10-QPeriod: Q2 FY2014

NASDAQ, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Filed August 6, 2014For Securities:NDAQ

Summary

NASDAQ, INC. (NDAQ) reported its financial results for the period ending June 30, 2014. The company demonstrated solid revenue growth, driven by strong performance in its Information Services and Technology Solutions segments, bolstered by recent acquisitions. Operating income saw a significant increase, reflecting both revenue growth and disciplined expense management, though the latter was partially impacted by integration costs related to acquisitions and debt extinguishment expenses. Overall, the company's financial position remains robust, supported by healthy operating cash flows and a strong liquidity position. NASDAQ is actively managing its capital structure, including debt repayment and opportunistic share repurchases, while continuing to invest in strategic initiatives and maintain a commitment to returning value to shareholders through dividends. Investors should note the ongoing integration of acquisitions and potential impacts from regulatory environments and market volatility.

Financial Highlights

55 data points
Beta

Revenue

$865.00M

60.5% Gross Margin

Net Income

$101.00M

11.7% Net Margin

EPS (Diluted)

$0.20

Total Assets

$13.12B

Cash & Equivalents

$314.00M

Free Cash Flow

$165.00M

Financial Statements
Beta
Revenue$865.00M
Cost of Revenue$342.00M
Gross Profit$523.00M
Operating Expenses$332.00M
Operating Income$191.00M
Interest Expense$30.00M
Net Income$101.00M
EPS (Basic)$0.20
EPS (Diluted)$0.20
Shares Outstanding (Basic)508.01M
Shares Outstanding (Diluted)517.42M

Key Highlights

  • 1Total revenues increased by 16.0% to $865 million for the three months ended June 30, 2014, compared to $814 million in the prior year period.
  • 2Net income attributable to NASDAQ OMX increased by 14.8% to $101 million for the three months ended June 30, 2014, compared to $88 million in the prior year period.
  • 3Diluted earnings per share increased by 13.5% to $0.59 for the three months ended June 30, 2014, compared to $0.52 in the prior year period.
  • 4Operating expenses increased by 13.7% to $332 million, largely due to integration costs from recent acquisitions.
  • 5The company completed the acquisition of the remaining 28% ownership interest in BWise Beheer B.V. on March 31, 2014.
  • 6The company repaid $400 million of 4.00% senior unsecured notes in June 2014 and issued $500 million of 4.25% senior unsecured notes in May 2014.
  • 7Cash flows from operating activities increased significantly by 50.2% to $383 million for the six months ended June 30, 2014, compared to $255 million in the prior year period.

Frequently Asked Questions

Revenue growth was primarily driven by increases in Corporate Solutions revenues (due to the acquisition of TR Corporate Solutions businesses), fixed income trading revenues (from the acquisition of eSpeed), and Market Data Products revenues.

NASDAQ repaid $400 million of its 4.00% senior unsecured notes and issued $500 million of new 4.25% senior unsecured notes. The company also utilized a portion of the proceeds from the new notes to repay part of its 2011 credit facility.

The company notes that its performance is influenced by macroeconomic events, investor sentiment, regulatory environments, and technological advancements. While cautiously optimistic about global economic recovery, it acknowledges potential for market volatility. Key growth drivers include the IPO market and non-transactional businesses, while risks include competition, regulatory changes, and technological disruption.

The increase in operating expenses was primarily due to additional expenses associated with the recent acquisitions of the TR Corporate Solutions businesses and eSpeed, along with a loss on extinguishment of debt. These were partially offset by a decrease in merger and strategic initiatives expense.