Nasdaq(NDAQ) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Financial and Operational Review Summary of Key Financial Metrics Nasdaq reported strong financial results for Q3 2025, with Solutions quarterly revenue exceeding $1 billion and Annual Recurring Revenue (ARR) reaching $3 billion for the first time. Net revenue increased 15% year-over-year, driven by growth across all segments | (US$ millions, except per share) | 3Q25 | YoY change % | Adjusted2 YoY change % | Organic2 YoY change % | | :------------------------------ | :--- | :----------- | :--------------------- | :-------------------- | | Solutions revenue | $1,003 | 15% | 10% | 10% | | Market Services net revenue | $303 | 14% | 13% | 13% | | Net revenue | $1,315 | 15% | 11% | 11% | | GAAP operating income | $586 | 31% | | | | Non-GAAP operating income | $732 | 15% | 16% | 16% | | ARR | $3,007 | 10% | 9% | 9% | | GAAP diluted EPS | $0.73 | 38% | | | | Non-GAAP diluted EPS | $0.88 | 19% | | 19% | - Solutions revenue surpassed $1 billion and Annual Recurring Revenues (ARR) reached $3 billion for the first time, reflecting a successful transformation into a leading technology platform[3] - Annualized SaaS revenue increased 12% and represented 38% of total ARR[3] - The company returned $155 million to shareholders through dividends and repurchased $115 million of common stock in Q3 2025[3] Management Commentary CEO Adena Friedman highlighted the achievement of significant milestones in Solutions revenue and ARR, attributing it to Nasdaq's successful transformation into a technology platform. CFO Sarah Youngwood emphasized excellent Q3 performance with revenue growth across all three divisions, driving robust earnings and strong operating cash flow - CEO Adena Friedman stated that surpassing $1 billion in Solutions quarterly revenue and $3 billion in ARR reflects Nasdaq's successful transformation into a leading technology platform[3] - CFO Sarah Youngwood noted that revenue growth across all three divisions drove robust earnings growth and generated over $2 billion in operating cash flow over the previous four quarters[4] - Nasdaq achieved its gross leverage milestone ahead of schedule and remains focused on organic investments for long-term revenue growth and shareholder value[5] 2025 Guidance Update Nasdaq updated its non-GAAP operating expense and tax rate guidance for 2025, narrowing the expense range and lowering the tax rate due to discrete items - Updated 2025 non-GAAP operating expense guidance to a range of $2,305 million to $2,335 million (previously $2,295 million to $2,335 million)[6] - Updated 2025 non-GAAP tax rate guidance to 22.5% to 23.5% (lowered due to certain discrete items in Q3)[6] Strategic and Business Updates Segment Performance Highlights Nasdaq's segments demonstrated strong performance, with Financial Technology showing robust organic growth and client engagement, Index reaching record AUM and inflows, Listings extending market leadership, and Market Services achieving record derivatives revenue Financial Technology Financial Technology delivered strong organic revenue and ARR growth, driven by high client demand and successful cross-selling. Nasdaq Verafin significantly expanded its client base, including a Tier 1 bank, and Regulatory Technology continued its momentum with new market signings - Delivered 13% organic revenue and 12% organic ARR growth, with 65 new clients, 97 upsells, and 4 cross-sells[8] - Nasdaq Verafin added 55 new small-and-medium bank clients and signed an enterprise Tier 1 bank, achieving 6 new enterprise client signings in the first three quarters of 2025, triple the number in full-year 2024[8] - Regulatory Technology secured multiple new Surveillance signings, including the CFTC for digital assets, and an enterprise cloud deployment with a global Tier 1 bank for AxiomSL[8] - Capital Markets Technology achieved 12% revenue growth, driven by Trade Management Services and Calypso upfront revenue, with 4 new Calypso clients and 39 upsells[8] Index The Index segment saw record ETP assets under management (AUM) and net inflows, with significant growth in new product launches - Index ETP AUM reached a record $829 billion at quarter-end, with $17 billion in net inflows in Q3 and a record $91 billion over the last twelve months[8] - Nasdaq launched 30 new Index products in Q3, including 18 international products and 13 in the institutional insurance annuity space[8] Listings Nasdaq maintained its listing leadership, welcoming the largest European IPO since 2022 and facilitating significant capital raises in the U.S. market - Nasdaq extended its listing leadership, welcoming the Verisure IPO to the Stockholm market in October, the largest European IPO since 2022[8] - The U.S. listings franchise welcomed operating companies that raised $6 billion in proceeds in Q3, with