Conference Transcript - ICE 2026-05-27

Christian, Analyst — Adage

All right. Good afternoon, everyone. We'll get started with our next session with Intercontinental Exchange. I'm delighted to have the chairman and co-founder of ICE, Jeffrey Sprecher. This is Jeff's ninth year in a row at this conference, so hopefully we can get to 10 next year. But as always, thank you for the time. It's always a pleasure interviewing you.

Jeffrey C. Sprecher, CEO

All right. Thank you, Christian. And thank you for those that are in the room.

Christian, Analyst — Adage

here. Good stuff. And as always, you can ask a question through the Pigeonel system. I'll try and get to it if we have time. Maybe, Jeff, let's just start with just the overall company and your strategy. You call it the all-weather model. It's certainly delivering. If I look at sort of EPS, very, very strong. All three segments are growing. So at almost any measure, the business is firing in all-cylinder, yet the stock trades at a minute for discounts appears, kind of what is the market missing and what can you do to help close the gap between performance and fundamentals?

Jeffrey C. Sprecher, CEO

Yeah, well, I feel like we're doing our job and you people in the room here need to, you know, lift up a little bit here, right? You know, no, I do think we've been caught up a little bit in the the SaaS apocalypse, a big part of the exchange and financial services businesses that we run are the distribution and sale of data. And similarly, we run a big network and software overlay for the U.S. mortgage industry. And I don't know, when we talk to investors, they're just unsure right now of what the future looks like in terms of how data is going to be consumed and paid for and and how these networks that that connect markets like the mortgage space will evolve in a world of AI we think and the numbers you just mentioned that it's that those are tailwinds for us not headwinds and and are certainly building the business to take advantage of AI. We've been early and aggressive in adopting AI models ourselves and building AI models with and for our customers. And so, you know, I've been at this a while as the founder of the company. And from time to time, you know, the performance of the company and the share price will disconnect. But we're markets people, and I ultimately put my faith in market and i know the market will eventually find our value so it's really just a for us keep your nose down keep doing the right thing and uh and uh and the value will find us okay um maybe on

Christian, Analyst — Adage

the same strategy topic the one question we do get is around the fact that you have three different businesses and arguably there might be conglomerate discounts to to to the stock how do you think about the investment case about three businesses together why why do they create more value than

Jeffrey C. Sprecher, CEO

and having them separately yeah it's um it's interesting because we have a common customer base that that is consuming these businesses and um and interestingly you know when we bought the new york stock exchange the market said why would you ever want to own the new york stock exchange it's a legacy business I mean it's a real legacy business right 1792 and one of the oldest businesses continuing in the United States people were asking why would you want this well you know our client base uses the New York Stock Exchange and it opens doors for us to sell all these other services and network connectivity and it's a trusted source in terms of getting through your company's firewall and working with your IT department to be a part of our network. And so, anyway, I give you that anecdote just because everything we do is very network-based and has a common customer base, and the trust that we've built with that customer base has allowed us to grow all these segments. Could they be separated? Maybe at some point. you've made the penetration you've made the customer relationships and so on and so forth but the reality is we you know when we started the business we were an energy commodity exchange and because I came out of the electric power business and that's what I knew and I never in my wildest imagination thought that in 20 years you could still grow the energy business you know we were talking about using less fossil fuels anyone you and I as consumers will never consume or buy a barrel of oil I thought anyone that bought a barrel of oil was it was a as an oil company it was already on the platform again I mentioned that just because we continue to grow our customer base so it's it's it's amazing how big the financial services markets continue to grow even after 20 years, and the core business, which we wanted to diversify, continues to be a growth driver for the company.

Christian, Analyst — Adage

Since you brought up energy, I think we'll shift there. To your point, 20 years old business, but over the last three years, it's almost doubled in revenues given the aftermath of Russia and Ukraine. As you think about Iran and Hormuz and some of the shifts in energy supply chains that that come from that, do you think it's another catalyst for potentially significant revenue growth over the next couple of years?

