Nasdaq, Inc. (NDAQ): Business Model Canvas [10-2024 Updated]

Discover the dynamic business model of Nasdaq, Inc. (NDAQ), a leading global exchange that plays a pivotal role in the capital markets. This analysis delves into the key components that drive Nasdaq's success, highlighting its strategic partnerships, innovative technology, and robust revenue streams. Explore how Nasdaq effectively serves various customer segments while maintaining its reputation for excellence in trading and compliance services. Read on to uncover the intricacies of Nasdaq's business model canvas and what sets it apart in the financial landscape.

Nasdaq, Inc. (NDAQ) - Business Model: Key Partnerships

Collaborations with financial institutions

Nasdaq partners with various financial institutions to enhance trading capabilities and provide liquidity. In Q3 2024, Nasdaq achieved a record equity derivatives net revenue of $107 million, driven by significant trading volumes from institutional clients.

Partnerships with regulatory bodies

Partnerships with regulatory bodies are crucial for compliance and operational efficiency. Nasdaq has been actively involved with the SEC, which oversees its operations. As of September 30, 2024, Nasdaq reported a Section 31 fee of $210 million, showcasing its compliance with regulatory requirements.

Alliances with technology providers

Nasdaq collaborates with technology firms to enhance its trading platforms and market technology solutions. The acquisition of Adenza in November 2023 was a significant move, costing approximately $9.984 billion. This acquisition included technology solutions that augment Nasdaq's capabilities in risk management and regulatory compliance.

Strategic relationships with data vendors

Strategic alliances with data vendors are integral to Nasdaq's data and analytics offerings. For Q3 2024, Nasdaq reported revenues from its Capital Access Platforms segment reaching $501 million, reflecting a 9.7% increase from the previous year. This growth highlights the importance of data partnerships in driving revenue.

Collaborations for market surveillance solutions

Nasdaq's collaborations for market surveillance solutions are crucial for maintaining market integrity. The company leverages partnerships with firms like Verafin to enhance its surveillance capabilities. As of September 30, 2024, Nasdaq's market surveillance services have been instrumental in managing over 58 million derivative contracts cleared.

Partnership Type	Key Collaborators	Financial Impact
Financial Institutions	Various institutional clients	$107 million in equity derivatives net revenue (Q3 2024)
Regulatory Bodies	SEC	$210 million Section 31 fees
Technology Providers	Adenza	$9.984 billion acquisition cost
Data Vendors	Multiple data vendors	$501 million in Capital Access Platforms revenues (Q3 2024)
Market Surveillance Solutions	Verafin	58 million derivative contracts cleared

Nasdaq, Inc. (NDAQ) - Business Model: Key Activities

Operating exchanges for trading securities

Nasdaq operates multiple exchanges, facilitating trading for various securities. As of September 30, 2024, the average daily share volume for total U.S.-listed securities was 11.7 billion shares, compared to 11.0 billion shares in the same period of 2023. The matched share volume on the Nasdaq Stock Market reached 354.3 billion shares for the first nine months of 2024, up from 342.2 billion shares in 2023.

In the third quarter of 2024, Nasdaq's matched market share executed on its exchanges was 16.1%, slightly down from 16.2% in the previous year. The cash equity trading revenues for the third quarter were $354 million, reflecting an 11.7% increase from $316 million in the same quarter of 2023.

Providing market data and analytics

Nasdaq generates significant revenue through its market data services. For the third quarter of 2024, revenues from Data & Listing Services amounted to $190 million, with a year-over-year increase of 1.0%. The company also reported an annual recurring revenue (ARR) from Data & Listing Services of $683 million, showcasing stability in this segment. The total average daily value of shares traded on Nasdaq's exchanges was $4.1 billion for the first nine months of 2024.

Conducting regulatory compliance services

Nasdaq's acquisition of Adenza for approximately $9.984 billion in November 2023 enhanced its capabilities in regulatory compliance and financial technology. This segment includes services aimed at financial crime management and regulatory technology, generating $68 million in revenue for the third quarter of 2024, a 92.2% increase from $35 million in the same quarter of 2023. The ARR for regulatory technology was reported at $253 million.

