Intercontinental Exchange Inc

NYSE:ICE

Earnings Call Transcript 2019-Q2

[Operator]

Good day, and welcome to the Intercontinental Exchange Second Quarter 2019 Earnings Conference Call. All participants will be on listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Warren Gardiner, Vice President of Investor Relations. Please go ahead, sir.

[Warren Gardiner, Vice President-Investor Relations]

Good morning. ICE's second quarter 2019 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 our 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 2018 Form 10-K.

In our earnings supplement, we refer to certain non-GAAP measures including adjusted income, EPS, operating income, operating margin, expenses, effective tax rate, free cash flow and EBITDA. We believe our non-GAAP measures are more reflective of our cash operations and core business performance. You'll find a reconciliation to the equivalent GAAP terms in the earnings materials and explanation of why we deem this information to be meaningful; as well as how management uses these measures in our Form 10-Q.

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. Please see the explanatory notes on the second page of the earnings supplement for additional details regarding the definition of certain terms. With us on the call are Jeff Sprecher, Chairman and CEO; Scott Hill, Chief Financial Officer; and Ben Jackson, our President.

I'll now turn the call over to Scott.

[Scott Hill, Chief Financial Officer]

Thanks, Warren. Good morning, everyone and thank you for joining us today. I'll begin on Slide four, with some of the key highlights from our second quarter performance. Earnings per share totaled $0.94, up 4% versus the prior year and equal to our record fourth quarter performance.

During the second quarter, we generated the second highest quarterly revenues in our company's history which yielded record adjusted operating income and record adjusted EBITDA. And importantly, first half free cash flow increased 13%year-over-year enabling us to return over $1 billion to shareholders through dividends and share repurchases.

Consolidated net revenues in the quarter were $1.3 billion with trading and clearing and data and listings both increasing 5% year-over-year on a constant current basis. Adjusted operating expenses totaled $540 million in the quarter, including roughly $5 million nonrecurring benefit primarily in tech expense.

Additionally, second quarter expenses reflect both the reclassification of certain licensing agreements from net revenues to expenses as well as a small amount related to our acquisition of Simplifile in late June.

Looking forward to the third quarter, we expect adjusted operating expenses to be in the range of $552 million to $562 million. This includes $9 million to $10 million related to Simplifile and roughly $10 million related to the aforementioned revenue reclassification. These expenses will be more than offset by around $25 million of revenue and thus accretive to the bottom line.

On a basis comparable to our original expense guidance, we now expect full year adjusted operating expenses to be around the low end of that range and between $2.14 billion and $2.16 billion, adding in roughly $50 million for the full year amounts related to Simplifile and the revenue reclass and noting again that those expenses will be more than offset by additional revenue.

Adjusted operating expenses are expected to be in the range of $2.19 billion to $2.21 billion. We've included slide 11 in the Appendix to provide additional clarity on this update.

Now let's move to slide five, where I'll provide additional color on the performance of our trading and clearing segment. In the second quarter, net revenues were up 4% year-over-year or 5% on a constant currency basis.

In our energy market, Average Daily Volumes, or ADV, were down 2% year-over-year. However, total energy revenues increased 2% versus the prior year on a constant currency basis resulting in the second best quarter in our history. This strong performance was driven primarily by continued growth in our European natural gas and global oil products.

Average Daily Volume in our European natural gas business established a new record during the second quarter and open interest is up 29% over the prior year through July. In addition, ADV in the broad suite of crude and refined oil related contracts that make up our global oil business increased 14% year-over-year in the second quarter with open interest up 25% at the end of July.

Overall, July energy trends remain positive with ADV up 9% and open interest up 4% on a year-over-year basis. ADV in our agriculture & metals market also set a record in the second quarter driven by strong performance in both our sugar and coffee products. This was mitigated somewhat by weaker * rate per contract driven by customer and product mix.

ADV remained strong in July, up 7% year-over-year. Revenue in our financial futures business, which includes both our interest rate and equity index products declined year-over-year. A difficult political and economic environment as well the tough compare versus the prior year impacted interest-rate volumes.

However, we're off to a really good start in July with interest rate ADV increasing 29% year-over-year led by a 60% increase in Euribor volumes. Importantly, open interest across the rates business is up 10% year-over-year, including Sterling open interest which is up 40%. In our equity index business, MSCI ADV was up 16% in the second quarter and remained strong in July with ADV up 7%.