Jeffrey C. Sprecher, CEO

Yes, and I think when you couple that with, even on top of the current Middle East conflict is different trade deals that have been going on where the U.S. in its most recent round of trade deals was trying to equilibrate the balance of payments and was already putting pressure, particularly on Asia, to accept more U.S. energy. That's probably moved to the forefront now in terms of scarcity value. So, yeah, and you also have the actions in Venezuela that have, to a certain degree, rewired the supply chains and potentially massive future rewiring as the Venezuelan assets are exposed to the world, particularly rewired in the western U.S. as well. So you kind of have this duality of the east wanting more ship-borne energy, be it natural gas or crude oil, from new suppliers potentially, and then the Western world bringing on massive U.S. exports coupled with Venezuelan exports. We just think that there's a lot more risk in the supply chains and differentiation in supply chains and new players that are coming into those supply chains that are all looking to hedge and bring activity to our markets. And you can see it in our numbers. It's pretty astonishing. It's not just more volume, but we actually have more participants. And those participants, in order to manage risk, are consuming more data. So there's a flywheel effect that was probably accelerated by what's been going on in Iran.

Christian, Analyst — Adage

Okay, so double revenues next three years ago?

Jeffrey C. Sprecher, CEO

Get my CFO up here and let me listen to him.

Christian, Analyst — Adage

Right. Just drilling onto your point around supply chains and U.S. energy being the dominant incremental source of price discovery, just talk about how that's impacting benchmarks globally. We're moving towards more Houston from cushion as the pricing mechanism, and that's benefiting your ecosystem. Just talk about how you think about the different benchmarks over time and how that benefits you.

Jeffrey C. Sprecher, CEO

Yeah. So one of the flagship products that we trade is Brent crude oil. Brent was a grade of crude that came out of the North Sea between the UK and Norway. And over time, the UK has shut in those oil fields. And while we have this thing we trade called Brent, there's actually no Brent crude in Brent. We basically took that index, if you will, and modified it and expanded it so that to a certain degree it is the optimal price of oil on a ship moving around the world. And we did that partly because there was no more Brent in the Brent crude index, so we needed to reconstitute the index. But then we caught this wave of, you know, U.S. energy dominance and oil exports and ship-borne oil moving around the world. And then you couple that where we, years ago, I asked my colleagues, like, you know, there's a pipe that goes between the U.K. and Europe. And we were trading natural gas on the U.K. side. And I asked my colleagues what trades on the European side. And they said nothing. And so we created this index called TTF, which was just natural gas, Dutch natural gas, that was really there in our minds to create a basis trade for the other end of this pipe. And because of a series of events, Europe has now a net importer of liquefied natural gas, and that marker has become the marker for natural gas at sea. similarly we have a marker called JKM the Japanese Korea marker and again because of many of the trade deals and and a rewiring of the energy markets we really expect a lot from from from you know risk management around around Asia natural gas so we I don't know the WTI which is the which is the oil in the United States is actually oil in a pipe delivered to Cushing Oklahoma and while we still talk about WTI and we still talk about the Dow Jones Industrial Average the reality is I think in the in the world of supply chain it's it's export and import ship-borne oil and natural gas that that is really you know helping to manage risk and and the relevance of taking delivery of oil in Oklahoma is lessened even though there's still a lot of trading in the Dow Jones Industrial Average and there's still a lot of trading in WTI and I think it will continue it's just these other grades I think is where the growth will

Christian, Analyst — Adage

be let's switch over to digital assets and tokenization clearly a lot of a lot of focus around organization today you guys have an initiative to grow there a A lot of different players, traditional PR exchanges, crypto firms. Just talk through what you're doing, how that's different. And then ultimately, how do you think about the revenue or the monetization here? Is it more volumes? Is it something else? I'd be curious.

