Nasdaq, Inc. (NDAQ) Bundle
A Brief History of Nasdaq, Inc.
Nasdaq, Inc. has evolved significantly since its inception. Founded in 1971, it became the world's first electronic stock market. Over the decades, Nasdaq expanded its services and technology, establishing itself as a leader in the global financial markets.
Recent Developments
In November 2023, Nasdaq completed the acquisition of Adenza, a provider of risk management and regulatory software, for a total purchase consideration of $9.984 billion. This acquisition was financed through approximately $5 billion in debt and $600 million in a term loan.
Financial Performance
As of September 30, 2024, Nasdaq reported total revenues of $1.902 billion for the third quarter, a 31% increase from $1.451 billion in Q3 2023. The nine-month revenues reached $5.370 billion, up 21.6% from $4.417 billion in the same period last year.
| Revenue Segment | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Capital Access Platforms | 501 | 456 | 9.7 |
| Financial Technology | 371 | 238 | 56.0 |
| Market Services | 1,022 | 747 | 36.7 |
| Other Revenues | 8 | 10 | (13.3) |
| Total Revenues | 1,902 | 1,451 | 31.0 |
Net Income
For the three months ended September 30, 2024, Nasdaq reported a net income of $306 million, or $0.53 per share, compared to $294 million, or $0.60 per share for the same period in 2023.
Expenses
Operating expenses for the third quarter of 2024 totaled $698 million, a 37.3% increase from $509 million in Q3 2023. Key drivers included a significant increase in compensation and benefits due to higher headcount following the Adenza acquisition.
| Expense Category | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Compensation and Benefits | 332 | 260 | 27.5 |
| Professional and Contract Services | 36 | 31 | 15.0 |
| Technology and Communication Infrastructure | 71 | 58 | 24.3 |
| Total Operating Expenses | 698 | 509 | 37.3 |
Debt Obligations
As of September 30, 2024, Nasdaq's total debt obligations were $9.858 billion, down from $10.454 billion at the end of 2023. The company's long-term debt included various senior unsecured notes with staggered maturity dates.
| Debt Category | Amount (in millions) |
|---|---|
| Short-term Debt | 499 |
| Long-term Debt | 9,359 |
| Total Debt Obligations | 9,858 |
Employee Growth
Headcount increased significantly to 9,120 employees as of September 30, 2024, up from 6,590 a year earlier, primarily due to the acquisition of Adenza.
Cash Flow
Net cash provided by operating activities for the nine months ended September 30, 2024, was $1.234 billion, a slight decrease from $1.279 billion in the same period of 2023. The company faced changes in working capital that affected cash flow.
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | 1,234 | 1,279 |
| Net Cash Provided by Investing Activities | 55 | (158) |
| Net Cash Used in Financing Activities | (2,537) | 3,019 |
A Who Owns Nasdaq, Inc. (NDAQ)
Ownership Structure
As of 2024, Nasdaq, Inc. (NDAQ) has a diverse ownership structure, with significant shares held by institutional investors, mutual funds, and individual shareholders. The company's common stock is authorized at 900,000,000 shares, with 598,541,046 shares issued and 574,742,353 shares outstanding as of September 30, 2024.
Major Shareholders
Following the acquisition of Adenza, Thoma Bravo became a notable shareholder, owning approximately 15% of Nasdaq's outstanding shares, equivalent to 85.6 million shares. After a secondary public offering, Thoma Bravo's stake was reduced to about 7.4%, holding 42.8 million shares.
Institutional Holdings
Institutional investors play a crucial role in Nasdaq's ownership. The following table summarizes the top institutional shareholders as of 2024:
| Institution | Shares Held | Percentage of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 69,210,000 | 12.1% |
| BlackRock, Inc. | 64,500,000 | 11.2% |
| State Street Corporation | 47,320,000 | 8.2% |
| Thoma Bravo | 42,800,000 | 7.4% |
| Fidelity Investments | 39,900,000 | 6.9% |
Stock Performance and Financial Data
As of September 30, 2024, Nasdaq's stock price closed at $73.01. The company reported a net income of $306 million for the third quarter of 2024, with total revenues reaching $1.902 billion. The diluted earnings per share were reported at $0.53.
Dividends and Share Repurchase
Nasdaq declared cash dividends totaling $0.70 per share for the year 2024. In the third quarter of 2024 alone, Nasdaq returned $138 million to shareholders through dividend payments and $88 million in share repurchases.