Turning next to slide six, I'll discuss our data and listings segment. Second quarter listings revenues totaled $111 million. The NYSE raised nearly $20 billion in IPO proceeds during the quarter ranking first globally. During the first half of 2019, the NYSE helped raised 55% of total U.S. IPO proceeds including 75% of U.S. tech proceeds.

Moving to data services; on a constant currency basis, revenues grew 6% year-over-year to a record $553 million; and pricing and analytics revenues grew 4% on a constant currency basis helped by strong growth in our index business.

Entering the third quarter, pricing and analytics ASV is up 6% year-over-year on a constant currency basis, and we expect revenue growth will reaccelerate in the second half.

Exchange data and feeds grew 9% on a constant currency basis. Strength in our futures business, which grew 7% in the second quarter as well as higher tape revenue related to share increases at the NYSE drove the strong performance.

While we expect demand for our futures-related exchange data products to continue to grow, lower tape revenues and continued softness in NYSE prop data will likely result in a sequential decline in total exchange data revenues in the third quarter.

And finally, in desktops and connectivity, revenue increased 5% year-over-year on a constant currency basis. Growth in the ICE Global Network as well as desktop and chat platforms was partially offset by weakness in some of our NYSE connectivity services.

Moving forward and despite currency impact, we remain on track to our original full year data revenue guidance, and we expect data revenues to be in the range of $550 million to $555 million during the third quarter.

Our continued focus on serving our customers combined with disciplined investments to support growth and profitability across our diverse business once again delivered solid results in the first half of 2019. We grew revenues, operating income, earnings per share, and free cash flow.

We returned more capital to shareholders in the first half of 2019 than in any other half year period in our history, and we are laser focused on building on this momentum to deliver a strong second half of the year and to strengthen the foundation for continued success in 2020.

I'll be happy to take your questions during Q&A, but for now I'll turn it over the Ben.

[Ben Jackson, President]

Thank you, Scott, and good morning to everyone on the call. I'll begin on slide seven. Over the last 20 years how energy is produced and consumed has rapidly evolved, so too have global trade flows, as well as the technology and data available to market participants.

We have continuously invested alongside this evolution building a global platform that today is one of the most diverse and liquid energy marketplaces in the world. In our oil business, Brent crude stands as the cornerstone of a franchise spanning key price benchmarks such as Gasoil, WTI, and Platts Dubai, which is one of the leading markers for crude traveling through Asia.

Together these benchmarks form the foundation for a cohesive web of more than 600 related oil products such as locational spreads, product spreads and refining spreads. These are precise risk management tools that benefit from the deeper liquidity in and their relationship to our global oil benchmarks.

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 global oil products up 25% year-over-year to over 5.5 million contracts or over 40% of our total oil open interest.

Our global natural gas complex spans trading hubs across North America, Europe and Asia. The globalization of natural gas is a trend we've been investing in for over five years. Beginning with our investment in index. That investment established us as a leader in European gas trading.

With Asia as the largest buyer of global LNG, the relationship between our European benchmark and Platts JKM, our Asian benchmark is driving global price formation. These new dynamics demand that commercials, investors and traders have a global view.

European customers must be aware of supply and demand factors in Asia just as a buyer in Asia must be cognizant of trends facing European markets. LNG shipments out of the Gulf are increasingly pricing away from Henry Hub.

And as our benchmarks become more global, we are seeing participation increased with the number of trading firms in our European TTF market doubling since 2015, while average daily volume has increased a 124% this year alone.

In addition, a few weeks ago, we announced an agreement to extend our partnership with Platts to bring the eWindow platform to the global LNG trading community replicating our successful strategy in the oil markets.

The Platts eWindow will leverage our unique WebICE technology enabling customers to transparently submit bids and offers and execute trades while simultaneously participating in the Platts price assessment process.

The globalization of natural gas alongside of global focus on decarbonization is also critical to the environmental markets. In Europe and the U.S. regulators are increasing the focus on incentivizing the use of renewables and cleaner fossil fuels such as natural gas over coal. Incentives include introducing cap and trade programs and renewable energy standards.

Built off of our acquisition of the climate exchange nearly a decade ago, we operate the world's largest emissions markets. And as demand for transparent pricing and carbon grows, our markets are well-positioned to capture these trends.

