Intercontinental Exchange, Inc. operates regulated exchanges, clearing houses, and listings venues for financial and commodity markets in the United States, the United Kingdom, Continental Europe, Israel, Canada, and Singapore. It operates in two segments, Trading and Clearing, and Data and Listings. The company operates marketplaces for trading and clearing an array of derivatives and securities contracts across various asset classes, including energy and agricultural commodities, interest rates, equities, equity and credit derivatives, exchange traded funds, bonds, and currencies. It primarily provides price discovery and trade execution, listings, trade processing and data repositories, clearing and related post-trade activities, data, and benchmark administration services. The company operates exchanges and marketplaces, such as ICE Futures Europe, ICE Futures U.S., ICE Futures Canada, ICE Endex, ICE Futures Singapore, and NYSE Amex and NYSE Arca Options, as well as over-the-counter markets for physical energy and credit default swaps, and central counterparty clearing houses. It serves commodity producers and consumers, financial institutions, money managers, trading firms, and other business entities; various market participants in the equities markets, such as financial institutions, institutional investors, wholesalers, hedge funds, quantitative funds, algorithmic traders, and individual investors; and members, which are entities registered as broker-dealers with the Securities and Exchange Commission. The company's customers also comprise companies operating in a range of sectors, including technology, financial services, consumer brands, industrial, transportation, media, energy, and mining; the financial services industry; and value added resellers, such as custodians, wealth managers, software providers, and other outsourcing organizations. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.
Business Analysis of Intercontinental Exchange
The Financial Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Intercontinental Exchange compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Intercontinental Exchange to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Intercontinental Exchange with an interactive chart.
- Revenue Growth: Intercontinental Exchange reported a revenue growth of 27.3% year-on-year during 2016. Investment Services Industry grew at -6.5% in the same period
- COGS share of Revenues: As a percentage of revenue, Intercontinental Exchange spent 24.5% of its total revenues on COGS. Investment Services industry average (COGS share of revenue) in the same period was 10.0%
- R&D share of Revenues: Intercontinental Exchange R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Intercontinental Exchange spent 28.9% of its total revenues on Sales, Marketing, and General Administration (SG&A). Investment Services industry average SG&A spending in the same period was 54.3%
- Inventory share of Revenues: Intercontinental Exchange Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Intercontinental Exchange invested 6.5% of its total revenues on Accounts Payable (A/P) Investment Services industry average Accounts Payable investment in the same period was 214.5%
- Accounts Receivable share of Revenues: As a percentage of revenue, Intercontinental Exchange invested 13.0% of its total revenues on Accounts Receivable (A/R). Investment Services industry average Accounts Receivable investment in the same period was 79.0%
- PP&E share of Revenues: As a percentage of revenue, Intercontinental Exchange invested 18.9% of its total revenues on Property, Plants, and Equipments (PP&E). Investment Services industry average PPE investment in the same period was 6.6%
- Intangibles share of Revenues: As a percentage of revenue, Intercontinental Exchange invested 381.2% of its total revenues on Intangibles. Investment Services industry average Intangibles investment in the same period was 74.6%
- Net Margins: Intercontinental Exchange Net Margins in the year 2016 were 23.9%. Investment Services industry average Net Margins in the same period were 17.8%
Sector and Industry Association of Intercontinental Exchange
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Intercontinental Exchange is associated with Financials Sector Group, Financial Services Sector, and Investment Services Industry.
Financial Services sector is comprised of the following industries: Investment Services; Consumer Finance; Payment and Transaction Processing Services; Financial News, Research and Data. The definitions for each of the industries is as follows:
- Investment Services industry includes investment banking companies, asset management companies, securities brokers and dealers, online brokers, and security/commodity exchanges.
- Consumer Finance industry includes companies providing credit services and mortgage finance services.
- Payment and Transaction Processing Services industry includes companies providing financial news, research, and data services.
- Financial News, Research and Data industry includes companies providing payments and transaction processing services.
Industry Ranking of Intercontinental Exchange
With $6 billion revenues, Intercontinental Exchange ranked number 10 of all the companies in the US Investment Services industry. There were a total of 143 public companies in the US Investment Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Investment Services industry by revenues during 2016 were:
- Morgan Stanley ($34.6 billion)
- Goldman Sachs ($30.6 billion)
- Bank Of New York Mellon ($15.2 billion)
- INTL FCStone ($14.8 billion)
- Ameriprise Financial ($11.7 billion)
- BlackRock ($11.2 billion)
- State Street ($10.2 billion)
- Charles Schwab ($7.5 billion)
- Franklin Templeton Investments ($6.6 billion)
- Intercontinental Exchange ($6 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Intercontinental Exchangeand its peers on select key performance indicators by clicking the reports provided below