ICE sees transaction revenue surge in mortgage unit

Intercontinental Exchange had more green shoots in its mortgage technology business to start the year, including a sizable gain in transaction revenue. 

The ubiquitous software provider reported mortgage segment revenue of $539 million for the first quarter, building on the 3-year high it posted in the prior reporting period. Within that business, ICE saw quarterly and annual revenue gains for various solutions, benefiting from stronger origination performance. 

The mortgage technology business recorded a $13 million operating loss, including operating expenses of $552 million, up 3% from the first quarter of 2025. That number reversed a profit in the fourth quarter but it was smaller than a bigger $27 million loss in the year-ago period. 

On an adjusted pro forma basis, factoring in the Black Knight acquisition earlier this decade, the mortgage business posted a $212 million profit, representing slight quarterly and annual increases. 

ICE, the owner of the New York Stock Exchange, enjoyed a strong overall quarter, with a massive annual gain in net income to $1.4 billion. That was driven in part by interest rate volatility over the January-to-March stretch, and a fair value gain from an investment in predictions marketplace Polymarket.

Mortgage business gains

The segment's largest revenue chunk is its servicing software, which generated $222 million in revenue for the first quarter, up 1% annually. New client implementations, contractual price increases and default management revenues were partially offset by loan count declines stemming from industry mergers and acquisitions, ICE noted in its 10-Q filing. 

The firm's origination technology revenue of $192 million and closing solutions revenue of $57 million in the first quarter were up 10% and 20%, respectively, because of more origination volume. Mortgage data and analytics services generated $68 million for ICE, a 1% rise over the first quarter of 2025. 

An executive in Thursday's earnings call cited an "impressive" 22% year-over-year gain in transaction revenue to $138 million, which was also down $3 million from the end of 2025. The winter months improvement was fueled by greater Encompass closed loan revenues, as customers increasingly exceeded their contractual minimums.

ICE also reported a slight uptick in quarterly recurring revenues to $401 million, from the fourth quarter's $391 million and the year ago period's $397 million. The company said it expects that figure to remain stable in the current reporting period. 

Firm President Ben Jackson on Thursday's call discussed ICE's momentum in the mortgage segment, and past headwinds on subscription revenues in negotiating with refinance boom-era clients. In those renewals, ICE increased the closed loan fees.

"[That] would put us in a position to benefit from the volume environment when it returns with getting higher per transaction fees, and we've seen that come through," he said. 

Tailwinds for ICE

Jackson said ICE is seeing the bank appetite for mortgage servicing rights grow, as Basel rules develop. The company touted a new MSP client, Huntington Bank, and another unnamed home equity line of credit lender implementing the servicing software. 

The servicing business processed around 4 billion API and web services calls in March, a 20% annual increase the firm attributed to increased use of its artificial intelligence tools. The company president suggested ICE's AI approach is particularly relevant in the wake of the government-sponsored enterprises' updated guidelines.

"Our clients' interaction with our platforms continues to evolve, and what we're seeing is not displacement, but deeper integration," said Jackson.