NASDAQ, INC. Quarterly Report for Q1 Ended Mar 31, 2011

Summary

NASDAQ OMX Group, Inc. (NDAQ) reported a strong first quarter in 2011, demonstrating significant year-over-year growth driven by its Market Services segment. Total revenues increased by 15.3% to $415 million, excluding transaction rebates and fees, with operational revenue growth of $45 million. This growth was propelled by robust performance in derivative trading and clearing, access services, and cash equity trading. Operating expenses saw a slight decrease of 5.6% due to the absence of significant one-time charges incurred in the prior year's comparable quarter, despite an increase in compensation and strategic initiatives. The company's net income attributable to NASDAQ OMX rose to $104 million from $61 million in the prior year, translating to diluted earnings per share of $0.57, up from $0.28. This performance highlights effective cost management and revenue generation, positioning NASDAQ OMX well amidst a cautiously optimistic economic recovery. Investors should note the ongoing strategic initiatives, including the significant joint proposal to acquire NYSE Euronext, which could substantially reshape the company's future market position and financial structure.

Key Highlights

• 1Total revenues (less transaction rebates, brokerage, clearance and exchange fees) increased by 15.3% to $415 million for the three months ended March 31, 2011, compared to $360 million in the same period of 2010.
• 2Net income attributable to NASDAQ OMX increased significantly to $104 million, or $0.57 per diluted share, compared to $61 million, or $0.28 per diluted share, in the prior year's quarter.
• 3Operating expenses decreased by 5.6% to $234 million, primarily due to lower general, administrative, and other expenses compared to the prior year's comparable quarter which included significant charges.
• 4Market Services segment revenue (less transaction rebates, brokerage, clearance and exchange fees) grew by 16.6% to $281 million, driven by increases in derivative trading and clearing, and access services.
• 5Issuer Services segment revenue (less transaction rebates, brokerage, clearance and exchange fees) increased by 8.3% to $91 million.
• 6Market Technology segment revenue increased by 26.5% to $43 million, primarily due to higher change request, advisory, and broker surveillance revenues.
• 7The company announced a joint proposal with Intercontinental Exchange (ICE) to acquire NYSE Euronext for approximately $11.3 billion.

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