01—Abstract
Summary
Summary of the 10-Q filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. reported its first-quarter 2024 financial results, showing a total revenue of $1.674 billiona, 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 millionb, 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 $0.24c per share, a 9% increase from the previous quarter.
02—Key points
Key Highlights
- Total revenues increased by 9.2% to $1.674 billion in Q1 2024 compared to Q1 2023.
- The Financial Technology segment experienced substantial revenue growth of 71.2%, largely driven by the acquisition of Adenza.
- Net income attributable to Nasdaq decreased by 22.5% to $234 million, impacted by increased operating expenses and interest expense.
- Diluted earnings per share (EPS) declined to $0.40 from $0.61 year-over-year.
- The company declared a quarterly cash dividend of $0.24 per share, a 9% increase from the previous quarter's dividend of $0.22.
- Operating expenses increased by 40.8% primarily due to higher compensation, depreciation, and amortization costs, reflecting the Adenza acquisition.
- Cash flow from operating activities was $530 million, a slight decrease from $565 million in the prior year period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Nasdaq, Inc. kept $0.14.
- Revenue$1.67B100.0%
- Cost of revenue−$557.0M33.3%
- Gross profit$1.12B66.7%
- Operating costs−$707.0M42.2%
- Operating income$410.0M24.5%
- Interest, other & tax−$176.0M10.5%
- Net income$234.0M14.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 2, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.67B$1.53B | +9.2% |
| Cost of Revenue | $557.00M$619.00M | −10.0% |
| Gross Profit | $1.12B$914.00M | +22.2% |
| Operating Expenses | $707.00M$502.00M | +40.8% |
| Operating Income | $410.00M$412.00M | −0.5% |
| Interest Expense | $108.00M$36.00M | +200.0% |
| Net Income | $234.00M$302.00M | −22.5% |
| EPS (Basic) | $0.41$0.62 | −33.9% |
| EPS (Diluted) | $0.40$0.61 | −34.4% |
| Shares Outstanding (Basic) | 575.45M489.93M | +17.5% |
| Shares Outstanding (Diluted) | 578.93M494.77M | +17.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in the first quarter of 2024?
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.
Why did net income decrease despite revenue growth?
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.
What is the company's strategy for returning capital to shareholders?
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.
How has the Adenza acquisition impacted the financial results?
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.
06—Continue