01—Abstract
Summary
Summary of the 10-K filed February 23, 2022. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. reported robust performance in its 2021 10-K filing, demonstrating growth across its key business segments.
The company successfully integrated the acquisition of Verafin, significantly boosting its Anti-Financial Crime Technology offering within Market Technology. Investment Intelligence also saw strong growth, driven by increased asset under management in ETFs tracking Nasdaq indices and expansion in its analytics solutions. Corporate Platforms benefited from a strong listings market, particularly in the U.S. IPO space, and continued growth in its IR & ESG services.
The company also highlighted strategic initiatives such as its partnership with AWS to migrate North American exchanges to the cloud, aiming to enhance agility and scalability. Despite a slight decrease in Market Services revenue primarily due to the divestiture of its U.S. Fixed Income business, overall revenues and earnings per share showed significant year-over-year increases, reflecting the company's diversified business model and strategic focus on high-growth areas.
02—Key points
Key Highlights
- Nasdaq reported a 17.8% increase in revenues less transaction-based expenses, reaching $3.42 billion in 2021, driven by strong performance in Market Technology, Investment Intelligence, and Corporate Platforms.
- The acquisition of Verafin in February 2021 significantly boosted the Market Technology segment, particularly in Anti-Financial Crime Technology, with revenues in this sub-segment growing by 90.0%.
- Investment Intelligence revenues grew by 19.8% to $1.076 billion, largely propelled by a 41.7% increase in Index revenues due to higher AUM in Nasdaq-indexed ETPs and strong performance in its Analytics business.
- Corporate Platforms experienced a 26.1% revenue increase in Listing Services, benefiting from a strong U.S. IPO market where Nasdaq captured 73% of all IPOs in 2021, and a 5.6% rise in IR & ESG Services.
- Strategic investments in technology include a multi-year partnership with Amazon Web Services (AWS) to migrate North American exchanges to the cloud, enhancing scalability and agility.
- The company repurchased approximately $984 million in common stock under its share repurchase program during the quarter ended December 31, 2021, demonstrating a commitment to returning capital to shareholders.
- Nasdaq continued its focus on ESG initiatives, expanding its ESG services and solutions and achieving carbon neutrality for the fourth consecutive year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Nasdaq, Inc. kept $0.20.
- Revenue$5.89B100.0%
- Cost of revenue−$2.47B41.9%
- Gross profit$3.42B58.1%
- Operating costs−$1.98B33.6%
- Operating income$1.44B24.5%
- Interest, other & tax−$254.0M4.3%
- Net income$1.19B20.2%
Where FY2021 revenue went
$5.89B- Cost of revenue: $2.47B, 42% of revenue
- Operating costs: $1.98B, 34% of revenue
- Net income: $1.19B, 20% of revenue
- Interest, other & tax: $254.0M, 4.3% of revenue
Kept 20% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 23, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $5.89B$5.63B | +4.6% |
| Cost of Revenue | $2.47B$2.72B | −9.4% |
| Gross Profit | $3.42B$2.90B | +17.8% |
| Operating Expenses | $1.98B$1.67B | +18.6% |
| Operating Income | $1.44B$1.23B | +16.8% |
| Interest Expense | $125.00M$101.00M | +23.8% |
| Net Income | $1.19B$933.00M | +27.2% |
| EPS (Basic) | $2.38$1.89 | +25.9% |
| EPS (Diluted) | $2.35$1.86 | +26.3% |
| Shares Outstanding (Basic) | 497.70M493.25M | +0.9% |
| Shares Outstanding (Diluted) | 505.09M500.71M | +0.9% |
05—Questions
Frequently Asked Questions
What were the main drivers of Nasdaq's revenue growth in 2021?
Nasdaq's revenue growth in 2021 was primarily driven by the strong performance in its Market Technology segment, bolstered by the acquisition of Verafin and growth in surveillance solutions. The Investment Intelligence segment also contributed significantly, fueled by higher assets under management in index-tracking ETFs and increased demand for analytics solutions. The Corporate Platforms segment benefited from a robust listing market, particularly for IPOs, and growth in investor relations and ESG services.
How did the acquisition of Verafin impact Nasdaq's financial performance?
The acquisition of Verafin in February 2021 had a substantial positive impact, particularly on the Market Technology segment. It significantly expanded Nasdaq's Anti-Financial Crime Technology offering, leading to a 90.0% revenue increase in that sub-segment. The acquisition also contributed to an overall increase in headcount and operating expenses, but was a key strategic move to enhance Nasdaq's position in a high-growth area.
What is Nasdaq's strategy regarding cloud migration, and what are the implications?
Nasdaq is strategically migrating its North American exchanges to the cloud through a partnership with Amazon Web Services (AWS). This move is intended to enhance operational agility, scalability, and resilience. The partnership also aims to support market infrastructure clients with more flexible cloud options, enabling them to adapt to evolving industry dynamics.
How is Nasdaq addressing its commitment to Environmental, Social, and Governance (ESG) factors?
Nasdaq demonstrated a continued commitment to ESG in 2021. They achieved carbon neutrality for the fourth consecutive year, expanded their ESG services and solutions for clients (including advisory programs and data platforms), and were recognized for diversity and inclusion efforts. Nasdaq also acquired a majority stake in Puro.earth, a marketplace for carbon removal, further integrating ESG into its business offerings.
06—Continue