01—Abstract
Summary
Summary of the 10-Q filed August 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Nasdaq, Inc. (NDAQ) reported its financial results for the period ending June 29, 2024, with total revenues reaching $1.792 billiona for the quarter, a significant increase from $1.433 billion in the prior year period.
This growth was primarily driven by strong performance in its Financial Technology and Market Services segments. The company also saw increased operating expenses, influenced by factors such as increased headcount related to the Adenza acquisition and higher technology investments. Net income attributable to Nasdaq for the quarter was $222 millionb, down from $267 million in the same period last year, leading to a diluted earnings per share of $0.38.
Despite the decrease in net income, the company continued to return capital to shareholders, declaring a cash dividend of $0.24c per share. Nasdaq's balance sheet reflects a strong equity position and a manageable debt load, with a focus on strategic capital deployment for long-term growth.
02—Key points
Key Highlights
- Total revenues for the quarter increased by 25.1% year-over-year to $1.792 billion, driven by strong growth in the Financial Technology segment (up 78.7%) and Market Services segment (up 17.7%).
- Net income attributable to Nasdaq decreased by 16.9% to $222 million, resulting in a diluted EPS of $0.38, down from $0.54 in the prior year period.
- Operating expenses increased by 35.5% to $736 million, largely due to higher compensation and benefits, technology investments, and restructuring charges related to the Adenza acquisition.
- The Capital Access Platforms segment showed steady growth, with revenues increasing by 9.8% to $481 million, supported by strong performance in the Index business.
- The company returned $138 million to shareholders through dividends and $58 million through share repurchases during the second quarter.
- Long-term debt decreased to $9.249 billion from $10.163 billion at the end of the previous year, indicating effective debt management.
- The Financial Technology segment's revenue surged by 78.7% to $420 million, largely due to the inclusion of Adenza's operations, particularly in Regulatory Technology and Capital Markets Technology.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Nasdaq, Inc. kept $0.12.
- Revenue$1.79B100.0%
- Cost of revenue−$633.0M35.3%
- Gross profit$1.16B64.7%
- Operating costs−$736.0M41.1%
- Operating income$423.0M23.6%
- Interest, other & tax−$201.0M11.2%
- Net income$222.0M12.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 6, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.79B$1.43B | +25.1% |
| Cost of Revenue | $633.00M$508.00M | +24.6% |
| Gross Profit | $1.16B$925.00M | +25.3% |
| Operating Expenses | $736.00M$543.00M | +35.5% |
| Operating Income | $423.00M$382.00M | +10.7% |
| Net Income | $222.00M$267.00M | −16.9% |
| EPS (Basic) | $0.39$0.54 | −27.8% |
| EPS (Diluted) | $0.38$0.54 | −29.6% |
| Shares Outstanding (Basic) | 576.38M490.78M | +17.4% |
| Shares Outstanding (Diluted) | 578.95M493.63M | +17.3% |
05—Questions
Frequently Asked Questions
What drove the significant increase in revenue for Nasdaq in the second quarter of 2024?
Nasdaq's revenue growth was primarily fueled by its Financial Technology and Market Services segments. The Financial Technology segment saw a substantial 78.7% increase due to the full inclusion of the Adenza acquisition, with particular strength in Regulatory Technology and Capital Markets Technology. Market Services revenue grew by 17.7%, also contributing significantly to the overall top-line expansion.
Why did net income attributable to Nasdaq decrease year-over-year, despite revenue growth?
While revenue increased, net income attributable to Nasdaq decreased by 16.9% to $222 million. This was primarily due to a 35.5% rise in operating expenses. Key contributors to this increase included higher compensation and benefits (partly due to increased headcount from the Adenza acquisition), increased investment in technology and communication infrastructure, and higher restructuring charges related to ongoing integration and alignment programs.
How is Nasdaq managing its debt and returning capital to shareholders?
Nasdaq has actively managed its debt, with long-term debt decreasing to $9.249 billion from $10.163 billion. The company remains committed to returning capital to shareholders, as evidenced by the $0.24 per share cash dividend declared for the quarter and $58 million in share repurchases. This demonstrates a balanced approach to capital allocation, supporting both debt reduction and shareholder returns.
What is the performance of Nasdaq's key business segments?
The Capital Access Platforms segment showed steady growth with a 9.8% revenue increase to $481 million, benefiting from the Index business. The Financial Technology segment experienced explosive growth of 78.7% to $420 million, largely due to the Adenza acquisition. The Market Services segment also performed well, with revenues up 17.7% to $883 million. 'Corporate Items' (like amortization, merger costs, and restructuring) resulted in an operating loss, as expected.
06—Continue