Intercontinental Exchange (ICE) 2 Feb 232022 Q4 Earnings call transcript

Hello, and welcome to the ICE Fourth Quarter 2022 Earnings Conference Call and Webcast. My name is Alex and I'll be coordinating the call today. [Operator Instructions]

I'll now hand over to your host, Katia Gonzalez, Investor Relations and Senior Analyst. Katia, please go ahead.

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

undertake forward-looking judgment current are subject and statements may represent assumptions and statements. risks, call to update, contain which Today's we uncertainties. no to obligation our These

the materially to description in with forward-looking described of could our For other those Form SEC. risks a and cause our please refer from that the results XXXX XX-K, to differ statements, filings

as to transaction that the regulatory to addition, see close ICE. Knight. a The we SEC the registration has Please proposed ICE common S-X of additional information in with last agreed to statement ICE ICE Form the In with half transaction. proxy to also transaction, S-X we the year, the Knight a is a this regarding has announced Form registration acquire expect connection of with register of the year. stock in first connection shares Black statement constitutes statement Black approval The transaction. filing the issued for customary In be of pending on prospectus and includes filed

believe to core our supplement, our earnings measures. reflective performance. In our non-GAAP more certain cash non-GAAP are we business refer measures and We of operations

of additional certain the notes expenses currency on this a of references share. our earnings growth You'll page adjusted constant per on the revenue on are items. refers explanatory the net call, the diluted to Please of this and otherwise used second for definition equivalent adjusted reconciliation When revenue basis. details supplement transaction-based earnings to revenue earnings find GAAP indicated, presentation, unless regarding terms refers a materials. in Throughout earnings the to to see net

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

to I'll the Warren. over call turn now

I'll thank begin with And key us our you of on the from everyone. for today. highlights four some joining results. morning, Good Katya. Thanks, Slide quarter fourth

billion and driven transaction $X.X year-over-year. of of million by revenues $XXX of $XXX revenues revenues Net were million, up X% recurring

year billion, $X.X versus the also For up last totaled year. full X% revenues

Fourth quarter EPS totaled including severance. we're fourth increase helped of million quarter to an range, of approximately This $X our versus and operating within guidance expenses strong $X.XX, additional full million, share and per XXXX. adjusted $XXX adjusted year performance adjusted of X% drive $X.XX earnings

strategic billion, return XXXX, $X.X to which shareholders free $X.X investments across totaled make to business. nearly cash flow a while billion record us our continuing to enabled also

dividend our growth. of to have addition, Board authorization track per quarter of by first we In our XX-year $X.XX XXXX, increase share, double digit received record extending in quarterly XX% beginning to the dividend

Slide segment. to performance overview five, I’ll of where our move let's the provide Now Exchange of an

were $XXX million. and revenues million commodities, $XXX net in Fourth revenues totaled in quarter of growth business. XX% derivatives part growth Transaction driven by XX% equity over agricultural in our

Importantly, natural trends open XX% in and in remain global including strong XX% growth in LIBOR. options growth our futures gas across January, and interest

increased business within growth include our our services, exchange in listings growth, in partially data Recurring and listings X% was NYSC fourth by slower business. particularly by Customer quarter. revenues, data which offset exchange energy year-over-year our the our

activity wide industry While relatively capital was muted. markets

more slower three combined. for listing a noting worth globe, last was years the companies year It's we transfers the despite IPOs, operating had record that including a year for in across XX,

and in segment, equity year a X%, derivatives, XX% XX% revenues For an rate increase exchange in including in the full our global a increase gas X% interest our natural by increase revenues. business, increased

data and to our Turning discuss I'll services six, now Slide income fixed segment.

to institutional in versus rates to continued Transaction to our XXX% growth last and including build a Similar million strong in bonds, up our quarter, record revenues a increased this $XXX growth was interest XX% efforts higher business. driven ICE totaled volatility, connectivity by market XX%, year Fourth bond by and our XX% ago. quarter CDS growth Clearing revenues platforms.

increased made performance impact fourth on to content network, enhance global desktop, in growth a and in offerings. well our excluding strong and the and services on both a Recurring key revenue across of for business as the was of of analytics by data growth Euronext X% feeds demand see This investments and network migration. our quarter, functionality. as driver is additional We're ICE driven the we've capacity beginning XX%, other X% which the return by

pressure our as slower offsetting equities year-over-year, Somewhat asset out a in business, and growth investors risk and in cycle and as base declined business, and from experiencing fee such we're digits bonds, shifted which ETFs. corporate of treasury sales index communities with slower assets, revenues pricing higher our end-of-day double

full record year, the total revenues totaled billion For $X.X XX%. segment, a up

Euronext. revenue adjusted recurring anticipated expanded after While for margins XXX year operating X% points, and by X% grew as adjusting it the was up basis for

