Intercontinental Exchange, Inc. (NYSE:ICE) Q3 2023 Earnings Call Transcript

Intercontinental Exchange, Inc. (NYSE:ICE) Q3 2023 Earnings Call Transcript November 2, 2023

Intercontinental Exchange, Inc. beats earnings expectations. Reported EPS is $1.46, expectations were $1.39.

Operator: Welcome to the ICE Third Quarter 2023 Earnings Conference Call and Webcast. My name is Lauren, and I will be coordinating your call today. There will be opportunity for questions at the end of the presentation. [Operator Instructions] I will now hand you over to your host, Katia Gonzalez, Manager of Investor Relations to begin. Please go ahead.

Katia Gonzalez: Good morning. ICE’s third quarter 2023 earnings release and presentation can be found in the Investors section of the 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 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 2022 Form 10-K, third 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.

A team of mortgage originators using a closing solution platform for quick and accurate mortgage processing.

You’ll find a reconciliation to the equivalent GAAP terms in our 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; and Lynn Martin, President of NYSE. I’ll now turn the call over to Warren.

Warren Gardiner: 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 third quarter results. Third quarter adjusted earnings per share was a record, totaling $1.46, up 11% year-over-year. Net revenues totaled $2 billion and on a pro forma basis, increased 4% versus last year, driven by double-digit growth in our Exchange segment which was led by 22% growth in our futures platform. Third quarter adjusted operating expenses totaled $812 million, including $56 million related to Black Knight and $756 million related to legacy ICE, which was $4 million below the – of our original guidance range, largely driven by lower technology spend, including reduced cloud exposure as we continue to optimize and drive efficiency through our data center footprint.

As we move into the fourth quarter, we expected adjusted operating expenses to be in the range of $955 million to $965 million, with the increase relative to the third quarter, driven by additional rent, D&A and seasonality and capitalized labor as well as a full quarter of expense related to Black Knight. Moving below the line. Adjusted nonoperating expense totaled $114 million, including $41 million of incremental interest expense related to our acquisition of Black Knight. We expect adjusted nonoperating expense in the fourth quarter to between $225 million and $230 million, largely driven by the full core impact of acquisition-related interest expense. It is also worth noting that we have reduced our term loan and CP outstanding by around $700 million since transaction closed in early September.

Now let’s turn to Slide 5, where I’ll provide an overview of the performance of our Exchange segment. Third quarter net revenues totaled $1.1 billion, up 10% year-over-year. Transaction revenues of $754 million were up 13%, driven by 42% growth in our energy revenues. This strong performance included 48% growth in global natural gas driven by a record quarter of TTF volumes. In addition, we continue to see robust trends across our global oil business with ADV up 40% year-over-year in the third quarter and open interest at the end of October, up 26% year-over-year. As we look to the fourth quarter, it’s worth noting that we expect OTC and other revenue to be in the range of $70 million to $75 million, with the third quarter benefiting from a few items that we don’t anticipate will repeat.

In addition, and in light of the strong performance in our equity options business, where revenues are up 15% year-to-date, we’ve elected to a regulatory fee holiday, which will temporarily reduce OTC and other revenues by $10 million to $15 million in the fourth quarter. Shifting away from transaction revenues. Recurring revenues increased by 4% year-over-year, including 8% growth in Exchange data services. which is once again driven by double-digit growth in the number of customers consuming our global energy and environmental data as well as a benefit of a few million dollars related to audit recoveries, which we don’t expect will repeat in the fourth quarter. This was partially offset by our listings business where growth in annual listing fees was offset by the rolling off of initial listings fees related to the strong IPO market in 2021.

Turning now to Slide 6, I’ll discuss our Fixed Income and Data Services segment. Third quarter revenues totaled $559 million, up 4% versus a year ago. Transaction revenues increased by 6%, including 9% growth in ICE bonds and 5% growth in our CDS clearing business. Excluding the impact of the Euronext migration, both recurring revenues and ASV grew by 4%, driven by strong growth across our desktop, feeds and derivative analytics offerings. Within our desktop business, revenues once again grew double digits as we continue to see strong demand from energy and environmental-focused customers as well as the continued robust growth in our ICE chat offering in part driven by growing adoption of large language models. In our consolidated feeds business, we once again grew high single digits and expect to exceed $100 million of revenue for the full year as we continue to realize the benefits of past investments to enhance our platform.