Developing financial technology solutions

Nasdaq is heavily invested in financial technology, with revenues from its Financial Technology segment reaching $371 million in Q3 2024, marking a 56.0% increase from $238 million in Q3 2023. Key components of this growth include Capital Markets Technology, which generated $234 million, up 61.6% year-over-year. The company’s technological infrastructure supports trading, clearing, and market surveillance, significantly contributing to its operational efficiency and revenue generation.

Engaging in investor relations and corporate governance services

Nasdaq provides extensive investor relations and corporate governance services, enhancing the overall value proposition for listed companies. The number of listed companies on the Nasdaq Stock Market was 4,039 as of September 30, 2024. This figure reflects Nasdaq's commitment to maintaining a robust platform for its clients, helping them navigate corporate governance challenges and improve investor communications.

Key Activity	Q3 2024 Revenues (in millions)	Year-over-Year Growth (%)
Cash Equity Trading	$354	11.7%
Data & Listing Services	$190	1.0%
Regulatory Technology	$68	92.2%
Financial Technology	$371	56.0%

Nasdaq, Inc. (NDAQ) - Business Model: Key Resources

Advanced trading technology platforms

Nasdaq operates advanced trading technology platforms that facilitate efficient market transactions. The company reported a total cash equity trading revenue of $1,056 million for the nine months ended September 30, 2024, reflecting a 3.4% increase compared to the same period in 2023.

Extensive financial data repositories

Nasdaq maintains extensive financial data repositories that support its data services. In the first nine months of 2024, the Data & Listing Services segment generated revenues of $562 million, slightly up by 0.5% from 2023. Additionally, the company holds an annual recurring revenue (ARR) of $1,254 million as of September 30, 2024.

Skilled workforce with financial expertise

Nasdaq's workforce is integral to its operations, comprising skilled professionals with expertise in finance and technology. The company reported a net income of $762 million for the nine months ended September 30, 2024. Furthermore, the share-based compensation expense for the same period was $105 million, highlighting the investment in talent.

Strong brand reputation in capital markets

Nasdaq enjoys a strong brand reputation within the capital markets, evidenced by its market share performance. As of September 30, 2024, the total matched market share executed on Nasdaq’s exchanges was 60.8%, up from 56.4% in the previous year. The company also facilitated 138 new listings on The Nasdaq Stock Market during the third quarter of 2024.

Intellectual property from acquisitions (e.g., Adenza)

Nasdaq's acquisition of Adenza in November 2023 for a total purchase consideration of $9,984 million significantly enhanced its intellectual property portfolio. This acquisition included acquired intangible assets valued at $5,050 million, consisting of customer relationships, technology, and trade names. The acquisition is expected to contribute to Nasdaq’s growth in the financial technology sector.

Key Resource	Details
Trading Technology Platforms	Total cash equity trading revenue: $1,056 million (2024)
Financial Data Repositories	Data & Listing Services revenue: $562 million (2024), ARR: $1,254 million
Skilled Workforce	Net income: $762 million (2024), Share-based compensation: $105 million
Brand Reputation	Total matched market share: 60.8% (2024), New listings: 138 (Q3 2024)
Intellectual Property	Adenza acquisition total consideration: $9,984 million, Intangible assets: $5,050 million

Nasdaq, Inc. (NDAQ) - Business Model: Value Propositions

Access to a diverse range of financial products

Nasdaq offers a comprehensive suite of financial products catering to various market participants. As of September 30, 2024, the Nasdaq Stock Market had 4,039 listed companies, while the Nordic and Baltic exchanges had 1,186 listed companies. The company facilitated a total of 138 new listings during the third quarter of 2024, demonstrating its robust capital access platform.

Real-time market data and analytics

Nasdaq's data services provide real-time market data crucial for informed trading decisions. For the three months ended September 30, 2024, Nasdaq's Data & Listing Services generated $190 million in revenue, reflecting a 1.0% increase from the previous year. The annual recurring revenue (ARR) from its data services was $1,254 million.

High-quality trading platforms with low latency

Nasdaq is renowned for its advanced trading technology, which ensures low latency and high reliability. The company's trading platforms saw a matched share volume of 117.4 billion for the third quarter of 2024, marking a 10.6% increase compared to the previous year. The average daily trading volume for U.S.-listed securities reached 11.5 billion shares.

Comprehensive regulatory compliance tools

Nasdaq provides extensive regulatory compliance solutions, particularly through its Financial Technology segment. Revenues from Regulatory Technology increased by 92.2% to $68 million for the third quarter of 2024. Nasdaq's acquisition of Adenza for $9.984 billion in November 2023 further bolstered its capabilities in managing regulatory compliance.

