01—Abstract
Summary
Summary of the 10-Q filed November 5, 2014. Cited figures are marked; the original filing is the authoritative source.
This 10-Q filing for NASDAQ, INC. (NDAQ) for the period ending September 30, 2014, shows a company experiencing modest revenue growth and managing its expenses effectively.
Total revenues less transaction rebates, brokerage, clearance and exchange fees increased by 12.7% to $1,549 milliona for the nine months ended September 30, 2014, compared to the same period in 2013. This growth was driven by strong performance in the Technology Solutions and Information Services segments, bolstered by acquisitions in prior years. Operating income also saw a significant increase of 29.1%.
The company has actively managed its debt, repaying a significant portion of its outstanding notes and term loans while also issuing new debt. Shareholder returns are being supported through ongoing share repurchase programs and dividends. Despite some legal proceedings related to past events like the Facebook IPO, Nasdaq maintains a strong balance sheet and appears well-positioned to navigate market conditions.
02—Key points
Key Highlights
- Revenue growth driven by Technology Solutions and Information Services, up 32.6% and 9.4% respectively for the nine months ended Sep 30, 2014.
- Operating income increased by 29.1% to $581 million for the nine months ended Sep 30, 2014, indicating improved profitability.
- Active debt management: Repaid $408 million of 4.00% senior unsecured notes and reduced term loan balances.
- Shareholder returns supported by $121 million in share repurchases and $73 million in dividends paid during the first nine months of 2014.
- Listing Services revenue increased by 4.1% for the nine months ended Sep 30, 2014, indicating continued demand for listing services.
- The company maintains a strong liquidity position with $482 million in cash and financial investments as of September 30, 2014.
- Ongoing legal proceedings related to the Facebook IPO and market data practices, though Nasdaq believes these claims are without merit.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2014, Nasdaq, Inc. kept $0.15.
- Revenue$818.0M100.0%
- Cost of revenue−$321.0M39.2%
- Gross profit$497.0M60.8%
- Operating costs−$290.0M35.5%
- Operating income$207.0M25.3%
- Interest, other & tax−$84.0M10.3%
- Net income$123.0M15.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2014filed November 5, 2014Financial Statements
Q3 FY2014 against Q3 FY2013
| Line item | Q3 FY2014Q3 FY2013 | Change |
|---|---|---|
| Revenue | $818.00M$805.00M | +1.6% |
| Cost of Revenue | $321.00M$299.00M | +7.4% |
| Gross Profit | $497.00M$506.00M | −1.8% |
| Operating Expenses | $290.00M$304.00M | −4.6% |
| Operating Income | $207.00M$202.00M | +2.5% |
| Interest Expense | $29.00M$32.00M | −9.4% |
| Net Income | $123.00M$113.00M | +8.8% |
| EPS (Basic) | $0.24$0.23 | +7.4% |
| EPS (Diluted) | $0.24$0.22 | +7.6% |
| Shares Outstanding (Basic) | 505.76M502.01M | +0.7% |
| Shares Outstanding (Diluted) | 519.47M516.31M | +0.6% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Nasdaq in the third quarter of 2014?
For the nine months ended September 30, 2014, Nasdaq reported total revenues less transaction rebates, brokerage, clearance and exchange fees of $1,549 million, an increase of 12.7% compared to the same period in 2013. Operating income grew by 29.1% to $581 million, and net income attributable to Nasdaq increased by 34.4% to $328 million. Diluted earnings per share were $1.89, up from $1.43 in the prior year.
How is Nasdaq managing its debt obligations?
Nasdaq has been actively managing its debt. During the nine months ended September 30, 2014, the company repaid $847 million in debt obligations, including the full repayment of its 4.00% senior unsecured notes due 2015 and a portion of its 2016 Term Loan. They also issued new debt, such as the 4.25% senior unsecured notes due 2024.
What is Nasdaq's approach to returning capital to shareholders?
Nasdaq is committed to returning capital to shareholders through share repurchases and dividends. During the first nine months of 2014, the company repurchased $121 million of its common stock and paid $73 million in cash dividends. The board of directors also authorized an additional $500 million share repurchase program in October 2014.
What are the key business segments contributing to Nasdaq's performance?
Nasdaq operates across four key segments: Market Services, Listing Services, Information Services, and Technology Solutions. For the nine months ended September 30, 2014, Technology Solutions and Information Services showed strong revenue growth, up 32.6% and 9.4% respectively, driven in part by prior year acquisitions. Listing Services also saw a 4.1% revenue increase.
06—Continue