Technology next where for revenues $XXX drive Fourth versus performance an quarter decline Technology Mortgage to discuss million. experienced year-over-year. and accounted segment I’ll $XXX which million seven, XX% Segment. grew nearly strong out XX% origination totaled revenues These Let's continue Slide of revenues Recurring go in our industry to revenues volumes. totaled that a two-thirds Mortgage recurring

by revenues less now XX% they've increased over Importantly, year-over-year.

in in billion, below in while are XX%. Technology our higher industry ago And XX% data totaled in year, of a pro Mortgage a years were $X.X XX%, forma seen revenues, our XX% XXXX Mortgage by increase those Technology recurring -- revenues. analytics representing and revenues roughly XXXX, three a full the XXXX increase volumes For nearly including revenues actually CAGR

some on Slide remarks additional guidance. I'll conclude with eight my

Recurring Mortgage adoption expecting workflow. growth, led to testament to high are revenues a Technology by mid be of the once single we XXXX our the across continued where digit mortgage again segment, automation were in

services digits. we once excluding In Euronext headwinds center million our data FX revenue to fixed related and again income growth, the approximately migration and data expect of segment, in $XX recurring the be to mid-single

to expect low the growth single recurring revenue cessation from we excluding segment, be a of in headwind Exchange digits. million our in lastly, $XX And LIBOR the

energy in growth continued is of and offset As fees. initial by data IPOs services fewer our listing the tapering XXXX exchange

the XXXX expense operating billion. to contributions and expenses $X.XX range prior expect we strong in be $X.XX Moving to $XX to will to therefore years, their expect cash to for by increase adjusted compensation our we employees million. Consistent with $XX results, expenses, our reward of approximately to

three Strategic licensees revenue operations by across million, our related increase driven as and to investments investments as by are in technology $XX expected to all initiatives segments. higher $XX of well

to noncash FX adjusted benefit expense, expenses CapEx. compared by Mae XXXX. to our rebuild we expect incremental In $XX roughly D&A of to lastly, million we $X addition, to approximately to an $XX related Ellie million expect the $XX million of $XX million million of including when And

flow delivered create we positioned we made meet and revenues, per the our enter summary, are operating our growth business, we again, to value evolving free deliver earnings and income, for customers, of year investments In our cash share. shareholders. well needs once strategic we in of XXXX, future Across another record and as growth profitable

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

and diversified we share, to results and environment, and macroeconomic model. Warren, and was earnings again X. us you XXXX you, a testament are Slide continued inflation, record operating marked that business our morning. once per interest resiliency turn rising year dynamic Please macroeconomic geopolitical to rates this Thank durability this joining grew uncertainty. a the and for rising strategically by thank Amidst revenues, income all of

and markets, complex financial central our rate rising been in our the environment in us In XX% growth bank in equity and business. presented that globe volume not futures rate generation, interest an our across inflation derivatives XX% helping activity has interest seen drive growth

across market America, reshaping unfolding Across the Europe, of global to North navigate. chain, triggered our new global for uncertainties Asia creating markets, and have Russia risks participants energy and events energy supply the a

American January Hub North drive natural with interest markets, also commercial natural to engagement helped has These gas, Henry North for America. global XX% and gas year-over-year, Europe from volumes gas global contract XX% has North in open global an markets. in trends This LNG, global led our chain liquefied energy basis not our gas have XX% supply XX% a or only evolving in with increased increased XXXX. growth increase has gas in growth includes our demand business, into continued including but which natural us In our American up in benefited

carbon trend markets we XXXX. growth in the XXXX factors, headwinds trend year aforementioned to is as experienced up to American year-over-year uniquely and our environmental in our secular X% markets the positioned a due continues are capture, in Although towards with volumes the European North cleaner record by energy evidenced

solutions, and term, largest we season data as products, emissions. climate carbon reduce is to allowances, long look providers longer the and fuel participants an that we've including of renewable environmental nature-based wealth environmental energy policy out is committed renewable evolution as remain over carbon contracts, into one corporates and the related certificates As to This the well of envisioned market analytics. of

many that future opportunities We lie are growth excited about ahead. the

Fixed our and to Services Moving Income business. Data

comprehensive strategic of revenues an business continues Our environments. deliver of of and underpinned transaction revenue growth, XXXX. growth to and This in year our ability record a another both diversification compounding through again to platform growth by and generate recurring strong macroeconomic was delivered growth array testament revenue to the our