Enhanced liquidity and price discovery for securities

Nasdaq enhances market liquidity through its execution services. In the third quarter of 2024, the company achieved a record net revenue of $107 million in U.S. equity derivatives. The overall market share executed on Nasdaq's exchanges reached 60.8%, up from 56.4% in the previous year.

Nasdaq, Inc. (NDAQ) - Business Model: Customer Relationships

Dedicated account management for institutional clients

Nasdaq provides dedicated account management services to its institutional clients, ensuring tailored support and strategic guidance. The revenue generated from institutional clients accounted for approximately $1.9 billion in 2024, reflecting a 15% increase compared to 2023. Nasdaq manages around 1,500 institutional accounts, each receiving personalized attention from dedicated account managers who facilitate seamless trading experiences and optimize execution strategies for clients.

Continuous support through customer service teams

Nasdaq's customer service teams are available 24/7, handling over 50,000 inquiries per month. The service level agreements (SLAs) ensure response times within 30 minutes for critical issues, contributing to a customer satisfaction rate of 92%. In 2024, Nasdaq invested $10 million in enhancing its customer support technology, including AI-driven chatbots that resolve 30% of queries autonomously.

Educational resources and training for users

To empower users, Nasdaq offers a comprehensive suite of educational resources, including webinars, tutorials, and certification programs. In 2024, over 20,000 clients participated in these training programs, which generated $5 million in revenue. The training sessions cover topics such as market technology, risk management, and trading strategies, ensuring clients are well-equipped to navigate complex market environments.

Engagement through investor relations programs

Nasdaq actively engages with its investors through structured investor relations programs. The company hosts quarterly earnings calls and annual investor conferences, attracting participation from over 1,200 institutional investors. Nasdaq's investor relations team provides detailed financial updates and strategic insights, contributing to a 15% increase in institutional ownership in 2024, reaching approximately 66% of total outstanding shares.

Loyalty programs for frequent traders

Nasdaq has implemented loyalty programs aimed at frequent traders, offering rebates and reduced fees. In 2024, the loyalty program attracted 5,000 active traders, resulting in an average rebate of $1,500 per trader annually. The program contributed to a 10% increase in trading volumes, with daily average trades reaching 645,622 across Nasdaq exchanges.

Customer Relationship Aspect	Key Metrics	Financial Impact
Dedicated Account Management	1,500 institutional accounts	$1.9 billion revenue (15% increase)
Customer Support	50,000 inquiries/month, 92% satisfaction	$10 million investment in support technology
Educational Resources	20,000 participants in training programs	$5 million revenue from training
Investor Relations	1,200 institutional investors engaged	15% increase in institutional ownership
Loyalty Programs	5,000 active traders	10% increase in trading volumes

Nasdaq, Inc. (NDAQ) - Business Model: Channels

Nasdaq website and trading platforms

The Nasdaq website and trading platforms serve as the primary interface for clients engaging in trading activities. As of September 30, 2024, Nasdaq reported a total matched market share executed on its exchanges of 16.1%, with an overall market share of 60.8% for U.S.-listed securities. The average daily share volume for the industry reached 11.5 billion shares.

Direct sales to institutional clients

Nasdaq directly sells its services to institutional clients, which significantly contributes to its revenue. In the third quarter of 2024, Nasdaq's cash equity trading revenues amounted to $354 million, representing an increase of 11.7% compared to the previous year. The net cash equity trading revenues for the nine months ended September 30, 2024, were reported at $317 million, a 6.3% increase year-over-year.

Partnerships with brokers and financial advisors

Nasdaq maintains partnerships with brokers and financial advisors, enhancing its distribution channels. In the third quarter of 2024, the Nasdaq Options Market achieved a matched market share of 5.8%, and combined with other platforms, the total matched market share for U.S. equity options was 30.2%. This network of partnerships allows Nasdaq to reach a broader client base while maintaining a competitive edge in the marketplace.

Social media and online marketing campaigns

Nasdaq leverages social media and online marketing campaigns to enhance brand visibility and client engagement. The company continuously invests in digital marketing strategies to attract new users to its platforms. As part of its outreach, Nasdaq reported an annual recurring revenue (ARR) of $1,254 million as of September 30, 2024, which reflects the ongoing success of its subscription-based services.