over $14 billion raised year-to-date[8] Market Services Market Services delivered record U.S. derivatives revenue and strong performance in U.S. cash equities, with record volumes in options and Nasdaq Index options - Market Services generated record revenues and volumes in U.S. derivatives, with industry-wide options contract volumes seeing 6 of the 10 highest days in history during Q3[8] - Nasdaq Index options volumes also hit record levels in Q3, and Nasdaq's Closing Cross set a new daily notional value record in September[8] Execution of Strategic Priorities Nasdaq continues to advance its 2025 strategic priorities—Integrate, Innovate, Accelerate—by exceeding efficiency targets, introducing advanced AI solutions, and driving cross-sell wins through its 'One Nasdaq' strategy Integrate Nasdaq surpassed its expanded efficiency program net expense target, achieving over $150 million in cost reductions, and received a debt rating upgrade from S&P - Surpassed expanded efficiency program net expense target with over $150 million in cost reductions actioned[10] - S&P upgraded Nasdaq's senior unsecured debt rating from BBB to BBB+ on August 12, returning to pre-Adenza acquisition levels[10] Innovate Nasdaq is innovating by facilitating tokenized securities trading, launching AI-powered tools like the Digital Sanctions Analyst, and forming strategic partnerships to enhance its anti-financial crime platform - Submitted a filing to the SEC to facilitate trading of tokenized securities on its markets[10] - Nasdaq Verafin launched its first Agentic AI Workforce digital worker, the Digital Sanctions Analyst, to address compliance workflow pain points[10] - Formed a strategic partnership with BioCatch to integrate behavioral and device intelligence alerts into Nasdaq Verafin's anti-financial crime platform[10] - Over 800 clients have opted-in to use AI tools within Nasdaq BoardVantage, demonstrating product innovation value[10] Accelerate Nasdaq's 'One Nasdaq' strategy continues to drive cross-sell wins, contributing significantly to the Financial Technology sales pipeline and remaining on track to exceed $100 million in run-rate revenue from cross-sells by the end of 2027 - Delivered 4 cross-sell wins across Financial Technology in Q3, totaling 30 cross-sells since the Adenza acquisition[10] - Cross-sells continue to account for over 15% of Financial Technology's sales pipeline[10] - On track to surpass $100 million in run-rate revenue from cross-sells by the end of 2027[10] Corporate Information and Disclosures About Nasdaq Nasdaq is a global technology company providing platforms and services to capital markets participants, aiming to enhance liquidity, transparency, and integrity in the global economy - Nasdaq is a global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators[13] - The company aims to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy[13] - Offerings include data, analytics, software, exchange capabilities, and client-centric services[13] Non-GAAP Financial Measures Nasdaq uses non-GAAP financial measures to provide greater transparency into its financial condition and operating results, believing they offer a clearer view of ongoing performance by excluding certain charges and gains. The report also details adjustments for foreign exchange impacts and restructuring programs - Non-GAAP measures are used internally and for investor transparency to evaluate performance and make financial/operational decisions, as they highlight trends not apparent in U.S. GAAP alone[14][16] - Non-GAAP measures are not a substitute for U.S. GAAP and may not be comparable to similarly titled measures from other companies[15] - Operating results excluding foreign currency fluctuations are calculated by translating current period results using prior period exchange rates to improve comparability[17] - Restructuring programs, including the efficiency program and divisional realignment, aim to optimize efficiencies and are excluded from non-GAAP measures as they are not reflective of ongoing operating performance[19] Forward-Looking Statements and Website Disclosure The report includes cautionary notes regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially. Nasdaq also discloses its intent to use its investor relations website for material non-public information - Forward-looking statements involve risks and uncertainties, and actual results could differ materially from projections[20] - Nasdaq intends to use its investor relations website (https://ir.nasdaq.com/) for disclosing material non-public information and complying with SEC Regulation FD[21] Consolidated Financial Statements Condensed Consolidated Statements of Income This section presents Nasdaq's unaudited condensed consolidated statements of income for the three and nine months ended September 30, 2025, and 