revenues interest to in our record bonds lead full factors, build ICE and protection, with rates our Bonds to XXXX efforts nearly have are business bonds increase increasing in our record we year These continued revenues uncertainty market and trading up business. our an this Rising institutional XXX% credit continued activity demand driving for to connectivity year-over-year. seen to in -- to coupled in platforms,

our will electronification a mortgage through efficiency believe to Mortgage trend variety origination now continue a business, continued through workflow secular environments. Turning we increased is of

and digital Our and XXXX. result is leveraging strength This ability in evidenced strategy strength of recurring executing trend increased data conversion. our against this expertise a mission-critical continued our capture is the revenues, of XX% to to this our to analog of technology accelerate which by secular resiliency

of In conversations with volumes each centered on our have and quarter last the had wins sales service. to quarter, across origination customers system our major mortgage fourth of As we efficiencies in loan strongest normalized, new origination automation. have terms customer we of year segment increasingly

interest continues and in to data our increased quarter in full the in In addition, XXXX. year XX% analytics which and there XX% the products, be for increased

our by in and analytics Through analyzer tools data customers loan leveraging dollars AIQ thousands process. tools drive can our solution manufacturing per of save the loan to and automation

with resonate the our about are to the lenders, conversion. of opportunity continues and We offerings that the long-term optimistic remain digital analog we to to pleased accelerate value

now to the turn over I'll call Jeff.

and XX. by morning, Black Slide Good everyone, thank Ben. pending our us. you turn Please joining begin of you, for I acquisition Knight. to on want to Thank touching

of when this we transaction half close continued announcement, the first will making the communicated, believe during year. As this to that

But we importantly, the intend the to as matter, regulatory mortgage entities other with for Federal do them that we will and to remain and consumer Trade stakeholders cooperate to transaction. not about we to on across respect comment further Our bring combined on gain Commission's the the ecosystem. this excited the work efficiencies the approval, end

asset to one and any risk. to that or provide XXXX This shifting diversified our was of compounding on hedging across We've reflects exposure and growth tied year revenues, per income and track the another environment. on vein, record that marked downside We've geographies, our yet to classes transaction mix importantly, while subscription strategy. that In so to successful strategy of of of positioned of revenues and what have XXth record and, macroeconomic the record cyclical earnings more adjusted the intentionally a year, company trend operating record upside consecutive share. deliberately our we're execution quality not

company largest model conversion. with less The the volatility an name center that risk and a the has combination is top growth on that provides all-weather model to an digital made downside analog business business the placed what these some to upside undergoing of and, factors growth. We've a of at ICE generates importantly, of markets of

risk European XXXX, credit up in These rate also business, rate year-over-year, a revenues to speculation for default revenues of interest increase XX% conditions our as bank clearing in demand in credit example, central concerns activity for protection. inflationary drove the business, record and For swap our driving contributed volatility management market U.K. benefited increased year. and XX% full year and full

this interest outperformed business broader Again, our growth, of revenue Across backdrop reflection up model. the our driven market is our against nature mortgage recurring of business, year. rates, of rising a for even XX% business this the by all-weather the strong full

opportunities positioned on and look asset beyond, executing across remain occurring in cyclical to front on the our the record that we XXXX extending us, secular we on and trends track focused classes, growth As many are capitalize we're of growth. to and of

to to by thank I'd for our the like XXXX, their their best and company's their our to I conclude my want for thanking trust year and history. contributions colleagues in for business customers in

our a that, And with Alex, back session Time. I'll call will X:XX to who Eastern the until question-and-answer conduct operator, over turn

for from Rich, your Rich Our first today now Please Sandler. open. Piper go ahead. Instructions] line question Repetto [Operator comes from is

Jeff morning, strong I more markets the you about good wanted about how are. a Yes, made Warren. specifically and natural and energy gas. ask U.S. comments Ben lot gas natural to Ben, and of

You natural intervention and implemented up perspective, broader this government question to markets, But politics you're European can it. about the contract going caps it gas as have TTF XX%, volumes. price put But what that see in it it's of on of only in regulation into the and regulation. the natural Jeff, And issue the the gas the coming impacting volumes bigger do think, or this the been of ties sort one want it guess the to gas with well. in question right I anyway, of is and seems I but natural whole deal and