Acquisition Impact
The acquisition of Adenza in November 2023 significantly impacted Nasdaq's ownership and financial structure. The total purchase consideration for Adenza was approximately $9.984 billion. This acquisition has been integrated into Nasdaq's Financial Technology segment, enhancing its offerings and market position.
Nasdaq, Inc. (NDAQ) Mission Statement
Mission Statement Overview
The mission of Nasdaq, Inc. is to deliver a transparent and efficient marketplace that empowers investors and companies to achieve their financial goals. Nasdaq aims to innovate and lead in the financial technology space, enhancing market access and improving the trading experience while maintaining the highest standards of integrity and security.
Financial Performance Data
As of September 30, 2024, Nasdaq reported significant financial metrics that reflect its operational effectiveness and market positioning.
| Financial Metric | Q3 2024 | Q3 2023 | Percentage Change |
|---|---|---|---|
| Net Income (in millions) | $306 | $294 | +4.1% |
| GAAP Diluted Earnings Per Share | $0.53 | $0.60 | -11.7% |
| Non-GAAP Diluted Earnings Per Share | $0.74 | $0.71 | +4.2% |
| Total Revenues (in millions) | $1,902 | $1,451 | +31.0% |
| Total Expenses (in millions) | $698 | $509 | +37.3% |
| Cash Dividends Declared (per share) | $0.24 | $0.22 | +9.1% |
Market Share and Trading Volume
Nasdaq's market share and trading volumes are crucial indicators of its operational success. As of September 30, 2024, the following data illustrates its performance:
| Market Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Matched Share Volume (in billions) | 117.4 | 106.7 |
| Matched Market Share (Nasdaq Stock Market) | 15.6% | 15.5% |
| Overall Market Share | 60.8% | 56.4% |
| Average Daily Share Volume (in billions) | 11.5 | 10.4 |
Revenue Streams
Nasdaq's revenue is diversified across several segments, showcasing its operational breadth and market capabilities. Below is a breakdown of revenue sources for Q3 2024:
| Segment | Revenue (in millions) | Percentage Change |
|---|---|---|
| Capital Access Platforms | $501 | +9.7% |
| Financial Technology | $371 | +56.0% |
| Market Services | $1,022 | +36.7% |
| Other Revenues | $8 | -13.3% |
Listed Companies and IPO Activity
As of September 30, 2024, Nasdaq continues to be a leading exchange for new listings and initial public offerings (IPOs):
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total New Listings (Nasdaq Stock Market) | 138 | 87 |
| Total IPOs (Nasdaq Stock Market) | 48 | 39 |
| Total Listed Companies | 4,039 | 4,086 |
Conclusion on Market Position and Future Outlook
Nasdaq's mission to innovate and lead in the financial sector is reflected in its robust financial performance and market metrics. The company continues to adapt and thrive in a dynamic market environment, maintaining its focus on transparency, efficiency, and technological advancement.
How Nasdaq, Inc. (NDAQ) Works
Overview of Nasdaq, Inc.
Nasdaq, Inc. operates as a global technology company that provides trading, clearing, exchange technology, regulatory, and securities listing services. The company comprises three reportable segments: Market Services, Financial Technology, and Capital Access Platforms. As of September 30, 2024, Nasdaq's total stockholders' equity was $11,072 million, compared to $6,467 million the prior year.
