10-QPeriod: Q1 FY2024

NASDAQ, INC. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 2, 2024For Securities:NDAQ

Summary

Nasdaq, Inc. reported its first-quarter 2024 financial results, showing a total revenue of $1.674 billion, an increase of 9.2% year-over-year. This growth was primarily driven by the Financial Technology segment, which saw a significant 71.2% revenue increase, largely due to the integration of the Adenza acquisition. The Capital Access Platforms segment also demonstrated solid growth, up 15.4%, supported by strong performance in its Index business. Despite revenue growth, net income attributable to Nasdaq decreased by 22.5% to $234 million, or $0.40 per diluted share, compared to $302 million, or $0.61 per diluted share, in the prior year. This decline is attributed to higher operating expenses, including a substantial increase in interest expense related to financing the Adenza acquisition and higher amortization expenses from acquired intangible assets. The company continued to return capital to shareholders, declaring a quarterly cash dividend of $0.24 per share, a 9% increase from the previous quarter.

Financial Highlights

53 data points
Beta

Revenue

$1.67B

66.7% Gross Margin

Net Income

$234.00M

14.0% Net Margin

EPS (Diluted)

$0.40

Total Assets

$30.27B

Cash & Equivalents

$388.00M

Free Cash Flow

$491.00M

Financial Statements
Beta
Revenue$1.67B
Cost of Revenue$557.00M
Gross Profit$1.12B
Operating Expenses$707.00M
Operating Income$410.00M
Interest Expense$108.00M
Net Income$234.00M
EPS (Basic)$0.41
EPS (Diluted)$0.40
Shares Outstanding (Basic)575.45M
Shares Outstanding (Diluted)578.93M

Key Highlights

  • 1Total revenues increased by 9.2% to $1.674 billion in Q1 2024 compared to Q1 2023.
  • 2The Financial Technology segment experienced substantial revenue growth of 71.2%, largely driven by the acquisition of Adenza.
  • 3Net income attributable to Nasdaq decreased by 22.5% to $234 million, impacted by increased operating expenses and interest expense.
  • 4Diluted earnings per share (EPS) declined to $0.40 from $0.61 year-over-year.
  • 5The company declared a quarterly cash dividend of $0.24 per share, a 9% increase from the previous quarter's dividend of $0.22.
  • 6Operating expenses increased by 40.8% primarily due to higher compensation, depreciation, and amortization costs, reflecting the Adenza acquisition.
  • 7Cash flow from operating activities was $530 million, a slight decrease from $565 million in the prior year period.

Frequently Asked Questions

Revenue growth was primarily driven by the Financial Technology segment, which saw a significant increase of 71.2% due to the inclusion of Adenza's results post-acquisition. The Capital Access Platforms segment also contributed positively with a 15.4% revenue increase, particularly from its Index business and improved data and listing services.

Net income attributable to Nasdaq decreased by 22.5% primarily due to a significant increase in operating expenses. This includes higher compensation and benefits, depreciation and amortization (especially related to intangible assets from the Adenza acquisition), and a substantial rise in interest expense due to debt incurred for the Adenza acquisition. Merger and strategic initiatives expenses also contributed to the increase in operating costs.

Nasdaq continues to return capital through dividends and share repurchases. The board of directors approved a regular quarterly cash dividend of $0.24 per share, marking a 9% increase from the prior quarter. The company also has an ongoing share repurchase program with a significant remaining authorization.

The Adenza acquisition, completed in November 2023, has significantly boosted revenue, particularly in the Financial Technology segment. However, it has also led to increased operating expenses, including higher amortization of acquired intangible assets, integration costs, and interest expense from the debt used to finance the acquisition. Goodwill and intangible assets related to this acquisition are substantial.