Rich, gas start, remember it's wellheads dependent Ben. you Great got and infrastructure. to a used that question. was be upon commodity to pipeline To that highly

chains it's supply very a infrastructure. localized, whenever And So there natural was really a to adjust product. all type those to type infrastructure, to attached used energy to very disruption difficult that gas, that to be of not of global very a rebalance chains is supply

to do well freely to gas as as supply is today, natural the much chain, as around benchmarks can saw much LNG long we've the continue this global the energy of there's And freight world natural global today, in product. advent LNG. We many ago, years regasification a pretty with energy gas LNG anywhere around the has to It's LNG business been forward a especially around and that expand Fast global this. very a capacity provides investing contracts. world, world flowed as contracts that be

off. where you many GTF very significant of was So saw if cut our Europe. to a oil, the time, supply growing At in same for part to gas balls significant difficult supplier market of natural specifically, around a where you more of in saw event supplies Russia look saw those continue data market It business. situation participants. and our Russia energy gas, had we at effectively particular, Ukraine, And subscriptions the created this. community our disruptions we last invades and grow more year unfortunate trading were high and and oil We of that more was in

U.S. Fast is Eastern And those those natural lost supplies. of a forward to have to Russian supply chains backfilling a lot XXXX, now because have LNG amount readjusted you gas commodity. Middle and of now gas a flowing significant LNG Europe, global

off are clarity ETF, which TTF already So X% year actually beginning it for the products comp pretty confidence interest year. bolster open this of roughly up trading market strong up at like see year, helped you in last XX%. Volumes has is the of of a and was

that like risk are around come now, need and of you can people events. specifically, there's online these regasification so all to gas Europe, macroeconomic point in it's tradable important right to more but Europe gas environments into out more that more Things kinds for efficiently. Now coming have manage

You've gas that facilities have filled. got -- storage Europe storage been across

so is been down. European Weather issue far demand year hasn't in this an Europe.

And all for into a and the you demand likely the physical last natural early was 'XXs. year LNG So first 'XX for China gas that it's 'XX, looming. for the since potential Chinese now is recession time intents to last economy, in year down closed, purposes, and time have in with the that's supplies it's a first reduce and reopening.

reopening, to is what So mean? that now the going with

we environment, also to fossil move gas tradable. where a in that. cleanest the the continues around the contracts being in And people They in LNG all be towards fuels that continue things of a have around can natural cleaner These can then are that, space, be basis around. demand. that And about high manage all the we macroeconomic forecast have you environments position Europe are help new and built feel few the invest in we've we traders that to contracts that to great with business

Now can caps, even the trade whole people issues difficulty introduce that through recently mentioned ESMA unfortunate cap the on I I price different price of around can manage consequences you last to manage call, have a bunch caps be to a people with comment for risk. it has of create a on went making and the out come risk. that can difficult for price

price set factors has of down. But participants. X these mentioned, issues said, is trading. now the I come market right times way of that the And TTF north that is can price where aforementioned the our create at for cap TTF for Now

decided new choice. we've provide to launching one U.K., now, TTF what the contract in look-alike a a to it's to customers do is So have Netherlands a the we're we in the

going that TTF contract that's LNG that have U.S. dollar-denominated. important trade are to used that, the those all basis out as those dollar-denominated It's contracts a contract to TTF point to another is the already. oftentimes we U.S. frontline. TTF because in contract It's called And also U.K. a U.K. already cleared trade the cargoes in contract alongside

for a manage us risk to already and clearing community have they us, contracts. we the a that. great. And free minimum hedge. are in At U.K. decide traders it, to market that attached house a it's settle it discovery If use to a price our provides So us mechanism of for in to

open. Fannon Please Our your now of Jefferies. line go next from Daniel ahead. question Daniel, is comes

XXXX, you're whether and fixed about outlook talk wanted as assuming think that's that those forward. the good I Can changes for headwinds you that bit 'XX. thinking and to follow how know morning. within about a I in cited you growth. headwinds going mid-single-digit Thanks, and on about the maybe And elaborate the on is? little some 'XX, data up pricing And where you've you're maybe growth income inputs the

Warren. Good Dan, question. it's

of So into for been as the and and that's years business, data we last ago, really next head there's the our targets for year. terms our in we not of consistent much expectations couple outlined the of pretty algorithm growth change years. A couple

be about new from there'll being price be There of a more. purchasing contributions So talked third customers that a of around certainly contributions the years, from current bit growth. customers, in prior will we little

years. think I so thinking algorithm about versus pretty And past year similar it's you're a if this

look, predict. AUM have I think specifically, mean, bit. particularly difficult weighed something two about little when I last us are fees, the quarters, to little XXXX we're bit thinking a a factors macro, have the that been those those on

don't income, I fixed like are could very class. a those where in going know exactly year. feel fixed we some become go stabilization. certainly to It attractive asset could see next quickly frankly, like And very areas income does

So customers. really having conversations look, good with we're some

a superstore, are indices, We if pricing. you data end-of-day We're will, we're

We have analytics.

