10-QPeriod: Q1 FY2017

NASDAQ, INC. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 10, 2017For Securities:NDAQ

Summary

Nasdaq, Inc. (NDAQ) reported solid financial results for the first quarter of 2017, with total revenues of $971 million, a 7.3% increase year-over-year. Net income attributable to Nasdaq rose by 28.0% to $169 million, translating to diluted earnings per share of $0.99, up from $0.78 in the prior year's first quarter. This growth was driven by strong performance across its segments, particularly Market Services and Market Technology, buoyed by recent acquisitions. The company also demonstrated effective cost management, with operating expenses increasing at a slower pace than revenue. Financially, Nasdaq maintained a strong balance sheet with total assets of $14.49 billion. While the company has a significant debt load, it managed its leverage well and remained compliant with its debt covenants. The company continued its commitment to shareholder returns through dividends and share repurchases, although dividends declared per common share decreased by 43.9%. Nasdaq is well-positioned for continued growth, supported by its diverse business lines and strategic acquisitions.

Financial Highlights

56 data points
Beta

Revenue

$969.00M

60.0% Gross Margin

Net Income

$168.00M

17.3% Net Margin

EPS (Diluted)

$0.33

Total Assets

$14.49B

Cash & Equivalents

$386.00M

Free Cash Flow

$208.00M

Financial Statements
Beta
Revenue$969.00M
Cost of Revenue$388.00M
Gross Profit$581.00M
Operating Expenses$335.00M
Operating Income$246.00M
Interest Expense$37.00M
Net Income$168.00M
EPS (Basic)$0.34
EPS (Diluted)$0.33
Shares Outstanding (Basic)499.42M
Shares Outstanding (Diluted)510.74M

Key Highlights

  • 1Total revenues increased by 7.3% to $971 million in Q1 2017 compared to Q1 2016.
  • 2Net income attributable to Nasdaq grew by 28.0% to $169 million.
  • 3Diluted earnings per share (EPS) rose to $0.99 from $0.78 in the prior year's quarter.
  • 4Market Services segment revenue increased by 5.9% driven by Equity Derivative Trading and Clearing, partially offset by a decrease in Cash Equity Trading.
  • 5Market Technology segment revenue saw a significant increase of 17.5%.
  • 6Total operating expenses increased by 6.3% to $335 million, indicating effective cost management relative to revenue growth.
  • 7The company repurchased approximately 2.2 million shares of common stock for $156 million during the quarter.

Frequently Asked Questions

Nasdaq's total revenues increased by 7.3% to $971 million for the three months ended March 31, 2017, compared to $905 million for the same period in 2016. This growth was driven by increases in Market Services, Corporate Services, Information Services, and Market Technology segments.

Profitability improved significantly. Net income attributable to Nasdaq increased by 28.0% to $169 million, and diluted earnings per share (EPS) rose to $0.99 from $0.78 in the prior year's first quarter. Operating income also saw a healthy increase of 13.2%.

The Market Services segment saw a 5.9% increase in revenue. The Equity Derivative Trading and Clearing sub-segment was a major driver, up 89.1%, largely due to the inclusion of revenues from the acquisition of ISE. Cash Equity Trading revenue, however, decreased by 16.2% primarily due to lower industry trading volumes.

The filing states that the financial results for the first quarter of 2017 include the results of acquisitions completed in 2016, such as ISE, Boardvantage, Marketwired, and Nasdaq CXC. No new acquisitions or divestitures were detailed as completed specifically within the first quarter of 2017, but the impact of the 2016 acquisitions was a key factor in the reported results.