've been automating things like data capture, document automation, automating certain parts of the underwriting process.

And as we brought those solutions to bear, we're bringing time efficiencies and lowering the cost for our clients. As we're bringing those to bear, the clients have insatiable demand for us to deliver more, and we're doing that. And the same is true on servicing, where within the servicing side of the business, we've been looking at the customer service area, in particular, and how can we help provide efficiencies there. We did that last year through the launch of call prediction capabilities, call summarization, automated call routing to help take costs out of the process there.

And now this year, we are already in pilot with a number of different initiatives that I mentioned in my prepared remarks, we're looking at consumer chatbots that would automate -- that would auto-populate basically a loan application for either a HELOC or a refinance. So helping customers identify automatically based on the servicing data we have, this is the opportunity, auto-populate the loan and then streamline the process of completing that transaction. We have a new chatbot on Ask Encompass, which is an always-on loan status, recommending the most efficient way for an underwriter to advance and close on a loan.

We have advanced our compliance chatbot capabilities, which is looking through millions and millions of pages of regulations that as the loans get underwritten to ensure that the underwriter has the right belt and suspenders on making sure that the loan is highly compliant as it's being originated and then taking our servicing chatbots even further with our servicing digital application and automating payments and then an intelligent virtual agent that we're also launching this year. So we feel really good about the technology opportunity and our ability to execute on it.

Our next question today comes from Benjamin Budish from Barclays.

I wanted to ask about the FIDS business. One of the themes that sort of reemerged quickly this week has been this AI disruptive fear across all things, software. Just for you guys, I think the question that we get the most is on the data and analytics businesses, where is there potential risk. So just curious if you could address that concern, where do you see -- or how would you describe sort of the moats of that business, where is there proprietary data versus software that could potentially be replicable? How do you think about the defensibility there?

Thanks for the questions. It's Chris Edmonds. One I'd like to go back to both Jeff and Ben's comments around being a trusted source over the years. And if I look at the pipeline of opportunity that we have in front of us, there are really 3 key components if I look at the data business. One, we generate a lot of proprietary mission-critical content on all of our activities that we have within the exchange and clearing space, that goes in to drive models around there, and we license that data effectively to the client base around there.

Second, we have the data center opportunity where folks needing that data along the way and want to be as close to that data and become part of that virtual speed backloop as they possibly can be at all times. And then third, we have things on the, we'll call it, the alpha generation side, like what Ben talked about with the deal that we announced, we're continuing to add correlated data sets to that culmination of all of that is something you can't get anywhere else.

And if you look at -- a prime example, that is what we have in our fixed income business around PRD. And then when we look at price and reference data and the valuations that come up with that and how they drive our index growth that we're seeing there. Those things are looked at over 1-, 3-, 10-, sometimes 30-year history. We have more than that in the history and that piece of it is not a formulaic conversation. That piece is much more comprehensive at the end of the day, and that trusted source piece that I referenced earlier that Jeff and Ben touched on, becomes most important.

If I look at the pipeline on a go-forward basis, I believe that's driving most of the conversations that we have. What more can you give us? What -- how can you deliver it? It's not a one-dimensional play that's out there of just exhaust data. It's actually in the context of how it's being used in their decision-making process. And that's what we're excited about coming this year, working closer with our clients of both the breadth and depth.

If you look at our energy business and what Ben [indiscernible] you in the prepared remarks, you look at all the thousands of contracts we created in energy, create ecosystem, you can't get anywhere else that continues to build for us in the FIDS statement, and I look forward to seeing that become a bigger reality even as decisions become more real time where other agents are coming online within our client base.

Our next question today is from Patrick Moley from Piper Sandler.

I wanted to ask about the outlook for the future business. Ben, you touched on it in your prepared remarks. But January, you finished a record open interest in both energy and financials, and it really took off in the fourth quarter has continued into this year. So can you talk about some of the drivers of that a little bit more? How sustainable you think it is? And then what impact either positive or negative do you expect some of the recent patent volatility you've seen in the markets to have on customer activity levels and open interest?

Thanks, Patrick. It's Ben. As we've as we've alluded to on prior calls around our energy business, customers now more than ever are looking for a truly global provider of the most accurate deep liquid places that people can manage their risks. And today, you have geopolitical flash points, you've got supply chain evolution. You have the energy evolution. You've got trade and tariff issues, people concerns around energy security and there's a confluence of issues that's going on around the world. And that's what's really led to our energy business being up year-to-date here, it's up 30%. Our Brent business, which is the cornerstone of our global oil complex is up 25% year-over-year. Our crude business overall is up 15% year-over-year. And more importantly, in those, we have open interest continuing to grow, which you alluded to in your question as well. Brent's up 35% to start off this year. It's an unbelievable start to the year.

So you had this backdrop of a bunch of issues and now you pile on top of it new dynamics that have taken place. You have escalating issues in Iran, which is obviously 1 big issue. A second issue that you have out there, which is a good resolution is the -- you take the trade deal now with India. And in that trade deal with India, it looks like India is agreeing to no longer import Russian crude. Well, what's going to be the substitute to that Russian crude. It's more likely than not to be Middle Eastern grades as well as U.S. grades of crude going into India. So that bodes very well because those grades of crude are priced via the Brent benchmark, number one. Number two, it bodes well for our HOU contract, which is the contract we launched 3 years ago to price Midland WTI barrels bases Houston that are hitting the water. So it's a great opportunity there. We've had a well-established Dubai contract, which is doing extraordinarily well, up 20% to start this year. It should bode well for that contract.

And then also, 3 years ago, on our ICE Futures Abu Dhabi exchange, we launched our Murban contract, which is another contract that should benefit from that dynamic for some period of time. And then you take on top of that, the U.S. involvement in Venezuela and the Venezuelan market. If that Venezuelan oil starts to flow into the U.S., starts to flow into Europe. That bodes well for further for Brent foreseeable future. And if in the U.S., the U.S. Gulf Coast starts to take on some of these Venezuelan barrels into processing, you're going to have Canadian barrels that are looking for a new home. And we could see that flowing into Asia as well as Europe.

That bodes well for our Brent benchmark. And then also in my prepared remarks, I mentioned we're the only place that price is crude -- Canadian crude oil futures. So those are just some examples of where we see some sustainable growth opportunities. And obviously, our TTF contract switching to gas quickly is off to an incredible start. Obviously, there's -- on a demand for power, LNG moving around the world, and our TTF contract started off the year up 100% off of a great year last year. So all signs are very possible.

Our next question comes from Ashish Sabadra from RBC Capital.

I just wanted to ask a follow-up question on the mortgage. You laid out some of the puts and takes for mortgage recurring revenue growth in '26. My question there was just around when do we expect that headwind from the lower minimums to come off, is it most '26? And as we get into '27, should we think some of those headwinds to start to come off to [indiscernible]. And then just on the transaction, I just wanted to confirm how should we think about when we do get a mortgage market going back to a normalized level? How should we think about the incremental transaction revenues?

Sure, Ashish. So I'll take both of those. So on the recurring side, the minimums, we've seen improvement in the minimums in terms of the headwind for the minimums over the last several years. And so as we head into 2026, we still do expect there to be some from that, but better than what we saw last year, better than the year before that. And so at this point, we've actually worked through all of the 2020 vintage contracts. We do have 2021 this year, and that will largely be complete this year once we get through those. And those were the 2 boom years, if you remember.

And so again, largely worked through all that in terms of the headwind perspective on the recurring revenue growth, and that's of course, baked into the guidance that we gave you today. So the ability to grow despite that is really going to be driven by the implementations that we see included in that is some of the revenue synergies that are coming online that we spoke to you about. So we're heading in the right direction on that front and feel pretty good about it as we head into next year and beyond that as well.

On the transaction side, I think the way to really think about that in a normal environment, we've defined is about 7 million to 10 million loans at an industry level. $10 million has been the average over the last 30 years, $7 million, $8 million is kind of in the median, if you will. And so if we get into those kinds of environment, we gave you guys some stats last year where we thought '24 revenues in that scenario -- or those 2 scenarios would be a couple of hundred to, call it, $0.5 billion of incremental revenue.

We obviously made a little bit of progress towards that this year because the market improved a little bit, but I think you're still in a good range to be thinking about that because, of course, we've added new customers, and we've got a solid pipeline of customers that are coming in over the next couple of years as well. So I feel good about the trajectory on that front as we head in again this year and into next year as well.

Our next question today is from Dan Fannon from Jefferies.

So you guys are talking to exchange recurring revenues in the mid-single digits after growing, I think, low double digits or 11% in 2025. So wanted to just talk about the difference as you think about next year -- or I'm sorry, this year versus last year and the strength across the recurring side of the exchange business?

Yes. Dan, it's Warren again. So it's a good question. I think, look, as you get to the second half of next year, those are going to be some difficult compares to, given we were double digits in both of those quarters as well. I think what you saw this year and what we expect to see next year is -- or sorry, last year and expect to see this year as well is continued growth from new customers coming on the platform. That's not only futures but also on the equity side as well. We saw a little bit of benefit last year from the pool size on [ SID ] data that helped us as well. That can be a little bit difficult to predict. So maybe a little bit conservative on that, but it's a bit of an unknown on that front. And then we don't see a ton of erosion as well.

So you pull all that. And then of course, we do and we've done so this year and we did so last year, we'll capture a little bit of price for the value that we brought to those products as well. So you bring all those things together, and again, I think it sets up for another really strong year for the exchange data business and recurring revenue overall.

To be clear, the guidance was for total recurring revenue, not just exchange data. I think exchange data could probably be a little bit better than the guidance we gave for overall recurring.

Our next question comes from the line of Ken Worthington from JPMorgan.

You experienced the highest number of Encompass new customer wins in a year. I think it's 32. Can you talk about sort of what sort of customers you're winning are you in dialogue still with some of the largest potential new customers for Encompass? Or is that sales cycle extending and then maybe lastly, how does the 32 new customers compared to attrition figures.

Ken, it's Ben. I'll take this. We had a great year this past year with Encompass sales. You look across the entire year, we had 90 deals done. So that's, to me, a great sign and testament to the quality of the technology that we're bringing out to the market, the innovation that we're bringing to the market, the leverage that we have with accelerating, modernizing workflows with all of the adoption of AI and as we continue to release more things for our customers, our customers are pointing us in the direction of other things that we can do to drive efficiencies for them. So that's a great start to the year and many of these clients are already customers of ours across our IMT segment and many of those Encompass clients are also on MSP or subservice through an MSP, subservicer that are taking advantage of the opportunity for us to provide that complete front-to-back automated workflows for them.

So that's a great sign. In terms of the strength of the the types of deals that we did last year, they're across all segments. We've done deals across the largest players in the segment as well as down to start-ups. So we've had success across the different segments of the marketplace.

I'll give you an example in the fourth quarter alone, we closed one of the largest home equity line of credit lenders in the United States. So that was a great sign and testament to our capabilities within that specific channel, expanding that footprint with this client.

In the third quarter, we closed one of the largest correspondent lenders in the United States. Another good testament. So we're having success in each channel, whether it's HELOC correspondent retail and then also across the variety of customer types. So we feel really good about our positioning. And then looking forward to the funnel that we have, the largest players in the market are as engaged as ever with us on looking for ways to automate and provide them more efficiencies based on -- and for the most part, homegrown technology that they have in place.

Our next question today is from Simon Clinch from Redburn Atlantic.

I just wanted to -- again, on the mortgage side, just could you update us on the transition from SDKs? And -- because that's been a relatively lengthy process. And I think there's a lot of clients that are still sort of wedded to the old ways, I guess. And I was just wondering how much disruption or how much window of opportunity that opens up for competition in this space? And how you're sort of managing that?

Thanks, Simon. It's Ben again. The transition to SDK, what that's about is just really providing more efficiency in supporting the connectivity that our clients have in either plug-ins and bespoke things that they build around our solution or the way that they connect to third-party vendors. And based on our clients looking at and adopting a lot of the other innovations that we've been providing them, we've enabled Encompass and have spent a lot of time innovating on Encompass to move it from a smart client technology to the web. We successfully have done that.

We've enabled Encompass to be able to, in a secure way be able to adopt ICE Aurora based agents and AI technology. We're enabling that across the workflow and giving them savings and providing time and resource towards the SDK thing has just been -- for some of the clients, it's been something that has been a lower priority. So we gave them more time to do it because we know it wasn't slowing down our pace of innovation in other areas. And we have not seen it in any way, shape or form as a hindrance to our our sales success nor have we seen it impacting any kind of attrition or change in the competitive landscape.

Our final question today comes from Alex Kramm from UBS.

Just since you mentioned -- Warren since you mentioned pricing on data earlier, can you maybe broaden that answer for pricing in general since you obviously just went to the budget process. Anything we should be aware of on -- across all the businesses, also on the transaction side? And maybe related to that, in January, you actually saw a nice pickup in pricing on the energy RPC. So maybe is it just mix or anything to point to? And how sustainable is that?

Yes. So thanks for the question. So yes, we took a very similar approach to what we've done in the last several years in terms of how we approach pricing. And on the future side, and that includes data and things of that nature, we again took a very similar approach in that. We picked our spots. We looked at some areas where we think we've created some value for customers. And so we did do some price increases on the futures contracts, particularly within financials. We also did some price increases within the data business, the Exchange data business that will be helpful in that front similar to what we did last year. And so again, I think in aggregate, the total amount was pretty similar to what you've seen us do over the last couple of years, but just in some different areas, as we said we would do. And again, areas that we think we've brought value to people on that front.

And then in some of the other businesses, it's really -- those tend to be a little bit more similar products at similar rates. And so we saw similar kind of price increases that we've done in prior years across the FIDS business. We do pick our spots a little bit in some areas there as well. And then, of course, in mortgage to as well, too.

So I would say really no change really versus the approach we've taken. And again, across the business, we really just look for areas that we think we've created value for our customers and then go capture that value. In terms of the RPC for the month of January, that wasn't related to any kind of contract change, that was actually really just the mix and really did happen in January. And Ben talked about it a little bit, but a lot of what that is, is TTF and the mix of TTF within the energy complex, obviously being very, very strong in the quarter.

And that, of course, has a higher RPC than a lot of the other contracts within that business. So really, it was a mix shift benefit that really was a little bit in December, but also in January as well more than anything.

Thank you. That concludes the Q&A portion of today's call. With that, I'll hand back over to Jeff Sprecher for some closing comments.

Well, thank you, Drew, for moderating the call, and thank you all for joining us this morning. And we look forward to updating you again as we continue to innovate for our customers. We're building an all-weather business model, and we're working to generate growth on top of growth. With that, I hope you'll have a great day, and thanks for attending our call.

Thank you for joining. That concludes today's call. You may disconnect your lines.

Okay. Wonderful. Thanks, everybody. So we'll get started with our next presenter. It's my pleasure to welcome back Jeff Sprecher, Chair and CEO of Intercontinental Exchange. Over the years, ICE has evolved into a leading global network across trading, data and mortgage services with lots of technological investment in the space. We look forward to getting Jeff's perspective on the evolution of today's markets, growth opportunities for ICE over the next couple of years. And of course, just broader thoughts on the environment. So Jeff, thank you for being here. This conference has been around for 36 years. I think you've been here for at least...