business. diverse desktops. fees. got have really It's We We've got a

And ways with an we conversations opportunity than kind so with to maybe environment this us for it's to have us. of but customers save spend more are to in find

you've last And I talk of us think heard the that's couple something years. about

our really So at moment. But about of it's the that a we're lot environment certainly cognizant target. for there's again, customers different nothing our a challenging somewhat

what with going this Dan, jump Hi, color more on I'm is to a Warren Lynn. bit just said. in

ICE of particular, has the that. of of some really this for all-weather this segment think to the highlighted ability the challenges grow really underpin Warren segment, in name. in spite XX% And illustrates I nature the

but been the you CDS the business, of at tailwind, the side options. in a new and new our driver new business, including growth, execution also has products importantly, been products clearing has side our certainly of If CDS the volatility customer acquisition look of

institutional to in been our share. by year. driven the asset Institutional muni points into been alone, particular, QX we've with of bonds, In in XXX terms the full able plug And work market workflows. for in basis done is institutions of we've muni gain XXX% ICE to share about their really in XXXX, actually the up class, to XXX% in business grow we've the able

AUM data analytics fee products driving trends the and our some sales out capture of our the pricing into our obviously, slower as slightly products. in impacted income Now forces highlighted, business. lower Warren capture and of macro higher line, cycle have fixed

But the capacity, I other cycle. businesses slowdown in outsized if well would about and growth haven't And in of fueled derivatives XX% for data as didn't desktop talk be double-digit where our analytics in our we was which seen sales I in by demand business. a really as growth the the services up remiss this was performance fees our quarter, strong line,

at So more the the for compounding macroeconomic I to a couldn't in the when take positions grow, think all-weather a particular, optimistic variety of of ability you that step we overall, because and segment, look back segment in the about nature of name. be

Ken comes your Our next line is from Ken, now open. of Worthington JPMorgan. question

the a on Good question, wanted but into oil follow of for question. on I some a morning. taking Thanks being up that changes bit made to focus Maybe to the deeper there. with Rich's are dig

that in taking Russian You mentioned on levels adding were molecules call the maybe and highlighted you to activity last benchmark out reconstitution Brent. the the of

hurting Given the helping like that to or in thought? Russian reconstitution pretty oil continues you Europe, actively flow is

to secondly, in about to then added extent To we has drive this oil? even ICE making benchmark? product see Brent competing think Midland as do shift might to And inclusion share this I been Brent what and as relevant an Brent further think And more a WTI, you Brent. WTI

Thanks, Ken. Ben. right. It's yes, Great question. And you're

on supply I same seen cutting to now off. well a highlighted oil Middle markets have of that that has U.S., to flowing lost based Russia as and effectively natural been that where from similar have in in oil as address downstream that gas mentioned help Europe. gas Norway the the I that you with on Eastern off well, degree, had dynamic But some we TTF as products like oil You dynamic before cut getting some

have the of longer an -- Russian no molecules in gas into the that we contract deliverable So were we oil since announced half second year, example. seen what last as

it's in that then in of year. gas January since of grew open things the we the oil And deliveries year, of the to starting last the develop XXX% in end that end from this XX%. X One underneath of interest year is grown saw another the October covers

the bolstering of confidence oil, the So all to that and of that created. market products specificity once is like health showing gas back underlying return was coming

you the said, since up year. as well come beginning -- we're confidence whole a so the That have market back. seeing Brent's of

we So contract. about good feel that

Our chain around But is of supply the bunch changes years. why in all these last Brent we've options around well. world we've over making contract has also oil whole very the been different investments a of areas the few done had

we've ago, Futures oil years the to of on supply things Abu and price Dhabi some of backfilling, in one seeing out Middle That's the this supplies. into we're Russia happen Europe. Murban to priced are with that launched now a used ICE year. seen as the going year-to-date announced degree, to cuts of barrels we've contract. I that's Murban And being Middle Eastern feeding Eastern Two now, and is Eastern north Murban some barrels And Murban Middle from growth Asia. XX% Murban the development mentioned, historically interesting that is also oil And going

start a to there. off we're So great

a of that there. water very people was are oil to The positioned and that off, chain contract a Tons going a you hits and supply the start. physical to that oil, U.S. lot goes Midland WTI a over were perfect into to Midland hedge is TI traders use well the prices, lot launched And that contract ago. that again, Europe, is And year Russian for backfilling to to we with Houston a contract cargoes in oil of going of it, dynamic off that Europe. that highlighted, that product cut it's of great we

positioned with Midland the index. then of at the into traded Midland be is in barrels that And Brent TI coming to year, midpoint this those to Brent perfectly parallel contract

positioned very well positioned around growth. chain there oil for and the we with all of we've anticipation changes, and in well of think making we we're potential been So feel investments supply in