Economies around the globe are demanding and consuming more energy. Sources such as renewables will continue to be introduced into the mix and these energy sources are unpredictable by nature.

Their interplay with fossil fuels and energy production has the potential to drive additional volatility in global energy markets, and will require traders to consume more data and integrate more robust analytics into their workflows. This is an evolution that we've long envisioned and have positioned our business to benefit from and we're excited about the future opportunities that lie ahead.

And with that, I'll turn the call over to Jeff.

[Jeff Sprecher, Chairman and Chief Executive Officer]

Thank you, Ben, and good morning to everyone on the call. The evolution of our energy market is one example of how we're continuously investing and developing customer driven solutions across asset classes, as well as the creative approach we've taken to leverage our infrastructure, our technology and our expertise to drive value creation.

In areas such as data services, we're leveraging our core fixed income pricing and reference data, developing new fixed income benchmarks such as our suite of muni indices and launching real-time fixed income yield curves and credit risk tools.

We're investing in our fixed income analytics, enhancing the functionality and now delivering it through an API to broaden the addressable market. In the second quarter, we launched the ICE Data Vault, a cloud-based data repository that leverages our consolidated feed business and delivers historical data from over 600 global sources.

And we've invested in our sales footprint, adding coverage across both the EMEA and Asia-Pacific regions. These are just a few examples of the initiatives and the new products that we're bringing to the market.

They demonstrate how we are taking the former IDC Foundation, one that traditionally serve the back and middle offices, and we're enhancing it to dry transparency and liquidity, while we also expand our addressable market further into the front office.

When we combined the long tail secular trends, such as the electronification of bond markets, workflow automation and the shift from active to passive fund management, our comprehensive data offering is positioned to continue to deliver compounding growth well into the future.

Towards the end of 2019, we expect to launch our ETF Hub, an innovative solution that will serve the $1 trillion fixed income ETF industry, an industry that some expect will double in size over the next five years.

With ETF Hub, we'll bring to market a single portal, one would -- that will be unique to the market to connect multiple participants and provide a more efficient solution for sponsors and traders to manage and execute their primary market orders.

In addition, the SEC is reviewing regulation around the use of custom baskets for the broader ETF sponsor community, a change that over time could provide additional tailwinds for activity on our ETF Hub platform.

Ultimately, we view the ETF Hub is one of the first steps towards building a more automated, efficient and complete ecosystem serving the fixed income trading and investing community.

We're also investing in our equity derivatives business, launching eight new MSCI contracts in the first half of the year. Led by the flagship emerging market index, open interest in our MSCI complex has more than doubled over the last five years to nearly 2 million contracts at the end of July, while average daily volume is up 12% year-over-year.

At the New York Stock Exchange we executed our second successful direct listing, as Slack went public through this innovative offering. An offering is maximized by NYSE's hybrid model, coupled to a dedicated market maker that is compensated under the rules of the exchange, thereby combining dedicated human judgment with state-of-the-art technology.

During the quarter, we also launched the NYSE Board Advisory Council, a creative initiative that leverages the unmatched network of the NYSE and one that seeks to address some of the important EFG issues that face corporation today.

As we look at opportunities across other asset classes such as mortgages and digital assets, we're applying our unique approach to platform building and innovation. In our mortgage business, we closed on our acquisition of Simplifile on the second quarter and added a key piece of infrastructure, one that complements our suite of digital solutions aimed at bringing more efficiency to the $11 trillion U.S. mortgage industry.

At Bakkt subject to final regulatory approvals we plan to launch our physically delivered Bitcoin futures in the very near future. As use cases for digital assets and payment flows advance, Bakkt is working to build a regulated digital asset ecosystem that serves the evolving needs of institutions, merchants and consumers around the world.

Let me close by having you turn to slide nine. As we turn back to the first half of this year, we're focused on building on our long track record of growth, while we stay concentrated on the execution and investing for our future.

I want to close by thanking our customers for their business and their trust. And I want to thank my colleagues for their efforts that contributed to yet another very very strong quarter for ICE.

And with that, and as my prepared remarks, let me turn our call back to Carrie to conduct the question-and-answer session which will operate until 9:30 AM Eastern time.

[Operator]

We will now begin a question-and-answer session. [Operator Instructions] The first question will come from Richard Repetto of Sandler O'Neill.