I've been around for quite a while...

So I appreciate your time and the support you've given us over the years.

[indiscernible] feel like the guy has acquired some knowledge.

Hopefully. Well, we need it today probably more than ever.

So look, my first question is actually a bit related to that, which is broadly around market structure. You have a long history of building traded markets, really starting with electronification of global energy and expanding them to fixed income data and obviously try to digitize the mortgage industry. We might be potentially again on the cusp of another fairly big shift in the space with respect to blockchain technologies and tokenization of assets. So it's a bit of a big picture question for you first, but how do you expect the ecosystem to evolve over the next 3 to 5 years when it's related to tokenization of traded assets? What's real? What's not, who wins, who gets disintermediated, just bigger picture thoughts from you on this topic would be super helpful.

Sure. First of all thanks for having me year after after. I appreciate it. I think the biggest -- I do think the tokenization is going to have a big impact on financial services, and I think it's use case that will emerge and be dominant is essentially movement of capital. I -- because I've been around a long time, I actually have access to a lot of important and powerful people that are in the U.S. and the U.K. and the EU, Middle East, Asia. And the last year or so, I've talked to a lot of regulators and central bankers and people that run infrastructure or that manage and regulate infrastructure about tokenization and sort of nobody that's running the legacy systems for governments want to touch it. And so as a result of that, you have all these entrepreneurs that are building tokenized systems, and now government catching up to try to organize and regulate them. But I think those cats are -- have run out of the room. I say that because I've suggested to some regulators that if the Fed Funds Wire, if the Swiss system, if the ACH systems worked outside of banking hours, then there would be no reason to have tokenized money. We already have digital money. But -- and a young person today will probably never carry paper or coin-based fiat money. But the banking system closes during banker hours. And I think what tokenization is going to do is allow 24/7 by 365 movement of capital and eventually then it's going to be figured out how to be regulated. When I ask bankers -- central bankers, why wouldn't you do this? The answer is the infrastructure that we manage is so rigid in the way we start it and stop it. And, "Oh, by the way, if there's a Silicon Valley Bank collapse, we need the systems to be closed, so we can resolve it." And, "Oh, Jeff, you do a lot of M&A. And don't you need the weekend to do that, so you can have a surprise Monday," and that's kind of baked into regulation. But meanwhile, while trade is being rebalanced -- physical trade is being rebalanced, capital is probably going around the world at a velocity like we've never seen. And the world is becoming more dollar-denominated and with Tether and Circle and other stable coins that are being invented, you're sending dollars to foreign places, and it's becoming -- I think Tether may have as many as 500 million users already that are essentially doing commerce in U.S. dollars in small countries in rural parts of Asia. And I think that trend is going to continue.

So that's much more -- so you're talking about more of that as a concept of money. When you think about it in the concept of trading assets, securities, equities, options, features and the fact that, that might have on the ecosystem as well. So curious, I guess, one, on your thought there? And then secondly, what role do market operators like yourself will play if there is a wider trend towards tokenizing things other than cash flow or...

Yes. I mean -- the basic tenet of trading -- and we have 13 exchanges, including the New York Stock Exchange. The basic tenant of trading is that buyers are looking for sellers and sellers are looking for buyers. And so the Romans created a town square, where everybody gathered the New York Stock Exchange started underneath a buttonwood tree on the corner of wall on Broad. People will gather in one place. There is this concept of let's go DeFi where everybody is everywhere, and we'll have a browser that will search the universe and find you. And that can work for kind of certain assets, but the reality is there's a latency in searching around the world for everything. And generally speaking, history has shown that buyers and sellers would prefer to gather in one spot, so that they're all together and that things work on a FIFO basis so that no one has a timing disadvantage. And so I think the legacy -- so the New York Stock Exchange, for example, which started in 1792 has seen the invention of electricity and smoke signal and eventually computers, big computers, small computers and health computers, high-frequency traders, people bouncing things off the ionosphere in order to have an advantage. And so it's incumbent on us as the steward of the New York Stock Exchange to adopt the latest technologies so that people have access. But I still think that there's something about gathering. It doesn't mean new exchanges won't be formed, but I think it's incumbent legacy operators like ourselves to be mindful and be at the forefront of adopting technology.

Speaking of new technologies and maybe new markets, let's talk a little bit about Polymarket and the investment you guys made there recently, $2 billion. It's the largest non-sports prediction market in the world. First, I guess, talk us a little bit about the strategic rationale behind this, and what your long-term aspirations from this relationship looks like.

Yes. It's exactly what I just said, which is we studied all of the tokenized and DeFi companies. We did a pretty deep dive. We have a lot of conversations in the background. We're very fluent, and who's doing what. And we felt that Polymarket was really the leader in DeFi protocols of anybody we've seen. And we wanted access to their engineers, and they -- we wanted to get educated on exactly how they were doing what they were doing. And then it turns out that they needed to get access to the United States, regulatory access to the U.S. And in order to be compliant in the U.S., they needed to do more of what we were doing. And so we shook hands and said, "We'll help you, you help us." And so it's been really -- and this is all about technology. This isn't about sports betting or predictions or anything. This was about, let's get fundamental technology, knowledge transfer going on. And the thing about -- Polymarket does two things that we don't do. One is let's just take a sports bet. There can be a person watching a game, and they can say, I think this person is going to miss the next shot. And I'll bet $5 on that. And so they can post that, and they can be disseminated broadly, and it will also be discussed in a social media setting. So everybody knows Jeff thinks this guy is going to miss the shot. And then somebody can take the other side of that, you can see the shot, somebody gets paid. And that all happened -- that contract could exist for an hour. That is not unlike anything that exists on traditional exchanges. There's no such thing as something that comes -- that exists for an hour and disappears. And in fact, the -- in the U.S., the Commodity Futures Trading Commission requires that we give them 30 days into notice before we list anything. I was told that over the U.S. government shutdown, there were roughly 2 million contracts that were created because of this sports betting and prediction markets. And we have six contracts that were at the CFTC, that the CFTC put a hold on and didn't approve. And they were grades of oil and natural gas that were going to be delivered in various locations, okay? So our regulator is dealing with that. And you have this other trend going on of short-term creation before the regulator could even act on it. And so one thing that we wanted to get with Polymarket is, how are you doing that? How are you disseminating that? What does your regulatory conversation look like? And can we help each other because the market wants more dynamic creation of tradable products. The other thing, which is the more important thing, and what I alluded to in your first question, is that once the the shot is made and buyer and seller exchange value money moves. And it moves via smart contract. So there's no human intervention. And it moves via a token that represents cash. So -- and is accepted by both parties as being worth the dollar. The -- that is really novel. I mean that is outside of a clearing infrastructure, outside of a banking infrastructure, value just transferred and title transferred with a bearer instrument that is unregulated and essentially represents tokenized deposits. So that's coming, I think, it exists, and I think it's going to be institutionalized. But what it's going to unlock is 24/7 by 365 capital movement. It will make -- like this audience that are largely institutional investors, it will allow you to not keep excess capital in various jurisdictions where your companies do business. Somebody like a Goldman Sachs that is almost on the present in every jurisdiction and has local subsidiaries, the local balance sheets and what have you, the key -- your treasurer has keep capital all around the world for the various businesses that you do and the risks that might occur during daylight hours, you're going to be able now to keep capital maybe in the central treasury and move it on demand at a moment's notice using the internet.

Yes. No, it's a fascinating topic. If you think about commercializing that relationship for ICE, beyond the value of Polymarket, which presumably, you guys already actually made some paper money on just based on some of the press announcements. But if you think about the...

These are people -- like our pedigree actually helped those guys. So for all of us that are in legacy finance, like we actually have a second life.

So I'm intrigued by the data that comes off of this marketplace, and how you guys might use it. And then when you talk about the new markets and creation, new markets and perhaps institutionalizing that, what are you thinking about in the intermediate term, right, something that's tangible in the next kind of two years.

Yes, so one of the fascinating things that Shayne Coplan and his team built is imagine there are tens of thousands of event contracts that exist now because you've got users that are saying, will somebody invade Syria? Will there be a ship wreck? All kinds of things that are -- that people have an interest in that are willing to put their capital behind. And one of the things that Polymarket has done is they have an AI algorithm that is just looking over all of that content and finding something that basically a market that's gotten hot, where there's a lot of money coming into it or a lot of conversation on social media, and it will put that market at the top of the list. And so if you have their app, or if you're on their website, you're constantly seeing new markets pop up to the top of the list that have a lot of attention to them. What that does is -- it's hot news. It's -- you take the kind of news that you're used to seeing on Twitter or X. And then imagine that the wisdom of crowds are speculating on the value of that news and putting it at the top. My understanding is that when the U.S. bombed the nuclear facilities in Iran that in the war room, they had Polymarket up with the odds that the U.S. would bomb Iran. Why would they do that? They're not betting. They launched a mission. But it took 20 hours for those planes to get over there. And they figured that if somebody could see it or figure out that there was lots of pizzas being ordered at the Pentagon or whatever, that they would start to see activity there, and it would give them an indication that maybe somebody has figured it out or news has leaked something. And so what we're seeing now to answer your question is hedge funds. Hedge funds have the Polymarket app up and traders are using it for hot news. We think for our kind of legacy business of oil and gas and cocoa and coffee and all kinds of basic commodities, even interest rates that people are going to want to see, okay, there's something hot here, and I better pay attention to it that can impact the risk on the position that I either have or about to take. And we've got probably over 5,000 institutional customers that we think would want that. We probably serve 10,000. We think 5,000 of them or so would be interested in this. And so we're helping to take this data, which is unstructured, real time, this market got created. Real time, there's activity. Real time, it was deemed to be worthy of dissemination. And so we're working with them to how do you put that into an institutional environment that's used to just receiving what is the price of the S&P 500.

Yes. It's fascinating. Look, maybe bringing it back to some of the traditional markets. Let's talk about your energy business for a couple of minutes. Despite the fact that it's -- I don't want to call it the most mature business because it's only not really growing like a mature business, but it's your kind of original business. But the growth really continues to be very phenomenal, right? Like 2015, I think revenue is up another 15% to 20%, something like that. And importantly, OI is still growing really nicely. We talked about a lot of structural underpinnings to that growth. So maybe as you look out into '26 and '27, what do you think is accelerating structurally, what's decelerating? How would you guys think about growth in that business over the medium term?

Yes. It's amazing how that franchise -- like I partly pushed the company to diversify because I thought, well, how many people are going to trade oil. I mean once you have all the oil companies and some of the sovereigns that are there, maybe some airlines like who else would ever trade it, and it just continues to grow and grow and grow. And part of the reason is the answer to your question, which we've seen the center of gravity of energy risk management move east. I don't know, 20 years ago, it was about U.S. oil and gas. And then we made a big bet that gas was going to globalize, liquefied natural gas would be put on tankers, would create a common market around the world, which is what's happened largely also driven by Europe's energy need and kind of exacerbated by cutting them off from Russia energy. And it continues to move east into Asia, which is growing. Part of it is population growth and just the energy dynamics of a population that is growing in certain regions faster than the West. But also, I think a lot of these trade rebalancing deals that the U.S. is striking, where they're trying to get equal transfer payments is, "Hey, we'll take your goods, but you've got to take our energy." And there just seems to be a more robust intercontinental movement of energy at a moment in time when everybody is building data centers, we're all becoming more electronified with everything we do. Natural gas is the transition fuel away from coal and oil. And it just seems like it's been continued limitless growth. I think our open interest in our European natural gas contract is up 46% year-over-year versus the year before and the year before and the year before, it's been double digit, double digit and double digit. It's just -- it's almost hard to fathom, but it is this, I don't know, retrenching of trade, coupled with a movement of growth and infrastructure investment that continues to move east.

Got it. Great. Well, it sounds like lots of runway there still. Look, I'm going to go around the ICE's ecosystem a little bit here because there's a lot to cover. First, I wanted to start with a question on data centers. It's not something that we spend a ton of time talking about it as a revenue driver for ICE, but it has become one kind of maybe perhaps quietly so. I know you guys put out extra capacity. Talk to us a little bit about monetization strategy for your data center capacity. How big is it? What do you see that going over the next couple of years? And who are the customers?

Sure. So going back to the Romans creating a town square, where everybody got together, these exchange data centers are where everybody is actually physically located. New York Stock Exchange trading floor is not the epicenter for stocks anymore. It's the data center we have in New Jersey. And so we were fortunate in a way when we bought the New York Stock Exchange, they had decided to build this really beautiful big data center in New Jersey in an area that had access to electric power. And we started to offer. We stripped everything out of that other than the trading infrastructure that we run at ICE and then we allow third parties to co-locate there. So you have high frequency traders, of course, but you also have brokerages, Goldman Sachs, anybody that's offering brokerage wants to have their infrastructure close to the actual match of the buyer and the seller. And now you've got with AI, this demand for more decision-making that is making its way into those data centers that's closer to the match. I met with yesterday actually with one of the most prominent algorithmic trading firms in New York and asked them about what are they doing. And they're putting -- so far, they're not allowing AI to actually make big risk decisions. Those are still being made by humans back at the office. But they are taking the data and organizing it on-prem in the data center and sending more results back as opposed to the raw data. And secondly, certain low level kinds of ordinary trading decisions they can make -- they're willing to put their risk management into that algorithm. I think that's like early days. I think think you're going to see more of this as people get more comfortable with these models and allowing them to actually put capital at risk. It will take some time, but I think it's an evitable trend. So we've decided to build and announce we're building a second data center. The way these data centers work as you build this big building and then we call them halls. I think we have 7 or 8 halls. And anyway, you -- most of the building is just an empty concrete slab, but you start building out one little area and then selling rack space in that area, and which includes power and cooling. And then organically, you kind of go build the next hall, the next hall, the next hall. And that allows you to innovate because there have been lots of trends in cooling, lots of trends in in energy management around data centers. And so it keeps you kind of at the cutting edge with each new investment that you make. And so we'll probably have a 10-year runway with the data center that we're building now. We auction off space once a year. We have -- we literally have an auction who does it. It's very transparent. And so people, I don't know, they kind of like the transparency and the conversation that we're having about what space do we have, and how do you get access to it, tends to put the highest and best use in those data centers by doing it that way.

Got you. Great. Let's talk about mortgage for a couple of minute. You guys made an important bet there that is -- has been paying off to some extent, but there's obviously been some cyclical headwinds that have been pressuring growth there as well. It feels like we're coming on the other end of the cyclical dynamics, hopefully, with both lower rates, and you're already starting to see a pickup in refi activity. Any thoughts about what that means for mortgage revenue growth for you guys into 2026? And then more importantly, when it comes to new product development and new initiatives, how do you sort of think about the longer-term organic growth algorithm that business?