Our your is next open. Chris comes Citi. line now Allen question of Please ahead. go from Chris,

morning, to ask Good I Tech everyone. revenue about wanted outlook. recurring Mortgage

in to sales conversations somewhat with of terms we're decline at bright noted the your albeit having just still to levels. terms spots continue you're some growth, pace the comments of the in in seeing seeing, You this customers, of of some -- healthy you're but

you mortgage kind have single was the industry into coming during busy very noted the slowdown, been of And the upturn. that mortgage

the set downturn going occurred, opportunity revenue to almost growth. efficiency that of an Now improve an to was it's that there acceleration recurring there

So the penetration dampening Mortgage decline just of the maybe could out overall kind in set in growth being Tech forward? of What's outlook. driven in terms What's right frame opportunity industry you the customer kind the further of revenue going terms of the of now?

Thank a for we're out, to important it's enable build question. time. the and some X% over always question. I you highlight, And to building Great blocks to point you. Thank business XX% that to that long this you're looking period fundamental build grow business and of this And right.

So we've made a very concerted effort.

more more make predictable strategy and model that of move to to the subscription more much is that. revenue transaction underneath towards big of move concerted cornerstones the One a business

about X% approximately. environment subscription were XX% sequentially, fact fourth able and given feel down down the quarter to And grow volumes an were we XX% good the of they in revenue we've the of been that backdrop where

environment, to downturn I'll mortgage we're did happen did. the the highlight, fast be able expect deep as or as as it. the grow to And first didn't that in to rapidly as it So it and still as industry

We've of have coming business. gone some we seen clients consolidate, true on our So up M&A seen clients for that with renewal. are some through

a of offsetting so give forward. some the going But had enabled items seen that, business. has have us those into the us And to grow some we've grow That to number and we've created headwinds business ability different that the due factors. to in cancellations confidence

of at XX% they subscription to last revenue first cross-selling at towards more to north had renewals strategy -- quarter that also the thing our success shift our in more The beginning quarter, higher of is did them than clients the transaction subscription intentionally to of we more the due rates renewed and of clients. products

The very and we encompassed a had second quarter sales. strong is

couple the in we've XXXX different of in had quarter. fourth of And of all a the fact, that seen quarter strongest was In we areas. that

we So the we different that across it segments all saw cover.

also brokers, lot I of companies a think banks, us. we coming credit non-bank new originators, of unions. But start-up So saw to

people mortgage impacted are we're environment, their So downsized it to shops. a becoming of to of employees with in we unfortunate to with the win market some those very lower start, point subscription several them grow that back positioned business, in own mortgage And backdrop have well getting albeit this at ability be as snap at fee mortgage this starting entrepreneurs, the time. will may but up

a We large also home been running of that. upgrade infrastructure that to see, that lending in-house -- legacy and lot that systems large banks, just of large looking for years replace that the they've a out looking there's future lot are banks into have

and the We growth think into that make really our in about investments to XXXX, we lead funnel those factors companies the future. to reflects will continue which that, here are prospects going to good looking for feel us

as So little as of bit happened good well of that's color the why a going quarter in fourth what forward. our prospects feel we about

And step Jeff. this I if -- you back think is

essentially the of same the versus they a industry model, where single every carte of and $X put of mortgage mortgage with fundamental model we're cost costs are step a la first-time SaaS back, what to model current is talking services If shift of the the out in subscription-based million in more a is assemble of mortgage a together manufacture homebuyers system. system, a instead and cost to the a mortgages the move to way industry take about the you the to

is their more can us can that analog which sense costs give markets just predictable is the be the their it other business they have moved if allocate way way digital. And done makes from proportionately we digital that of responsive across markets customers their a in industry to most and or more businesses, operating business, to to

Our next line Alex, Alex question of is comes Kramm from UBS. your now open.

Good everyone. morning,

Just wanted price peers, in, at to not of in them that the data about the seeing business. When holistically across you because some ask pricing the maybe inflation. space of desktop but increases services some you're space, your of look we're

have in increase primary to side seems been usual taken price Your a the futures this peer year. also than bigger trading

seems it you're look like and afraid like that all of some you're more. to leaving turn this bit you lever put you the little business, when bit money little your So on together table a at a kind and

that's wondering all the evolving it is higher if just inflationary driving your cost as environment So given you're obviously well? thinking, higher

value on. and going the year. We've peers to good going changed, question. they've our not seen there the with to philosophy particular the done pricing front. when on It's some out hasn't that Warren. this that's of price, this what come that added And It's is Alex, and to increase we're a certainly will increasing price that always been change we're that, product it