Jeffrey C. Sprecher, CEO

Yeah, so I think the end state in my mind for this, this is one person's opinion, right? it but the end state in my mind is that we're going to exchange value over the internet and and it will be tokenized effectively and and it will be encrypted and and why will we do that well the banking hours and the banking systems close you know they have banker hours and so we we have what we just talked about was global supply chains global energy movement which we trade we have 13 exchanges and six clearing houses around the world to do that so to a certain degree we follow the Sun but the reality is that when banking hours close in a region we basically have to close money movement and and so I think as we move to 24 by 7 365 trading of things around the world the the capital is going to move on the internet the thing that could disrupt and I think that is that's already happening in the crypto world and I think that's that's going to be institutionalized in the world of you and I sitting in this room the thing that could change that is if if if encryption could be broken, in which case, we may move to a world like that, and then it may move, either encryption will get better and outlive quantum computers, and we all know and have read dozens and stories about crypto wallets that have been hacked and Bitcoin that's been stolen and what have you. If that's the case for traditional capital, then I think we'll move those tokens back on to some kind of private network banking system. But we will have gone 24 by 7, 365. The other thing it's doing is that we're dollarizing the world because we have people around the world that want to own the Magnificent Seven. Because that is dollar denominated, people have figured out how to use Tether and USDC as stablecoin dollar-based collateral to buy these things and and so and other countries that have been slow to recognize you know the tokenization of money are being left behind and so I really feel like you know we're just gonna have global money movement what does that do for my company it allows us to for people to trade 24 by 7 365 um and it allows us to instead of having excess collateral in our six clearing houses we can keep let's just say excess collateral for an institution in one of our clearing houses and as you know the trading moves we can we can quickly transfer funds and and always keep everything in balance um that's what i really think crypto and tokenization is doing I think you know we're we're already working with three large banks who are tokenizing deposits and so while we have stable coins right now and that's a very popular retail product for institutions like us you know we may just be using a different set of wires to move the money that we already have in our accounts and it may move a lot faster a lot more efficiently and cheaper I've talked to you know senior people in the US government senior people in Europe and and UK government about you know could you really extend the legacy pipes of the banking system and the answer is no the answer is those are controlled by government entities they're slow to react they they kind of depend on closing the banks so that you can resolve a failing bank like a Silicon Valley bank. They kind of like the idea that M&A and other things can happen over the weekend and we can have Monday morning surprises. But I do think that that attitude is going to be overtaken by the private sector, which it already is. And we've been, I think, aggressive and quick to embrace it because I think it will yield better, faster, cheaper risk management and ultimately that will increase our volumes and our earnings and cash flow.

Christian, Analyst — Adage

You took, you've taken stakes or at least partnerships with two prominent digital players, OKEx and Impoli Market. On OKEx, just talk through the rationale behind that investment where you're trying to what we're trying to get done, maybe your vision for that partnership.