Yes. So we've built this network essentially and then we -- by stitching together a bunch of legacy businesses that we acquired. And move the whole thing on to what I call a mobile phone plan, where you sort of buy a tier of volume that you can use it for. And if you go above your tier, you go as a minimum in any event, if you go above the maximum, then there's a per unit charge, and that becomes a high per unit charge. So it was funny that we started moving people into the cellphone plan a couple of years ago. And most of the -- we have about 3,500 lenders now that are on this. And most of the lenders went to a higher plan than their last year business thinking, "Oh, we're good. We're going to grow. We're going on to this network that's going to help us take cost out. And so we'll go up a tier." And with rates staying higher for longer, now we've seen people go down each year. And -- but what they've done is they've gone down a tier in fixed price, but they're going to pay a higher per unit price when volume starts to come. So the thing is spring-loaded for kind of a surge in housing, and we look at just historical trends, and we really believe things will revert to a mean that any pre-COVID year that you would pick 2019 or what have you, it's fundamentally different than what's going on in the space today. I can have dinner last night with somebody who's a very prominent, well-known person in the mortgage space. And I asked him, like what do you think the catalyst is? And their economists think that mortgage rates have to have a 5 in front of it, that there will be a psychological release when mortgage rates start with a 5. That's their guess, and it's not based on any knowledge other than anecdotal from talking to thousands of clients. Whether we get to 5, it's hard to know. Obviously, the Trump administration is pushing hard on short-term interest rates, and how that transpires into mortgage rates, we'll see. But we feel good about the business, we just -- but not so much about the environment.

Are there any areas of potential disruption risk you see in the mortgage franchise. So we talked about tokenization obviously, the concept of blockchain is super relevant for mortgage, just thinking about how inefficient that system is, and that's part of your thesis, while you try to actually digitize and make it better. So are there risks to a new technology coming across and disintermediating you guys in one way, and how would you deal with that?

First of all, I think if anyone is going to disintermediate us, it's going to be us. We have 3,500 lenders, every major person you can think of is in some way attached to us, and we're talking to everybody. I think the opportunity -- so where there's real opportunity and is not -- and where we're getting a lot of conversations, not tokenization, but it's the use of AI models too to better predict the home values, the credit worthiness of a client without making the credit decision, which the regulators would not allow in our mind. But more importantly, a lender today tends to loan the money and then sell it to Fannie and Freddie or sell it into the market where it makes us win into mortgage-backed securities of jumbo loans and other things. So they don't own the loan long term, and that's the norm. And so they lose connectivity with the client. And yet now with models, AI models, and we're doing this for our clients, we can value the home. We can look at the balance of the mortgage. We can look at the curiosity of payments that the borrower has and make predictions, tell the original lender. Maybe you should contact that person, they'd be a good refi candidate. There's a lot of equity in that house. Maybe you want to offer them sort of some kind of cash out refi product. Maybe you want to talk to them. They've been in the house for 12 years. Maybe you should go back and see if they want to remodel loan, things like that, that would allow the original lender to have a customer for life, even though they sold the loan into the capital markets. I think in terms of tokenization, the regulation is so heavy around mortgages, and what you can say, and what you can't say and what information has to be gathered, and that's part of what we do is is help make that more efficient by digitizing a lot of it. But I do think this current administration and a lot of lenders are working with us on two kinds of loans. One is, can I sell my house and go to a new house and have my loan be portable? Or secondly, can I sell my house and keep the mortgage that's there and have it be assumable. Those things are very difficult to do right now because mortgages gets sold into capital markets. There's all kinds of rules about who can know the actual owner of the mortgage. It's in a mortgage-backed security and what happens if there's a default, and who gets rights, and it's very complicated. It's all designed for consumer protection. But with a token, you could theoretically keep track of everything without necessarily giving up identity. And might allow for these more innovative kinds of loans. Those kinds of loans exist in other countries where they don't have mortgage-backed securities, where the loan stays on the balance sheet of the lender. We're trying to figure out with the industry, can we keep the MBS market, which is a very robust market, but maybe find ways of facilitating some of this other activity.

Great. All right. Fair enough. We talked about AI in a couple of different points in this conversation, mostly related to revenues. But on the last earnings call, maybe it was one before that. You guys also talked about how you're using AI internally to improve efficiencies within the firm, which I thought was probably worthwhile, spending a couple of minutes on. So talk to us a little bit about how you're using AI operationally? What kind of savings you hope that could produce? And again, more importantly, just contextualize for us, like what does that mean for ICE's longer-term expense growth? Is it just slower pace, more reinvestment capacity, kind of what does that mean?

Yes. A few years ago, we set up what we called an AI center of excellence, and we hired some really top AI engineers. And so we had a center for domain knowledge. And so we look at every model that is -- and new models come out every day. And so we have a group in my company, is very proficient. And then what we say to all the business people is if you have an idea or a use case go to those people, they can tell you what we should be doing, and how we should do it and so on and so forth. What we found as a result of that, we did a deep dive across the whole company. We've been doing this for years now. What we found is just, I guess, what you kind of expect, which is where there is a language oriented task, the AI model can help streamline that half. So language being code writing, so all of our people now have copilots. Our call centers and help taking customer support areas and then some of this mortgage stuff that I'd already talked about, where is really digitizing what was a paper-based application and signature -- wet signature process. The -- -- I think if you mark the market today, I would tell you our good people are better and more efficient. And that we haven't necessarily eliminated any positions or what have you. We have slowed down just naturally, not organized -- we're not organized, but naturally, we sort of slowed down these kind of entry-level jobs. They have been getting automated in many cases, where somebody might have had a junior person doing something. And so I have a lot of friends that have children that are graduated from college -- good colleges with good degrees that are having problems and their friends are having problems entering the workplace. I kind of see that because I look at our own behavior, which is we're kind of slow walking some of that kind of hiring now because we're using these tools. So I think for your model, Alex, it kind of slows the growth of expenses as opposed to being some revolutionized thing. But that's today. I mean, as we know, these models get better every day. And someday, they may be -- you may be interviewing one up here.

It will be two models in [indiscernible]. All right. So before we wrap up, I did want to ask you a question around acquisitions, I understand we only have like a minute left on the clock. But you guys made an investment in Polymarket. That was one of the more meaningful things I think you've done since like the mortgage venture that you guys have kind of pursued. Anything else looks interesting out there? Obviously, I don't expect you to announce anything on stage. But as a framework, and as you think about the types of businesses you guys are in today, how attractive is M&A opportunities for you guys for the next two year?

Yes. Our own stock in our mind, is a great value. Like when you all in the audience are rotated into [ Mag Seven ] and kind of left us behind. It just -- we started our share buybacks. We run our own models on our own stock. And if we do M&A, we always test the thesis, the M&A returns against our own share buyback returns. And right now, it's been very fruitful for us in our minds to pick up as much as we can. So fortunately, we're generating a lot of free cash flow and able to do that.

Yes. Great. Nice and sweet.

Thank you, all.

All right, Jeff, thanks. Appreciate it.

All right. Hello again. Let's continue here. I'm Alex Kramm, Senior Research Analyst at UBS, covering the U.S. exchanges and business services companies. Excited to have Intercontinental Exchange, ICE, here up next. Ben Jackson, President; and Warren Gardiner, CFO.

Let's just jump in to keep it simple. But thanks again for coming. This has been great.

I'd like to start at a very high level, typically, to get the audience on the same page. So look, I followed ICE for basically 20 years or so, and it's become a much more diversified company over that time. You've got three segments, a lot of different macro drivers, volatility, commodity prices, interest rates, AI now, given where we are, so when U.S. managers think about the outlook for the company over the next few years, why do you think ICE is positioned for attractive growth against all those things that I just mentioned?

Thanks, Alex. Thanks for the introduction, and thanks for everybody here and listening online as well.

I'll start with a quick story that happened actually today. And in the first group meeting we had this morning, we had an investor that was in the meeting and kicked things off and said, "I really love what you guys have done for us. We've been an investor since 2006, and every single year since we've been an investor, you've been able to grow earnings per share consistently no matter what the market was doing. Whether it was up, whether it was down, whether it was navigating through a crisis, you guys have managed through that and been able to grow the business by being such a globally diverse company, and we appreciate that."

So I think that's a good way to start for people that don't know our company well because that's a really interesting statistic, and it's kind of the guidepost by which we, as managers manage ICE and Intercontinental Exchange. We do that by -- you mentioned the three segments of our business. We've built a diverse business over the years that helps us weather any type of market environment and continue to grow earnings per share.

We operate our businesses seamlessly across the company. We leverage technology. We start -- in the forefront of our minds is how do we leverage technology to take and apply and find analog marketplaces, analog business processes and how can we apply technology to bring it to a more modern digital reality.

And you mentioned AI, and with AI over the last several years, we pushed the gas pedal to the floor. We leverage AI across the company, both internally as well as in the external solutions that we're driving for our clients each and every day to help them lower their costs, find new ways to grow, provide new solutions to them. So it's an important front of mind in everything that we do.

And when you summarize that, we're a business that is compounding growth every single year with a high amount of recurring revenue in our business. We're a stable, growing company, and we're weathering all kinds of marketplaces. And that's really the guidepost at how we manage the whole organization.

All right. Well, then over the next 26 minutes, let's try to unpack those more on a segment basis. So look, let's just dive in and start with your biggest franchise, which is energy trading still. Growth has been very strong, 20% plus in the last 3 years. And people are somewhat worried about that things will have to significantly slow here or even go negative in the near term. So how do you see the outlook for that energy trading business from here?

Great question. So there's a lot of secular growth drivers in and around the energy space globally. So first, you have a major energy transition that's going on. So the world moving to cleaner sources of fuel. And we've built our business by building the most diverse set of products for people to manage their exposure to risk across the energy spectrum and across this energy transition and have done that deliberately for over a decade.

That enables clients as they're going through this energy transition to manage from the movements from coal to oil to natural gas to power and also putting a price on carbon. That is a bumpy transition. It's going to take a long period of time. And we see that as a -- risks that are going to be -- need to be managed for a long, long period of time.

You also have growth in energy demand, and we're a beneficiary of growth in energy demand in areas like AI with data center demand wanting to consume and data center operators consuming more and more power to support AI models, we're a natural beneficiary of that as we provide the global natural gas markets as well as power markets in the U.S. and around the world.

For power -- when you think about power, in particular, in the United States, if you're building a new data center and you're building it here, in Scottsdale, Arizona, you're worried about the price of power here in this area. You're worried about natural gas prices here, and we've built our basis markets in the U.S. with that in mind, with the commercial customers in mind to help them manage that risk. So that's another important trend that we see.

And then the third is really the liberalization of energy moving around the world more freely. Natural gas, for example, used to be locked into a pipeline. Now it's been liberalized with LNG, it can move around the world freely. And the U.S. is one of the largest providers of LNG exports around the world, primarily going to Europe, and those exports are expected to double in just the next 3 years. So a lot of secular trends there underneath the hood.

But then the main metric and the proof point of where we see the growth opportunity in the metrics we look at is a thing called open interest. Open interest is when a buyer and seller are trading a futures contract, it settles into the future at a future date. And the more of those buyers and sellers that are in there with contracts that haven't settled, the larger your open interest pool is. The larger your open interest pool is, we believe, is the #1 metric for the health of a market.

And open interest in our marketplaces have continued to grow. They continue to hit records in a number of different areas. And just as an example, across our energy business alone, it's up over 10% in futures. Our oil markets are up almost 20% year-over-year in futures. Our Brent contract is up almost 30% year-over-year in futures. And our TTF contract, which is the benchmark for global natural gas is up 40% year-over-year. So great signs and proof points for our ability to grow.

Okay. Good. I will have to ask a quick backward-looking question on what you just talked about because in August and September, which seems like an eternity ago now, but growth did, in fact, slow a little bit. And you saw it in the stock and people freaked out a little bit. And then in October and November, things seem to have been quite better again. But maybe you can just tell us what you saw in those 2 maybe not so great months and what has kind of normalized, just to understand like how this can shift shorter term a little bit more.

Sure. So volume did slow a little bit in those windows, didn't surprise us. August doesn't surprise us because August tends to be a slow month to begin with. We have a large amount of commercial customers in our portfolio. A number of them are based in Europe. Trading volumes just tend to go a little slower each and every August.

The main metrics that we continue to look at, though, is that open interest metric that I just mentioned. And open interest hung in the entire time and actually grew, and we were hitting records in different products in the month of September, that continued into October and into November. So from an underlying perspective, the market was very healthy as things got more volatile, trading started -- the trading volume started to pick up. But all along, market participation was increasing, market data subscriptions were increasing, and open interest pool was also increasing.

All right. Then staying on the exchange side of the business for now, but rounding it out a bit, while energy is the biggest business in there, there are a few other businesses like rates is pretty sizable. Ags is decent and you still have a cash equities and options business, right, out of the NYSE. So actually, if I look at those businesses in aggregate, they've also grown 6% to 7% CAGR, pretty respectable, over the last 5 years. Energy was, by the way, 14%. So that's still leading the charge. But anything we should be paying more attention to that could surprise us to the up or downside, maybe in businesses that people may not be paying attention to as much.

Yes. I'd go back to one thing that people should pay attention to is just the diversification of the energy business overall. And this energy transition across that energy spectrum is going to take a long period of time. There's been underinvestment in the traditional fossil fuel sources. There's -- energy demand is increasing. It's taking longer to get sustainable type of projects up and off the ground. They're not predictable in terms of their ability to produce. So we see that as [ definitely ] an area and then just getting educated around the breadth of the offering that we have there is number one.

Number two, the second one I would just highlight, in particular, is our rates business. Our interest rate business is primarily in Europe and the U.K. interest rates. So SONIA is our U.K. benchmark, and then Euribor is our European benchmark. And going back to that open interest statistic, in SONIA, our U.K. benchmark for U.K. rates, open interest in that contract is up 75% year-over-year. So you continue to see with the political environment that's going on in the U.K., the uncertain direction of rates, we've seen incredible growth in open interest pool in that contract in particular.

And Euribor coming off of a strong year last year has seen similar. So it's up 20% year-over-year in terms of open interest, which I think is a good sign. And as the direction of rates is really uncertain as well in Continental Europe, that will be an interesting development in that market as well.

Okay. Last question on the Exchanges segment, and maybe I'll give you a break if you want it, Ben, and shift to Warren because it's just about pricing in the segment. And I think it is probably budget period for you right now, Warren and maybe Ben as well. But -- so maybe can you just help us, you've been more active on the pricing side over the last couple of years, how do we think about it into 2026?

Warren just grinds on me to make sure that I'm getting the numbers.

That's right. So it's true. We're going through the budget process right now, but nothing I'm obviously going to disclose in terms of where things will -- we're wrapping it up, you know what I mean. So we got to get there to the end of the day.

But I think, look, I think at the end of the day, the framework you've seen us use across ICE over the last several years will apply broadly speaking. And that -- what has that been? That's been, we've been able to kind of look at across our business and look for areas where we've added value and price to that value. And so it's not the same area every single year. It's not the same level every single year, particularly on the exchange side that we do that. But we do have levers that we pull in pockets that we are able to kind of go after from that perspective. And I think as we move into next year and years beyond, that will be a similar approach.

And so on the future side, we have, over the last several years, made some headline price changes to various contracts across our commodities business, our rates business and things of that nature, not necessarily to the same amount each year or the same products each year, but again, picking our spots and really looking at where we've created some value across the platform and wanting to get compensated for that value.

