10-QPeriod: Q3 FY2021

NASDAQ, INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 4, 2021For Securities:NDAQ

Summary

Nasdaq, Inc. (NDAQ) reported its third-quarter and nine-month financial results for the period ending September 30, 2021. The company demonstrated solid revenue growth, particularly in its Market Technology and Investment Intelligence segments, driven by strategic acquisitions and organic expansion. Net income and diluted earnings per share saw a significant increase year-over-year, reflecting strong operational performance and effective cost management. Key strategic initiatives, including the acquisition of Verafin and the divestiture of the U.S. Fixed Income business, are reshaping Nasdaq's business profile towards higher-growth, technology-centric offerings. The company also continued its commitment to shareholder returns through share repurchases and dividend payments, underscoring a focus on delivering value to investors. Nasdaq's robust performance indicates a positive trajectory, supported by its diversified business segments and strategic acquisitions.

Financial Highlights

55 data points
Beta

Revenue

$1.36B

61.8% Gross Margin

Net Income

$288.00M

21.2% Net Margin

EPS (Diluted)

$0.56

Total Assets

$18.40B

Cash & Equivalents

$303.00M

Free Cash Flow

$200.00M

Financial Statements
Beta
Revenue$1.36B
Cost of Revenue$519.00M
Gross Profit$838.00M
Operating Expenses$482.00M
Operating Income$356.00M
Interest Expense$33.00M
Net Income$288.00M
EPS (Basic)$0.57
EPS (Diluted)$0.56
Shares Outstanding (Basic)503.08M
Shares Outstanding (Diluted)510.54M

Key Highlights

  • 1Total revenues less transaction-based expenses increased by 17.2% for the three months and 19.8% for the nine months ended September 30, 2021, compared to the prior year periods.
  • 2Operating income rose by 9.2% for the three months and 19.8% for the nine months ended September 30, 2021.
  • 3Net income attributable to Nasdaq increased by 9.1% for the three months and 31.1% for the nine months ended September 30, 2021.
  • 4Diluted earnings per share (EPS) grew by 7.0% for the three months and 30.1% for the nine months ended September 30, 2021.
  • 5The Market Technology segment saw a significant 32.6% revenue increase in Q3 2021, primarily driven by the Verafin acquisition.
  • 6The company returned $90 million to shareholders through dividend payments in Q3 2021 and continued its share repurchase program with $984 million remaining authorized as of September 30, 2021.
  • 7Strategic acquisitions, notably Verafin, and divestitures, such as the U.S. Fixed Income business, are actively transforming Nasdaq's business mix towards technology and analytics.

Frequently Asked Questions

Revenue growth was primarily driven by strong performance in the Market Technology segment, significantly boosted by the acquisition of Verafin, and continued expansion in the Investment Intelligence segment. The Corporate Platforms segment also showed growth due to an increase in listed companies and adoption of IR & ESG services. Market Services revenues saw a decline due to the divestiture of the U.S. Fixed Income business and lower brokerage, clearance, and exchange fees.

The acquisition of Verafin, completed in February 2021, significantly contributed to the growth in the Market Technology segment, particularly in Anti Financial Crime Technology revenues. It also led to an increase in compensation and benefits, computer operations and data communications expenses, and depreciation and amortization due to acquired intangible assets.

Nasdaq is committed to returning value to shareholders through a combination of cash dividends and share repurchases. In Q3 2021, the company paid $90 million in dividends and had $984 million remaining under its share repurchase authorization as of September 30, 2021. The company also entered into an Accelerated Share Repurchase (ASR) agreement for $475 million.

While specific risk factors are detailed in the company's 10-K, this 10-Q highlights potential impacts from regulatory matters, including an ongoing OFAC inquiry related to the Armenian Stock Exchange and a fine from the Swedish Financial Supervisory Authority (SFSA) concerning Nasdaq Clearing. The company also faces risks related to market volatility, competition, cybersecurity, and the successful integration of acquisitions.