01—Abstract
Summary
Summary of the 10-Q filed May 2, 2018. Cited figures are marked; the original filing is the authoritative source.
For the first quarter of 2018, Nasdaq, Inc. (NDAQ) demonstrated solid financial performance, with total revenues reaching $1.151 billiona, a significant increase from $969 million in the prior year period.
This growth was primarily driven by a strong performance in the Market Services segment, which saw a 21.3% increase in revenue, largely due to higher trading volumes in equity derivatives and cash equities, alongside an increase in Section 31 pass-through fees. The Information Services segment also showed robust growth, up 26.1%, benefiting from the acquisition of eVestment and increased ETP assets under management tracking Nasdaq indexes. Net income attributable to Nasdaq increased by 5.4% to $177 millionb, resulting in diluted earnings per share (EPS) of $1.05, up from $0.99 in the prior year.
The company continued to return capital to shareholders, increasing its cash dividend declared per common share by a substantial 156.3% to $0.82c. Nasdaq also maintained a strong liquidity position, with net cash provided by operating activities increasing significantly, while managing its debt obligations effectively and remaining in compliance with all covenants. The company also announced a new $500 million share repurchase authorization, underscoring its commitment to shareholder value.
02—Key points
Key Highlights
- Total revenues increased by 18.8% year-over-year to $1.151 billion, driven by strong performance across key segments.
- Market Services revenue grew 21.3% to $735 million, fueled by higher trading volumes and increased Section 31 fees.
- Information Services revenue saw a significant jump of 26.1% to $174 million, boosted by the eVestment acquisition and growth in ETP-linked assets.
- Net income attributable to Nasdaq increased by 5.4% to $177 million, with diluted EPS rising to $1.05 from $0.99.
- The company significantly increased its cash dividend declared per common share by 156.3% to $0.82.
- Net cash provided by operating activities increased by 53.7% to $375 million, indicating strong operational cash generation.
- Nasdaq authorized an additional $500 million for its share repurchase program, demonstrating confidence and commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2018, Nasdaq, Inc. kept $0.15.
- Revenue$1.15B100.0%
- Cost of revenue−$485.0M42.1%
- Gross profit$666.0M57.9%
- Operating costs−$393.0M34.1%
- Operating income$273.0M23.7%
- Interest, other & tax−$96.0M8.3%
- Net income$177.0M15.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2018filed May 2, 2018Financial Statements
Q1 FY2018 against Q1 FY2017
| Line item | Q1 FY2018Q1 FY2017 | Change |
|---|---|---|
| Revenue | $1.15B$969.00M | +18.8% |
| Cost of Revenue | $485.00M$388.00M | +25.0% |
| Gross Profit | $666.00M$581.00M | +14.6% |
| Operating Expenses | $393.00M$335.00M | +17.3% |
| Operating Income | $273.00M$246.00M | +11.0% |
| Interest Expense | $38.00M$37.00M | +2.7% |
| Net Income | $177.00M$168.00M | +5.4% |
| EPS (Basic) | $0.35$0.34 | +5.0% |
| EPS (Diluted) | $0.35$0.33 | +6.1% |
| Shares Outstanding (Basic) | 500.76M499.42M | +0.3% |
| Shares Outstanding (Diluted) | 506.98M510.74M | −0.7% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in the first quarter of 2018?
Revenue growth was primarily driven by a strong performance in the Market Services segment, benefiting from higher trading volumes in equity derivatives and cash equities, as well as increased Section 31 pass-through fees. The Information Services segment also contributed significantly due to the acquisition of eVestment and growth in ETP assets tracking Nasdaq indexes.
How did Nasdaq manage its capital and shareholder returns during the quarter?
Nasdaq demonstrated a strong commitment to shareholder returns by significantly increasing its cash dividend declared per common share by 156.3%. Additionally, the company authorized a new $500 million share repurchase program. The company maintained a healthy liquidity position, with a substantial increase in net cash provided by operating activities.
What is the impact of the eVestment acquisition on Nasdaq's financials?
The acquisition of eVestment, completed in October 2017, positively impacted the Information Services segment, contributing to its 26.1% revenue growth. This acquisition is reflected in the increased revenues from data products.
How did Nasdaq's debt and liquidity position fare in the quarter?
Nasdaq managed its debt obligations effectively, with total debt decreasing slightly. The company maintained a healthy liquidity position, supported by strong operating cash flows and an undrawn revolving credit facility of $1 billion. Nasdaq remained in compliance with all debt covenants.
06—Continue