So I think ultimately, it will be a similar approach. We also have opportunities across our data -- that is our data business. That's an area too on the exchange side. We recently did announce some price changes that will be going into effect next year. So again, a lot of levers to pull there, and we try to really pick our spots and make sure that they're spots that we feel like we've added value for our customers at the end of the day.

Okay. Very good. All right. Moving on briefly to the FIDS business, which is fixed income and data solutions, I think it stands for. Anyway, 80% of that segment is recurring revenues. And this year, over the last 2 quarters, it accelerated pretty nicely. So maybe, Ben, you can talk about what's driven that and why you think that growth is sustainable or maybe even accelerate into 2026.

Fixed Income and Data Services.

Well, that's -- yes, sorry...

I think one of the things underappreciated in the business that we as a team have built in our Fixed Income and Data offering is the comprehensive nature of it. But if you're an asset manager or a trader in the fixed income marketplace, we've become a one-stop shop for what you need to help manage risk and trade in the markets, create indices, et cetera.

And underpinning that business is our pricing and reference data business. It's a significant part of the business. And for those of you that aren't familiar with the fixed income markets, for our pricing and reference data, it's very difficult to price a fixed income instrument because they don't trade very often. Municipal bonds trade -- 1% trade every day. And we, as data providers need to be able to provide reference data and pricing, we do it on millions of instruments, and we have to do it every day and many of them on a real-time basis.

But because they don't trade, you have to have very complex algorithms that have been built up over decades that have looked at all kinds of scenarios of what's happened in the marketplace, where did correlations break down, where did they hold up, and use that historical data set to continue to train your models because they're real-time living organic things that as new events come up, what's the impact going to be to price. So we've had a great business in that space, continue to have a great business in that space. And see a lot of growth potential.

On the index side of the business, so we work with asset managers around the world that want to create new indices. We help them manufacture those indices and then they go out and get assets under management under that, or we have our own proprietary indices that asset managers can utilize from -- that's our IP, but they can utilize to go out and gather assets under management with the clients that they service.

We also have a great electronic execution business. So in the execution business and electronic execution of both municipal bonds and corporate bonds, we have a great business that's been growing strong there.

We have a data and network technology business that can -- that includes a consolidated feed business. It includes a data center business that we continue to invest in, our own proprietary data centers where the demand for power for things like AI and also access to our exchanges continues to go up.

We have our ICE Global Network connecting to hundreds and hundreds of sources of data around the world and allowing clients to consume that in a very secure way. So we have a number of different solutions there, all of which interplay and kind of create a flywheel effect across each other and an opportunity to cross-sell these solutions where clients aren't using all of the comprehensive suite.

I would just add to that, too. Ben mentioned it at the end there, the data -- for the data network technology business and our IGN business and data center business within that, that's actually been the real driver of the inflection in growth you've seen the last couple of quarters.

And so we have been more in the mid-single-digit range for that data network technology business last year. First half of this year, we were about 7%. And then in the third quarter, we were in the double digits. And so -- and that has been driven by that business because the desktop business, the feeds business within that line had been high single digit or low double digits for quite a long time now. And so the -- really, the pickup in the overall growth in business has been driven by that data center business.

And we've been -- it's a great business from my perspective because we get some really good visibility into it. We see a lot of forward demand coming in. And so as Ben mentioned, we're going to continue to invest in that business because we do continue to see the demand on the customer side for greater, bigger pipes for more capacity to consume data, to trade more. And certainly, with artificial intelligence coming in more and more as part of people thinking about that as incorporating that into some of their trading strategies, they're thinking about having those bigger pipes to utilize those strategies with. So that's been an important part of our growth and [ it will ] continue.

And Alex, it's an area where -- I mentioned upfront that our Fixed Income segment is an area that's leveraging AI. So it's an area that we are -- have been and continue to leverage AI to help expand the breadth of the coverage that we have, the speed with which we can produce data, the speed with which we can back-test indices, we're seeing a real efficiency pickup in being able to do more with the same resources there.

That's somewhat of a segue to my next question, which is actually the lengthiest question I wrote down, and it relates specifically to the PRD business because that's an area where we got the most kind of AI disruption questions from people when there was a theme for the last few months. So you've talked, when you get that question, at length about the stickiness of that business and the historical data and how everybody needs that. But then I think when I look at that business, I also worry or think that there may be customers who are maybe not as sticky, and they don't rely on the historical data. So maybe you can talk about both the positives but maybe also the potential negatives there.

And I'm asking specifically because what I see in the -- covering the info services space, there are some vendors who have very broad data offerings, and they're increasingly bundling with firms like us. And some of those have done a lot to improve their kind of fixed income data business. So just wondering if maybe the competitive dynamics could shift a little bit as some other vendors that historically may not have been as good are now catching up and they're also bundling them with other things that -- unfortunately, you set a little -- your product set is a little bit narrow. I told you it was a long question. So...

That was a lot in that question. Let me start on the quality of the offering. So we focus, first and foremost, on the quality of the data offering that we provide to our clients and having accurate marks and accurate reference data, accurate -- as accurate pricing as possible. You can't break apart the ability to create as accurate of marks as possible in the fixed income space, apart from having the historical data set because in order to have accurate marks, you have to have a tremendous amount of historical data built up over time that have seen how instruments have behaved, as I mentioned before, how correlations have broken down, how correlations held up. And all that historical data is our own proprietary information.

And more importantly than just the prices is how do we come to that price. The algorithm underneath that is a living thing, as I said, it changes over time, and we have all that intellectual property around how that algorithm has changed over time. And an example I used in one of the meetings we had earlier, when a similar question to this came up, is that we saw -- back in 2019, we saw a couple of customers leave us for a lower-quality offering, a lower-priced offering. And when COVID hit, a new event that the market hadn't seen, they saw the correlations broke down in different ways and customers came back to us en masse for the quality of the data sets that we provided because they saw that the correlation analysis that we did with all the different back-testing that we did over time was much more accurate and much more succinct. So that's on the first part of the question.

Second part of the question, I unpacked all the different components that are in our Fixed Income and Data Services business. So I would argue we have an equal amount of breadth, in some areas, more depth than the competitive landscape that's out there. And if we needed to pull triggers for growth for bundling and those types of things, we could do that. So we have that optionality to it.

Okay. Fair enough. Shifting gears then, again, to mortgage, the Mortgage Technology business. Growth has obviously been a little bit less favorable here over the last few years, both in the recurring and the transactional side. So maybe you can talk about what of that is cyclical. What other factors have maybe been at play here? And really what it takes for the business to get back to your target growth rate, which is around high single digits.

Yes. So let me start with that, Alex. So I think it's largely cyclical in terms of what we've seen. I mean this is -- we're in the third year of what is the most challenging period for mortgages on an origin -- at an industry level from an origination perspective in the last 3 decades. And so from that perspective, it's certainly -- it's been a challenge for the business.

But I think when we look about -- look forward for the opportunity for us, we are sitting in a moment in time here where rates have started to come down. You've seen a little bit of improvement in the mortgage market over the last year or so. It was a little bit better than last year, last year was better than the year before. So we're starting to gradually improve. And so we're at a point now where rates, if we were to see -- where there's probably 4 million or so loans that are sort of eligible to be refinanced or should be incentive -- in the money to be refinanced at the moment. And that's generally, we categorize that as sort of 75 basis points below where their actual mortgage is or in terms of where the current rate is.

And so there certainly is a fair amount of loans that are today just at this current rate that are being refinanced and can be refinanced. And if you were to have a 50-basis point change to that downwards, you'd have somewhere 8 million loans that are in the money to be refinanced. So we are kind of this moment where it feels like the market is getting better, and we're starting to see some of that improvement. It's just been a little bit gradual on that front.

So it's been cyclical for us. I think this is the nature of the mortgage market. It's always been like this. I think one thing that we do have a lot of benefit from our peers in the space would be that it is part of a much broader platform in ICE where we do have significant amount of free cash flow and cash flow to invest in the business and really put ourselves in a better position than we would otherwise be.

And so I think from that perspective, we continue to focus on those things that we really can control. And while cognizant, of course, of what's going on from a macro perspective, really more focused on making the investments that we want to make, and I'll turn it over to Ben on this. But investments we want to make and focusing again on the things that we can actually control.

Yes. And of the things we can control is, first and foremost, we've been focused very heavily on the integration of the businesses that we've acquired. And we've been public about it that we're ahead of schedule on our synergy cases on the execution of the integration of these businesses, not only within ICE but integrating the platforms across the ecosystem so that our clients can get the most benefit from the efficiencies of being on one platform.

So we've been focused heavily on execution. In my assessment, we've done very well, and the proof is in the pudding in terms of being able to have tremendous sales success as we're ahead of our -- even our revenue synergy target and where we thought we would be at this point in time on our 5-year targets, we're ahead of that. And a lot of it is due to cross-selling our solution set and that comprehensive offering to our clients.

So cross-selling our loan origination system to clients that were already on MSP, which is our servicing system, or vice versa. We've had a lot of success doing that, and we've signed on some really marquee names like JPMorgan Chase, it's front of mind. M&T Bank, another great financial institution. Citizens Bank is another one that we've brought on to the platform. Fifth Third Bank; United Wholesale Mortgage, obviously, one of the biggest nonbank originators is coming on to our servicing platform. Lennar, one of the big homebuilders who's already on Encompass is now implementing MSP.

So we've had a lot of success. And we have a number of clients in the -- not only in the implementation process, we have clients that are going live, and we have a strong funnel behind that.

Perfect segue, I think, to my next question, which was -- actually, maybe there's not much to add. But it was about the excitement around larger clients. I think a lot of us after JPMorgan in particular, thought there was going to be a lot. And you just mentioned a few other names, but I think there was still the sense that, wow, this is going to be a lot very quickly.

On the flip side, however, and again, this is just a perception maybe, there's been unfortunately a couple of well documented kind of losses due to unfortunate circumstances. So maybe you can just balance the two of them, like, as you just mentioned already in terms of the pipeline, how do we get comfortable that we're going to start seeing some of these larger deals and maybe minimize any other potential losses from an operating perspective, in particular, as we head into the next couple of years.

Yes. On the latter part of that question, we haven't really lost a client to a competitor. I mean we've been very strong in terms of retention of our client base and don't see that as an issue. M&A has been one of the areas that we have seen some impact, but that's something we can't control. Nobody can wave a magic wand over a transaction that two institutions want to do and say don't do that. So that's something we can't control.

I continue to focus on what are the things that we, as a company, can control. And that's harnessing the technology, driving efficiency for our clients, leveraging AI to automate as many parts of the loan origination process as possible, things like doing automation around compliance checks as a loan is being originated. Looking at income checks, so as income verifications come in, did it meet the qualifications, the criteria of the loan that this client applied for. Credit checks as those are maturing.

Then we've also -- leveraging AI, have also built a bridge, electronic conduit for the first time between our loan origination system and our servicing system that takes a ton of inefficiency out of the process that a servicer has in moving loans from loan origination into servicing, we're moving not only the data but the document payload over there and then auditing that package to make sure that all of the requirements that the servicer has are being met.

And then on the servicing side, we're also leveraging AI for modernizing our tech stack. One of the data points I shared in an earlier meeting today, is that we've been modernizing our MSP servicing system that we just acquired 2 years ago, and the pace at which we're able to move that platform off the mainframe is going 2x faster than an acquisition we just did, call it, 8 years ago of IDC, that's a fundamental part of our Fixed Income and Data Services business.

So we're seeing leveraging AI and leveraging things like GitHub Copilot and other tools in that space, helping us to dramatically increase our speed to bring those solutions to market as well as new solutions that are helping to automate areas in customer service like call prediction, call summarization, call routing and intelligent chat bots.

Good. I'm not sure if this is already the last question, but let me -- given the time. But let's shift gears completely and maybe talk about your recent investment in Polymarket, and how you think that could impact ICE in the future. I think there's multiple dimensions here. You're getting closer to retail traders, which historically was not your end market, you're experimenting with new technologies and contract types. And then you have this data relationship, which probably is a little bit more near term. So yes, maybe talk about that or what else there is. And what you think this investment could really mean for ICE in the longer term?

Sure. So it's a minority investment that we made. We've established a relationship with Shayne, the founder over the last few years. And the elements that made us want to invest in this is that there's some interesting dynamics that we think are unique to that platform that may have applicability to the broader ICE space, but also as we've looked around corners throughout the years and looked for new innovations that are coming up, we've tried to be on the forefront of these innovations as they take place. Whether or not these will be all applicable to the institutions, probably not, but they're interesting developments regardless.

So the first one is non-intermediated settlement of transactions and trades. So there's not really a clearinghouse function in the settlement of those match trades on that platform. So that's one interesting technology development that we're staying close to.

The second is that it's really a social media network. There's hundreds of thousands of people just like us in this room, but around -- spread around the world that are creating event contracts on the fly. So they're creating things from political events to settlement of geopolitical events to supply chain disruptions and what's the impact of that to economic indicators, all kinds of contracts can be created on a real-time basis between parties.

And then once it's created, the rest of the community can go ahead and create a marketplace around it. Well, today, if all the exchanges, not just us, but all the exchanges, when we're working with our regulators, it can take weeks, if not months, to get a new contract off the ground. So that's an interesting development. We'll see how the regulators think about that and the applicability into marketplaces like ours.

And then you mentioned the data agreements, I'll touch on that quickly. This is all around creating sentiment indicators. So that all of that event contract data and marketplace data is setting odds on events happening. We are -- we have a data agreement with Polymarket to create sentiment indicators that we think are applicable to the capital markets. And we've already done this in partnership with companies like Reddit and Dow Jones and the development of these marketplaces around event contracts and the probability of that happening, we think, is another one that will be interesting for the capital markets, and we've unleashed our Fixed Income and Data Services business to help make that a reality.

Very good. I see that we're out of time. So we'll keep the CFO expense questions for next time. But thank you for the time so much, Ben. And thanks for -- yes, thanks for doing that today.

Thank you, everybody. Thank you, Alex.

Hi, everybody. My name is Ken Worthington. I cover brokers, asset managers, exchanges and crypto at JPMorgan. Today, we have Warren Gardiner, the CFO of ICE. I'm going to walk through 25-ish minutes of Q&A. I encourage you all, if you have questions, I'll allot time at the end for Q&A, and you'll be able to hear less from me and probably more of your own good questions. So Warren, thank you so much for joining here today.

I'm going to start sort of higher level. I'm going to dig through the exchange part of the business, mortgage and end up a little bit with FIDS. But starting big picture and higher level, where are you spending your time these days? What's taking your time? Where are you focused? What are you thinking about?

Well, first of all, thanks for having me, and thanks, everybody, for joining here and everybody online listening. So I would say, look, these days, it's really focused on the day-to-day operations of the company. So looking across our various businesses. We're in the middle of our budget process right now. So thinking about capital allocation across the business as we head into next year. And we are in a fortunate position.

