New York Stock Exchange-owner Intercontinental Exchange Inc (ICE.N) reported first-quarter profit that beat Wall Street estimates on Thursday, boosted by strength in its mortgage technology business and continued market volatility.
Excluding one-time items like M&A costs, ICE earned $1.34 per share in the quarter, 4 cents above analysts’ average estimate, according to IBES data from Refinitiv.
ICE’s mortgage servicing business benefited from its $11-billion acquisition last year of mortgage tech firm Ellie Mae. ICE has been investing in the business since 2016.
“We see, just like we saw in the commodities markets two decades ago, just like we’ve seen in the fixed income markets, that the mortgage space is an industry that’s going through a significant analog to digital transition,” ICE President Ben Jackson said on a call with analysts.
Revenue in the segment surged 672% from a year earlier to $355 million, which the company said was just scratching the surface of what it sees as a $4 billion opportunity in the mortgage loan origination and processing space alone.
The exchange, clearinghouse, and data services provider also benefited from the pandemic-induced market turmoil, which continued its momentum into the first quarter as a new cohort of retail traders entered the market.
ICE’s exchange segment, its biggest business, brought in $1.61 billion in revenue, up marginally from last year.
Total revenue, excluding transaction-based expenses, rose 15% to nearly $1.8 billion.
In the current quarter, ICE said it sold its 1.4% stake in cryptocurrency exchange Coinbase (COIN.O) for more than $1.2 billion. Coinbase debuted on NYSE competitor Nasdaq Inc (NDAQ.O) earlier this month with an initial market capitalization larger than ICE’s.
ICE’s own cryptocurrency exchange subsidiary, Bakkt, is expected to complete its merger with blank-check firm VPC Impact Acquisition Holdings (VIH.O) at the end of this quarter, giving it a $2.1 billion enterprise value.