Summary
NASDAQ OMX Group, Inc. reported strong revenue growth in the second quarter and first six months of 2008, largely driven by the business combination with OMX completed in February 2008. Total revenues increased significantly compared to the prior year, with the Market Services segment being the primary contributor. While operating expenses also rose, largely due to the integration of OMX, the company demonstrated solid operating income and net income growth. Key to the company's financial performance was the substantial increase in goodwill and intangible assets on the balance sheet, reflecting the acquisition. The company also reported a significant increase in debt obligations to finance these strategic acquisitions. Despite increased debt, the company maintained compliance with its covenants and reported sufficient liquidity from operations to cover short-term needs.
Key Highlights
- 1Total revenues for the three months ended June 30, 2008, increased to $821.5 million from $558.2 million in the prior year period, a 47.2% increase, primarily due to the integration of OMX.
- 2Net income for the quarter grew to $101.6 million ($0.48 per diluted share) from $56.1 million ($0.39 per diluted share) in the same period last year.
- 3Goodwill and intangible assets saw a substantial increase on the balance sheet, reaching $4,074.6 million and $2,039.7 million respectively, reflecting the acquisition of OMX.
- 4Debt obligations increased significantly to $1,643.6 million from $118.4 million at the end of 2007, driven by financing for the OMX and PHLX acquisitions.
- 5The company completed the acquisition of the Philadelphia Stock Exchange (PHLX) on July 24, 2008, for approximately $695.7 million, further diversifying its product portfolio.
- 6Cash provided by operating activities increased by 51.1% to $272.5 million for the six months ended June 30, 2008, compared to the same period in 2007.