[Richard Repetto, Sandler O'Neill]

Good morning, Jeff, Scott, and Ben. It's been an early morning for some of us. And I guess with the LSE Refinitiv confirmation of the announcement this morning, it seems like they've taken a page out of your playbook with a focus on market data and certainly they have some fixed income and FX trading platforms as well. I guess, the question, Jeff, is you know how do you see this impacting your businesses, this one-stop shopping for market data? And how would you differentiate what you're offering versus what could be a potential LSE Refinitiv combined platform?

[Jeff Sprecher, Chairman and Chief Executive Officer]

Well, that's a great question. Thanks for asking it. First of all, we are fortunate that we saw the move to that kind of pivot very early so that we were able to acquire some very, very strategic assets that what today would be viewed as incredibly attractive valuations to build the foundation for what we offer today. And as you see the footprint that we’ve pivoted towards in data was really around fixed income data more than anything. And in that space – it's a unique space, and one of the things that we were able to acquire with IDC was a 50-year-plus history of a high quality fixed income data that is hard to replicate for new entrants simply because of time.

And what we find is people, the buy side and sell side that are doing analytics and what have you, need that rich robust data set in order to back test portfolio theories and other things. Separately, the fixed income business is interesting in that only a very tiny amount of fixed income trades on any given day. It's probably less than 5% of fixed income names in the muni space where we’ve really put a big investment. It's less than 1%. And so, the algorithms and knowledge base that comes from that foundation is really important much more so than the trading platforms, which is why we – as we realized that we pivoted hard into acquiring indices, legacy data sets, and other relationships as opposed to execution venues as you've seen, because that will not change with the electronification of the business in our mind.

So, we're well-positioned. It's a space we expect more competition in. It’s a space we expect more* consolidation around. One of the facts that I mentioned years ago that we began to see partly by acquiring the New York Stock Exchange is that it's very hard to have connectivity to many, many customers because of cybersecurity issues. People want a smaller number of large vendors that have the scale to guarantee that connectivity -- direct connectivity to companies is safe, and so it was somewhat inevitable that there was going to be a roll up in the space, and as I said, that's why we chose some assets quickly and went hard at them very early.

[Operator]

The next question will come from Michael Carrier of Bank of America.

[Michael Carrier, Bank of America]

Good morning. Thanks for taking the question. First, Scott maybe just on the expenses and the guidance on slide 11, just with the gross and the net expense guide, can you just provide some color on the revenue offsets and maybe which lines that will be flowing through for the second half?

[Scott Hill, Chief Financial Officer]

Sure. Yes. So, slide 11 is the good one to look at. I think the key point I would highlight there is effectively what we did this quarter was bringing the midpoint of our original guidance down by $25 million. And then we added 50 million on top of it, and that's roughly 28 million which was simply a change in how we're treating some revenue share agreements that we have. We're going to treat those as net revenue now, not gross. That's about $28 million. And the vast majority of that is on our financials business, and you saw that in our RPC, which we adjusted the rolling three month is up a couple pennies. There's about $8 million in the second quarter, and then $10 million a quarter in third quarter and fourth quarter.

The other piece is the addition of * Simplifile. As I mentioned that's 9 million to 10 million in the quarter. You could double that and let's assumed for the half it will be 18 million to 20 million. And that's where for the second half we expect revenues in excess of $30 million. And so, we've now got a mortgage business that annualized is a 140 million plus business at very attractive margins. And so, we're really excited about that.

So, I think the way to think about expenses, they brought the midpoint down $25 million for the year. The growth in that change is no impact to the bottom line and Simplifile is* immediately accretive and adds to a really large mortgage business in a quickly digitalizing space.

[Operator]

The next question will come from Ken Worthington of JPMorgan.

[Ken Worthington, JPMorgan]

Hi. Good morning and thank you for taking my question. Maybe on ASV, it's up* less now than it had been in the past. I think the calculation was something like 5.7% organic constant currency. It'd been in high, as high as maybe 6.7% a couple of quarters ago. So what are the biggest drivers in the decline in ASV? I think you guys mentioned equity data. Is there something else as well? Pricing and analytics growth seems to be around 4% now, that's less than it's been in the past. Maybe is that a driver as well. And then lastly, ASV does not capture all the outlook for data. Can you give us an update on the part of data that's not captured by ASV. How is that progressing?

