01—Abstract
Summary
Summary of the 10-Q filed November 7, 2017. Cited figures are marked; the original filing is the authoritative source.
This 10-Q filing for NASDAQ, INC. (NDAQ) for the period ending September 29, 2017, demonstrates solid top-line growth and improved profitability compared to the prior year.
Total revenues, less transaction-based expenses, increased by 6.8% for the nine months ended September 30, 2017, reaching $1.8 billiona. This growth was primarily driven by the Market Services segment, which saw a significant 8.9% increase in revenues, boosted by strong performance in Equity Derivative Trading and Clearing, as well as contributions from recent acquisitions. Net income attributable to Nasdaq saw a substantial increase of 46.5% to $488 million for the nine-month period, leading to a corresponding 46.2% rise in diluted earnings per share to $2.88.
The company also maintained a strong balance sheet with total assets of $15.1 billionb and actively managed its capital structure. A key event during the period was the acquisition of eVestment in October 2017, further diversifying Nasdaq's offerings within its Information Services segment, and indicating continued strategic investment in growth areas.
02—Key points
Key Highlights
- Total revenues, less transaction-based expenses, increased by 6.8% to $1.8 billion for the nine months ended September 30, 2017, compared to the same period in 2016.
- Net income attributable to Nasdaq increased by 46.5% to $488 million for the nine months ended September 30, 2017.
- Diluted earnings per share rose by 46.2% to $2.88 for the nine months ended September 30, 2017.
- The Market Services segment showed robust growth with revenues less transaction-based expenses up 8.6% to $659 million for the nine months ended September 30, 2017.
- The company completed the acquisition of eVestment in October 2017, strengthening its Information Services segment.
- Total assets grew to $15.1 billion as of September 30, 2017, indicating a healthy financial position.
- The company continued its share repurchase program and increased its cash dividend declared per common share by 21.3% for the nine-month period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2017, Nasdaq, Inc. kept $0.18.
- Revenue$969.0M100.0%
- Cost of revenue−$366.0M37.8%
- Gross profit$603.0M62.2%
- Operating costs−$341.0M35.2%
- Operating income$262.0M27.0%
- Interest, other & tax−$92.0M9.5%
- Net income$170.0M17.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2017filed November 7, 2017Financial Statements
Q3 FY2017 against Q3 FY2016
| Line item | Q3 FY2017Q3 FY2016 | Change |
|---|---|---|
| Revenue | $969.00M$929.00M | +4.3% |
| Cost of Revenue | $362.00M$344.00M | +5.2% |
| Gross Profit | $603.00M$585.00M | +3.1% |
| Operating Expenses | $341.00M$352.00M | −3.1% |
| Operating Income | $262.00M$233.00M | +12.4% |
| Interest Expense | $34.00M$37.00M | −8.1% |
| Net Income | $170.00M$131.00M | +29.8% |
| EPS (Basic) | $0.34$0.26 | +29.1% |
| EPS (Diluted) | $0.33$0.26 | +29.9% |
| Shares Outstanding (Basic) | 500.08M496.82M | +0.7% |
| Shares Outstanding (Diluted) | 510.01M508.49M | +0.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in this period?
The primary driver of revenue growth was the Market Services segment, which saw an 8.9% increase in revenues less transaction-based expenses for the nine months ended September 30, 2017, compared to the prior year. This was supported by strong performance in Equity Derivative Trading and Clearing, as well as contributions from recent acquisitions like ISE.
How did Nasdaq manage its debt during this quarter?
Nasdaq actively managed its debt obligations. For the nine months ended September 30, 2017, the company repaid $683 million in long-term debt and also issued new debt, including $498 million from the 2019 Notes, partly to fund strategic initiatives. The company also utilized commercial paper and maintained strong compliance with its debt covenants.
What is the significance of the eVestment acquisition?
The acquisition of eVestment, completed in October 2017 for $705 million, is significant as it strengthens Nasdaq's Information Services segment. eVestment is a content and analytics provider, and its integration is expected to enhance Nasdaq's data product offerings and support institutional investment decisions.
What is Nasdaq's outlook on future profitability and shareholder returns?
Nasdaq demonstrated strong profit growth with a 46.5% increase in net income and a 46.2% increase in diluted EPS for the nine months ended September 30, 2017. The company also increased its cash dividend declared per common share by 21.3% and has a stated dividend policy aiming for regular and growing dividends over the long term as earnings and cash flow grow, indicating a positive outlook on shareholder returns.
06—Continue