What were the main drivers of the revenue decrease in the first quarter of 2012?

The primary driver for the revenue decrease was a decline in the Market Services segment, specifically within U.S. cash equity and derivative trading revenues. This was largely attributed to lower industry trading volumes and a decrease in revenue capture, although partially offset by an increase in market share for U.S. cash equities.

How did the company's expenses change compared to the previous year?

Operating expenses increased by 4.3% to $240 million. This increase was mainly due to restructuring charges totaling $9 million, higher professional and contract services expenses, and increased marketing and advertising costs. Compensation and benefits remained flat year-over-year.

What is the company's outlook on returning capital to shareholders?

In a significant development, NASDAQ OMX declared its first quarterly cash dividend of $0.13 per share in April 2012, signaling a commitment to shareholder returns. This decision was made after evaluating profitability and financial condition, and future dividends are subject to board approval.

Were there any significant one-time charges or impairments during the quarter?

Yes, the company recorded $9 million in restructuring charges related to workforce reductions and asset impairments. Additionally, there was a $12 million other-than-temporary impairment charge on its equity investment in EMCF. These items impacted profitability for the quarter.

NDAQ 10-Q Quarterly Report Q1 FY2012 — Revenue, Net Income, EPS

Summary

NASDAQ OMX Group, Inc. reported revenues of $801 million for the first quarter of 2012, a slight decrease of 1.8% compared to $815 million in the same period of 2011. This decline was primarily driven by a 2.5% decrease in Market Services revenues, largely due to lower U.S. cash equity and derivative trading volumes. However, Issuer Services revenues saw a marginal increase of 1.1%, and Market Technology revenues grew by 4.7%. Operating expenses increased by 4.3% to $240 million, influenced by restructuring charges of $9 million and increased professional and contract services. Net income attributable to NASDAQ OMX decreased by 18.3% to $85 million ($0.48 per diluted share) from $104 million ($0.57 per diluted share) in the prior year's quarter. The company also incurred a $12 million impairment charge on an equity investment. Despite revenue pressures, NASDAQ OMX announced its first quarterly cash dividend, signaling confidence in its future financial stability.

Financial Highlights

53 data points

Beta

Revenue

$804.00M

0.5% Gross Margin

Net Income

$85.00M

0.1% Net Margin

EPS (Diluted)

$0.16

Total Assets

$9.02B

Cash & Equivalents

$525.00M

Free Cash Flow

$92.00M

Financial Statements

Beta

Revenue	$804.00M
Cost of Revenue	$390.00M
Gross Profit	$414.00M
Operating Expenses	$243.00M
Operating Income	$171.00M
Interest Expense	$24.00M
Net Income	$85.00M
EPS (Basic)	$0.16
EPS (Diluted)	$0.16
Shares Outstanding (Basic)	518.87M
Shares Outstanding (Diluted)	532.53M

Key Highlights

1Total revenues for the first quarter of 2012 were $801 million, a decrease of 1.8% year-over-year.
2Net income attributable to NASDAQ OMX decreased by 18.3% to $85 million in Q1 2012, down from $104 million in Q1 2011.
3Diluted earnings per share were $0.48 in Q1 2012, compared to $0.57 in the prior year's quarter.
4Market Services revenue, the largest segment, declined by 2.5% to $666 million, primarily due to lower trading volumes in U.S. cash equities and derivatives.
5Issuer Services revenue grew slightly by 1.1% to $90 million, supported by increased Corporate Solutions revenues.
6Market Technology revenue increased by 4.7% to $45 million, driven by license, support, and delivery project revenues.
7The company incurred $9 million in restructuring charges and a $12 million asset impairment charge during the quarter.

NASDAQ, INC. Quarterly Report for Q1 Ended Mar 31, 2012

Summary

Financial Highlights

Key Highlights

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