2024, detailing revenues, operating expenses, and net income | (in millions, except per share amounts) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenues: | | | | | | Capital Access Platforms | $546 | $501 | $1,588 | $1,460 | | Financial Technology | 457 | 371 | 1,352 | 1,183 | | Market Services | 946 | 1,022 | 3,171 | 2,700 | | Other Revenues | 9 | 8 | 27 | 27 | | Total revenues | 1,958 | 1,902 | 6,138 | 5,370 | | Revenues less transaction-based expenses | 1,315 | 1,146 | 3,857 | 3,422 | | Operating income | 586 | 448 | 1,702 | 1,281 | | Net income attributable to Nasdaq | $423 | $306 | $1,270 | $762 | | Diluted earnings per share | $0.73 | $0.53 | $2.19 | $1.32 | | Cash dividends declared per common share | $0.27 | $0.24 | $0.78 | $0.70 | Revenue Detail by Segment This section provides a detailed breakdown of Nasdaq's revenues by segment and sub-segment for the three and nine months ended September 30, 2025, and 2024 | (in millions) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | CAPITAL ACCESS PLATFORMS | | | | | | Data and Listing Services revenues | $204 | $190 | $594 | $562 | | Index revenues | 206 | 182 | 595 | 517 | | Workflow and Insights revenues | 136 | 129 | 399 | 381 | | Total Capital Access Platforms revenues | 546 | 501 | 1,588 | 1,460 | | FINANCIAL TECHNOLOGY | | | | | | Financial Crime Management Technology revenues | 84 | 69 | 241 | 200 | | Regulatory Technology revenues | 109 | 68 | 315 | 253 | | Capital Markets Technology revenues | 264 | 234 | 796 | 730 | | Total Financial Technology revenues | 457 | 371 | 1,352 | 1,183 | | MARKET SERVICES | | | | | | Market Services revenues | 946 | 1,022 | 3,171 | 2,700 | | Total Market Services revenues, net | 303 | 266 | 890 | 752 | | OTHER REVENUES | 9 | 8 | 27 | 27 | | REVENUES LESS TRANSACTION-BASED EXPENSES | $1,315 | $1,146 | $3,857 | $3,422 | Condensed Consolidated Balance Sheets This section presents Nasdaq's unaudited condensed consolidated balance sheets as of September 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | (in millions) | September 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :----------------------------- | :---------------- | | Assets | | | | Cash and cash equivalents | $470 | $592 | | Total current assets | 7,597 | 7,786 | | Goodwill | 14,336 | 13,957 | | Total assets | $30,654 | $30,395 | | Liabilities | | | | Total current liabilities | 7,705 | 7,902 | | Long-term debt | 8,667 | 9,081 | | Total liabilities | 18,624 | 19,195 | | Equity | | | | Total Nasdaq stockholders' equity | 12,023 | 11,191 | | Total equity | 12,030 | 11,200 | | Total liabilities and equity | $30,654 | $30,395 | Non-GAAP Reconciliations Net Income and Diluted EPS Reconciliation This section provides a reconciliation of U.S. GAAP net income and diluted earnings per share to their non-GAAP counterparts, detailing the adjustments made for various items such as amortization, merger expenses, and restructuring charges | (in millions, except per share amounts) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. GAAP net income attributable to Nasdaq | $423 | $306 | $1,270 | $762 | | Total non-GAAP adjustments, net of tax | 88 | 123 | 190 | 432 | | Non-GAAP net income attributable to Nasdaq | $511 | $429 | $1,460 | $1,194 | | U.S. GAAP diluted earnings per share | $0.73 | $0.53 | $2.19 | $1.32 | | Total adjustments from non-GAAP net income above | 0.15 | 0.21 | 0.33 | 0.74 | | Non-GAAP diluted earnings per share | $0.88 | $0.74 | $2.52 | $2.06 | Revenues Less Transaction-Based Expenses Reconciliation This section reconciles U.S. GAAP revenues less transaction-based expenses to non-GAAP figures, primarily adjusting for the Adenza purchase accounting change related to AxiomSL on-premises contracts | (in millions) | Three Months Ended Sep 30, 2024 (U.S. GAAP) | Non-GAAP Revenues Less Transaction Based Expenses | Nine Months Ended Sep 30, 2024 (U.S. GAAP) | Non-GAAP Revenues Less Transaction Based Expenses | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | :----------------------------------------- | :------------------------------------------------ | | CAPITAL ACCESS PLATFORMS | $501 | $501 | $1,460 | $1,460 | | FINANCIAL TECHNOLOGY | | | | | | Financial Crime Management Technology revenues | 69 | 69 | 200 | 200 | | Regulatory Technology revenues | 68 | 102 | 253 | 287 | | Capital Markets Technology revenues | 234 | 234 | 730 | 730 | | Total Financial Technology revenues | 371 | 405 | 1,183 | 1,217 | | SOLUTIONS REVENUES | 872 | 906 | 2,643 | 2,677 | | MARKET SERVICES REVENUES, NET | 266 | 266 | 752 | 752 | | OTHER REVENUES | 8 | 8 | 27 | 27 | | REVENUES LESS TRANSACTION-BASED EXPENSES | $1,146 | $1,180 | $3,422 | $3,456 | Operating Income and Operating Margin Reconciliation This section reconciles U.S. GAAP operating income and operating margin to their non-GAAP equivalents, adjusting for items such as