I consider myself pretty lucky from that perspective that we've got a business that's around $10 billion or so of revenue, generates maybe $6.5 billion or so of EBITDA off of that. So a really healthy cash flow stream to really work with. And we always want to invest in the business first. So that's what we're doing today and over the last couple of weeks or so that we've been going through this budget was focusing on that. So that's really been where the the main focus for us has been and for me and my team in recent days.

So I guess the big question is, who's getting more money in ICE and who's getting less?

Well, we are, as I said, in a fortunate position where we do generate a lot of cash. And there certainly are -- there's no shortage of ideas at ICE in terms of what we can invest in and where we can take the company. And so we go through all of those, but I think we do a good job distributing that in an equal way. And I think we are in a position where we can really invest across the business to really grow well into the future.

And again, I think it's one of the important things about ICE is we do have, as I said, roughly $10 billion revenue stream with $6.5 billion of EBITDA. But importantly, that is spread across a bunch of different asset classes and around the world. And so really a durable and diversified revenue and cash flow stream for us to work with on that front and continue to grow the business as we have over the last 20 or so years that we've been public.

So how are you thinking about leverage and deleveraging following the investment in Polymarket? And I guess to any extent, does the Polymarket investment change the outlook for your buyback now that you sort of have gotten that leverage level to your target sort of following Black Knight?

Yes. So there's no change to how we're approaching things. And so we ended the third quarter at about 3x gross debt to EBITDA, which is right around where we would like to be on a normalized basis. Our target is 2.75x to 3x. So we're in that range or we're in that range. We're actually about 2.9x, just to be totally clear and transparent on it. So we felt like we were in a pretty good position.

Polymarket, of course, that happened in October. So that will tick up leverage or has ticked up leverage a little bit. But still, even with the second tranche of that investment that should happen over the next several months or so, pro forma through the third quarter, we would still have been around 3.25x or so of gross debt to EBITDA. So at a range where traditionally, we've been in more of a buyback mode with the excess free cash flow that we generate.

And so we've been taking the approach over the last couple of quarters of not only paying down some debt a little bit, but also buying back stock and with a little bit more weight towards buying back stock. And so I think as we head into the fourth quarter, of course, we're a little bit more halfway through, I suppose, at this point and into next year, it's a similar approach in that way. And so I think you can expect us to continue to pay down a little bit more debt here, but then also we'll weight more towards buybacks.

That, of course, absent any kind of opportunities we see on the M&A front, which can be a little bit difficult to predict. But we've always been really just opportunistic with that. I don't think there's nothing we necessarily need as a company. But when those opportunities do arise, we obviously have the balance sheet and the cash flow stream to take advantage of those opportunities. And so we will do that as we move through the next couple of quarters and years, of course.

And with the stock off its highs, does it make sense you can be more opportunistic here than you might have been if the stock was back at $200 million?

Yes. Well, I think we repurchased $400 million in the third quarter. Obviously, the stock has gotten a little bit better in the last couple of weeks, but I felt like that was a good allocation of cash. That was definitely well into the majority of that excess free cash flow for us. And so we've been able to take advantage of those opportunities when we see them. So yes, no, I certainly think our stock is in an attractive position from a buying standpoint these days given where the levels are, yes, of course.

Perfect. Okay. So digging into the exchange, I'm sorry, I've got big windups for a bunch of these questions. So ultimately, it's -- what does the outlook for oil and gas look like going into 2026? So when we speak to investors, the first half of '25 was really strong on the energy side of the franchise.

We had geopolitical events, which seem maybe less likely or not certainly going to repeat themselves, making for tough comparisons from the first half of this year. But I think as you said maybe on the conference call or the earnings call, open interest is clearly growing really quickly, particularly in the flagship products. What does next year look like? And are there catalysts that you see for volume growth in energy in what seems like a tough comparable market in the first half of '26?

Yes. Well, I think people thought that '24 was going to be a tough compare and '25 was going to be a tough...

And '23 actually.

'23 -- yes. So there's certainly -- we've seen this plenty of times in the past. But I think the important thing is that the fundamentals and the secular drivers behind the growth we've had in energy. And if you look at our energy business over the last several decades, and you can kind of pick your time frame within that, if you'd like. And we've been, roughly speaking, in the high single-digit range in terms of revenue growth on average. Obviously, they can fluctuate above and below that at times, given the transactional nature of that business.

But as Ken said, open interest being a very important indicator of health in those markets continues to be up high single digits, low double digits across the platform. And that's an important -- that second part is important. It's not just 1 or 2 products. It's it's really -- the breadth of it is really strong, which obviously indicates a lot of customer engagement on that front.

And so I think, again, the secular trends around energy moving around the world more and more, whether it's oil or LNG, all those different sources moving around the world into more places around the world and just the complexity of those supply chains ever increasing are trends that have been in place for a while. And clearly, there's a lot of demand for energy consumption as we head into not just next year, but the next several decades, whether it is on the natural gas side or on the oil side.

I think LNG trade is expected to double over the next couple of decades, for instance. And so I think we're in a really good position from a long and medium-term perspective to see growth across that platform much like we have in the past.

I think if you drill down a little bit further from that and some of these key benchmarks that we have, whether it's Brent or TTF, which is really becoming the global benchmark for natural gas, much like what Brent is for oil, there continues to be a huge runway for growth there. I mean it was only a few years ago that the Midland contract, I'm sure we'll get into that, but I'll speak a little bit about that here.

Midland contract in Houston was added to the Brent index. Midland is actually 70%, 80% of U.S. exports today. And so that benchmark, while only a few years old, is increasingly becoming a huge part of the commercial world in terms of their hedging needs and then moving oil around the world as well.

And so when you think about oil that's coming to Houston today, I think it's something like 3.5 million barrels are coming into Houston today versus maybe 400,000 or so into Cushing. And so it's becoming a really key market for people. And then, of course, being part of that Brent index as people are moving oil around the world is also helping that Brent index become -- the adoption of that Brent index become greater. And so we're seeing U.S. oil producers using the Brent index more and more that hadn't really used it before. And that's been a key part of our growth.

And then on the TTF side, as I said, we've got LNG, of course, being a bigger component of the energy mix and moving around the world more and more. We're seeing a lot of a commercial adoption of that contract. That contract used to be really more of a European regional contract years and years ago and again, has expanded into becoming more of this global benchmark for people. And so as LNG becomes more important, that's becoming an increasingly critical risk management tool for our customers. And so we've actually seen a lot of growth in the U.S. cohort that trades that contract, it's increased pretty significantly over the last couple of years as, again, it used to be more of a European contract and now it's becoming more of this global benchmark for people.

And so that all then funnels down to risk management needs off of those key benchmarks and a lot of our other oil contracts and some of our more regional gas contracts, all that starts -- that whole ecosystem starts to benefit as the adoption of these key benchmarks grows. And so I think we've got a lot of runway for growth across energy as we head into the next couple of years and decades.

Yes. I think our observation is gas oil emissions, heating oil, some of these non-flagships are seeing like really great growth even as we sit here today. So maybe moving on, one of the observations we had is that we're seeing other exchanges continue to experiment and probe into getting into each other's contracts. So we've seen CME share of Brent rising. Eurex is doing more on Euribor.

I think Eurex has actually not in October because ICE crushed in October, but 50-50 in ESTR trading. So I guess the question around this is, is it getting easier for exchanges to crack the futures monopolies that we've seen in the past? Or is there just sort of a greater willingness to sacrifice pricing to stay in these contracts for longer and hopes that eventually they can sustain some market share? Like is the game any different today than it was 10 years ago? Because it seems like we're seeing pockets of, I don't want to say, success, but at least higher market share than maybe we've seen in attempts in the past.

Yes. I don't think anything has really changed on that front. I think it's more of the latter there in terms of what you're seeing on the competitive front. And we see that from time to time across the exchange ecosystem. And so I think the important thing to really look at in times such as that would be with the open interest. And so if you look at Brent open interest, it's mid- to high 90% market share.

Obviously, the volumes can fluctuate here and there. But if you look at the open interest there, that obviously sustain a pretty healthy market share in that way. And I would say the same for ESTR as well, where we've been in the sort of 70-plus percent range, if not more than in terms of our market share of open interest.

And actually, on big volume days like we actually saw more recently and to your point on share, we've seen more share shifts to us and away from some of the others that are out there, which again is indicative of people coming to us where they know the liquidity is going to be on those higher stress days. So -- and Euribor too, in terms of looking at market share, we continue to maintain those healthy 90-plus percent market share levels.

So those are -- that's what I would really guide you to. I mean you're going to have fluctuations in volumes across these different contracts. But ultimately, with that market share and open interest sticking steady, I think it's indicative of us continue to be able to grow and that competitive position not changing a whole lot in that way.

So one of the things I wanted to dig into, I think Jeff made a big deal about this on the earnings call. So maybe talk about how the plumbing in futures is changing. So clearing, margining, collateral management. So Jeff mentioned that Polymarket has been innovative in these areas and is sort of in a position to teach ICE, I'm going to say, how to maybe improve upon the existing framework. So maybe talk a little bit about what Polymarket is doing and maybe how can they help you in terms of the evolution of the ICE clearing system?

Sure. So Polymarket, for those that maybe aren't as familiar with it, it's in a prediction market. It's one of the leading prediction markets, particularly in events that are outside of sports. And that was one of the things that was really interesting to us in terms of what they're doing because a lot of those events in those markets are adjacent to financial markets. And so there's a lot of data that comes off of that, that's going to be interesting and is interesting to our customer base.

But to Ken's question and also part of our thesis and why we were interested in that is they also have a very different technology stack in that way, market infrastructure technology stack. And so Polymarket operates a decentralized sort of noncustodial smart contracts that are on the Polygon blockchain, which is a layer 2 Ethereum blockchain.

As you know, we're more of a traditional financial market infrastructure. So a different world in terms of what we're operating in and what they're operating in. And so we -- as we were looking at that, we felt like there could be applications in some markets over time that, again, we didn't really have the core expertise to -- at ICE, much like they don't have in some of the more traditional financial market infrastructures like we have. And so we felt like there was an interesting opportunity to collaborate on those and really help over time potentially advance and evolve markets in the way that markets want to.

So it's not that we're necessarily sitting there wanting to pick one horse or the other or frankly, even have a very clear vision on where all these markets will necessarily end up, if you will. But the opportunity to collaborate on those is now there in a way that wasn't before. And to be clear, too, that goes for Polymarket as well who may have some interest in some of the traditional market infrastructure and technology that we operate and how that may be applied to some of their markets as well over time. So that was a really important component of it. for us.

I think one of the other areas, and it's obviously very related, would be around stablecoins. And so that's one of the elements of that Polymarket infrastructure is that when you do make a trade, it locks in a stablecoin for cash on that amount. And then once that event is resolved through this decentralized protocol, decision protocol, a stablecoin is delivered to the winner of that contract. And so they obviously have some expertise in that area of stable coins, and it's something that we think could potentially be interested from an efficiency standpoint, maybe not exactly in the way that they necessarily do it today on their markets, but components of it that could be of interest in our clearinghouse infrastructure.

So we operate 6 clearing houses around the world. In many cases, customers are carrying excess collateral balances at those clearing houses. When they need to kind of pull down on that excess collateral for whatever reason that may be, they, of course, go through traditional financial rails, which are not 24/7 and have friction to them to some degree.

Whereas a stablecoin, if that was able to be operated and cut across the clearinghouses, you could have a lot more efficiency in terms of moving collateral from one to the other on a 24/7 basis, which, of course, would create a lot more efficiency within the system and maybe allow people to maybe carry a little bit excess -- a little less excess capital and which could open it up maybe for more trading.

So that's ultimately what we're exploring on that front. I mean nothing to obviously officially announce anything here today, but one of the things that we're exploring because the efficiency is ultimately -- that's a core component of what we try to do at ICE in terms of bringing efficiency to our customers in all the different ways we possibly can. And so this could be one tool to be able to do that.

It actually -- it's sort of similar in -- that theme is similar in terms of what we've recently launched too with our IRM 2, which is a new risk model within the clearinghouse that will enable people to gain more efficiency across their portfolios by a pretty significant margin. So we're proud of that launch separate from stablecoins, of course. But again, it just sort of another point to make that it's something we're always looking to do is bring more efficiency to our customers, which can ultimately benefit us to some degree and maybe additional trading.

So when you spoke about this, the way I'm thinking about it is efficiency, right, efficiency and margining. Efficiency and margining means maybe responsibly margining less. That's sort of what...

Absolutely, in the correct order too as well, yes.

Okay. There we go. And then the other thing that came to mind as you were speaking, if we're doing this all in the smart contract, do you need FCMs? Do they still have a role in a smart contract world? Or does the smart contract sort of replace a bunch of what they do?

Well, I don't know that it's there yet on that front. That's where I would sort of -- and that's why we're still exploring that. I mean the smart contract today, like I said, that's a fully collateralized contract. There is no margin against that in that way.

And so I mean, that's sort of a different market structure in that sense. So that's why I'd say we're still exploring that. I mean there's obviously a lot of -- we have important FCM customers, and we'll explore that further. But I think today, we're just thinking about how certain components of that -- of the Polymarkets's market infrastructure, market technology can be applied, not necessarily the full technology stack, if that makes sense.

So I'm going to digress a little bit on to Polymarket. So ICE has a data agreement with Polymarket. Is there institutional interest from ICE's perspective in binary futures contracts? So we see your interest in data. We see your interest in sort of the plumbing. Is there also an avenue of ICE interest in the trading side of Polymarket as well?

It could be. I think the first 2 components of the investment were what I said. And I think the data side is a really interesting one in that, again, these are -- a lot of what their markets are, these non-sport markets that are adjacent to ours that we discovered a lot of our customers were utilizing off of the Polymarket website to inform their risk management processes and decisions.

And so what we're going to do on the data side is really institutionalize that data feed so that they can consume that data in the way that they're accustomed to today in terms of how they consume other data sources. And so that's -- those are the 2 initiatives that we're really working on at the moment and are focused on. We're a month or so, 1.5 months or so into this.

But I think over time, more directly answer your question, I think it could be something, but it would be something that we would do as we understood from our customers that, that was something that they felt was important to them. And I think it's something that we could do in the event that there was that interest. I think the other side of that, too, is maybe bring -- helping bring more of an institutional customer base to their platform as well, which we understand is something that many customers have interest in doing as well. So that can kind of work both ways. And with this partnership, we'll be able to kind of drive the best outcome for the customer in that way. So to the benefit of either our investment or the ICE P&L, if you will, either way.

Okay. I'm going to head on to mortgage. So again, starting sort of higher level, where are things going well? Where are challenges emerging on ICE's mission to digitize the mortgage origination servicing process?

Yes. So I think -- well, maybe I'll start with the second part of that. I mean the area that -- I wouldn't say it's not that it's not going well or anything, but it's maybe I would have hoped for a better macro environment from a mortgage standpoint. I mean we are in -- things are getting better. This year is going to be better than last year from an origination standpoint. So we're seeing stabilization across the industry, which I think will be just to the benefit of everybody in the ecosystem, of course.

But that's certainly one area that I suppose I would have hoped would have been better.

