01—Abstract
Summary
Summary of the 10-Q filed August 3, 2022. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. (NDAQ) reported its second-quarter and first-half 2022 financial results, demonstrating resilience and strategic growth.
Total revenues rose by 9.9% year-over-year in Q2 to $1.55 billiona, and by 0.8% for the first six months to $3.09 billion. While net income attributable to Nasdaq saw a decline to $307 million in Q2 from $341 million in the prior year, diluted EPS was $1.85, down from $2.05. For the first half, net income was $590 million, compared to $639 million, with diluted EPS at $3.55, down from $3.83.
The company saw strong performance in its Market Technology, Investment Intelligence, and Corporate Platforms segments, driven by increased demand for anti-financial crime solutions, index licensing, and listing services respectively. The Market Services segment experienced a slight decline in revenue, impacted by market conditions and a decrease in U.S. equity options market share. Nasdaq continued its commitment to returning capital to shareholders, increasing dividends by 11.1%b year-over-year for Q2 and announcing a 3-for-1 stock split.
The company also actively engaged in share repurchases, with $166 millionc in repurchases during Q2 and approximately $293 million remaining under its authorized program as of June 30, 2022. Management highlighted operational strengths, including a leading position in IPOs and options trading, and strategic investments in areas like ESG services. Despite a challenging macroeconomic environment, Nasdaq's diversified business model and focus on technology and data solutions position it for continued growth.
02—Key points
Key Highlights
- Total revenues increased by 9.9% to $1.55 billion in Q2 2022, driven by growth across key segments.
- Net income attributable to Nasdaq decreased by 10.0% to $307 million in Q2 2022, with diluted EPS at $1.85.
- Market Technology segment revenue grew 12.0% in Q2 2022, fueled by demand for anti-financial crime solutions.
- Investment Intelligence revenue increased by 8.4% in Q2 2022, supported by strong performance in Index and Analytics businesses.
- Corporate Platforms revenue rose 12.8% in Q2 2022, driven by increased listings and IR & ESG services.
- The company declared a 3-for-1 stock split in the form of a stock dividend, effective August 2022.
- Shareholder returns remained a focus with a 11.1% increase in Q2 dividends and $166 million in share repurchases during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2022, Nasdaq, Inc. kept $0.20.
- Revenue$1.55B100.0%
- Cost of revenue−$659.0M42.5%
- Gross profit$893.0M57.5%
- Operating costs−$481.0M31.0%
- Operating income$412.0M26.5%
- Interest, other & tax−$105.0M6.8%
- Net income$307.0M19.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2022filed August 3, 2022Financial Statements
Q2 FY2022 against Q2 FY2021
| Line item | Q2 FY2022Q2 FY2021 | Change |
|---|---|---|
| Revenue | $1.55B$1.41B | +9.9% |
| Cost of Revenue | $659.00M$566.00M | +16.4% |
| Gross Profit | $893.00M$846.00M | +5.6% |
| Operating Expenses | $481.00M$470.00M | +2.3% |
| Operating Income | $412.00M$376.00M | +9.6% |
| Interest Expense | $32.00M$33.00M | −3.0% |
| Net Income | $307.00M$341.00M | −10.0% |
| EPS (Basic) | $0.62$0.69 | −10.6% |
| EPS (Diluted) | $0.62$0.68 | −9.3% |
| Shares Outstanding (Basic) | 492.24M492.26M | 0.0% |
| Shares Outstanding (Diluted) | 496.58M499.31M | −0.5% |
05—Questions
Frequently Asked Questions
What was Nasdaq's revenue performance in the second quarter of 2022?
In the second quarter of 2022, Nasdaq's total revenues increased by 9.9% year-over-year to $1.55 billion. This growth was primarily driven by increases in the Market Technology (up 12.0%), Investment Intelligence (up 8.4%), and Corporate Platforms (up 12.8%) segments. Market Services revenue also saw an increase of 10.9%.
How did Nasdaq's profitability change compared to the previous year?
Net income attributable to Nasdaq decreased by 10.0% to $307 million in the second quarter of 2022, compared to $341 million in the same period of 2021. Consequently, diluted earnings per share (EPS) also decreased to $1.85 from $2.05 year-over-year.
What are the key growth drivers for Nasdaq's segments?
The Market Technology segment's growth was primarily driven by increased demand for anti-financial crime technology solutions. The Investment Intelligence segment benefited from higher licensing revenues from futures trading linked to the Nasdaq-100 Index and growth in the eVestment platform. Corporate Platforms saw revenue increases due to a higher number of listed companies and growth in IR & ESG services. Market Services experienced growth driven by higher U.S. industry trading volumes and market share in cash equity trading, though equity derivative trading saw a decrease.
What actions did Nasdaq take regarding shareholder returns?
Nasdaq demonstrated its commitment to shareholder returns by increasing its quarterly cash dividend by 11.1% to $0.60 per share for the second quarter of 2022. Additionally, the company announced a 3-for-1 stock split in the form of a stock dividend and repurchased approximately $166 million of its common stock during the second quarter, with $293 million remaining under its authorized repurchase program as of June 30, 2022.
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