NASDAQ, INC. (NDAQ)·Q1 2025 Earnings Summary

Executive Summary

• Non-GAAP EPS of $0.79 beat S&P Global consensus of $0.771 by ~$0.02, driven by strong operating leverage; net revenue (revenue less transaction-based expenses) was $1.237B, roughly in line with consensus on a comparable basis as the company’s primary reporting metric is net revenue . Estimates marked with * are from S&P Global. *
• Broad-based growth: Solutions revenue rose 9% YoY to $947M, Market Services net revenue up 19% YoY to a record $281M, and ARR reached $2.831B (+8% YoY) with SaaS 37% of ARR (+2ppt YoY) .
• Guidance: 2025 non-GAAP opex raised at the low end to $2.265–$2.325B (from $2.245–$2.325B), tax rate maintained at 22.5–24.5% . Dividend increased 13% to $0.27 per share (from $0.24) .
• Catalysts: Record U.S. cash equities and options activity, Index strength (record average ETP AUM $662B; $27B 1Q net inflows), and an expanded AWS partnership introducing Nasdaq Eqlipse to accelerate cloud-based market infrastructure modernization .

What Went Well and What Went Wrong

• What Went Well
  • Market Services delivered record net revenues with record U.S. cash equities and derivatives volumes; total market share climbed to 62.7% (vs. 57.7% YoY) .
  • Index outperformed: revenue +14% YoY (+26% adjusted) with record average ETP AUM of $662B and $27B 1Q net inflows; 50% of 1Q inflows came from non-Nasdaq-100 products, underscoring diversification .
  • FinTech momentum: revenue +10% YoY; Verafin +21% YoY with 35 new SMB clients and growing AI Copilot usage; AxiomSL upsells including a Tier 1 U.S. bank; Calypso 25 upsells .
• What Went Wrong
  • Management flagged macro uncertainty (tariffs/geopolitics) elongating decision cycles for larger FinTech deals; Q2 growth likely affected, with tough Calypso comps vs. 2Q24 renewal .
  • Non-GAAP opex grew 6–7% YoY as Nasdaq invests in technology and people, with higher regulatory costs and strategic initiative expenses partly offset by synergies .
  • GAAP results still include amortization of acquired intangibles and restructuring charges tied to Adenza integration—non-cash but a headwind to GAAP EPS comparability .

Financial Results

Table 1: Headline results vs prior periods (oldest → newest)

Note: Management also cited free cash flow of $674M for Q1 on the call; press release reported cash from operations of $663M (CFO vs. FCF distinction) .

Table 2: Segment and sub-segment revenues (YoY view)

Table 3: KPIs and activity

Table 4: Results vs S&P Global consensus (company-reported measures for actuals)

Notes: Estimates marked with * are from S&P Global. S&P’s “Revenue” actual sometimes reflects total revenues; for comparability we present net revenue actual against consensus, consistent with Nasdaq’s primary reporting metric .

Guidance Changes

Management also reiterated strong capital allocation: deleveraging (gross leverage 3.4x at Q1-end; targeting 3.3x by Q2/Q3), plan to retire $400M June 2025 bonds primarily with cash, and opportunistic buybacks .

Earnings Call Themes & Trends

Management Commentary

• “Nasdaq’s first quarter results underscore the resilience of our business model and our ability to deliver growth across our divisions in a rapidly shifting environment.” — Adena Friedman, Chair & CEO .
• “We demonstrated strong operating leverage and our high level of cash flow enabled us to make meaningful progress on our capital allocation strategy of investing in organic growth, reducing debt, and repurchasing shares.” — Sarah Youngwood, CFO .
• On Index resilience and diversification: “50% of the $27 billion inflows in the quarter were into non‑Nasdaq 100 products… multiple vectors of performance allow continued growth even with market value swings.” — CEO .
• On AWS partnership: “The combined power of AWS and Nasdaq will enable market operators to modernize in a cost‑effective manner while mitigating transformation risk… maintaining the highest levels of performance, security and resilience.” — CEO ; see also joint release .

Q&A Highlights

• AWS partnership mechanics and revenue model: New hybrid infrastructure plus Nasdaq Eqlipse services shift parts of Marketplace Technology toward managed services over time; early client adopters include JSE and Grupo BMV; Nordic markets to leverage blueprint subject to approvals .
• M&A stance: Focus remains on organic growth, deleveraging, dividend, and buybacks; not evaluating new deals now .
• Sales cycles and Q2 setup: Larger FinTech decisions moving up approval chains, elongating timelines; tough Calypso comp in 2Q; medium-term growth ranges maintained given demand and pipeline .
• Index durability: Diversification beyond NDX, ongoing product launches, and derivatives activity underpin growth even in volatile markets .
• Texas presence: Regional HQ to deepen client engagement across ~700 Texas clients while maintaining access to global liquidity on Nasdaq .

Estimates Context

• Q1 2025 vs S&P Global consensus: Non-GAAP EPS $0.79 vs $0.771* (beat); Net revenue $1,237M vs $1,234M* (in line) . Estimates marked with * are from S&P Global.
• Note on comparability: Nasdaq’s primary revenue metric is “revenues less transaction-based expenses” (net revenue). S&P’s “Revenue” actual field can reflect total revenues; we present net revenue actual vs consensus to align with company reporting .
• Implications: EPS upward revisions are likely on operating leverage and market activity; revenue revisions modest given in-line net revenue and macro caution around Q2 FinTech timing .

Key Takeaways for Investors

• Operating leverage intact: Non-GAAP margin held at 55% while EPS beat; continued cost discipline despite tech investment supports medium-term operating profile .
• Cyclical + secular growth drivers: Market Services benefited from record U.S. activity; Index growth supported by diversified inflows; FinTech ARR grew double digits with expanding AI features .
• Near-term watch items: Elongated FinTech sales cycles and tough 2Q Calypso comp could weigh on Q2 growth trajectory even as pipelines remain healthy .
• Capital returns and balance sheet: Dividend raised 13% to $0.27; deleveraging ahead of plan with targeted bond repayment; buybacks remain opportunistic .
• Strategic optionality: Expanded AWS partnership (Nasdaq Eqlipse) positions Marketplace Technology for a shift toward managed services and broader TAM in market modernization .
• Index franchise resilience: Record AUM and strong inflows beyond NDX reduce dependency risk and support fee durability through cycles .
• Trading/PM implication: Bias to reward durable recurring growth and operating leverage; monitor Q2 FinTech momentum, index derivatives volumes, and U.S. cash/option activity for read-through to 2Q results .

Estimates disclaimer: Values marked with * were retrieved from S&P Global.