But it also is giving us -- we have the opportunity, again, to come back to the first question that you asked me. But because of the diversified nature of our revenue and cash flow stream and the durability of that, revenue and cash flow stream, we can make investments in that business through all kinds of cycles. I mean it was only a few years ago, we saw the worst year for mortgage in over 30 years, but we continue to move forward in making the investments that we wanted to make and modernizing the servicing platform, launching new products, integrating servicing more with the Encompass platform. All of those are things that I think are going really well on that front, and we're able to do because we are a big diversified company across a lot of different asset classes.

And so I think we'll be in a much better position than maybe a stand-alone company might have otherwise been as a result of that. And so I've been very pleased with that -- with where the investments are going, in many cases, ahead of schedule in terms of what we originally thought. And so been happy with the results on that front. I'd say, too, just from an integration standpoint, our -- the original synergy targets that we set, we thought we would have about $200 million of expense synergies over a 5-year period at the outset when we announced the deal.

We expect to be at $200 million by the end of this year, very comfortable with that target, which is now year 2, so well ahead of schedule. And I think actually over year 5, we can be closer to $230 million of expense synergies. And so again, coming back to the integration and things going well, that's a way to kind of sort of help quantify it a little bit in that sense and be able to do a lot of these things a little bit faster than we maybe originally thought of, I thought we could. So I've been pleased with that performance.

Perfect. So there's been a lot of buzz on AI. And I think Ben -- Ben Jackson spent quite a bit of time on the conference call talking about how ICE is utilizing AI in many of the different parts of the business.

How are you thinking about how AI could improve the mortgage origination and servicing process? And in particular, I think it was Jeff, when you guys announced Black Knight, talked about the digitization of the mortgage process and how much time you could take out and how much cost you could take out. Does AI or maybe how does AI, I don't know if you guys have gotten there yet, but how much more do you think that ICE can do utilizing AI than maybe what you had initially thought when you started the process? Is it incremental? Does it make your business more attractive if you can take that much more out in cost and time and...

Yes. I think it can. It's not something we've quantified quite yet, but I can tell you that, look, a mortgage today costs $10,000, $11,000 or so to originate. Most of that is in personnel costs. And we've got a target of being able to take out a couple of thousand of that through the utilization of our tools over time. And so I think AI -- and we had that target before. I think AI really came on to the scene in a major way.

So I think AI can certainly be something that's helpful on that front, whether it's accelerating or increasing it. And so I think that we're working on -- and so we are working on several different initiatives currently to help drive that. And so you think about areas within the origination workflow, we have a suite of products called our analyzers that really attack different tasks across the mortgage workflow using artificial intelligence, machine learning to extract information from documents and feed it into the origination system in a way that previously was done through stare and compare work. So taking a lot of time to accomplish where today, we can do that in a far quicker and far more accurate way than previously. So enhancing that as AI becomes better is a key initiative for within those -- that product suite that will be, I think, really helpful for people, too, as well.

The other area that we've more recently been really working on is on the customer service front, where we've been able to utilize AI tools to really summarize customer service calls, predict potential issues within those calls. And over time, we think we'll be able to be an agent that will help handle things like payments and remitting payments and things of that nature on the servicing side that will just create more of a borrower-friendly experience, more of a borrower self-service experience for people as well as creating tools that will help with issue resolution.

I think the one thing to remember, though, is that this is still a highly regulated industry. I don't think regulators and frankly, originators and customers for that nature want a bot to fully create a mortgage. And there is that risk of putback risk if you don't do it correctly that people are very aware of. And so I think there -- we are spending a lot of time trying to assess what the different tasks are that can be adopted by AI to a great extent and maybe which ones are maybe less so. And so I think there are always going to be this level of human interaction to ensure -- and it will be on the more complex issues, the more complex tasks that, that will exist.

But ultimately, I think it can be certainly a help [ per pound ] in terms of driving more efficiency across that workflow. And that's something I think we're doing a good job of, and we'll see how this technology ultimately evolves. But I think it's certainly something that can contribute to that greater efficiency we've talked about.

So we've got a few minutes left. If there's any questions in the room, raise your hand, and we'll take your questions now. Otherwise, you can hear me drone on. Any questions? Okay. It means I'm doing a really good job. So since we're in the House of Morgan and you've got a big relationship with JPMorgan, maybe talk about how the relationship with JPMorgan is going? And to what extent do you see the JPMorgan relationship as a blueprint for other larger bank mortgage originators to outsource or servicers to outsource to ICE rather than to do it themselves?

So it's a good question. So things have been going really well on that front. And JPMorgan was already on MSP, which is the servicing platform that we have, but post the acquisition, agreed to come on to our origination platform. And one thing that I think was really compelling about this acquisition, our acquisition of Black Knight, to be very clear, was the opportunity to bring together and integrate servicing and origination technology.

And so with that, I think JPMorgan -- you saw the opportunity on that front and signed on. And these are -- as we know, JPMorgan is a big bank with a very big mortgage business. And so they can take some time to implement these products. And so I think we've got 2 channels, a correspondent channel and a retail channel.

Correspondent channel is up and running and starting to ramp, whereas the retail channel is very much on track, but was always plan to be staggered in that way and start a little bit later. And so very good on that front. I've been very pleased with the partnership on that front as well. And so things are going well.

And I think that -- because of that, it starts to increase some interest from others around, as we would have hoped. JPMorgan, obviously, being a very prestigious and well-known bank and particularly in the mortgage space, is going to attract some interest when they do something along those lines. And so it's definitely something that is bringing some people and making some people have some discussions with us, I think, and consider moving over to our platform. So it's been a helpful experience.

Good. Okay. Last chance for questions. Okay, up in front. Just identify who you are.

Ram from TD Asset Management. How do you see the global market structure changing over the next 5 years? And how is ICE positioned to grow in this? And where do you see pockets of growth in the future?

Which asset class, a mortgage or trading?

Overall.

Yes. No, it's a good question and probably -- well, I'll say a difficult one to answer with any degree of full certainty. Part of the reason we made that investment in Polymarket was because we felt like that was a new financial market infrastructure or technology that has potential applications, maybe not entirely in all different markets, but certainly components of it. That we felt could be applicable to some of our markets over time. And so I think ultimately, what we did with that and the reason we did that is we don't really know exactly where everything is going to go in that way.

But we've got all the tools and the capabilities now under -- well, not under our roof, but certainly in partnership with them to help advance those markets in the way that they want to. So it's a difficult one to answer with really any degree of certainty. It's certainly a world where things are changing very rapidly. And that's why we wanted to put ourselves in that position to be able to flexibly evolve over time as markets demand it.

Okay. We're at time. Warren, thank you so much. This is one of the highlights of my -- our chat here today. So thank you, everybody for joining, and have a great rest of the conference.

Thanks, everybody.

Hello, everyone, and welcome to the ICE Third Quarter 2025 Earnings Conference Call and Webcast. My name is Lydia, and I will be your operator today. [Operator Instructions]

I'll now hand over to Katia Gonzalez, Manager of Investor Relations, to begin. Please go ahead.

Good morning. ICE's third quarter 2025 earnings release and presentation can be found in the Investors section of ice.com. These items will be archived and our call will be available for replay.

Today's call may contain forward-looking statements. These statements, which we undertake no obligation to update, represent our current judgment, and are subject to risks, assumptions and uncertainties. For a description of the risks that could cause our results to differ materially from those described in forward-looking statements, please refer to our 2024 Form 10-K 2025 3rd quarter Form 10-Q and other filings with the SEC.

In our earnings supplement, we refer to certain non-GAAP measures. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You'll find a reconciliation to the equivalent GAAP terms in the earnings materials.

When used on this call, net revenue refers to revenue net of transaction-based expenses, and adjusted earnings refers to adjusted diluted earnings per share. Throughout this presentation, unless otherwise indicated, references to revenue growth are on a constant currency basis. Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain items.

With us on the call today are Jeff Sprecher, Chair and CEO; Warren Gardiner, Chief Financial Officer; Ben Jackson, President; Lynn Martin, President of the NYSE; and Chris Edmonds, President of Fixed Income and Data Services.

I'll now turn the call over to Warren.

Thanks, Katia. Good morning, everyone, and thank you for joining us today. I'll begin on Slide 4 with some of the key highlights from our record third quarter results.

Third quarter adjusted earnings per share were $1.71, up 10% year-over-year and the best third quarter in our company's history. Net revenues totaled $2.4 billion, and were underpinned by a 5% increase in recurring revenue. This recurring revenue growth was fueled by a 9% rise in Exchange Data and a 7% uplift in Fixed Income and Data Services, both reflecting sustained demand for our high-value proprietary data offerings.

Third quarter adjusted operating expenses totaled $981 million. Our disciplined cost management was further supported by approximately $15 million in onetime benefits, without evenly distributed across compensation expense and depreciation and amortization. After adjusting for these benefits, we would have been towards the low end of our guidance range.

I also want to provide some color on our third quarter adjusted tax rate of 21%, which benefited from recent prior year tax audit settlements. Excluding this benefit, the adjusted tax rate would have been within the prior 24% to 26% guidance range. And as a result, we expect the fourth quarter tax rate will normalize to between 24% and 26%.

Moving to capital allocation. We returned $674 million to our shareholders during the quarter, including approximately $400 million of share repurchases. In addition, we reduced debt outstanding by roughly $175 million, reducing gross leverage to just over 2.9x EBITDA.

Next, I will touch on a few fourth quarter guidance items. We expect fourth quarter adjusted operating expenses to be in the range of [ $1.05 billion to $1.15 billion ]. Sequential increase is largely driven by the aforementioned onetime expense items not repeating in the fourth quarter.

Fourth quarter adjusted nonoperating expense is expected to be between $180 million and $185 million, driven by a sequential uptick in interest expense related to our October investment in Polymarket. As a note, we funded $1 billion of that investment with CP issuance in early October and expect to fund up to an additional $1 billion in the future, also utilizing existing capacity on our commercial paper program.

Now let's move to Slide 5, where I'll provide an overview of the performance of our Exchange segment. Third quarter net revenues totaled $1.3 billion, building on strong double-digit growth in the prior 2 years. Transaction revenues sold $876 million. Importantly, towards the end of October, open interest across our futures and options complex surged 16% year-over-year, with energy futures up 14% and interest rate futures climbing 37%, underscoring the growing demand for our risk management tools amid shifting macroeconomic conditions.

Shifting to recurring revenues, which include our exchange data services and our NYSE listings business, revenues totaled a record $389 million, up 7% year-over-year, underpinning growth in our record recurring revenues with 9% growth in our broader exchange data and connectivity services, which is once again led by our futures data, while also benefiting from approximately $6 million of auto-related revenue that we don't anticipate will repeat in the fourth quarter.

In our listings business, the NYSE helped to raise a market-leading $20 billion in new IPO proceeds through the first 3 quarters of 2025. It is worth noting that only roughly half of new IPOs have met the NYSE's listing standards, and these high standards remain a critical component of our 99% retention rate. As a result of this strong performance within our exchange data business, we now expect full year growth to be towards the high end of our 4% to 5% guidance range.

Turning now to Slide 6. I'll discuss our Fixed Income and Data Services segment. Third quarter revenues totaled a record $618 million, including transaction revenues of $123 million. On a year-over-year basis, ICE Bonds revenues increased 15%, driven by 41% growth in our muni business, which was in part driven by growing institutional adoption.

Within our CDS business, results were largely driven by lower member interest, a direct result of the lower Fed funds rate when compared to the year ago period. Recurring revenue totaled a record $495 million and grew by 7% year-over-year.

In our fixed income data and analytics business, record third quarter revenues of $311 million increased 5% year-over-year, driven by growth in pricing and reference data in our index business, which reached a record $754 billion in ETF AUM at the end of the third quarter.

Data network technology revenues were a record -- increased -- and increased by 10% in the quarter, an acceleration from 7% growth in the first half and 5% growth in 2024, driven by heightened demand for our ICE Global Network. Our strategic investments in data center infrastructure are paying off, driven by increasing demand for data and increased capacity as well as clients preparing to integrate AI into trading workflows. We also continue to drive high single-digit growth across our consolidated feeds business and our desktop solutions as we continue to realize the benefits of investments to enhance our platform.

Worth noting that the third quarter included a few million dollars of onetime revenue that we don't expect will repeat. That said, we still anticipate fourth quarter revenue growth in data and network technology to be in the high single-digit range, and for total segment recurring revenue to be between 5% and 6%, both the fourth quarter and the full year.

Please look to Slide 7, where I'll discuss our Mortgage Technology results. Third quarter revenues totaled $528 million, up 4% year-over-year. Recurring revenues totaled $391 million and increased on a year-over-year basis. The year-over-year improvement was largely driven by our data and analytics business and MSP within our servicing business.

Shifting to the fourth quarter, we expect revenues to remain at these levels, primarily driven by Mr. Cooper's acquisition of Flagstar, and customers resetting their minimums on Encompass, which I'll note is paired with the benefit of higher transaction fees. We expect these items to largely be offset by revenue from new customers coming online.

Transaction revenues totaled $137 million, up 12% year-over-year, driven by double-digit revenue growth related to Encompass closed loans and high single-digit growth from MERS registrations. As you look to the fourth quarter, it's important to remember typical seasonal impact on purchase volumes, which tend to be lighter in the fourth quarter relative to the second and third quarters.

In summary, the third quarter was -- once again grew revenues, adjusted operating income and adjusted earnings per share, building upon our record first half results and representing the best year-to-date performance in our company's history. And as we continue to strategically invest in our future, we have also returned over $1.7 billion to shareholders year-to-date. As we look to the end of the year and into 2026, we remain focused on extending our track record of growth and on creating value for our shareholders.

I'll be happy to take your questions during Q&A. But for now, I'll hand it over to Ben.

Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 8. Technology and innovation have been foundational to ICE since our inception. Our approach to AI is a natural extension of that legacy. We are using it to accelerate our existing 25-year automation journey by building and implementing tools to drive efficiency and deliver enhanced analytical insights for ICE and our customers. We are now taking the next step by combining our pursuit of workflow automation across our business processes with the solutions we provide to our clients through generative and agentic AI under the name of ICE Aurora.

As we continue to expand our AI capabilities, we're leveraging 3 core strengths: deep operational and complex workflow expertise; highly differentiated proprietary data, which we believe will only grow in value; and the powerful network effects of our platform. We started with a deep understanding of our data, workflows, task and document management as well as the rules and compliance frameworks of our businesses. We then conducted a risk assessment of how much automation can be applied to executing these workflows based on the impact, technical maturity, accuracy and model explainability in the AI tools available balanced against the risks of automation.

Similar to benchmarks used across industries to measure the scale of automation, we rank our automation within processes on a scale of 0 to 5. At 0, the process is entirely manual. At 5, the process is fully automated, including exception handling without requiring human input. We are applying this model to every workflow across ICE, bottom up, measuring exactly where we are today in terms of the maturity of AI models automating workflows with or without human intervention, and where we can get to based on the current state of the technology.

