01—Abstract
Summary
Summary of the 10-Q filed August 6, 2015. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. (NDAQ) reported its second-quarter and first-half 2015 financial results, showcasing a mixed performance.
While total revenues less transaction-based expenses saw a slight decline in both periods compared to the prior year, influenced by foreign currency headwinds, operational improvements were noted in specific segments like Listing Services and Information Services. The company incurred significant restructuring charges in the first half of 2015, largely due to a rebranding initiative and workforce reductions, which impacted overall profitability. Despite these charges, operating income saw a notable increase in the second quarter, driven by expense management.
Nasdaq also completed a strategic acquisition of Dorsey, Wright & Associates, LLC, bolstering its Information Services segment. Investors should monitor the integration of this acquisition and the ongoing impact of restructuring efforts on future performance.
02—Key points
Key Highlights
- Revenues less transaction-based expenses decreased by 1.0% for the three months ended June 30, 2015, and by 2.6% for the six months ended June 30, 2015, compared to the prior year periods, partly due to foreign exchange impacts.
- Operating expenses decreased by 9.3% in Q2 2015 but increased by 15.4% in the first six months of 2015, with the latter driven by significant restructuring charges ($152 million).
- Net income attributable to Nasdaq increased by 31.7% to $133 million in Q2 2015, but decreased by 30.7% to $142 million in the first six months of 2015, impacted by restructuring charges.
- Acquisition of Dorsey, Wright & Associates, LLC for $226 million in January 2015, strengthening the Information Services segment.
- The company repurchased $55 million of its common stock in the first six months of 2015.
- Declared cash dividends totaling $68 million in the first six months of 2015.
- Total assets were $12.104 billion and total liabilities were $6.388 billion as of June 30, 2015.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2015, Nasdaq, Inc. kept $0.16.
- Revenue$807.0M100.0%
- Cost of revenue−$289.0M35.8%
- Gross profit$518.0M64.2%
- Operating costs−$301.0M37.3%
- Operating income$217.0M26.9%
- Interest, other & tax−$84.0M10.4%
- Net income$133.0M16.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2015filed August 6, 2015Financial Statements
Q2 FY2015 against Q2 FY2014
| Line item | Q2 FY2015Q2 FY2014 | Change |
|---|---|---|
| Revenue | $807.00M$865.00M | −6.7% |
| Cost of Revenue | $289.00M$342.00M | −15.5% |
| Gross Profit | $518.00M$523.00M | −1.0% |
| Operating Expenses | $301.00M$332.00M | −9.3% |
| Operating Income | $217.00M$191.00M | +13.6% |
| Interest Expense | $27.00M$30.00M | −10.0% |
| Net Income | $133.00M$101.00M | +31.7% |
| EPS (Basic) | $0.26$0.20 | +31.7% |
| EPS (Diluted) | $0.26$0.20 | +30.5% |
| Shares Outstanding (Basic) | 506.15M508.01M | −0.4% |
| Shares Outstanding (Diluted) | 516.42M517.42M | −0.2% |
05—Questions
Frequently Asked Questions
What was the impact of restructuring charges on Nasdaq's financial results?
Nasdaq recorded significant restructuring charges in the first half of 2015, totaling $152 million, primarily related to a rebranding initiative (impacting the OMX trade name) and workforce reductions. These charges negatively impacted net income for the six-month period but were a key driver behind the operational decrease in expenses for that same period.
How did the acquisition of Dorsey, Wright & Associates, LLC affect Nasdaq?
In January 2015, Nasdaq acquired Dorsey, Wright & Associates, LLC (DWA) for $226 million. DWA is a leader in data analytics, passive indexing, and smart beta strategies. This acquisition primarily bolstered Nasdaq's Information Services segment and contributed to revenue increases in that area, although the integration costs and their impact on overall profitability should be monitored.
What is Nasdaq's current liquidity and debt position?
As of June 30, 2015, Nasdaq had cash and cash equivalents of $324 million. Total debt obligations stood at $2.281 billion. The company also had $587 million in availability under its $750 million revolving credit commitment, indicating a healthy liquidity position to meet near-term obligations.
06—Continue