01—Abstract
Summary
Summary of the 10-Q filed May 10, 2017. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. (NDAQ) reported solid financial results for the first quarter of 2017, with total revenues of $971 milliona, a 7.3% increase year-over-year.
Net income attributable to Nasdaq rose by 28.0% to $169 millionb, 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 billionc. 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%d. Nasdaq is well-positioned for continued growth, supported by its diverse business lines and strategic acquisitions.
02—Key points
Key Highlights
- Total revenues increased by 7.3% to $971 million in Q1 2017 compared to Q1 2016.
- Net income attributable to Nasdaq grew by 28.0% to $169 million.
- Diluted earnings per share (EPS) rose to $0.99 from $0.78 in the prior year's quarter.
- Market Services segment revenue increased by 5.9% driven by Equity Derivative Trading and Clearing, partially offset by a decrease in Cash Equity Trading.
- Market Technology segment revenue saw a significant increase of 17.5%.
- Total operating expenses increased by 6.3% to $335 million, indicating effective cost management relative to revenue growth.
- The company repurchased approximately 2.2 million shares of common stock for $156 million during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2017, Nasdaq, Inc. kept $0.17.
- Revenue$969.0M100.0%
- Cost of revenue−$388.0M40.0%
- Gross profit$581.0M60.0%
- Operating costs−$335.0M34.6%
- Operating income$246.0M25.4%
- Interest, other & tax−$78.0M8.0%
- Net income$168.0M17.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2017filed May 10, 2017Financial Statements
Q1 FY2017 against Q1 FY2016
| Line item | Q1 FY2017Q1 FY2016 | Change |
|---|---|---|
| Revenue | $969.00M$905.00M | +7.1% |
| Cost of Revenue | $388.00M$371.00M | +4.6% |
| Gross Profit | $581.00M$534.00M | +8.8% |
| Operating Expenses | $335.00M$315.00M | +6.3% |
| Operating Income | $246.00M$219.00M | +12.3% |
| Interest Expense | $37.00M$28.00M | +32.1% |
| Net Income | $168.00M$132.00M | +27.3% |
| EPS (Basic) | $0.34$0.27 | +26.2% |
| EPS (Diluted) | $0.33$0.26 | +26.9% |
| Shares Outstanding (Basic) | 499.42M492.85M | +1.3% |
| Shares Outstanding (Diluted) | 510.74M505.11M | +1.1% |
05—Questions
Frequently Asked Questions
What was Nasdaq's revenue growth in the first quarter of 2017?
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.
How did Nasdaq's profitability change in Q1 2017?
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%.
What were the key drivers of the revenue increase in the Market Services segment?
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.
Did Nasdaq engage in any significant acquisitions or divestitures during the quarter?
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.
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