Ricardo Pillai
5 min read
In This Article:
We came across a bullish thesis on Intercontinental Exchange, Inc. (ICE) on Substack by Business Model Mastery. In this article, we will summarize the bulls’ thesis on ICE. Intercontinental Exchange, Inc. (ICE)'s share was trading at $176.53 as of May 7th. ICE’s trailing and forward P/E were 36.55 and 26.53 respectively according to Yahoo Finance.
A trader on the floor of a bustling stock exchange, surrounded by a sea of monitors.
Intercontinental Exchange (ICE) is not simply a trading platform—it is the invisible architecture underpinning some of the world’s most critical financial, energy, and mortgage transactions. Whether it’s the pricing of a barrel of Brent crude, the execution of a sovereign bond trade, or the underwriting of a U.S. mortgage, ICE is likely collecting fees and facilitating the infrastructure behind the scenes. Its reach spans 13 regulated exchanges and six clearinghouses across global financial hubs, connecting every major financial actor from lenders and governments to energy traders and mortgage processors. This isn't a marketplace—it’s an economic operating system. ICE's dominance is institutional, geographic, and regulatory. Across three main verticals—exchanges, fixed income and data, and mortgage technology—the company has embedded itself into the workflows and compliance systems of global finance. The NYSE, which ICE owns, lists 70% of the S&P 500, while its futures markets benchmark global commodities from oil to coffee. Meanwhile, its bond pricing engine covers nearly 3 million fixed-income instruments, powering ETFs, credit models, and risk frameworks across 150 countries and 80 currencies. This is not simply data—it is legally and operationally essential infrastructure.
The company’s mortgage technology platform touches over 70% of all U.S. mortgage originations, with its digital tools automating everything from loan application to foreclosure processing. The power of this business lies not in siloed segments but in the self-reinforcing nature of its ecosystem. Mortgage data feeds into bond pricing, which informs ETF construction, which in turn drives trading activity—creating a flywheel effect that deepens user dependence and raises switching costs. ICE has turned necessary processes into recurring revenue, with subscriptions and data products now comprising over 50% of total revenue, up from 34% in 2014. These products carry gross margins exceeding 60%, a structural advantage over the 40% margins of transactional businesses. The dependence ICE cultivates is structural and nearly impossible to unwind. Its clearinghouses are mandated by law. Its pricing data is hardcoded into regulatory filings, ETF prospectuses, and compliance software. And its software powers daily operations at institutions that cannot afford a millisecond of disruption.