[Scott Hill, Chief Financial Officer]

That's a big bundle of questions. Let me see if I can go work my way through that. So, first of all, you're 100% right to be looking at the ASV metric. That is the key indicator of the very good health of our data business. Because that ASV number represents the 90% of our revenues roughly give or take, that Lynn and her team are outselling every day. The other are non-ASV stuff is session fees and NMS and tape data. We don't sell that. We don't really control that to a great extent. So, you're focused on the right metrics.

I look at an ASV number. I think it was maybe 6.4% last quarter, 6.1% this quarter on a constant currency basis. They're between 5.7% and 6.7% in a given quarter. I don't lose much sleep on. As long as we're pivoting around 6%, I think that's really indicative of a data business that's positioned to deliver the kind of growth that you've seen from us over the past couple years. So, I think the ASV is well-positioned. There is a little bit of weakness on the NYSE exchange data. And that weakness is not that it's going backward. It's just not growing. And so that does have a bit of a downward impact.

But the good news is, you look at futures exchange data, as I said growth in the quarter plus 7%, but no customer erosion at all. You hear from others that customers are going away, we're not seeing that. I think that reflects the commercial orientation of our market. You look at pricing & analytics where it dipped a little bit in the second quarter, but again, an instructive point in that audits come and go. And last year we had a few. The year before that we had a few. This year we didn't. And I mentioned that business is going to re-accelerate 5%, 6% in the third quarter, 6%, 7% in the in the fourth quarter, and coming off a 6% year headed back toward or another 6% year in pricing & analytics.

So, again feel really good about that business, feel really good about the execution from Lynn and the team. And I think ASV metric is a really good indicator that that business is healthy and growing. And the thing that I also hope you noted in the quarter was as we start to get some of the foundational investments behind us in that data business you're starting to see the margin expansion that we would expect from the incremental revenue growth. So, we were up a couple of points year-over-year in the quarter. And again, I think that's reflective of the fact that that business its position to continue to grow is also likely to have very solid incremental margins and expansion overall.

[Jeff Sprecher, Chairman and Chief Executive Officer]

And Ken, let me just pile on by mentioning that Ben went over on Slide seven, how our energy business has really changed. We started -- when I started the company, we had natural gas was U.S. Henry Hub. Today, you look at the map on slide seven and you see that the energy business has pulled us to Europe and then EMEA, Asia. And so I mentioned in my prepared remarks, we're investing in sales and marketing people in these new areas. In other words, the flow of data sales is following the flow of commercial interest in our products. And so it gives us some confidence. We get asked a lot about changes in large banks like yours, [ph] changes that are going on around Brexit, changes in Europe, and what have you. But when you really look at the flow of the way people are integrating with our network you see that it's broadening globally and that's helping to drive those datasets.

[Operator]

The next question will come from Kyle Voigt of KBW.

[Kyle Voigt, KBW]

Hi. Good morning. Maybe just one more follow up on the LSE Refinitiv transaction. It sounded like from LSE's call this morning that the Refinitiv deal was really shaft or wasn't a highly competitive deal. So I guess my question is were you able to look at the asset prior to the LSE announcement last week. And then, I guess part two of that is just clearly is moving LSE bigger into the front office, which you mentioned in your prepared remarks, with their desktop business are Refinitiv, would that be an area you'd focus on if assets were available in that space in terms of M&A? Thanks.

[Jeff Sprecher, Chairman and Chief Executive Officer]

Good question. I'm unable to speak to the current transaction. But let me just say to you that, we had -- we've been relatively aggressive at the way we've built ICE over the last couple of decades. And we have had conversation around those assets for more than a decade with multiple management teams, who have had multiple ideas on how we might interface with those including acquisitions, joint ventures, bundling, cross licenses you name it. And we've watched those management teams and discuss with those management teams as they've made major investments in those assets, as they've pulled back from investments in those assets, as they've tried to do cost cutting around those assets, as they've tried to bundle with us, as they've focused on price increases, as they've focused on price decreases. And because it was a public company, we have watched with tremendous detail how those assets have evolved over decades.

And so, we've had many opportunities to engage and we haven't found a way obviously that did something that would -- that we felt would really be accreted to ICE shareholders. That in no way as a comment on the current deal. David Schwimmer and David Warren are two people who I have known for years and highly respect, and are tremendous at what they do and have given us guidance from time to time. And also Joe Baratta and Martin Brand at Blackstone are amazingly sharp and savvy, and so I've got nothing but good feeling about those people in that deal that they did. But as a respects to ICE, over many, many years we were not able to find a way that we can create value.