amortization, merger expenses, and restructuring charges to provide a clearer view of operational performance | (in millions) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. GAAP operating income | $586 | $448 | $1,702 | $1,281 | | Total non-GAAP adjustments | 146 | 189 | 433 | 569 | | Non-GAAP operating income | $732 | $637 | $2,135 | $1,850 | | Revenues less transaction-based expenses | $1,315 | $1,146 | $3,857 | $3,422 | | U.S. GAAP operating margin | 45% | 39% | 44% | 37% | | Non-GAAP operating margin | 56% | 54% | 55% | 54% | Operating Expenses Reconciliation This section reconciles U.S. GAAP operating expenses to non-GAAP operating expenses, adjusting for items like amortization of acquired intangibles, merger and strategic initiatives, and restructuring charges | (in millions) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. GAAP operating expenses | $729 | $698 | $2,155 | $2,141 | | Total non-GAAP adjustments | (146) | (155) | (433) | (535) | | Non-GAAP operating expenses | $583 | $543 | $1,722 | $1,606 | Organic Impacts Reconciliation This section provides a reconciliation of organic impacts on non-GAAP revenues less transaction-based expenses, operating expenses, operating income, and diluted EPS, isolating the effects of foreign currency, divestitures, and accounting changes | (in millions, except per share amounts) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 (Non-GAAP) | Total Variance $ | Total Variance % | Other Impacts(1) $ | Other Impacts(1) % | Adjusted/Organic Impact $ | Adjusted/Organic Impact % | | :------------------------------------ | :------------------------------ | :----------------------------------------- | :--------------- | :--------------- | :----------------- | :----------------- | :------------------------ | :------------------------ | | Solutions revenues | $1,003 | $906 | $97 | 11% | $2 | 0% | $95 | 10% | | Market Services, net revenues | 303 | 266 | 37 | 14% | 4 | 1% | 33 | 13% | | Revenues less transaction-based expenses | $1,315 | $1,180 | $135 | 11% | $7 | 1% | $128 | 11% | | Non-GAAP Operating Expenses | $583 | $543 | $40 | 7% | $10 | 2% | $30 | 5% | | Non-GAAP Operating Income | $732 | $637 | $95 | 15% | $(3) | (1)% | $98 | 16% | | Non-GAAP diluted earnings per share | $0.88 | $0.74 | $0.14 | 19% | $0 | 0% | $0.14 | 19% | Key Business Drivers Detail Capital Access Platforms Key Drivers This section details key performance indicators for the Capital Access Platforms segment, including Annualized Recurring Revenues (ARR), IPOs, new listings, number of listed companies, and Index ETP metrics | (in millions, except as noted) | Sep 30, 2025 | Sep 30, 2024 | | :----------------------------- | :----------- | :----------- | | Annualized recurring revenues | $1,345 | $1,254 | | Initial public offerings (Nasdaq Stock Market) | 76 | 48 | | Total new listings (Nasdaq Stock Market) | 205 | 138 | | Number of listed companies (Nasdaq Stock Market) | 4,359 | 4,039 | | Period end ETP AUM tracking Nasdaq indexes (in billions) | $829 | $600 | | TTM net inflows ETP AUM tracking Nasdaq indexes (in billions) | $91 | $62 | Financial Technology Key Drivers This section provides a breakdown of Annualized Recurring Revenues (ARR) for the Financial Technology segment by its sub-segments: Financial Crime Management Technology, Regulatory Technology, and Capital Markets Technology | (in millions) | Sep 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | | Annualized recurring revenues | | | | Financial Crime Management Technology | $316 | $268 | | Regulatory Technology | 389 | 350 | | Capital Markets Technology | 957 | 864 | | Total Financial Technology | $1,662 | $1,482 | Market Services Key Drivers This section details key drivers for the Market Services segment, including U.S. equity options and cash equity trading volumes and market shares, as well as Nasdaq Nordic and Baltic options, futures, and securities trading data | (in millions, except as noted) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | | :----------------------------- | :------------------------------ | :------------------------------ | | Equity Derivative Trading and Clearing | | | | U.S. equity options industry average daily volume | 55.8 | 44.5 | | Total matched market share executed on Nasdaq's exchanges | 28.5% | 30.2% | | Nasdaq Nordic and Nasdaq Baltic options and futures total average daily volume | 184,267 | 213,911 | | Cash Equity Trading | | | | Total U.S.-listed securities industry average daily share volume (in billions) | 17.6 | 11.5 | | Total matched market share executed on Nasdaq's exchanges | 14.1% | 16.1% | | Market share reported to the FINRA/Nasdaq Trade Reporting Facility | 47.6% | 44.7% | | Total market share | 61.7% | 60.8% | | Nasdaq Nordic and Nasdaq Baltic securities total average daily value of shares traded (in billions) | $4.5 | $4.1 |