In our fixed income, data and analytics business, we generated a record $279 million in the third quarter with sequential growth in revenue driven by our North American pricing and reference data business or PRD. While PRD growth may continue to be below trend in the near term, we’re seeing signs of an improved sales cycle alongside strong retention. Let’s go next to Slide 7, where I will discuss our Mortgage Technology segment. Third quarter Mortgage Technology revenues totaled $330 million, including $87 million related to Black Knight. Recurring revenues totaled $235 million and on a pro forma basis, $396 million, representing nearly 80% of total pro forma segment revenues. Despite the headwinds facing the mortgage industry and the related near-term pressure on our recurring revenues, sales continued to be robust as customers look to reshape and modernize how they do business.

Through October, we have already surpassed our prior full year record for new Encompass sales, which was set in 2020. In our servicing solutions business, the closing of the Black Knight transaction has unlocked the pipeline with four new MSP customers signed October alone, including a top 25 servicer, Fifth Bank. This compares to a total of five signings through the first nine months of the year and has quickly put 2023 on track to be the second best year for MSP sales since 2017. In addition, as we look to 2024 and continuing the momentum, we have seen post close, the current pipeline for MSP is at its highest level in five years. While we expect the secular trend of customers seeking greater efficiency across their workflows to continue, it’s important to note that these strong sales results will take time to implement.

And looking to the fourth quarter, we anticipate near-term cyclical headwinds will persist, coupled with typical seasonal pressures on origination volumes in the first and fourth quarters of each year, we expect the total fourth quarter IMT revenues will be in the range of $490 million to $500 million, bringing full year pro forma – revenues to approximately $2.06 billion and in the middle of the guidance range we provided on our Black Knight closing call in late September. In summary, at a consolidated ICE level, we once again grew revenues, adjusted operating income and adjusted earnings per share. And as we look to the end of the year and into 2024, we remain focused on meeting the needs of our customers, continuing to drive growth and to create value for our shareholders.

I’ll be happy to take your questions during Q&A. For now, I’ll hand it over to Ben.

Benjamin Jackson: Thank you, Warren, and thank you all for joining us this morning. Please turn to Slide 8. I would like to first welcome the Black Knight team to their first ICE earnings call. While it has been less than two months since we closed on the acquisition in early September, we’ve been very impressed by the collaboration between our teams during this short time, a testament to the talent of our respective employee populations and our shared entrepreneurial cultures. Similar to our exchanges and fixed income businesses, Black Knight integrated into our ICE Mortgage Technology network, a network that thrives by offering a value proposition that aligns growth with efficiency gains that we bring to our customers. As we have seen across our network in futures and fixed income, these efficiency gains are best achieved through harnessing unstructured data to create mission-critical information, seamlessly linking participants to that information and ensuring that the network technology underpinning are of the highest quality and security.

It is the execution of this value proposition that often propels an analog to digital conversion of an industry, and it is a blueprint we’ve applied across all our businesses. A number of years ago, we saw the importance of investing in an energy platform that is truly global, one that better serves the needs of an evolving and growing commercial customer base. Today, as trade dynamics evolve and become increasingly complex, customers are not only seeking liquidity in the major gold benchmarks, but also in products that provide for greater hedging pursuit. Our global oil complex spans over 700 products, including locational spreads, product spreads and refining spreads. These products are built off of our benchmark contracts, such as Brent crude oil and gas oil.

Driven by the breadth of our commercial customer base, we have become the natural home for liquidity in these products with open interest in our oil complex up 26% year-over-year through the end of October, including a 28% increase in our other crude and refined products. In our natural gas markets, we began investing in the globalization of these markets over a decade ago. Today, our European TTF and Asian JKM gas complexes continue to grow and reach important milestones as they evolve into global gas benchmarks. In the third quarter, the number of participants in each market grew double digits year-over-year and TTF reached another quarter of record volumes. This strong performance helped drive record revenues across our natural gas complex through the first nine months of 2023, up 37% year-over-year.

In addition – interest trends for TTF and JKM remained strong through October, up 58% and 19% year-over-year, respectively. This strength continues to underscore the significance of our contracts to the price formation of global natural gas. We are well positioned to both benefit from the near-term volatility and the long-term secular growth trends occurring across these markets because we operate a global gas market with benchmarks across North America, Europe and Asia. In our environmental markets, we recognize the importance of carbon price transparency over 10 years ago by acquiring the Climate Exchange in 2010 and building around those leading markets to develop a global environmental business. As we look out over the longer term, corporates and market participants remain committed to environmental policy to reduce carbon emissions.