[Operator]

The next question will come from Alex Blostein of Goldman Sachs.

[Alex Blostein, Goldman Sachs]

Hey guys. Good morning. Thanks. So, maybe just a round up the discussion around LSE and Refinitiv, anyway you guys kind of help us think about exposure ICE Data Services has to Refinitiv. I think most of that is going to be on the exchange that aside. But within pricing & analytics is there any sort of revenue exposure there as well and how do you guys think of any potential risks to ICE on the back of that transaction?

[Jeff Sprecher, Chairman and Chief Executive Officer]

This is Jeff. I don't want to answer that question only because that particular transaction is going to go through a global antitrust review, and I don't want to say something that in any way is used in that review positively or negatively. So don't take that to mean anything other than there is a transcript being made of this call. And I'd rather not have us discussing that particular thing. You're going to give me a pass?

[Operator]

The next question will come from Dan Fannon of Jefferies.

[Dan Fannon]

Thanks. Can you talk about the ETF Hub in more detail and timing of launch, kind of your expectations and maybe some of the incentives that you're going to put out there to attract participants to that offering?

[Ben Jackson, President]

Sure. Dan. This is Ben. And thanks for the question. So we've been talking about this on many calls and we're really excited about it, because we are deep in the testing phase right now with a lot of the institutional buy side and sell sides that are going to onboard onto this platform as it launches. And our target launch date is in the fourth quarter of this year and we feel really good about it on how the testing process has gone. One of things that excites us about this and Jeff had highlighted in some of the comments he made that we have a multi-decade relationship on the institutional side of these buy side and sell side firms between our pricing, our reference data, our analytics and our index offerings. And what this is enabling us to do is we're going to be really combining that set of offerings with our execution capabilities in TMC and BondPoint that have historically been in the wealth management space, but have protocols that are really oriented towards the new wave of electrification and fixed income with central order book trading. And you're obviously hearing that other platforms out there are trying to race to build similar capabilities to what these platforms already have.

So, as we're now going through the testing process and we're now onboarding customers into the ETF Hub, these institutional customers through the testing process for the technical integration process as well as the legal onboarding we are coupling the onboarding process of that ETF Hub for a lot of these institutional buy sides that have traditionally not been on our venues to also onboard onto TMC, BondPoint, or auction in our RFQ protocols. So for the first time a lot of these institutional buyers and sellers will have an opportunity to use our venues that have historically not interacted with that order flow in the secondary market.

So that's all upside for us to be able to compete in an area that we traditionally have in secondary trading. And in primary trading which is where the ETF Hub is, we're going to have as Jeff highlighted in his comments, the unique solution for the industry that solves a ton of inefficiency that there is. And because we're solving that inefficiency and helping all these market participants save an additional amount of cost, reduce risk and hopefully continue to grow an asset class that has seen explosive growth. We see recurring revenue opportunities coming from this, from clients onboarding on it as a natural output of it.

[Operator]

[Operator Instructions] The next question comes from Brian Bedell of Deutsche Bank.

[Brian Bedell, Deutsche Bank]

Great. Thanks. Good morning folks. I was going to ask one on the Refinitiv as well, but Jeff, you might not answer, given the global antitrust review. But one I'll ask and then I'll have a second question, you can pick one of the two.

[Jeff Sprecher, Chairman and Chief Executive Officer]

Okay. Fair enough.

[Brian Bedell, Deutsche Bank]

The Refinitiv one with just longer term thoughts on how it could change pricing in the industry given how you've gone out to a lot of large customers and have been able to successfully bundle a lot of data services together, whether the Refinitiv transaction changes that dynamic longer term in that strategy? And then the second question would be on energy. And the question there is given that product range that you guys outlined a lot in this call. Is there a view of broadening out the customer base there? You've traditionally been very happy in the commercial side to doing things to introduce more market making and proprietary trading and perhaps even retail usage of energy futures?

[Jeff Sprecher, Chairman and Chief Executive Officer]

I think we'll try to answer both questions. So, yes, I think you thread the needle. So, yes, the notion of trying to bundle content and distribution is something that's unique to financial services. It is the play in media and transportation and many other industries around the world. And so, I do think that that trend will continue. I do think that competition authorities are going to pay attention to that. And which is why I'm not prepared to get too in-depth with somebody else's strategy versus our strategy.