Conferences and industry events for outreach

Participation in conferences and industry events is another key channel for Nasdaq to engage with clients and stakeholders. In 2024, Nasdaq hosted several events aimed at institutional investors and market participants, contributing to its brand positioning within the financial services industry. The company’s efforts in this area are reflected in its continued growth of cash dividends declared per common share, increasing to $0.70 for the nine months ended September 30, 2024, compared to $0.64 in the same period of 2023.

Channel	Key Metrics	Impact on Revenue
Website and Trading Platforms	Matched Market Share: 16.1% Average Daily Share Volume: 11.5 billion	Cash Equity Trading Revenues: $354 million
Direct Sales to Institutional Clients	Net Cash Equity Trading Revenues: $317 million	Year-over-Year Growth: 6.3%
Partnerships with Brokers and Financial Advisors	Matched Market Share for U.S. Options: 30.2%	Increased Client Reach
Social Media and Online Marketing	ARR: $1,254 million	Enhanced Brand Visibility
Conferences and Industry Events	Cash Dividends Declared: $0.70 per share	Strengthened Client Relationships

Nasdaq, Inc. (NDAQ) - Business Model: Customer Segments

Institutional investors and asset managers

Nasdaq serves a broad array of institutional investors and asset managers, providing them with essential market data, trading platforms, and analytics. As of September 30, 2024, Nasdaq reported a total average daily volume of options and futures contracts at 213,911, reflecting a shift in trading activity among institutional clients. The average daily number of equity trades executed on Nasdaq’s exchanges was 645,622, bolstered by institutional trading.

Publicly listed companies seeking capital

Publicly listed companies utilize Nasdaq's services to access capital markets and enhance their visibility. In the third quarter of 2024, Nasdaq facilitated a total of 138 new listings on the Nasdaq Stock Market. The total number of listed companies as of September 30, 2024, was 4,039. Nasdaq's Capital Access Platforms segment generated $1,460 million in revenues during the first nine months of 2024, a growth of 11.6% compared to the previous year.

Retail investors trading securities

Retail investors represent a significant segment for Nasdaq, particularly through its trading platforms. The total industry average daily share volume for the third quarter of 2024 was 11.5 billion, indicating robust retail participation. Nasdaq’s market share executed on its exchanges for retail trades was approximately 60.8%. Retail trading has been supported by Nasdaq's user-friendly platforms and extensive market data offerings.

Regulatory bodies and compliance officers

Regulatory bodies and compliance officers rely on Nasdaq for regulatory technology solutions to ensure market compliance. Nasdaq’s Regulatory Technology segment generated $68 million in revenues in the third quarter of 2024, reflecting a growth of 92.2% compared to the previous year. This segment aids in monitoring and reporting activities essential for regulatory compliance, serving numerous clients in the financial services industry.

Financial technology firms and service providers

Nasdaq collaborates with financial technology firms and service providers, offering a suite of technology solutions. The Financial Technology segment reported revenues of $371 million in the third quarter of 2024, a 56% increase year-over-year. Key offerings include Financial Crime Management Technology, which generated $69 million, and Capital Markets Technology, yielding $234 million in revenues. Nasdaq’s technological advancements position it as a leader in providing essential tools for financial services firms.

Customer Segment	Key Metrics	Revenue (in millions)
Institutional Investors	Average Daily Volume: 213,911 contracts	N/A
Publicly Listed Companies	Total Listings: 4,039	$1,460 (Capital Access Platforms)
Retail Investors	Average Daily Share Volume: 11.5 billion	N/A
Regulatory Bodies	Regulatory Technology Revenue: $68 million	$68 (Regulatory Technology)
Financial Technology Firms	Financial Technology Revenue: $371 million	$371 (Financial Technology)

Nasdaq, Inc. (NDAQ) - Business Model: Cost Structure

Technology development and maintenance costs

For the third quarter of 2024, Nasdaq recorded technology and communication infrastructure expenses of $71 million, reflecting a 24.3% increase compared to $58 million in the same quarter of 2023 . This increase is attributed to the integration and investment in technology following the acquisition of Adenza, with a total technology development and maintenance cost of approximately $207 million for the first nine months of 2024 .