This is illustrated by continued growth in active market participants, up 9% year-over-year. Importantly, because we offer one of the broadest suites of environmental products across the carbon cycle, we remain excited about our position to serve customers as they navigate the journey to clean energy and as the demand for transparent pricing in carbon grows. In summary, these cleaner energy sources combined, including global natural gas and environmental make up over 40% of our energy revenues today and have grown 17% on average over the past five years, including a 30% growth year-to-date. As the clean energy transition continues to introduce new complexities, uncertainties and volatility to energy markets, our global environmentals, alongside our gas and oil complexes, will provide the price transparency across the energy spectrum needed to manage these evolving risks.

Moving to our Fixed Income and Data Services business. As fixed income markets electronify and passive investing grows, our comprehensive all-weather platform continues to generate compounding revenue growth, up 7% year-to-date. Investments we’ve made to enhance content and functionality across our other data and network services business continue to pay dividends. Year-to-date, this part of our business is up 7%, driven by strength across our desktop, derivatives analytics and feed offerings as customers continue to modernize workflows. Within our desktops business, the investments we have made to reduce friction across the workflow have contributed to double-digit revenue growth year-to-date, along with double-digit growth in the number of users that connect to our ICE Chat platform.

Similarly, within our consolidated feeds business, investments we’ve made to elevate and enhance our offering have led to accelerating adoption by large financial institutions. This has directly contributed to high single-digit growth in this area year-to-date. In addition, we continue to see strength in our index business driven by double-digit growth in ETF assets under management as of the end of the third quarter, with now over $0.5 trillion in assets selecting ICE indices as the passive benchmark. As we move forward, we will continue to build on our track record of adding efficiencies and bringing transparency to opaque asset classes, leveraging our mission-critical data assets and market-leading technology. Turning now to our mortgage business.

Like what we saw in the commodity markets 20 years ago, there’s an analog to digital conversion occurring in the U.S. residential mortgage industry. Critical to our ability to execute on this opportunity is our network, one that in combination with Black Knight, spans from consumer acquisition all the way through to the secondary market. In the third quarter, our mortgage business once again outperformed the broader industry that experienced a nearly 20% decline in origination volumes. This continued outperformance is a result of executing against our strategy of leveraging our mission-critical technology and data expertise to accelerate the analog to digital conversion happening in the industry. Part of that strategy is intentionally shifting more business to recurring revenue, particularly within our origination technology and data and analytics business.

And during the third quarter, of the Encompass customers that came up for renewal, roughly 60% increase their base subscriptions. Importantly, where customers decline in subscriptions, the trade-off is a higher per closed loan fee, which will provide an uplift in transaction revenues when the market returns. In addition, part of our thesis has been at clients that have origination businesses, combined with servicing businesses, we want to bring together a complete front-to-back experience for their clients through one trusted platform provider. As mentioned last quarter, JPMorgan Chase has selected Encompass for their loan origination system across all channels and has implemented or is implementing our data and document automation platform.

These wins are on top of a long-standing, great relationship with MSP for servicing, which now positions us to provide a platform to help facilitate their front-to-back experience for their clients. And since we closed on Black Knight, I am pleased to share two new wins along the same lines. First, M&T Bank has now selected Encompass to replace their existing loan origination platform and has added our data and document automation platform on top of the existing MSP relationship for servicing, again, positioning us to provide our platform to support the front-to-back experience for their clients. The second new win is with Fifth Third Bank. We have cross-sold MSP and several data and analytics products to Fifth Third Bank, an existing IMT customer, our consumer engagement solutions and all regs product.

In summary, these are major wins for us and serve as a validation of our vision with large clients bringing together a complete front-to-back experience for their clients through one trusted platform provider. The relationships with these great customers are models we plan to replicate with many more. Increased workflow efficiency through continued electronification is a secular trend we believe will continue through a variety of mortgage origination environments. This trend gives us confidence that we can grow the business that today is only a fraction of the $14 billion addressable market that is in the early days of an analog to digital conversion. With that, I’ll now turn the call over to Jeff.

