ICE

ICE is a high-quality, toll-booth business spanning three segments (Exchanges, Fixed Income & Data Services, Mortgage Technology) where roughly half of revenue is recurring ($5,056M of $9,931M in net revenues per the MD&A). FY2025 net revenues grew 7% with recurring +5% and transaction +10%, and the operating leverage is real: operating income rose 14% to $4.93B and diluted EPS jumped 20.7% to $5.77 on a near-flat operating-expense base (+1%). Consolidated operating margin printed 50% GAAP / 60% adjusted. This is exactly the consistent, profitable growth the methodology rewards, and the five-year revenue path ($9.17B→$12.6B) confirms durability even though net income was depressed in 2022.

The most important forward change is the Mortgage Technology turn. That segment swung to a $14M operating profit in 2025 from losses of $(170)M in 2024 and $(276)M in 2023, with adjusted operating margin climbing to 41% from 36%. Management is candid that the recovery is fragile — higher mortgage rates have suppressed origination volume and 'if mortgage rates further increase... our Mortgage Technology segment revenues may be further impacted.' But the cost discipline (segment opex down to $2,087M from $2,192M) means any rate-driven volume recovery drops disproportionately to the bottom line, a credible multi-year catalyst. Meanwhile the Exchanges segment (74% margin) benefits from the very volatility management cites — 'increased trading across... energy, interest rate and equity futures, credit default swaps and bonds' — making the franchise partly counter-cyclical.