Jeffrey C. Sprecher, CEO

One of the things we have done is we've applied to the SEC to tokenize stocks at the New York Stock Exchange. Now the reality is the market doesn't want us to tokenize stocks at the New York Stock Exchange. And so what we've done is we've set up a sister company, which they call an ATS, an alternative trading system. and we've asked the SEC to allow us to trade 24 by 7, 365 stocks and we're well along that process of getting approval and we think we will get approval and we think we will, we believe we can, the SEC has the authority to approve this under existing US law, it does not require the crypto bill called the Clarity Act to pass and And assuming that we do that, on day one, I would expect no one in this room would want to participate. There's a broad resistance to trading over the weekends and trading at night, and it's just not how the infrastructure has been set up. But there is a demand for it. And so we asked the question, well, how are we gonna, who's gonna show up to distribute this? OKX is the second largest crypto exchange after Binance. Both Binance and OKX, they were brother-sister. CZ, who started Binance, was the chief technology officer of OKX and eventually left to start his own. But these are two Asia-based crypto exchanges. and OKX got into trouble with the U.S. under the Biden administration, paid a large fine, and agreed to a monitor and agreed to do KYC AML and really get to know their customers so that they could follow U.S. law. And we liked that about them, and we said, OK, they want to enter the U.S. lawfully and legally. We want to distribute tokenized 24 by 7 equities in Asia, which is where that volume, incremental volume, would come from. So we'll help them effectively become a broker-dealer and FINRA-regulated with SEC oversight, and they'll help us by distributing into Asia. And you all can sleep and not worry about it and then wake up in the morning and see what happened, I think. okay um anyhow and then similarly we invested in the prediction markets um in in the polymarket um because polymarket is a true defy exchange it it it in its absolute form has no oversight it the market determines what's going to happen what products trade how the how the things settle Their stablecoin collateral is algorithmically attached to each trade. The trades settle algorithmically. I mean, it's very different than what we do that has human oversight, human responsibility, and has a clearinghouse that's a separate entity that settles trades. We're just interested in that technology. It doesn't fit with U.S. regulation, and we've been helping Polymarket. and articulate what could be modified to allow it to be U.S. compliant. And we've been spending a lot of time with the CFTC to talk about the core principles that legacy exchanges like we are subject to and how those might apply to a DeFi exchange. We're distributing their data to you all, the institutional market. We do think that over time, a lot of what's being talked about of sports betting and and and even politics but but we do think that there's going to be a tremendous growth of of economic data that gets that gets benchmarked and traded in prediction markets and on legacy exchanges it's gonna it's gonna bring institutional investors and retail investors together to discover prices and and inputs and we just want to be a part of it and we wanted to fully understand the DeFi movement. So it was kind of a marriage of, we'll help you, you help us, and let's see if we can move the market along. Okay. Some of these crypto-native

Christian, Analyst — Adage

players are also coming after some of your markets. Hyperliquid has gotten a lot of attention in the energy markets. What do you make of that platform as a competitive threat, and sort of how do you think about being responsive to what they're doing?

Jeffrey C. Sprecher, CEO

Well, first of all, we know them well, and I've met with them a number of times personally and to talk about what they're doing, what we're doing, where there may be some common overlap that we can work together on. They have gotten attention because they've been trading oil on the weekends when our traditional oil markets are closed. And it just so happens in this time of conflict in the Middle East, there have been a lot of activity that happens, a lot of decisions and things happen on the weekends. So it's gotten a lot of interest. I think the reality is it's going to go to the next level. They've listed SpaceX for trading, or they've listed a derivative of SpaceX for trading. And I think it's going to be really interesting to watch on June 11th when SpaceX goes public what this private market has discovered as the price and whether that price impacts the IPO. I think regulators and market participants are going to say either it was irrelevant or it was highly relevant. And so to a certain degree, you know, I guess I'll withhold judgment for another few weeks, other than the people that have built that exchange are extremely smart, and that is a true DeFi exchange. and it's attracted a lot of market makers and other market participants early adopter market participants that would ordinarily be in our traditional markets are there exploring you know this technology and and and this way of doing business it is on a blockchain it is settled with stable coins algorithmically settled it has very high margining you can have up to a hundred to one leverage which is part of the lure it means going back to SpaceX depending on how much leverage is allowed you're going to have retail are going to essentially mathematically are going to be putting a lot of capital at risk on that IPO it may it may you know depending how big this gets it could be bigger than the IPO so that's why I say I don't think you can ignore it I don't know yet whether we embrace it or or hate it um but uh but i think we'll all have an opinion you know in june and i salute these these guys for doing it i mean they're these are some very very smart people

Christian, Analyst — Adage

maybe just on the on the energy and oil side um clearly they've tapped into a demand yes um is there anything ice can do to at least help satiate that demand and bring that falling back