Jeffrey Sprecher: Thank you, Ben, and good morning, everyone. Thank you for joining us. Please now turn to Slide 9. The idea to start ICE came in the late 1990s, an idea to take advantage of the move of commerce to the Internet and an idea to capitalize on changing government regulations regarding energy procurement. The subsequent dot-com crash and the collapse of Enron created a very difficult business environment, particularly the trading of energy. But it was in this challenging environment where ICE was able to gain a toehold into the market and build the foundation for a growing business in commodity trading, a business that, as you’ve just heard, continues to flourish more than 20 years later. Sometime around 2006, we came across a newspaper article about credit default swaps and the difficulty that this market was having settling such contracts.

We became convinced that ICE could build a clearinghouse infrastructure that could solve these delivery problems. Our colleagues took up the challenge and we acquired targeted platforms and talent. Two years later, when the financial crisis of 2008 froze the CDS markets, we were in a position to offer a sustainable solution. And when the Dodd-Frank Act of 2010 and the European Market Infrastructure Act of 2012 required the use of clearinghouses in the over-the-counter swaps markets, ICE was able to expand what has now become another significant business for us. I tell you these stories not as some kind of victory lap, but to remind you of our repeated experience that the best time to lay the groundwork for a strong future is when your target customers are experiencing stress and are open to new vendors and new platforms to alleviate their problems.

I also remind you that evolutions in regulation in the financial services industry typically follow periods of economic change and that standardized, open and transparent platforms, such as those that ICE operates, can benefit. A1nd ultimately, I call your attention to our history to answer a question that we’ve been asked, why is ICE investing in a consumer finance technology platform via the mortgage market? And why do it now? We spoke on our recent call following the closing of our acquisition of Black Knight about our aim to build financial market infrastructure across the company that can offer earnings and dividend growth in variable market conditions, all weather growth that will allow our shareholders to have confidence that they won’t have to time their investments into and out of – an episodic earnings stream.

There are currently many stress points across large portions of the U.S. mortgage industry and ICE is experiencing an openness from market participants and its regulators to consider new solutions delivered by our comprehensive technology platform. This is why Warren and Ben were able to tell you in specifics about the encouraging reception that we’re receiving for our vision to rewire the mortgage market. And why Ben shared our success with platform clients like JPMorgan Chase, M&T Bank and Fifth Third Bank, all of whom are significant sophisticated drivers of the market. The same economic stress that exists in the current U.S. mortgage market is, in converse, fueling growth on our commodity hedging and credit protection platforms, which benefited ICE’s record third quarter earnings.

We’re positioning ourselves to transform the U.S. mortgage market while it is under stress with a goal to create opportunities to springload our future growth and contribute to our all-weather earnings and dividend growth road map. Another topic that we’re being asked about a lot is our adoption of large language models and learning algorithms. ICE has long been investing in adaptive learning tools beginning more than a decade ago when we incorporated learning tools into our growing ICE Chat system as a way of automating workflows based on unstructured trader and back-office conversations. We’re also – we’ve been deploying learning models in our compliance effort to recognize trading and use patterns that deviate from norms. Ben mentioned, our ICE Mortgage Technology product, now called Data and Document Automation, which is an extension of the learning model that we acquired within Ellie Mae.

This product recognizes a wide variety of documents that end up in a consumer file when underwriting a loan, documents such as pay stubs, tax returns, bank statements and alike, which the algorithm automatically identifies and places in appropriate digital folders. The model extracts key structured and unstructured data elements from these folders for further validation by a credit team via a workflow that detects exception cases for the compliance team. Our model is based on a transparent rules engine, which we believe will assist our customers and their regulators to comply with the President’s recent private letter ruling on model fairness, integrity. And our model is being further extended by us across our expanding mortgage platform. Our experience in building and deploying these learning models also facilitates our research into the cost of computation that is associated with model queries, and it permits us to have a thoughtful understanding of the cost benefit analysis of their deployment and the model’s extension.

When we acquired the New York Stock Exchange, it was built on a technology stack that was overly complicated, hard to manage and unreliable. So we set off to completely rebuild the underlying architecture with modern technology. Given the importance of the New York Stock Exchange to the global economy, we had to rebuild the exchange while it was in daily use. And its extensive connectivity to the global financial services industry demanded that we not ask our customers to invest in making changes on their side of the firewall. So, we wrap the old technology with a modern front end and methodically rebuilt and replaced all of the back-end hardware and software. This process took us years to execute with our successful final software rollout just a few days ago, deprecating the last of its seven unique legacy matching engines.