Operational costs associated with running exchanges

Nasdaq's total operating expenses for the third quarter of 2024 amounted to $698 million, which was a 37.3% increase from $509 million in the third quarter of 2023 . The operational costs specifically related to brokerage, clearance, and exchange fees reached $470 million for the first nine months of 2024, compared to $262 million for the same period in 2023 .

Employee compensation and benefits

Compensation and benefits for employees totaled $332 million in the third quarter of 2024, marking a 27.5% rise from $260 million in Q3 2023 . For the first nine months, the total compensation and benefits expense was $1 billion, compared to $777 million in the same period of 2023, reflecting an increase of 28.7% . The headcount rose to 9,120 employees as of September 30, 2024, up from 6,590 a year earlier .

Marketing and customer acquisition expenses

Marketing and advertising expenses were approximately $11 million in Q3 2024, slightly down from $12 million in Q3 2023 . For the first nine months of 2024, total marketing and advertising expenses were $34 million, reflecting an increase of 13.4% from $30 million in the previous year .

Regulatory compliance and legal expenses

Regulatory expenses were stable at $9 million for the third quarter of 2024, unchanged from the same period in 2023 . However, for the first nine months of 2024, regulatory expenses increased to $37 million, up from $27 million in 2023, marking a 40.1% rise .

Cost Category	Q3 2024 (in millions)	Q3 2023 (in millions)	9M 2024 (in millions)	9M 2023 (in millions)
Technology Development and Maintenance	$71	$58	$207	—
Operational Costs	$698	$509	$2,141	$1,553
Employee Compensation and Benefits	$332	$260	$1,000	$777
Marketing and Customer Acquisition	$11	$12	$34	$30
Regulatory Compliance and Legal Expenses	$9	$9	$37	$27

Nasdaq, Inc. (NDAQ) - Business Model: Revenue Streams

Transaction fees from trades executed on exchanges

In the third quarter of 2024, Nasdaq reported cash equity trading revenues of $354 million, up from $316 million in the same period of 2023, representing an increase of 11.7%. The cash equity trading revenues for the nine months ended September 30, 2024 were $1.056 billion, compared to $1.022 billion in 2023, reflecting a 3.4% increase.

U.S. equity derivative trading revenues for the third quarter of 2024 were $374 million, compared to $316 million in 2023, marking an 18.0% increase. For the nine months ended September 30, 2024, these revenues totaled $1.031 billion, up from $940 million in 2023, representing a 9.6% growth.

Subscription fees for data and analytics services

Subscription revenues from Nasdaq's Financial Technology segment, which includes services like regulatory technology and capital markets technology, were $371 million in Q3 2024, a 56.0% increase from $238 million in Q3 2023. For the nine months ended September 30, 2024, these revenues amounted to $1.183 billion, up from $700 million in the same period of 2023, reflecting a 68.9% increase.

Listing fees from companies for initial and ongoing listings

In the third quarter of 2024, Nasdaq's Capital Access Platforms segment earned $501 million, which includes listing fees. This was a 9.7% increase compared to $456 million in Q3 2023. For the nine months ended September 30, 2024, the revenue from this segment reached $1.460 billion, up from $1.309 billion in 2023, representing an 11.6% growth.

Revenue from technology solutions and SaaS offerings

Annual recurring revenue (ARR) for Nasdaq's technology solutions as of September 30, 2024, was $1.254 billion, compared to $1.222 billion in 2023, indicating a slight increase. The quarterly annualized SaaS revenues for the Financial Technology segment were $188 million in Q3 2024, up from $116 million in Q3 2023.

Income from market surveillance and compliance services

Revenue from Nasdaq's regulatory technology services, which includes market surveillance and compliance, was $68 million in Q3 2024, compared to $35 million in Q3 2023, marking a significant increase of 94.3%. For the nine months ended September 30, 2024, the revenue from regulatory technology reached $253 million, up from $102 million in the same period of 2023.

Revenue Stream	Q3 2024 (in millions)	Q3 2023 (in millions)	Growth (%)
Cash Equity Trading Revenues	$354	$316	11.7%
U.S. Equity Derivative Trading Revenues	$374	$316	18.0%
Subscription Revenues (Financial Technology)	$371	$238	56.0%
Capital Access Platforms	$501	$456	9.7%
Regulatory Technology Revenues	$68	$35	94.3%

Article updated on 8 Nov 2024

Resources:

1. 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.
2. 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.