Jeffrey C. Sprecher, CEO

to your yeah um so you know we went to all the major oil companies and said good news we can we can stay open we follow the sun we have people around the world so um we can stay open on saturday good news uh and it wasn't very good news honestly um and so uh the market hated it so what you're going to see us do is stay open very very very very very late on friday and open very very very very very early on monday and so um um essentially narrow down the the window that um that there isn't traditional trading um and um and i you know i think it's a wake-up call for the industry because while most of our institutional clients are not you know trading on blockchain and they're not, these are unregulated, you know, foreign entities, and most of our clients don't even have the ability, you know, internal controls don't give them the ability to trade on these things. They're all watching it, and they're watching the price discovery, and whether they admit it or not, it is being, you know, part of the zeitgeist of when our markets do open really really really really really early on Monday and so and so in that sense you know they're important and and and we we would we just think that like it or not markets are have become much more global much more dollarized and and there's been a just like the equity markets that many of you participate in here the the rise in retail and the equity markets is phenomenal and that's happening in all markets and and I think we're just gonna have to get used to the interplay of retail and professional trading 24 7

Christian, Analyst — Adage

365 okay it sounds like you know you're a founder sounds like you have some at least admiration for those founders I love that I love what you're doing I

Jeffrey C. Sprecher, CEO

wish I wish I was younger and and doing it by the way the number of billionaires that are being created doing this. This hyperliquid that we're talking, if you haven't heard about it, it's bigger than NASDAQ, okay? It's 11 people. You look at it, you're like, wow, that's pretty something.

Christian, Analyst — Adage

There's been some reports, and then yourselves and CME have raised some concerns with regulators around the risks at the hyperliquid venue. I guess, how do you answer skeptics? well what are the risks that you see one and how would you answer skeptics that think um or simply

Jeffrey C. Sprecher, CEO

say using regulation to slow down a fast growing yeah yeah there was an article written uh where it had us in the headline that we were we were all you know freaked out about it we're not freaked out about it we're actually talking these people and learning about it they're learning what we're doing we're helping them understand our world they're helping us understand their world so um In that sense, you know, a joint admiration. But what we are saying to the regulators is, can we do that? Like, why are you prohibiting us from doing this when it's already happening? And can't we have a level playing field? And by the way, this stuff is global. So, you know, and the U.S. is very, under this administration, is very pro-digitization. and so how do we square that circle because we'd like to do more of it if you think it's lawful and if you don't think it's lawful then how come they're not getting the same nasty letters that you send us the thing that is trading right now which you'll hear a lot about is a thing called the perpetual future in our world it's called a swap and and in our world Dodd-Frank was passed and Dodd-Frank says exactly how swaps are reported to the government and what what who is a swap dealer and and how much you can margin and how these things get liquidated and you know title seven of Dodd-Frank is is a whole you know multi-page set of laws that was designed specifically after the financial crisis to prevent the trading of swaps, and so now we call these things perpetual futures, and they're highly levered and, you know, very liquid, and the regulators have a choice to make, which is do they create some new category of regulated perpetual future, or do they call them swaps and suck them into Dodd-Frank and Ymir in the in the EU and there's similar regulation in Japan and we don't know the answer that I'm not sure the regulators know the answer to that right now they're on the one hand people want there to be innovation they want there to be competition on the other hand you know the incumbents like us we want to make sure that we understand the rules and that it's fair competition and I think you know the next few months and maybe the SpaceX IPO will, I think people will start to settle around a common view of this stuff.

Christian, Analyst — Adage

Okay. Just quickly on this, just how you think about strategy and attacking this whole digital asset space. Seems like it's been very much about taking equity stakes, but as we roll forward three to five years, is there a vision of ICE having its own on-chain platform, et cetera, as opposed