But I think ultimately our industry has been going through consolidation, not just in platform providers, if you will like ICE, but buy side firms and sell side firms, and the way assets are gathered and managed. And so it's somewhat of an inevitability in my mind that you're going to see winners emerge. And as I mentioned, I'm glad that we made the transition early, so that that we had a look at all of these assets and could figure out which ones really would work for the specific kind of platform and distribution, and content that we think can continue to deliver top line growth. You can bundle downward growth as well you know. So the idea here is to create compelling bundles that more customers want that can drive EPS growth. And I know we've done that.

[Warren Gardiner, Vice President-Investor Relations]

Youu want to pick up the [Indiscernible].

[Jeff Sprecher, Chairman and Chief Executive Officer]

Yes.

[Warren Gardiner, Vice President-Investor Relations]

Go ahead.

[Jeff Sprecher, Chairman and Chief Executive Officer]

So, on the energy side just to pick up on the question -- second question you had there. So you're right, we have focused on the commercial hedger in building out a diversified product suite around the world. And when we say that, we're focused on the commercial hedger. I think one of the important distinctions that not everyone appreciates is what we mean by that. What we mean is that, we've established a set of diversified products. So the product that people are actually consuming, whether it's various grades of crude oil or its refined products and also enabling at the point of consumption of those goods, putting locations around the world for where these customers are either buying or selling the end commodity.

That enables them to as precisely as possible manage their exposure to price risk where they have the most acute risk, which is at that point of consumption. And this is distinct from many of the other peers that are out there, where they primarily focus on a single product and trying to attract customers, which could be halfway around the world to interact with a product that they may have no commercial connection to.

If you look at products that we've developed in Asia for example like Singapore Gasoil, Fuel Oil, Singapore Jet Kerosene, these are a small sample set of hundreds and hundreds of products that we have around the world in our global oil and refined products suite that we've been partnering with our customers to build. And we have an -- have had – have today and continued to build on and grow market share in this part of our business as Scott had pointed out, open interest up 25% and volumes even accelerated this month to up 17% in this week [ph].

The last thing I'd point out is the reason we focus on the commercial is that to have a real vibrant market. It starts with the Cornerstone, which has to be the commercial trader that really cares about that physical instrument that's underpinning -- that's underpinning the price formation and the really the real risk around consuming the end good at the particular location. And what we've seen is, if you get that right, market makers, financials and those follow into that market. And that's what we've seen in all of the markets that we've developed. So we do focus on each of those areas that you had mentioned, but we really focus on getting the commercial aspect of it right first. And that's why we're seeing this area of our business significantly grow.

[Operator]

The next question will be from Chris Harris of Wells Fargo.

[Chris Harris, Wells Fargo]

So, part of ICE's value proposition in fixed income data is really offering valuation services for harder to value securities. So I'm wondering as more trading moves to electronic and becomes more transparent, how do you think this part of the data business will evolve?

[Ben Jackson, President]

Thanks Chris. This is Ben. I'll take this. So I think one of comments Jeff made in an answer to a question earlier today is very important to highlight. In that if you look at the corporate bond space where you have 30,000 instruments, on a given day the number of instruments out of at 37 – or 30,000 corporate bonds that are out there, less than 2000 of those trade every single day. So even as electrification takes hold, you're talking about 5% or less of the market is actually trading in a given day. And with the explosion of data and the more precision the people want around managing their risk and pricing instruments moving not only from end of day, but to intraday, you can imagine the algorithm that's needed to understand what the correlations are of all the different instruments that actually do trade in given day, and having to figure out what does that mean for something that hasn't traded in a day, a week or a month.

And when we talk about the multiple decades of being that trusted pricing and reference data provider to our customers, having that history, having that trust of being able to build out that complex algorithm, having trained it over many, many decades puts us in a position that I think is very, very strong. We'll continue to grow as data and information assets continue to grow around this space.

[Operator]

And this concludes our question and answer session. I will now like to turn the conference back over to Jeff Sprecher for any closing remarks.

[Jeff Sprecher, Chairman and Chief Executive Officer]

Thank you, Carrie and thank you all for your participation in today's call. And we'll look forward to being back next question to similarly give you our great results.

[Operator]

Thank you, sir. The conference is now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.