Analyst Note
| Michael Wong, CFA, CPA |Intercontinental Exchange reported record revenue for 2020, and while we’re generally positive on the company’s business model and growth trajectory, the company’s growth rate remains fairly uncertain. The company reported net income to common shareholders of $526 million, or $0.93 per diluted share, on $1.67 billion of net revenue for the fourth quarter of 2020. Net revenue of $1.67 billion increased 29% compared with the previous year, after including a full quarter of revenue related to the Ellie Mae acquisition that closed in September 2020. On an adjusted basis that includes Ellie Mae revenue in the year-ago quarter, net revenue would have still increased a healthy 14%. Along with fourth-quarter earnings, the company announced that it is increasing its quarterly dividend 10% to $0.33 per share. We don’t anticipate making a material change to our $99 fair value estimate for wide-moat Intercontinental Exchange.