10-KPeriod: FY2014

NASDAQ, INC. Annual Report, Year Ended Dec 31, 2014

Filed February 17, 2015For Securities:NDAQ

Summary

Nasdaq, Inc. (NDAQ) reported strong performance for the fiscal year ending December 30, 2014, demonstrating resilience and growth across its diverse business segments. The company, a leading provider of trading, clearing, exchange technology, and information services, saw a significant 9.1% increase in revenues less transaction-based expenses, reaching $2.07 billion. This growth was driven by strong contributions from its Market Services, Information Services, and Technology Solutions segments, reflecting successful acquisitions and organic expansion. Key drivers for the year included increased trading volumes in U.S. cash equities, a robust IPO market with a significant number of new listings on The NASDAQ Stock Market, and growth in its Corporate Solutions and Data Products businesses. Despite facing intense competition and a challenging macroeconomic environment, particularly in Europe, Nasdaq strategically diversified its revenue streams. The company continued to invest in technology and integration of its acquired businesses, positioning itself for sustained growth and profitability in the evolving financial landscape.

Financial Highlights

56 data points
Beta

Revenue

$3.50B

59.1% Gross Margin

Net Income

$414.00M

11.8% Net Margin

EPS (Diluted)

$0.80

Total Assets

$12.07B

Cash & Equivalents

$427.00M

Free Cash Flow

$492.00M

Financial Statements
Beta
Revenue$3.50B
Cost of Revenue$1.43B
Gross Profit$2.07B
Operating Expenses$1.31B
Operating Income$754.00M
Interest Expense$117.00M
Net Income$414.00M
EPS (Basic)$0.82
EPS (Diluted)$0.80
Shares Outstanding (Basic)506.78M
Shares Outstanding (Diluted)519.06M

Key Highlights

  • 1Reported revenues less transaction-based expenses of $2.07 billion, a 9.1% increase year-over-year.
  • 2The U.S. IPO market saw its best year since 2000, with The NASDAQ Stock Market attracting 189 IPOs.
  • 3Market Services segment revenue less transaction-based expenses grew by 4.9% to $814 million, driven by cash equity trading and fixed income, currency, and commodities trading.
  • 4Information Services segment revenue increased by 8.5% to $473 million, fueled by growth in Data Products and Index Licensing and Services.
  • 5Technology Solutions segment revenue saw substantial growth of 19.1% to $542 million, primarily due to the strong performance of Corporate Solutions following acquisitions.
  • 6The company completed the acquisition of Dorsey, Wright & Associates, LLC (DWA) in January 2015, further strengthening its Information Services business.
  • 7Nasdaq maintained a strong market share in key areas, including 26.9% in the U.S. equity options market and 17.1% of U.S. cash equity volume on The NASDAQ Stock Market.

Frequently Asked Questions

Nasdaq's primary revenue drivers in 2014 included its Market Services segment (39.4% of revenues less transaction-based expenses), Technology Solutions (26.2%), Information Services (22.9%), and Listing Services (11.5%). Growth was particularly strong in cash equity trading, fixed income, commodities, data products, and corporate solutions, boosted by acquisitions and increased IPO activity.

Recent acquisitions, such as the TR Corporate businesses (May 2013) and eSpeed (June 2013), significantly contributed to Nasdaq's revenue growth in 2014, particularly within the Corporate Solutions and Fixed Income, Currency, and Commodities Trading and Clearing businesses. The acquisition of Dorsey, Wright & Associates in early 2015 further enhanced the Information Services segment.

Nasdaq faces several key risks, including intense competition across all its business segments, susceptibility to adverse economic conditions and market volatility, potential system limitations or failures, cyber security threats, and the need to keep pace with rapid technological changes. Additionally, the company operates in a highly regulated industry and is subject to potential litigation and regulatory changes.

As of December 31, 2014, Nasdaq had total debt obligations of approximately $2.3 billion. The company reported positive cash flow from operations ($687 million) and maintained a working capital balance of $420 million. Nasdaq refinanced its credit facilities in 2014, ensuring sufficient liquidity to fund operations, capital expenditures, debt repayments, and dividends.