I that's be better think is and the what that from this our strategy operate to we're long-term perspective, way, year. doing going to

on this Services there we're that have And of pretty bit how how it's approaching contracts, Fixed a wasn't benchmarked are year. day, fluctuate. Data amount inflation. really the notice the little don't at of much much you'd the we depending earlier and immaterial to I Income But on side, the day, at in the mentioned small that end difference of will do that that think We really end terms a of

it's I that pretty say consistent. would So on front,

and and looking thinking frankly. On about, thinking certainly this haven't where about lever that something always as an up always at pulled the option. we something have in again, there side, we we've instances the been on we're until it. futures point, done But past it's But really are

what much others there wouldn't change. necessary But I a been So that's doing. the out yes, of have that's that's some and certainly something of on

delivering amount mention a make costs we resources. to and own investments just continue on underneath allocate cost I the that products And to would personnel tremendous but and of of prudent this focused is spend our these Jeff. time and

to we've if notice, groups, increases moving will, are unpredictable of the the most you in cloud the we've where largest exchange may of you those -- been cautious, rises major all business cost been the the most We've seen areas and cost. because

way to products to that but continued customers efficient. in a very very, conservative have trying we be to delivering cost in want way our our is So do see the it them

Please Alex Our go next line now from of open. question Sachs. is Goldman ahead. Alex, comes Blostein your

again? And morning. talk environmentals a to just go for hoping in the you Hi, I space. could energy in market of of environmental are life here What of it kind going that bit. in for And about 'XX? question. January. everybody see the It’s to products the back TTF to I coming guess, complex take of the kind Thanks back to the some the what some would guys I good the dynamics dynamics get, was great want to for

Thanks, position really really, have we environmental about Alex. the feel we It's in And Ben. marketplace. great the

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So relationship we see symbiotic a there.

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Atlantic open. Our Clinch question line comes from next Equities. Simon, Simon is your now of

as And shift as revenue line the that recurring was question. should to looking time, specifically increasingly to just for business. to the mortgage wanted you're revenue I Thanks revenues, my looking streams towards cycle at rebound? taking start the at back look -- do transaction wanting we your over to I just

there streams? transaction those because revenues should should that between the industry we're mortgage of versus -- of zero is to recurring point. -- volumes on understand revenues narrow assume the Just secondly, transaction dynamic sort of outgrowth then to revenues And right we recurring effectively versus shifting of all and the level to this that's your and trying revenue business the going at

Ben. Simon, Sure. it's

pieces couple So a I'll question to there's different that that cover. of

to willing transaction we we on some have give said that So are revenue, today. up have transaction we revenue

that, revenue to revenue When recurring lower that towards associated shift "success" where some fee more if degree codified, we there's to to and clients predictable a that. is fee. example, for transactional a loan a of but that take, that do more So we'll our -- us, for

time, and is early Encompass some for of that, continue to impact mature transaction because to closing those, suite showing recurring, of but So revenues. continuing a tilted some that in be transaction item to will and analytics around -- which incremental more short-term signs subscription. the to success, of were But in cross-selling that also our then our continuing ability some cross-sell -- very invest stable we other transaction like services there line we're At X,XXX which services whole have revenues. we've offerings, data we we're our towards same stages transaction our they're our those transactions add that existing are example, great much of world, to the things to have which are to of are as customers, that we some on we're

to business us will there. enable to for a that the term XX% model long continue X% grow longer So more there's believe a period business of a predictable year to mix at covers But a underneath for having we time. the the

from Siegenthaler Craig of line from comes Bank now is Craig, question open. your next Our America.

Mortgage I since And sales on What several in increase XQ Wells quarters? that the the products are and Tech which commentary the come Ben's thinking sales seeing of XQ? I'm the Fargo last quarter most probably given exits you the everyone. under announcements prior and is strongest versus back the morning, also Good pressure wanted to biggest, products to year. front XQ drove residential in mortgage the world, downsizes is in

Thanks for the question, Craig.

I'll of in strength, go first, I'll so then we -- what just saw sales XXXX terms the fourth in quarter. lot about of a talk I'll So

lowering our AIQ, for hopefully, cost the to those clients as the new whole, of cost comments loan had clients year a good quarter automation of each throughout that's entire passed to service that in and lowering that hopefully a made XXXX a that's very the -- a quarter. So that strong on manufacturing consumer. cost our onto was end savings manufacturing the their Again, before. And of selling lot platform. along Jeff the get We

core It that interesting Encompass our that product in the quarter. drove fourth that was sales actually dynamic. strength In an quarter, fourth it was had the the we --

that So unions, are that, infrastructure. client that things the with happening that, this invest using you they're M&A, banks see non-bank is have credit The you originators, in some mix. customers do while to parallel have are that we lot consolidating, one, a what of seeing that's two have we're in some you time downsizing

they systems, to when for in be they're market often is ready what unseating, looking for back. have So invest if which to in-house example, this their snaps we're infrastructure

these shops, impacted start them of lot well. to a them by is, at a back. we that that win they as seeing then And We're Looking as as when and downsizings. investments banks employees that thing forward, market mentioned, they're making we're that, are shops. looking business we're entrepreneurs, And big well seeing at looking that funnel new the position snaps to have and I know new positioned starting going infrastructure the that of at other our as the well lot are