Jeffrey C. Sprecher, CEO

to sort of the stakes approach? Yeah. So we have already hooked the New York Stock Exchange to you know a blockchain market for settlement we were running that in our own data center it's not public but but we proved we can do it and and and so I think like I say I think as we digitize collateral I think you know worse we're ready to go we understand what to do what I said to you though is we hooked the New York Stock Exchange market to a blockchain because we do 1.7 trillion transactions a day. The volume on the New York Stock Exchange is staggering. It's more than Google search, I think. There's no chain that can handle the kind of volumes that we do. Second thing is that on a blockchain, the way it's decentralized is you have proof of stake or proof of work but basically you have to have multiple oracles that are multiple validators that agree that title has transferred and that takes time and um and we all live in a world where algorithmic traders are are you know in in microseconds making markets on our our platforms and they don't i don't think the market wants to go back in time on latency i think the market wants has figured out how to deal with fast speed, but it wants the kind of digital settlement that I described earlier against that speed. And I think blockchain as it exists today, even the best chains are good enough to net positions relatively quickly and move collateral near instantaneously, but not at the same speed and the same velocity that trades are being done and I think that will be a relatively easy and painless transition for most people because collateral movement against the positions that you all take is done by your back office, it's well understood how to move capital I think this is just a different set of pipes the big banks that are working with us are going to accommodate that wiring and network. And I think eventually most people will coalesce around a single chain or multiple chains that can talk to each other. And I think it will happen pretty organically, but relatively quickly.

Christian, Analyst — Adage

Let's move from digital assets and instant settlement and speed and innovation to mortgage technology. We can't get any more different than that. On mortgage, maybe just firstly, more of a macro question. I think there's certainly hopes of rates coming down this year. That's sort of flipped. The business seems like it's beginning to turn around, irrespective of the macro. But just talk through how changing rate expectations impact how you think about the business over the next year or so.

Jeffrey C. Sprecher, CEO

Yeah, we have an interest rate franchise in the company. and what we didn't have was consumer rates, which is really, let's call it the cash market. We have a lot of derivative markets. We wanted to have a counterweight to our business in order to create an all-weather name. We thought as interest rates, if they were to go down, home mortgage volume would go up and derivatives volume would go down. The opposite has happened. You know, interest rates have stayed high. The best product we have at our company and the fastest growing product we have are the interest rate derivative markets. The all-weather strategy has worked. It's just frustrating that there's this one leg there that we thought it was going to go the other way, and it hasn't. But what we have been doing, you know, in the interim, we run this network. Pretty much everybody in the U.S. mortgage industry touches our network. or probably over 90% of all mortgages at some point go across our network. And when they go across our network, we're gathering the data and distributing mortgages. People don't, lenders don't write mortgages and then hold the mortgage on their books for 30 years the way that maybe they did in the 50s. Mortgages are either packaged and sold into mortgage-backed securities. The servicing rights can be and often are stripped off and sold and mortgage are packaged in different ways, or they're given to Fannie and Freddie who then, or Ginnie Mae, and who then turn around and repackage them and put them into other kinds of government-backed securities. So these mortgages are moving around, and we run this network. And what we're finding now in a world of AI is that that is a foundational layer for which everybody is interested in improving the velocity of executing a home mortgage but because they change hands the data set also has to change hands and has to be auditable and the government has Fannie and Freddie have now come out and said we do not want mortgages that AI has underwritten because we don't know what's underneath those mortgages we want a foundational data layer that is auditable we don't care if you use AI to help automate some of your workflow but but the mortgage itself has to have this foundation layer so we've been working with around with the government and and with you know major market participants to to put AI heads on top of this network to streamline the way things flow. The most amazing thing that we discovered, which AI has helped us do, is that we have this amazing topology on our network because we see pretty much everybody and everybody's data. We know who does business with who. We know where the mortgages go, how they originated, where they go. We know in a company which employees have access to which data because data is segregated depending on what your role is in a company in order to protect the consumer and so we we've now been working you know using Claude and anthropic to to create a topology layer that is we think gonna be really valuable to help automate the workflow not just inside a company but across the whole industry and knowing who does business with who and where the mortgages went and how to reconstruct them and if there is a default or a foreclosure, what the origination of that mortgage was and who's liable for the sharing of the pain. So anyway, kind of the opposite, I think, of what people thought about that business, that maybe everybody would just go write their own code and write their own platform. And the reality is that data, foundational data piece,

Christian, Analyst — Adage

we think is is very very valuable okay you know to your points the data piece and your platform and compass is it's a dominant loan organization system you know there are a couple of new AI native players one a particular investor has been pretty visible with a couple of competitive wins from from your platform again how real is this threat from the sort of players as anything you're doing in in your business to sort of neutralize that threat?