Our upgrade blueprint worked. And today, the New York Stock Exchange sits atop one of the most powerful, deterministic performance and resilient tech stacks in the world. This same plan to build a new bridge while the cars continue to drive across it was deployed by us when we acquired Interactive Data Corporation. There, we inherited over 100 legacy servers, many of which literally could not be shut down for fear of not being able to properly restart them. We, again, replaced this mess with a modern data superstore over a period of six years and without sacrifice from our customer base. When we made our initial investment in MERS, its technology was outsourced, and was not able to keep up with the demands placed on it during the financial crisis.

Our business deal with MERS ownership consortium was to rebuild the platform within two years. If successful, we had an option to buy and run the company. We did just that. And MERS is now a cornerstone to our broad US mortgage industry platform. With our acquisition of Black Knight, we’ve again undertaken a blueprint to wrap its legacy technologies, tie it to our mortgage platform for near seamless integration with our customer base and rebuild its tech stack with a modern architecture over the coming years. As I’ve mentioned on past calls, ICE is agnostic to cloud providers, but we also operate our own proprietary cloud with ICE data centers having connectivity to a vast portion of the global financial services industry. This allows us to oversee our costs and stand behind our performance, a cloud strategy that Warren mentioned was a contributor to our record earnings in the quarter.

In summary, my comments today highlight three backdrops that ICE follows to evolve our all-weather business model. We invest in environments that may have fallen out of favor and at times when customers need us the most. We embrace regulatory shifts and the workflow alterations that inevitably follow periods of economic change. And we embraced an experiment with new technologies, while enhancing technology assets that we may acquire to drive platform efficiencies and better serve our customers. Shifting now to ICE’s strong results. Please turn to Slide 10. In the third quarter, we delivered the best quarter in our company’s history with record revenues, record adjusted operating income and record adjusted earnings per share. We have intentionally positioned our company to provide customer solutions in numerous geographies and economic conditions to facilitate all weather results.

These record-setting third quarter results against our extraordinary third quarter results of last year are another example of strong execution across our platform. And I’d like to end our prepared remarks by thanking our customers for their continued business and their trust. And I’d like to thank my colleagues at ICE for their contributions to our best ever quarterly results following up on our unsurpassed results of the first half. And with that, I’ll now turn our call back to our moderator, Lauren, and we’ll conduct a question-and-answer session until 9:30 Eastern Time.

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Q&A Session

Operator: [Operator Instructions] Our first question comes from Ken Worthington from JPMorgan. Ken, please go ahead.

Ken Worthington: Hi. Good morning. Thanks for taking the question. I wanted to ask about ICE oil. So you mentioned last quarter that Midland was added to Brent, and we’ve seen trading of Brent – I’m sorry, trading at Midland take off. I’m curious how you think Midland is impacting the trading of Brent? And to what extent Midland is a contributor to ICE’s increased share in WTI? And then I guess, most importantly, how much of the benefit to ICE is left as we look forward? Or has the positive impact already played out?

Benjamin Jackson: Hi, Ken. It’s Ben. Thank you for the question. We see all the investments that we’ve been doing in our oil platform as a truly global platform that’s all complementary to one another. As the clear trend around the world has been under investment in energy infrastructure, so you have a lot of volatility in energy when there’s any kind of supply shocks. You’ve got electronification continuing to take hold. You have energy markets that are truly global. You got supply chains that are evolving and changing and people are looking for more precision and risk management. So with all the investments that we’ve been making in our global oil platform, we take all that into account, we’re engaging with customers now more than ever, and we’re getting feedback that there’s a need for more precise instruments, pricing Middle East oil that’s destined for China.

That’s what created that Murban contract and ICE futures Abu Dhabi, and it’s grown nicely. In parallel to that, Brent, which is the centerpiece of that entire complex is up both in OI and volume year-over-year. So we see them as complementary trading assets that run side by side. We also continue to see investments like our HOU contract in the U.S., which is pricing Midland barrels coming out of Midland, going into Houston and then eventually making its way into our dated Brent contract. We’re seeing that contract also continue to grow. So we see these all as very complementary assets to one another. And even within the Middle East itself, you look at our Dubai contract. That contract is up in volumes 80% year-over-year, with OI up close to 50% year-over-year.

So we, again, see them all as very complementary assets that traders look at both for the precision that, that particular instrument provides, but then also trading them in parallel to the other benchmark contracts.

Ken Worthington: Okay. Great. Thank you.

Operator: Thank you. Our next question comes from Ben Budish from Barclays. Ben, please go ahead.

