01—Abstract
Summary
Summary of the 10-Q filed November 2, 2022. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. (NDAQ) reported solid financial results for the nine months ended September 30, 2022, demonstrating growth across its core segments.
Total revenues, less transaction-based expenses, increased by 5.6% to $2.675 billiona compared to the prior year period. The company saw revenue growth in Market Technology, Investment Intelligence, and Corporate Platforms, with Market Technology showing a notable 16.6% increase, largely driven by its Anti Financial Crime Technology solutions. Market Services revenue also saw a modest increase of 2.8%, supported by equity derivative trading and clearing.
Despite an increase in operating expenses, primarily due to higher compensation and benefits and investments in technology, Nasdaq achieved an 10.8% rise in operating income to $1.215 billionb. Net income attributable to Nasdaq slightly decreased by 4.7% to $884 million, impacted by a decrease in income from unconsolidated investees.
Diluted earnings per share were $1.77c, a slight decrease from $1.84 in the prior year period. The company continued to return capital to shareholders through dividends and share repurchases, highlighting a commitment to shareholder value.
02—Key points
Key Highlights
- Total revenues less transaction-based expenses increased by 5.6% to $2.675 billion for the nine months ended September 30, 2022, compared to $2.534 billion in the prior year period.
- The Market Technology segment experienced significant revenue growth of 16.6% to $387 million, primarily driven by the Anti Financial Crime Technology solutions.
- Operating income increased by 10.8% to $1.215 billion for the nine months ended September 30, 2022, reflecting strong performance across segments despite increased operating expenses.
- Net income attributable to Nasdaq decreased by 4.7% to $884 million for the nine months ended September 30, 2022, mainly due to a reduction in income from unconsolidated investees.
- Diluted earnings per share for the nine months ended September 30, 2022, were $1.77, a slight decrease from $1.84 in the prior year period.
- The company returned $285 million to shareholders through dividends during the first nine months of 2022, with a quarterly dividend of $0.20 per share approved for the fourth quarter.
- As of September 30, 2022, Nasdaq had $293 million remaining under its share repurchase program, demonstrating a continued focus on capital return.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2022, Nasdaq, Inc. kept $0.19.
- Revenue$1.56B100.0%
- Cost of revenue−$667.0M42.8%
- Gross profit$890.0M57.2%
- Operating costs−$492.0M31.6%
- Operating income$398.0M25.6%
- Interest, other & tax−$104.0M6.7%
- Net income$294.0M18.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2022filed November 2, 2022Financial Statements
Q3 FY2022 against Q3 FY2021
| Line item | Q3 FY2022Q3 FY2021 | Change |
|---|---|---|
| Revenue | $1.56B$1.36B | +14.7% |
| Cost of Revenue | $667.00M$519.00M | +28.5% |
| Gross Profit | $890.00M$838.00M | +6.2% |
| Operating Expenses | $492.00M$482.00M | +2.1% |
| Operating Income | $398.00M$356.00M | +11.8% |
| Interest Expense | $32.00M$33.00M | −3.0% |
| Net Income | $294.00M$288.00M | +2.1% |
| EPS (Basic) | $0.60$0.57 | +5.3% |
| EPS (Diluted) | $0.59$0.56 | +5.4% |
| Shares Outstanding (Basic) | 491.23M503.08M | −2.4% |
| Shares Outstanding (Diluted) | 496.34M510.54M | −2.8% |
05—Questions
Frequently Asked Questions
How did Nasdaq's revenue perform in the reported period?
For the nine months ended September 30, 2022, Nasdaq's total revenues less transaction-based expenses grew by 5.6% to $2.675 billion, up from $2.534 billion in the same period of 2021. This growth was supported by increases across most segments, with Market Technology showing particularly strong performance.
What is the company's profitability trend?
Nasdaq's operating income increased by 10.8% to $1.215 billion for the nine months ended September 30, 2022. However, net income attributable to Nasdaq saw a slight decrease of 4.7% to $884 million due to lower income from unconsolidated investees. Diluted earnings per share also decreased slightly to $1.77 from $1.84 year-over-year.
How is Nasdaq returning capital to shareholders?
Nasdaq is actively returning capital to shareholders through both dividends and share repurchases. For the first nine months of 2022, the company paid $285 million in dividends and had $293 million remaining under its share repurchase program as of September 30, 2022. A regular quarterly dividend of $0.20 per share was approved for the fourth quarter.
What drove the performance in the Market Technology segment?
The Market Technology segment revenue increased by 16.6% to $387 million for the nine months ended September 30, 2022. This growth was significantly boosted by the Anti Financial Crime Technology solutions, which saw a 37.4% revenue increase, indicating strong demand for fraud and anti-money laundering solutions. Market Infrastructure Technology revenue saw a slight decrease.
06—Continue