Jeffrey C. Sprecher, CEO

Yeah, well, first of all, I would say there's a lot of experimentation going on around with AI, including in my own company and the way we're using it for our own needs. But there are startups that are running out and saying, look, give me 10 loans and let me show you how my thing works. And most of this stuff is very, very good if you're dealing with vanilla ice cream. but what you find in in the mortgage space is is we're a very diverse population with a very very diverse housing set and very very diverse outcomes on what happens with a mortgage and and the edge cases are the ones that regulators care about honestly and the ones that catch people by surprise and And going through a foreclosure, for example, is a legal process. For those that are my era, remember that during the financial crisis, lenders were showing up with loan documents in court that had what they called robo-signatures. In other words, they were not the original wet signature. And the courts would not honor the foreclosure. And, you know, our system of dealing with the resolution of mortgages is very, very deeply ingrained in the legal process, and there's a process in every state and jurisdiction on what has to happen. and an AI model, maybe that helps a lawyer deal with that better, but the reality is it is not something that the courts want to see automated. Everybody learned that in the financial crisis with these robo-signatures. So those are areas where we just don't think the incumbents understand. Like I say, I don't think people were prepared for Fannie and Freddie to say, we're not gonna we're not gonna underwrite those kinds of mortgages you can understand why they're saying that like you know this this could be the next financial crisis if we don't understand what the you know what the algorithm is doing or what data it's using or is it hallucinating and is it discriminatory you know which it's just and a highly regulated area in the most important decision that that a consumer will make that has a lot of empathy by lawmakers to make sure that they're treated fairly and properly and that's very hard right now to automate we can do little workflow things to make sure that the people that are in charge are doing it fast and efficient but I think people are overestimating putting AI into regulated markets like there are other markets where you could do AI and and have it adopted regulated markets are tough I'm telling you we're you know we run regulated markets and we have a lot of expertise and we get dinged all the time and every one of our lenders gets dinged all the time and you know we have 3,500 lenders that are on this network and and and that thing is completely audited from soup to nut every lender is audited on the behavior on that network, and so it's something that puts us in a very strong strategic position, if you will.

Christian, Analyst — Adage

Okay. Let's switch over to your fixed income and data business. Pretty interesting launch you had on private credit data, I think with Apollo as the encore. Just talk about how that came about. how do you ultimately take what is a single partnership into an industry standard and any thoughts on the vision for this over time yeah I think first

Jeffrey C. Sprecher, CEO

of all a lot of credit to Apollo Mark Rowan and Apollo they they are one of the leaders in the private credit space and and in talking to Marco starting maybe a year and a half ago or more they felt like the market was not appreciating the quality of the of the loans that they had originated and and and their ability to to put their own credit standards on things that and and so now with the sort of recent downturn in share prices for for people in the private credit space Mark and the team there wanted to provide more transparency into what they've done because they they they think the market as overreacted so how do they want to do that so we've we've set up a relationship with them where they've so far they've given us we've been working on this for over a year but they so far they've given us about 12 000 loan documents and they cover about 1100 loans and we've been going through their loan documents and and essentially building a data set of 350 unique qualities that that we jointly agree sort of define a loan and of those 350 attributes there's about 65 in our mind somewhere around there that if you were going to buy a loan from them or have a loan on your books you would you would be interested in those 65 attributes and to the extent that there's a change in credit quality like what what has happened to those 65 attributes and there's probably 20 or 25 of those attributes that if you were actually going to do secondary trading of a loan, you'd want those updated all the time so that you could see the real value of that loan. So anyway, we're starting with just, let's just get transparency into what these loans are, how they're constructed, and Apollo on its choosing will allow certain of its limited partners to have access to that data set. So as Apollo marks these to market, that those people that are on the receiving end have some visibility into what are the attributes that are in that loan and what are the attributes that Apollo is looking at when they're coming up with the marks. We've been talking to most of the other major private credit entities who are all interested in what we're doing and are in various stages of determining whether or not they want us to do that for them but if I had to guess I think a lot of the LPs will like having more visibility because these things are on their books and and I think they'll be I don't know my experience and is that it's hard to get transparency you know floor traders didn't want to give up their position on the floor and you know people like dark pools because they don't want to see you know that have people think that they can see what they're doing in a lit market when reality you know dark markets have the same participants as lit markets i'm not sure there's a lot of difference and over time we've all kind of gotten used to okay i'm gonna i'm gonna be more transparent i think that will happen to the private credit market and kudos to mark and and the team at Apollo for wanting to take a leadership role there.