Ben Budish: Hi. Good morning. Thanks for taking my question. I wanted to follow-up on some of the commentary around the wins in the mortgage business. Just to what degree do you think that some of the MSP wins and some of the cross-selling, is that a result of things ICE is doing differently since acquiring the asset? To what degree is it perhaps pent-up demand, things were maybe stalling while the merger was pending? And if that’s the case, what do you think about the pipeline? How sustainable is that growth versus perhaps a compression of some built up – or some pent-up demand over the last many months? Thank you.

Benjamin Jackson: Yes. Thank you for the question. And as we’ve said in a number of calls, our hypothesis has been that the combination of these businesses will create, for the first time, an opportunity for our clients to have one d1 trusted platform provider for that complete front-to-back experience for their clients. And you heard a lot from in our prepared remarks about the sales success across our platform. And we believe that based on that success as well as the funnel we see ahead of us, that we have a platform that’s really spring loaded as the market normalizes as loans are growing. And just unpacking some more detail what’s going on under the cover. So we mentioned we had a solid Q3 in Encompass sales in the third quarter and then also in October.

And as Warren pointed out in his prepared remarks, we’ve had a record sales year and we still have a couple of months to go in the year. So that’s playing out very well for us. As we mentioned, we won M&T Bank, that’s already an existing MSP customer. They’re adding both Encompass and our DDA platform. We’ve won TriPoint that’s moving to Encompass. And then we’ve also had an expansion with a client called The Federal Savings Bank, adding our data and document automation platform on top of the existing Encompass relationship. There’s – switching to MSP. There’s no doubt that there was some pent-up demand on MSP as there was an overhang on the deal with clients waiting to see how it was going to come through. And now we’re seeing a number of deals that have come through.

We mentioned Fifth Third Bank replacing their existing platform provider. They’re also adding a number of data products as part of that deal as well. We’ve also added Black Hills Federal Credit Union, which is an existing Encompass client, has now added as I look at it, is incredibly strong. And – but as Warren also commented in his prepared remarks, this is core infrastructure that’s going into these clients, and it does take time for them to implement across both MSP as well as on the loan origination side. You’ve got a six to 18-month window to implement these clients. But then once implemented, we’re getting new loans under our platform and on our network. So the final thing I’d point out is we’re also not losing customers. We’re not losing significant customers on the platform.

And that’s why I used the comment that we’re spring-loaded because as we see the market environment is going to normalize at some point in time, the loan growth that we’ve had in our platform positions us very well to achieve those long-term objectives of the growth criteria that we’ve outlined.

Ben Budish: Great. Thanks for all the incremental color.

Operator: Thank you. Our next question comes from Dan Fannon from Jefferies. Dan, please go ahead.

Dan Fannon: Thanks. Good morning. Questions on the fixed income data. I think, Warren, you mentioned improved sales cycles. Was hoping you could expand upon that. And then also, as you think about next year, and pricing, how we might think about – or what has been the typical price that you’ve raised or the percentage increase and maybe how that might be different in this type of inflationary environment?

Warren Gardiner: Hi, It’s Warren. So I’ll talk a little bit about the pricing, and I’m going to hand it over to Lynn to talk about some of the color on what we’re seeing on the fixed income data analytics side. So on the pricing side, we – it would have been a couple of years now that we talked about a third or so of the growth we felt like would come from pricing. I’d say that, look, it will move around each year, so it’s not necessarily perfectly consistent in that way. But certainly, as you look over the last number of years that we’ve had the IDC asset, it’s been pretty much in that range. And so as we’re thinking towards next year, I think it’s fair to be thinking that will continue. And it’s underpinned by the philosophy you’ve heard us articulate a number of times on these calls and that we really just look to capture value when we bring it to our customers.

And that’s really what we’re doing when we think about price within the fixed income and data analytics business and really across the platform. So we’re going to continue to do that in that business, similar to what we have over the last couple of years.

Lynn Martin: Yes. And it’s Lynn. I’ll just chime in with some color of what we’re seeing. As we said on previous calls, this segment, in particular, really shows the all-weather nature of ICE. And if you look at the execution side of the business, ICE bonds, in particular, had really strong growth over the last quarter, particularly given the muted volatility in the muni markets where we’ve been able to continue to increase our adoption by the retail and wealth side of the businesses as well as benefit from the increased adoption by institutional users contributing to share gains in all of our different products. Now bringing that through to the fixed income data and analytics side of the business, as we’ve continued to interact with the front office customers, we’ve seen continued increasing demand for our front office tools.