Currently, most generative or agentic AI models at their core are best at pattern recognition, and this recognition continues to evolve. This means there is a stochastic and probabilistic accuracy to them, measuring the reliability and predictability of the outcomes AI models produce. For the highly regulated businesses that we and our customers operate, there has to be an acknowledgment of how much accuracy a probabilistic outcome must have in order to be considered acceptable for full automation versus when some level of human interaction remains necessary, especially in exception handling.

Today, we have clear visibility of where we can go and are executing on this in many areas balanced by the risk I just outlined. That is our strategy and what our ICE Aurora platform is all about, and we're already seeing results across ICE. AI is streamlining and automating workflows across systems, accelerating product development and dramatically accelerating the speed with which we can deliver the modernization of multiple tech stacks within ICE. Importantly, we aim to do this without compromising our adherence to information security, data management and privacy.

In our energy markets, the macro AI and data center expansion trend is expected to drive significant energy demand over the next decade. We believe our trading and clearing platform, which offers deep liquidity and price transparency across the full energy spectrum, is uniquely positioned to support customers.

Despite lower overall market volatility, the third quarter of this year was the second strongest third quarter in our history, following the record quarter of a year ago, led by continued strength in our global gas and power markets, with third quarter volumes up 8% and 18% year-over-year, respectively.

As we've consistently said, open interest is a leading indicator of future growth, and we're pleased to see it continue trending higher with record futures Energy OI in October up 14% year-over-year, including 25% and 30% growth in our Brent and TTF benchmarks, respectively. This reflects the value of our diversified energy platform, the depth of our liquidity and the confidence customers place in our benchmarks, which serve as global price reference points across thousands of related contracts providing trusted price transparency across geographies.

Across our global gas portfolio, which spans North America, Europe and Asia, volumes have increased 20% year-to-date. Importantly, this strong year-to-date performance has been underpinned by broad-based strength, including a 16% increase in our North American complex, a 26% increase in our European portfolio and a 27% increase in our Asian JKM market.

In parallel, our power markets have seen continued growth, with volumes up 21% year-to-date and 18% in the quarter. This reinforces the synergy between our gas and power markets and the need for comprehensive risk management tools that offer transparency, flexibility and choice.

In Fixed Income and Data Services, driven by multiyear investments, our comprehensive platform delivered another quarter of record revenues, which grew 5% year-over-year, including 7% growth in recurring revenue and 10% growth in our data and network technology business. Our proprietary data is the cornerstone of our business and a key differentiator in the evolving AI landscape. With over 50 years of experience, our high-quality pricing and reference data serves as the foundation for what is today, one of the largest providers of fixed income indices globally. From benchmark indices and analytics to custom solutions, we support the full ETF ecosystem.

As AI becomes embedded in trading strategies across all areas of investing, we expect our proprietary data to grow in strategic importance, with our data sets providing a competitive edge to users of AI models that depend on precision, depth and large quantities of historical data. Our data is securely managed within ICE's infrastructure, protected by firewalls and entitlements. Our commercial agreements tightly control access and only permits specific use cases through authorized delivery channels. This approach helps ensure our data remains exclusive and strategically deployed, especially as models increasingly rely on high-quality inputs to drive performance.

In our reference data business, we're leveraging AI to process and validate documents from hundreds of sources, using AI models that we thoroughly test for fit-for-purpose and high probabilistic outcomes from Google, Meta, Amazon and several other AI models, achieving over 95% accuracy in extracting reference data from fixed income prospectus. This capability is a critical part of the collection process, improving both efficiency and speed of delivery, enabling us to do more with the same resources.

Today, within our reference data business alone, we are processing roughly 40,000 documents on average per month using AI. Documents assessed by AI that meet predefined confidence thresholds go straight into our database for clients to consume, while those falling below the threshold are flagged for manual review and intervention. This capability is a critical part of the collection process, improving both efficiency and speed of delivery, enabling us to do more with the same resources.

We're also leveraging machine learning to power key components of our evaluated pricing. Our continuous evaluated pricing blends trade and quote data to predict bond pricing, complementing our deep market expertise and data quality workflows. Additional models use historical data to determine bid-ask spreads across the bond universe, with machine learning capabilities significantly improving evaluation quality when measured against actual trades in the market.

Meanwhile, our ICE global network continues to set the standard for resiliency, latency and security, connecting participants to over 750 data sources and more than 150 trading venues, including ICE and the NYSE. The ICE Cloud comprises state-of-the-art data centers owned and operated by ICE and facilitate seamless integration with key third-party cloud providers, all under ICE's cybersecurity and operational resilience framework. This provides our clients flexibility to access AI workloads where it makes the most sense without compromising cyber and operational controls.

We continue to invest in our data centers to support business growth needs and to meet growing customer demand, including to support increased adoption of AI strategies. This is to ensure we are accessing the most cost-effective, secure and reliable infrastructure for ICE's needs and our customers' needs, both now and in the future.

Across product development, AI is automating data analysis, pattern recognition and repetitive processes using tools such as GitHub CoPilot, freeing product managers to focus on validation and enhancement. This has already accelerated speed to market for certain products. For example, we've reduced the time to convert code for index qualification, calculation and reporting by roughly 60%.

Demonstrating the new innovation underway across ICE, we're utilizing AI with our new sentiment indicator data sets including Reddit, Dow Jones and soon, Polymarket, with Google and Meta AI models helping to process these data sets and identify patterns. While still in the development phase, these data sets are particularly attractive to market participants seeking an edge through differentiated data inputs. This illustrates how our proprietary data set is set to become increasingly vital to a trading community reliant on models to support trading decisions.

In our mortgage business, the use of AI is helping our efforts to streamline the homeownership experience, enhancing productivity of lending and servicing operations, improving the borrower experience with self-service workflows, reducing risk via automated compliance and quality checks across the mortgage life cycle, all while improving recapture rates for our customers. All of this contributes to lowering the cost to originate and service alone for our customers, a foundational part of our mortgage strategy.

For example, customers using our industry standard loan servicing system, MSP, saved roughly 20% to 30% on the cost to service a loan based on a recently conducted customer study, and we expect this number will increase with new innovations that we have come to market or are coming to market, such as our enhanced customer service, loan boarding, ICE Business Intelligence for servicing and our loss mitigation [indiscernible]. This execution reinforces our clients' trust in us to enhance and streamline their business workflows through our workflow automation capabilities.

In the third quarter, despite a tough macro backdrop, revenues increased 4% year-over-year, while transaction revenue grew 12%. We also continued to win new clients, signing on 2 new clients to MSP, both already on Encompass, and building on the 2 we signed in the second quarter, including [ WM ]. We also signed 16 new Encompass clients, 5 of them already on MSP or an MSP subservicer.

We've also made significant progress in re-platforming MSP from the mainframe to ICE's modern tech stack to give us increased agility, cost efficiency and scale. Here, tools such as GitHub CoPilot have helped us achieve a significant improvement in productivity, helping us rewrite the entire user interface by the end of this year and migrate 30 million lines of code, with roughly 1/3 complete, and the remaining targeted to complete within 2 years. The original estimate to complete this project was baseline to take up to 7 years, similar to the move off the mainframe following our acquisition of Interactive Data Corporation. With the assistance of GitHub CoPilot and other AI-based code conversion tools, we have reduced the projected window to around half the time originally anticipated, a significant improvement to the speed with which we can now convert old technology processes to ICE's modern tech stack.

Another interesting area where we're applying our AI adoption model is in customer service. Here, we have evolved our capabilities to a level of conditional automation, one where there is significant automation but still requires human intervention for exception handling. We are using generative AI to provide predictions for a customer service representative on call intent and then call summarization.

We are next applying agentic AI to automate department handoff for issue handling. Then we plan to take this to the next level by adding a chat bot designed to go beyond search capabilities, one that also executes real action, such as payment scheduling for borrower self-service within our ICE mortgage technology servicing digital application. And we will work to expand even further with an intelligent virtual agent for certain issue resolution, where the maturity of the solutions and the quality of the probabilistic outcome is balanced against risk.

In summary, as ICE continues to enhance our leading technology, we do so with both the client and end consumer in mind as well as always considering what will make us more operationally efficient and deliver solutions that help automate workflows.

With that, I'll hand it over to Jeff.

Thank you, Ben. Please turn to Slide 9. Given ICE's recently announced investment and business relationship with Polymarket, I thought it might be helpful to explain our thinking on the evolution of markets.

ICE was an early investor in the crypto space, having been an early-stage funder of back and coin base. We made these investments in order to stay close to the evolution of the market's use of blockchain. In the case of [ BAC ], we thought that there could be an acceptance of a system of tokens that adhere to a high level of then existing securities and commodities regulation. We found, however, the traditional regulated financial firms were slow or unwilling to adopt tokens during a period of regulatory uncertainty, particularly where events of default would move unwanted tokens onto a financial guarantors balance sheet.

Current U.S. administration and Congress have been attempting to address these uncertainties, which has caused ICE to more actively lean into the knowledge that we've accumulated over the past decade. One of the significant macro trends of the past decade of blockchain investment is a rewiring of the rails of the banking system. ICE, for example, operates 6 clearing houses around the world, all of which are highly regulated and which are required to operate within the limitations of local banking hours, customs and preferences.

On chain banking now operates globally with 24/7 availability, allowing for instantaneous margin calls and trade liquidations. This facilitates increasing margining and lending against assets, which some cohorts of asset holders are clearly taking advantage of with increased risk management tolerances, and which places excess trade financing collateral into an omnibus stablecoin collateral pool. This excess collateral pool is funded by traders via the forfeiture of earnings on their collateral. Features that were previously unavailable to regulated clearing houses.

ICE decided to invest in Polymarket as we're impressed with the design of its underlying architecture of smart contracts that take advantage of this new banking infrastructure. Alongside our investment, we've also announced a strategic data agreement, under which ICE will become a global distributor of Polymarket's highly differentiated event-driven data. As the leader in nonsports prediction markets, Polymarket provides real-time probabilities on events like elections, economic indicators and cultural trends, offering a powerful new layer of insight, supporting more informed decision-making.

We believe that we can accelerate Polymarket's acceptance into the traditional financial system by virtue of our distribution, understanding and long-time customer relationships. And we believe Polymarket's engineering team can help ICE's engineers better understand our own adoption of evolving banking technology, a relationship that is already paying dividends to both of us.

ICE is in the process of rolling out an advanced clearing model for our global clearing houses, one that we've very elegantly named ICE Risk Model 2. Our new clearing system was built on the existing local banking and regulatory infrastructure for funds movement and collateral management. However, the current regulatory environment is being confronted by collateral management using tokens, which I believe will help evolve regulatory oversight to take advantage of 24/7 capital movement.

And ICE intends to be at the forefront of driving this evolution, given our own use case of operating 6 global clearing houses with different collateral and regulatory environments. Such an evolution can make global clearing and trade settlement more efficient. And we've seen that the efficient use of collateral typically results in increased trading volumes and transaction revenues. One does not have to look too far to see that trading volumes in the U.S. equities markets have dramatically increased since the industry freed-up collateral by moving from T+ 2-day to T+1 day settlement times.

Beyond the rewiring of funds movement, Polymarket has pioneered the rapid listing of new markets, driven by real-time consumer demand. Traditional exchanges have been subject to government approvals of our new product launches, which, at best, take 30 days. And in many countries, substantially longer. Polymarket is forcing a dialogue in the U.S. on how to minimize government regulatory burdens, so as to not impede innovators. We think this dialogue will ultimately benefit new product innovation for all markets, and certainly for ICE.

Now augmenting on Ben's comments on the adoption of artificial intelligence. We see the [ jag ] in intelligence phenomenon at play for both our own AI adoption and for that of our customers. Internally at ICE, we have our engineers using copilots to help them write code more effectively, particularly where the projects involve modernizing our legacy code. However, to fully deploy production code at scale and at the latency precision which ICE operates, we still require unique skill sets that are not now available in AI. So our current experience is that AI has become a good assistant for our teams, but not a replacement.

Ben also highlighted our use of AI in improving our customer service. Artificial intelligence has made our help desk more efficient at diagnosing real-time issues as well as cataloging and summarizing customer inputs to create more efficient feedback loops.

The third area where we deployed AI is in our data gathering and data organizations such as cataloging bond and equity prospectuses, cleansing our data sets and organizing unstructured data for our vast financial data offerings.

And lastly, much of the regulation that ICE is required to oversee is surveillance in the form of pattern recognition. Here, again, AI tools are making our colleagues more efficient at our oversight. So in summary, our internal use cases for AI have made our colleagues better at what they do.

In terms of our customer adoption of AI, we see that same [ jag ] in intelligence, where AI is very helpful in some areas, yet unreliable in others. Where our customers interface with ICE products for pattern recognition or language organization, we're seeing positive uptake. For example, we've seen healthy uptake of our structured and unstructured financial data offerings. Similarly, the AI tools that we've built into our mortgage network, such as our data and document automation and our customer engagement suite have strong interest, with customers adopting these tools to more efficiently target new business and minimize the cost of mortgage onboarding, but not to replace underwriting decisions that are subject to regulatory oversight or to replicate the vast ICE mortgage network that links the industry together, including the U.S. federal housing regulators supervisory efforts in validating GSE and Federal Home Loan Bank mortgage holdings and providing it with monthly mortgage service information.

Finally, a number of people have speculated to me that the overall volumes of trading must have increased due to AI adoption. While that's possible, I believe that a significantly larger volume impact has come from capital being freed up when moving equity settlement times 1 day forward and with the expansion of retail trading leverage that's inherent in popular 1-day options. So all in all, we think the current state of AI is helping to control costs and control new hiring in -- and is for us at the margin, driving sales and transaction growth.

Our record third quarter results on top of our extraordinary third quarter results of last year are another example of strong execution across our all-weather platform. We very intentionally positioned the company to provide customer solutions in numerous geographies and economic conditions to facilitate these all-weather results.

I'd like to end our prepared remarks by thanking our customers for their continued business, and thank you for your trust. And I'd also like to thank my colleagues at ICE for their contribution to the very best third quarter in our company's history, following on our unsurpassed first half results, and yielding the best year-to-date performance in the company's history.

I'll now turn the call back to our moderator, Lydia, and we'll conduct a question-and-answer session until 9:30 Eastern Time.

[Operator Instructions] Our first question today comes from Ken Worthington with JPMorgan.

Believe it or not, my question is on the impact of AI in the mortgage origination and servicing business, then really following up in your prepared remarks. So maybe first, how easy is it to incorporate the benefits of AI in MSP and Encompass given what their tech stacks look like today? You gave some examples, but can you get AI into all the areas you need to maximize your competitiveness?

And then maybe secondly, do you think AI can make it easier for perspective, ICE Mortgage Technology clients to pursue efficiency on their own? And does the hope of new technology extend the time it's taking for ICE to sign up new Encompass and MSP customers, particularly when thinking about large customers.

Thanks, Ken. It's Ben. I'll take this. I think the -- in my mind, the best way to summarize the impact of AI on our mortgage origination and servicing platforms is that it's enabled us to transition these platforms from what have historically been seen as systems of record to a system of intelligence.

