NASDAQ, INC. Quarterly Report for Q1 Ended Mar 31, 2020

Summary

Nasdaq, Inc. reported solid revenue growth for the first quarter of 2020, with revenues less transaction-based expenses increasing by 10.6% year-over-year to $701 million. This growth was primarily driven by a significant surge in the Market Services segment, which saw revenues increase by 46.2% to $933 million, largely due to heightened trading volumes in cash equities and equity derivatives amidst market volatility. Despite the revenue growth, net income attributable to Nasdaq decreased by 17.8% to $203 million, or $1.22 per diluted share, primarily impacted by higher operating expenses, including restructuring charges and a loss on early debt extinguishment, as well as a decrease in net income from unconsolidated investees. The company also highlighted its strong liquidity position, with cash and cash equivalents significantly increasing to $1,015 million, bolstered by debt issuances and credit facility utilization in response to COVID-19 uncertainties.

Key Highlights

• 1Total revenues less transaction-based expenses grew 10.6% to $701 million, driven by strong performance in Market Services.
• 2Market Services segment revenue increased 46.2% to $933 million, fueled by higher trading volumes in equity derivatives and cash equities.
• 3Net income attributable to Nasdaq decreased by 17.8% to $203 million, impacted by increased operating expenses and lower equity method investment income.
• 4Diluted Earnings Per Share (EPS) declined to $1.22 from $1.48 in the prior year period.
• 5Cash and cash equivalents significantly increased to $1,015 million, indicating a strong liquidity position.
• 6The company incurred $12 million in restructuring charges related to technology platform transitions and business realignments.
• 7Nasdaq experienced an increase in operating expenses, up 18.7% to $426 million, primarily due to higher compensation, general administrative costs, and restructuring charges.

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