Financial Performance
For the third quarter of 2024, Nasdaq reported the following financial metrics:
| Financial Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | Percentage Change |
|---|---|---|---|
| Total Revenues | $1,902 | $1,451 | 31.0% |
| Operating Income | $448 | $431 | 3.9% |
| Net Income | $306 | $294 | 4.1% |
| Diluted Earnings Per Share | $0.53 | $0.60 | (11.7%) |
| Cash Dividends Declared Per Share | $0.24 | $0.22 | 9.1% |
Market Services Segment
The Market Services segment includes cash equity trading, equity derivatives, and fixed income trading. Key metrics for the third quarter of 2024 include:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Cash Equity Trading Revenues | $354 million | $316 million |
| Matched Share Volume (in billions) | 117.4 | 106.7 |
| Total Market Share Executed | 60.8% | 56.4% |
Financial Technology Segment
This segment includes solutions for financial crime management, regulatory technology, and capital markets technology. The following are the revenue figures for Q3 2024:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Percentage Change |
|---|---|---|---|
| Financial Crime Management Technology | $69 | $58 | 19.0% |
| Regulatory Technology | $68 | $35 | 94.3% |
| Capital Markets Technology | $234 | $145 | 61.4% |
Capital Access Platforms Segment
This segment focuses on listing services and market data products. Key performance indicators for Q3 2024 include:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Number of Licensed ETPs | 388 | 366 |
| Quarterly Average ETP AUM (in billions) | $575 | $423 |
Cash Flow and Dividends
For the nine months ended September 30, 2024, Nasdaq's cash flows were as follows:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,234 | $1,279 |
| Net Cash Provided by Investing Activities | $55 | ($158) |
| Net Cash Used in Financing Activities | ($1,945) | ($1,209) |
Debt Obligations
As of September 30, 2024, Nasdaq's debt obligations were as follows:
| Maturity Date | Short-Term Debt (in millions) | Long-Term Debt (in millions) |
|---|---|---|
| 2025 Notes | $499 | |
| 2026 Notes | $499 | |
| 2028 Notes | $993 | |
| Total Debt Obligations | $9,858 |
Recent Developments
In the third quarter of 2024, Nasdaq achieved a record U.S. equity derivatives net revenue of $107 million and returned $138 million to shareholders through dividends and stock repurchases.
How Nasdaq, Inc. (NDAQ) Makes Money
Market Services
In 2024, Nasdaq's Market Services segment generated significant revenue through various trading activities. For the three months ended September 30, 2024, the Market Services revenue was $1,022 million, compared to $747 million in the same period in 2023, reflecting a growth of 36.7%.
Transaction-based expenses in this segment included:
- Transaction rebates: $513 million
- Brokerage, clearance, and exchange fees: $243 million
Net revenues from Market Services after accounting for these expenses totaled $266 million for the three months ended September 30, 2024, compared to $236 million for the same period in 2023, marking an increase of 12.6%.
Cash Equity Trading
Cash equity trading revenues for the three months ended September 30, 2024, reached $354 million, up from $316 million in 2023, representing an 11.7% increase. The net cash equity trading revenues stood at $107 million, increasing by 14.5% from $93 million in the prior year.
Key metrics for cash equity trading included:
- Total matched market share executed on Nasdaq's exchanges: 16.1%
- Average daily share volume: 11.5 billion
U.S. Tape Plans
For the three months ended September 30, 2024, revenues from U.S. Tape Plans remained constant at $35 million. However, for the nine months ended September 30, 2024, revenues decreased to $94 million from $107 million in 2023, a decline of 11.6%.
Regulatory Technology
In the Regulatory Technology segment, Nasdaq reported revenues of $350 million in Annual Recurring Revenue (ARR) for the three months ended September 30, 2024, compared to $132 million in 2023. Quarterly annualized SaaS revenues rose to $188 million, up from $116 million.
Capital Markets Technology
Capital Markets Technology revenues for the three months ended September 30, 2024, increased to $864 million in ARR from $511 million in 2023. Quarterly annualized SaaS revenues also saw a significant rise to $128 million from $39 million.
Other Revenues
Other revenues, which include Nordic fixed income trading and clearing, amounted to $17 million for the three months ended September 30, 2024, compared to $16 million in 2023, representing a 4.9% increase. For the nine months, these revenues totaled $52 million, up from $50 million.
Financial Overview
Net income for Nasdaq for the three months ended September 30, 2024, was $306 million, compared to $294 million in 2023. The diluted earnings per share were $0.53 for 2024, down from $0.60 in 2023.
For the nine months ended September 30, 2024, the net income attributable to Nasdaq was $762 million, compared to $862 million in 2023, with diluted earnings per share at $1.32 versus $1.76.
| Revenue Source | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Market Services | $1,022 | $747 | 36.7% |
| Cash Equity Trading | $354 | $316 | 11.7% |
| U.S. Tape Plans | $35 | $35 | 0.0% |
| Regulatory Technology | $350 | $132 | 150.0% |
| Capital Markets Technology | $864 | $511 | 68.9% |
| Other Revenues | $17 | $16 | 6.3% |
As of September 30, 2024, Nasdaq's total debt obligations amounted to $9,858 million, with a weighted average interest rate of 3.93%. The company declared cash dividends totaling $403 million during the first nine months of 2024, with a quarterly cash dividend of $0.24 per share.
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Article updated on 8 Nov 2024
Resources:
- Nasdaq, Inc. (NDAQ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Nasdaq, Inc. (NDAQ)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Nasdaq, Inc. (NDAQ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.