10-QPeriod: Q3 FY2017

NASDAQ, INC. Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 7, 2017For Securities:NDAQ

Summary

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 billion. 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 billion 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.

Financial Highlights

56 data points
Beta

Revenue

$969.00M

62.2% Gross Margin

Net Income

$170.00M

17.5% Net Margin

EPS (Diluted)

$0.33

Total Assets

$15.07B

Cash & Equivalents

$530.00M

Free Cash Flow

$57.00M

Financial Statements
Beta
Revenue$969.00M
Cost of Revenue$362.00M
Gross Profit$603.00M
Operating Expenses$341.00M
Operating Income$262.00M
Interest Expense$34.00M
Net Income$170.00M
EPS (Basic)$0.34
EPS (Diluted)$0.33
Shares Outstanding (Basic)500.08M
Shares Outstanding (Diluted)510.01M

Key Highlights

  • 1Total 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.
  • 2Net income attributable to Nasdaq increased by 46.5% to $488 million for the nine months ended September 30, 2017.
  • 3Diluted earnings per share rose by 46.2% to $2.88 for the nine months ended September 30, 2017.
  • 4The 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.
  • 5The company completed the acquisition of eVestment in October 2017, strengthening its Information Services segment.
  • 6Total assets grew to $15.1 billion as of September 30, 2017, indicating a healthy financial position.
  • 7The company continued its share repurchase program and increased its cash dividend declared per common share by 21.3% for the nine-month period.

Frequently Asked Questions

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.

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.

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.

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.