Summary
NASDAQ, INC. (NDAQ) reported a strong performance for the quarter and six months ended June 30, 2007, driven by significant revenue growth in its Market Services segment, which benefited from increased market share in NYSE and Amex-listed securities and its new operational status as a national securities exchange. The Issuer Services segment also saw revenue growth, bolstered by revised annual renewal fees and recent acquisitions. Financially, the company demonstrated improved profitability with net income rising substantially year-over-year. Total revenues increased by 35.8% for the quarter and 38.7% for the six-month period. Operating expenses decreased due to the completion of the INET integration and cost reduction programs. Notably, the company is actively pursuing a significant strategic initiative: the proposed business combination with OMX AB (publ), announced in May 2007, which is expected to create a larger global network of exchanges. The financing for this combination is secured through an interim loan agreement.
Key Highlights
- 1Net income for the second quarter of 2007 was $56.1 million, a significant increase from $16.6 million in the prior year's quarter, with diluted EPS rising to $0.39 from $0.13.
- 2Total revenues grew by 35.8% to $558.2 million for the three months ended June 30, 2007, and by 38.7% to $1,120.1 million for the six months ended June 30, 2007.
- 3Market Services segment revenues increased by 40.2% ($487.4 million) for the quarter and 43.5% ($982.9 million) for the six months, driven by increased market share and operational status as a national exchange.
- 4Issuer Services segment revenues grew by 11.5% ($70.7 million) for the quarter and 12.1% ($137.1 million) for the six months, boosted by new fees and acquisitions.
- 5Operating expenses decreased by 20.7% to $99.7 million for the quarter, largely due to the completion of INET integration and cost reduction programs.
- 6The company announced a proposed business combination with OMX AB (publ) in May 2007, aiming to create a larger global network of exchanges, with financing arrangements in place.
- 7Cash and cash equivalents increased by 78.6% to $575.0 million as of June 30, 2007, compared to December 31, 2006, reflecting strong operating cash flow and the settlement of foreign currency contracts.