And what do I mean? So when you think about these core platforms, we are orchestrating incredibly complex and highly regulated business processes and workflows. We alluded to it in the comments multiple times, both Jeff and I did, that we also have an incredible network attached to us, thousands of customers, hundreds of network service providers, 35,000 settlement agents, tens of thousands of notaries as an example. And we're orchestrating communication not only of those clients connecting to us, but as important, if not more important, connectivity between our clients. And we have the proprietary information on how to orchestrate that workflow and how to make it more robust.

We also own and maintain the most robust compliance and underwriting guideline databases in the industry, and that's the reference data that's required to really automate underwriting workflows, which we're doing through our DDA platform. We also own and maintain the most comprehensive set of closing guidelines and rules for every county in the country, which enables our electronic closing and the e-reporting of loan transactions in the business that we acquired with Simplifile. We've also have significant proprietary data -- derived data offer our platforms that helps to inform our business intelligence models and enable our clients to find more operational efficiencies and business efficiencies that our clients can benefit from.

So you take all of this together and how we're applying AI throughout each business process from a bottom-up perspective using that Aurora process that I had mentioned. Going through business process by business process, understanding what the probabilistic accuracy of a pattern recognition model that AI is providing and what's the business tolerance around the regulatory rules, the compliance associated to how much automation can be applied versus when human intervention needs to take place.

So we're extraordinarily well positioned to take advantage of this. And it shows up in our results. We had our highest quarter of the year in terms of sales in the third quarter. Across our ICE Mortgage Technology segment, we had 2 MSP clients, both of which are already on Encompass signed in the last quarter, and that's on top of the 2 that we had last quarter, including one of the largest lenders in the U.S. with United Wholesale Mortgage. And then we had 16 Encompass wins, 5 of which are on MSP or MSP subservicers that are really buying into our vision of the benefits of a front-to-back workflow. So we feel very well positioned, and we're looking at the funnel behind that, we feel like we're in a very strong position.

Our next question comes from Dan Fannon with Jefferies.

Another question here on Mortgage. Warren, you gave some near-term comments around the fourth quarter given Flagstar, but could you elaborate a bit more on the shorter-term dynamics and also PennyMac, which announced in the quarter that they would also be leaving your platform over time. What that contribution is today?

Sure. Thanks for the question, Dan. So in terms of the third quarter, which I think is what you're referring to, yes, we were a little bit lower by a few million dollars. There were 3 real reasons for that. So first, -- and we mentioned this a little bit last quarter, was there was the roll off of -- the typical roll-off of inactive loans on MSP. That came in a little bit higher than we anticipated. But that said, active loans on MSP ticked tire for the first time in a few quarters, too. So there was a positive there on that front.

And the second component of that too is, and you heard us talk a little bit this last couple of quarters, we did have some customers renew at slightly lower minimums than we had expected. But overall, we do continue to see the discount to prior minimums narrowing versus last year, and the percent of loans above the minimums are improving, which is helping our transaction fees.

And then third, we did have some implementations in the fourth and the first quarter of next year, just really all based on customer needs. But as Ben noted, we just noted we had the best quarter of the year for sales across the platform. Not all of those, of course, hit in the current quarter in the fourth quarter, but certainly a good forward-looking indicator for the business as you think about next year.

So all that together is nothing terribly significant on a stand-alone basis, but did have to a couple of revenues coming a bit lighter. And that sort of impacts the fourth quarter from a run rate standpoint and also some of the implementations too that I noted have an impact in the fourth quarter as well. And then, of course, as you mentioned, Flagstar, that will roll off in the fourth quarter, which has an impact, but we had mentioned that before.

In terms of PennyMac, I think the way to think about that is it's probably about 0.5 point of growth, but that won't be an impact for us until 2028. And to be clear, it's a 0.5 point on recurring revenue that, that would have an impact on. But -- and again, not until 2028, would we expect to see that.

Our next question comes from Ben Budish with Barclays.

Maybe following up on Jeff's commentary on Polymarket. I was wondering, maybe first, if you could give us any more details about the data licensing or redistribution arrangements? What sort of P&L impact might that look like? And then maybe you bought -- you took a big stake in the company, can you talk a bit about your longer-term plans? Do you have any plans to list event contracts. We've heard your competitor talking about that quite a bit. Or is this more about the partnership?

And maybe -- sorry to squeeze another one in there, but to what degree is that the blockchain technology itself part of the appeal rather than sort of a means to an end to access this type of trading type of new market data points?

This is Chris Edmonds. I'll take the first part of that and let Jeff pick up on some of the other parts of your questions. But on the sentiment analysis itself of the data has become an interesting feedback loop for our clients. We've seen a tremendous demand from our clients based on our experience with the Reddit data, the Dow Jones data that Ben referenced in his prepared comments. So now the ability to take those signals and actually create a market around that and then get the feedback loop from that activity that's happening on Polymarket really gives us an opportunity for a complete ecosystem around that, and that's driving the customer interest in that. And really what led us to the idea that we wanted to be a distributor of that data to make sure we had in our ecosystems for our clients to use.

And I think -- as I tried to -- this is Jeff. I think what I mentioned -- tried to convey in my prepared remarks was that we really believe Polymarket has done something particularly innovative and special in the way they have historically settled their contracts. And it's through blockchain non-intermediated settlement between 2 parties sending tokens on a second layer that they've been adopting that gives them some performance capabilities. And we wanted to learn more about that, get our engineers more involved in it because you can see the trends in traditional finance are that there are going to be more assets that are tokenized, potentially, bank deposits, and we won't think that, that will ultimately make its way into the clearing infrastructure and allow us to better run 24/7.

The thing for us, as I mentioned a couple of times in my prepared remarks, the fact that we have 6 clearing houses means that clients tend to keep excess collateral at all 6 because of the banking hours that are required to move capital around when those particular clearing houses are open. And we think, by having 24/7 collateral management, we'll be able to minimize overall collateral requirements for our customers. And that will feed its way into higher trading volumes, which is we have seen that correlation. And so it's in our interest to help make our customers trading more efficient.

I would just say separately, we built ICE over 20 years by really leaning into commercial users and the workflows that they have and the supply chains that exist around the globe and helping to manage risk of commercials. We've never been particularly potent in the retail space or even the high-frequency space. Others have focused on that, and we've been very, very commercial. So it's good to have a relationship with Polymarket because they're really educating us about how they have gone to market with retail customers, how they did essentially tremendous ground game marketing with -- without money assets at their disposal and really created a brand and brand awareness with a small balance sheet. And so again, we admire what they've done. We're trying to educate them on traditional finance while they educate us on consumer finance. And hopefully, that will pay dividends for both of us down the road, but it just made sense that the teams work together to really educate one another, and the hope that 1 and 1 makes 3.

Our next question comes from Patrick Moley with Piper Sandler.

Yes. Maybe just double clicking on Ben's question on Polymarket and just at kind of the contract level, in prediction markets, a lot of the volumes we've seen so far has been in sports contracts. There's been a lot of lawsuits and questions about whether regulators are going to allow that to proliferate, but it seems like in the next few years, if they do allow it to continue, you could see a lot of sports book volumes move on Exchange. So just wondering if you -- what you think -- how you see that playing out and what opportunity could present for Polymarket and ICE. And maybe just if you can talk about how you see sports contracts versus nonsports contracts and their applicability at the commercial level progressing from here?

Sure. This is Jeff again. Well, I reached out the [ Shane ], the founder of Polymarket, early in the summer after it became clear that the Trump administration and the U.S. Congress was going to validate much of what was being done in stablecoins and ultimately on the blockchain. And it was in that environment that we began conversation, and that was before the NFL football season. And we were attracted by their nonsports activities where they really are a global leader. And we really think that data and information, supply chain data, acts of God, weather, corporate actions, we think that kind of information is going to be very, very interesting to the traditional finance. In fact, we know it is. Anecdotally, Shane and I are very well aware of many institutional investors that are already scraping data or finding data and making its way into -- informally into their traditional decision-making.

And so sports was not something that really got our interest. I think it's great for Polymarket. If they can make a business around that and make earnings around that and certainly longer term for our equity stake in the business, that would be great. But we're not a venture firm. We don't -- you guys won't really reward us if we make a lot of money on that investment. Honestly, I think we'll be rewarded if we can bring the underlying technologies into our workflow and increase our sales revenue and manage our costs. And so long-winded way of saying good for Polymarket if they can navigate the sports complex, kind of not eye on our list in terms of what we're going to contribute to them and what they'll contribute to us.

Next question comes from Brian Bedell with Deutsche Bank.

Great. Maybe just back to mortgage. I just wanted to clarify, Warren, on the 4Q outlook, that the guide of, I think, flat revenue, 3Q to 4Q, was that the whole segment? Or was that just for recurring? I know you did mention the seasonality in transaction fees. So if you could just clarify that. And then just longer term, outlook on that build of the revenue synergy, what's been action so far? And are you sticking to the same time line on the integration? And then maybe just longer term, just comments around competition in the mortgage space from the blockchain and from blockchain providers. I know that's more futuristic, but just your thoughts on that.

All right, Brian, I'll try to hit the first 2 there and then hand it over to Ben. So yes, thank you for clarifying. So the comments in the script were referring to recurring revenue being around the same level as the third quarter. I did mention that, of course, there is a typical seasonal impact from just lower purchase volume that happens in sort of the winter months. You see that in the fourth and the first quarter of each year. So I don't -- I'm not trying to give a specific guidance on that. I just think because we don't know where volumes are ultimately going to be in a particular period. So it's more of just a helpful guide for you guys to just sort of think through that as you update your models.

I think your second question, if I remember, was around just maybe longer-term guidance. I think we'll give guidance on the fourth quarter call, of course, but the MBA is forecasting loan growth kind of in the high single-digit range right now. Industry originations will be slightly below the $6 million next year based on what they're seeing today. And I'm not confirming you're denying that, but that's kind of the information that's out there. So based on that, I would just point you back to the scenarios that we provided in the past where when we closed the Black Knight transaction that we would probably be more in the lower mid-single digit range in that kind of an environment. But that obviously can change as interest rates move -- mortgage rates move, that can obviously change pretty quickly. So we'll have to see as we get closer to guidance next year in terms of what we provide there.

Brian, I'll hit the competitive landscape question that you had towards the end. We -- customers, and I've said this in prior calls, customers continue to focus on having an independent, well-capitalized neutral technology provider to help develop and enhance this critical market infrastructure for them. And in particular, one that doesn't compete with them. And that's why we continue to have the sales success that we highlighted. Obviously, we've said it in this call, that we had the highest quarter in sales in the third quarter than we've had all year. So we're continuing to have a lot of success in there.

On the landscape itself, there was a question about PennyMac earlier. The reality is with PennyMac, just a little bit of history on that, that there was a long-standing dispute between PennyMac and Black Knight. An arbiter found that PennyMac used our confidential information to build a servicing system. So it wasn't a surprise to us, to be honest with you, after buying Black Knight, that they took an ownership stake in a platform, and they are trying to build a loan origination system to potentially move to over time. So it's not a surprise. But again, there's -- in our mind, it's not a neutral independent platform.

And then you have the [ Rocket ] conversation that we have, our understanding is that Rocket's moving their loans to their -- to a legacy Cooper platform mainframe system called [ LSAMS ]. It's not going to [ Sagen ]. And they've decided that they want to have their own proprietary custom system that is mainframe based to go to.

And then you look at platforms like we have with MERS, where MERS is a comprehensive platform, handles first and second loans. It's got legal standing within the mortgage processes. It's got proven expertise in the bankruptcy foreclosure space. It's an incredible business that's run with an independent Board. Board members that are part of the industry, and it's a great business for us. So you take all of that and then our positioning of where we're, again, an independent well-capitalized, proven technology provider for many, many different industries, and that we're neutral and don't compete with our customers, we think we're very well positioned.

Our next question comes from Alex Blostein with Goldman Sachs.

I was hoping to go back to one of the earlier points you made in prepared remarks around AI initiatives when it comes to the workflow automation, and you spent quite a bit of time talking through various processes. When you zoom out, I guess, what's the goal here? What in terms of actual savings you guys think this can produce for the firm? What's the time frame on that? And how are you thinking about either reinvesting some of these savings or letting them sort of drop down to the bottom line? And maybe sort of help us frame what that means for the firm's sort of profitability over time.

Alex, it's Ben. So we went through, and I alluded to in my prepared remarks that we have a strategy and a process that we're applying across ICE, that ICE Aurora platform. And for us, it's really about literally breaking down business process by business process internally that we have within ICE as well as the solutions that we're providing to customers. And figuring out on our automation scale, how much automation can be applied, where and when human intervention should be applied along that because we and our customers operate extraordinarily highly compliant regulated businesses in all of the areas where we operate.

And at the end of the day, these AI models, their pattern recognition software that have various levels of probabilistic outcomes and some are really -- some processes are really good and apt to be to move towards almost full automation, and there's others where you've got to have human intervention, especially in the exception handling process because in some areas like compliance checks, for example, in mortgage, it's going to be a very low level of tolerance accepted.

So what we're seeing through this is, are we seeing efficiency gains? Absolutely, we're seeing efficiency gains. Where, right now, our best guess from the way we've been applying is, is that we're going to be able to do more with the same, more with the same number of people. We're going to be able to speed to market as the types of offerings that we want to provide, the types of solutions that we want to provide to our customers. There's more and more demand for us to do more, and we think we'll be able to do that with the same head count that we've had historically.

Our next question comes from Ashish Sabadra with RBC Capital Markets.

This is [ Bill Chi ] on for Ashish Sabadra. Just with the continued strength we've seen on your data services and solutions businesses across ICE, can you maybe give a little bit of a commentary on the drivers there? Where maybe the appetite is coming from a customer perspective, either kind of quantity of data consumed versus pricing? And also with the development of the new kind of high-value data sets like the sentiment indicators, is that kind of another leg up, you'd say, kind of for driving growth in those segments?

It's Chris. I appreciate the question. I would suggest to you that it's more comprehensive than that. It's a complete playbook that you're getting to take advantage of on the client side, and that is what is resonating that. Certainly, the high-value assets that you made reference [ tier 1 ]. But if you look at the mission-critical data that we have across all of our Exchange space, going there, that's a foundation that people come to know and trust our ability to deliver that into their systems, given the delivery channel that they deem most appropriate at a given time. And the ability to add additional content, whether it's the new pieces we talked about or where they can get additional pieces of data from other sources.

As we said in the prepared remarks, we have 750 different data sources that can come across those different delivery mechanisms. We made investments, as Warren and Ben both said in the prepared remarks, in these capabilities. Those investments are paying off, and you're seeing the clients' ability to make those changes and incorporate these opportunities into their operational workflows.

We have no further questions. So I'd like to turn the call back over to Jeff Sprecher, Chair and CEO, for any closing comments.

Well, thank you, Lydia. I appreciate the way you managed the call today, and thank you all for joining us this morning.

I'd like to again thank all of my colleagues for delivering the best third quarter in our company's history and again, thank our customers for their continued business and for the trust they have in the way we manage our business. We'll be back soon to continue to update you. But meanwhile, we're going to be working to innovate for our customers and continue to build our all-weather business model. Thanks, and have a great day.

This now concludes our call. Thank you very much for joining. You may now disconnect your lines.