-- the ready people when are to of So we're a right the and And the now taking very comes for strain in entire system invest market well back. taking the spectrum. opportunity advantage there positioned we be where is across see people

of Our next open. Bank. your line Brian Bedell comes Brian, from now Deutsche question is

revenues thinking be on been mostly of back my muni in million such have a folks. if about traction within about Great. growing year-over-year wanted question. strong market good. taking in annual more doubling good the quarters. little fixed maybe like it It's than the business And just reaching within the morning couple turn a a that to you when a grow income Is continues munis? can for of growth if it the been of business million I the sequentially, on quarter really business good $XXX data, this, And a mix annual trajectory. can and trading. revenue bit gains to sustainability business. a share to been basis, more Thanks Thanks, described $XXX you munis I has will it talk second and know

sense think trying just momentum a you get So the can this and drivers that of to behind if continue?

for Thanks question. Yes. the

share we've the muni from in has came the of business XX% side As of out help business, really in but achieved what's I institutional gains this certainly volatility the institutional activity mentioned, QX accounts. growth. a lot our of did been the driving

platforms. different So to started that's up these from all acquire XX% in XXXX when we of

footprint. institutional been really we've So able to increased

of decisions the within also think lot workflow platforms the into We into of do with be of outperformed couple deliberate in providers classes the and CDs. see thing to variety a we workflow-agnostic, XXXX. to solutions variety a really a to years plumb took I work our of ago have fruit beared And segment Those in plumbing the is institutional volatility-driven. asset to accounts. a two that do But the get toughest opportunities have execution treasuries to

asset diversified executing us trader So when just a multiple fixed about It's now munis market, classes your the volatility platform trader income. sees that came was traditional it retail corporates. about institutional as in that wasn't across and into the the

line now Michael Our ahead. Stanley. is of next your comes from Michael, question Morgan go Cyprys open. Please

circle Technology. I to back on wanted Mortgage Thanks. Great.

portion unpack be me, unit that gains XXXX, portion recurring was was where with do to With growth, transactional expanding existing existing single-digit is growth you from growth might new the what services high Mortgage I the your they when sides mid-teens to how share growth unit from wallet the in and revenues about of XX% from revenue growth able 'XX mix recurring evolving to help -- in recurring to you look to there the outlook you. ahead you are you're And recurring up the your versus see from from what excuse hoping Tech, customers into versus side. offering customers revenue from Thank coming on 'XX? mid- that revenue them of then current versions

Thank it's you, Michael. Ben. And a on It's it. mix

the in elements asked question. way the of some on hit you You the

So a that there's our on to of this have customers, when are has utilizing services, been stable that tremendous our lenders the you significant X,XXX opportunity platform view and our cross-sell.

And one customer our the of base. driving the revenue continuing sell recurring is we success things to that's in platform that really that AIQ have growth into

to way to go being that be provide more in long they ever. those efficiency to than now able a able have need We penetrate and them lenders the X,XXX

acquired, our So future. to since how the former cross-sell business on we about feel and to we've we the ahead ability date forward good and Mae Ellie executed looking it into

sales. new is other The thing

other new that come So can adding to have third-party on those Customers we analysis providers. continue utilize success customers. and offering to AIQ, great

answered And question go that. we customers So continue A questions we that Encompass. a continue add of to here. to And on I to success there. also have couple new just on

to our replace through. needs. the credit those win major union, we as see continue placed we non-bank believe platform a all spectrum, that business it's made And to of we looking very great Encompass originator, the a clients' success to positioned segments the think is or we the U.S. entire lot also in-house we've we start-up meet home whether very in whether we're infrastructure, lenders as investments well in a that company, well legacy well. different established we're bank for a in Whether across the to So the an have broker sell it's a it's

drivers So having well as relatively as low attrition. it's key those -- very are the

We for these operating platform are businesses. core a

or business going happening, they're M&A So business. out of not unless there's we're that's losing

Thank you.

no have for We further today. questions

remarks. So I will for Sprecher further hand back to any Jeff

Thank Well, joining us for you you, Alex. this thank here morning. all

and all-weather growth. business We to for and our innovate model are an continuing build delivery customers

you'll I hope so appreciate us. great And with have with that, and day your being a

joining you call. Thank today's for

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