Christian, Analyst — Adage

Okay, quick question on just your infrastructure. You've chosen, unlike your peers, to own your own data centers. Yes. And there's certainly been, from the revenue side, that's been a great decision in the last, at least in the last year or so. Remind us again why you chose that, and then how you think about just demand, sustainability for you know access to your data centers etc over the next

Jeffrey C. Sprecher, CEO

couple years yeah so there was a period maybe I don't know ten years ago when everybody was moving to the cloud and and we have a lot of business in the cloud and we work with all all of the major cloud providers and and for you all that do business with us we're cloud agnostic you you can show up with your own cloud but you will pay for it and what we figured in the early days of cloud is we couldn't control the expenses for the cloud like our people were using more and more and more of it and the price was going up and up and up and we were like well this you know as a manager it's like this this is this is this is not a good situation so we said we you know we run the New York Stock Exchange for crying out loud like we we we have everybody in and their brother and finances wants to take data and information from us we should have our own data center network and we should beyond that we should build our own network we should have our own pipes and wires and create our own cloud and so we have a thing called the ice cloud which is how you know many many financial services companies take take data and information from us there's been a demand you know as as we moved from floors to screens you know from mouses to algorithms the there's been more and more demand to be located in our data centers and we created a concept of you give us your hardware you you pick your hardware you give us your hardware we'll put it in our data center and we'll manage it for you and we'll co-locate it and we will guarantee that no one has priority over anyone else by by literally down to microseconds making sure that the data distribution is even across all players and anyway that That caused us to start building data center capacity and then NVIDIA took off a couple of years ago and we decided maybe we should get some of these GPU chips and maybe we should maybe build more data center capacity and we need to get electric power and cooling and everything else and so we luckily I guess sort of beat the curve and so we've got a brand new data center that sits next to the New York Stock Exchange data center is still not built completely full we're going to fill it up here pretty soon and now we've got a second data center about the same size that's sitting next to it that will allow us to expand for years and so we're right we run auctions for space for people that want to be a part of that data center and and now you know with our with all the AI stuff that I mentioned to you we We can use the cloud, if people want to use the cloud for running inference and learning, or we can use our own GPU stack. So I don't know, we're in a really good position. And as Christian's alluding to, we have a lot of clients that are like, okay, that sounds good to me, how do I get into it? Great stuff.

Christian, Analyst — Adage

We're almost out of time, but I wanted to just squeeze in one last one, and you have one minute, Jeff, on this one. So it's just the next five years or so in the company. If I think through the last 10 years or so, you've added a new big segment. It was first fixed income and data, then mortgage. What's next? What's the next big segment?

Jeffrey C. Sprecher, CEO

Well, I mean, to a certain degree, we talked about we're moving into private credit. We're moving into tokenized collateral. We're moving into 24 by 7, 365 access to everything we do. without doing anything other than the organic growth that I just mentioned to you, I think it's going to transform the company.

Christian, Analyst — Adage

Great stuff. As always, always a pleasure. Thank you very much, Jeff.

Jeffrey C. Sprecher, CEO

Great. Thank you, Christian.