01—Abstract
Summary
Summary of the 10-K filed February 22, 2019. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. reported strong performance in its 2018 fiscal year, with revenues less transaction-based expenses growing 4.8% to $2.526 billiona.
This growth was driven by increased activity in its Market Services and Information Services segments, complemented by strategic acquisitions such as eVestment and Quandl. The company continues to execute its growth strategy by increasing investment in high-growth areas like Market Technology and Information Services, while sustaining its core marketplace businesses.
Despite facing a competitive landscape and economic uncertainties, Nasdaq demonstrated resilience. Key financial highlights include a significant increase in operating income and a robust cash flow from operating activities, enabling the company to increase its cash dividends declared per common share.
02—Key points
Key Highlights
- Revenue growth of 4.8% to $2.526 billion (revenues less transaction-based expenses) in 2018, demonstrating continued expansion.
- Acquisition of eVestment and Quandl (Information Services) and Cinnober and Sybenetix (Market Technology) underscore a strategy focused on high-growth segments.
- Market Services revenue increased by 12.0% to $2,709 million, driven by strong performance in Equity Derivative Trading and Clearing, and Cash Equity Trading.
- Information Services revenue saw a significant increase of 21.4% to $714 million, largely due to the investment data and analytics business growth.
- Operating income grew by 3.7% to $1,028 million, indicating improved profitability and operational efficiency.
- Nasdaq successfully increased its cash dividends declared per common share by 16.4% to $1.70 in 2018.
- The company maintained a strong liquidity position with $813 million in cash and cash equivalents and financial investments as of December 31, 2018.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Nasdaq, Inc. kept $0.11.
- Revenue$4.28B100.0%
- Cost of revenue−$1.75B40.9%
- Gross profit$2.53B59.1%
- Operating costs−$1.50B35.0%
- Operating income$1.03B24.0%
- Interest, other & tax−$570.0M13.3%
- Net income$458.0M10.7%
Where FY2018 revenue went
$4.28B- Cost of revenue: $1.75B, 41% of revenue
- Operating costs: $1.50B, 35% of revenue
- Interest, other & tax: $570.0M, 13% of revenue
- Net income: $458.0M, 11% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 22, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $4.28B$3.95B | +8.3% |
| Cost of Revenue | $1.75B$1.54B | +13.9% |
| Gross Profit | $2.53B$2.41B | +4.8% |
| Operating Expenses | $1.50B$1.42B | +5.5% |
| Operating Income | $1.03B$991.00M | +3.7% |
| Interest Expense | $150.00M$143.00M | +4.9% |
| Net Income | $458.00M$729.00M | −37.2% |
| EPS (Basic) | $0.92$1.46 | −36.8% |
| EPS (Diluted) | $0.91$1.43 | −36.5% |
| Shares Outstanding (Basic) | 496.05M499.09M | −0.6% |
| Shares Outstanding (Diluted) | 503.07M508.76M | −1.1% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Nasdaq's revenue growth in 2018?
Nasdaq's revenue growth in 2018 was primarily driven by its Market Services and Information Services segments. The Market Services segment benefited from increased trading volumes in equity derivatives and cash equities, while the Information Services segment saw significant growth, particularly in investment data and analytics, bolstered by strategic acquisitions.
How is Nasdaq investing for future growth?
Nasdaq is strategically increasing its investments in its Market Technology and Information Services businesses, which it identifies as its largest growth opportunities. This includes organic initiatives like the Nasdaq Financial Framework and acquisitions of companies that enhance its capabilities in these areas.
What is Nasdaq's strategy for its core marketplace businesses?
Nasdaq is committed to sustaining and enhancing its core marketplace businesses, which form the foundation of its operations. The strategy involves continued innovation, maintaining strong market share, and leveraging these foundational businesses to expand relationships and offer technology and analytics capabilities to clients.
What impact did acquisitions and divestitures have on Nasdaq's financial results in 2018?
Nasdaq completed several acquisitions, including eVestment and Quandl, which contributed to revenue growth, particularly in the Information Services segment. The company also divested its Public Relations Solutions and Digital Media Services businesses in April 2018, which impacted certain revenue lines but allowed for resource reallocation. These strategic moves are part of Nasdaq's focus on high-growth opportunities.
06—Continue