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    Nasdaq Inc (NDAQ)

    Q1 2025 Earnings Summary

    Reported on Apr 28, 2025 (Before Market Open)
    Pre-Earnings Price$73.50Last close (Apr 23, 2025)
    Post-Earnings Price$72.10Open (Apr 24, 2025)
    Price Change
    $-1.40(-1.90%)
    • Robust Diversification and Resilient Index Business: The index segment is expanding through new product launches and diversified inflows—evidenced by 26% revenue growth driven largely by non-Nasdaq 100 products—even amid market value declines.
    • Strategic AWS Partnership Fuels Technology Modernization: The enhanced collaboration with AWS aims to deliver scalable, secure, and interconnected market infrastructure, positioning Nasdaq for long-term revenue growth in new market segments.
    • Expanding Domestic Presence Strengthens Client Engagement: Establishing a regional headquarters in Texas—serving over 700 clients and 200 listed companies—underscores a strong domestic demand and reinforces Nasdaq’s competitive position.
    • Delayed client decision-making and extended sales cycles in key fintech segments (including Calypso) may lead to short-term revenue disappointments.
    • Regulatory uncertainty—including shifting requirements and delays in implementation—could postpone deal closures and negatively impact near-term growth.
    • The transition to new infrastructure via the AWS partnership, while promising long term, may incur integration challenges and short-term cost pressures amid ongoing macro volatility.
    MetricYoY ChangeReason

    Total Revenue

    Increased by approximately 25% (from $1,674 million to $2,090 million)

    Total Revenue increased driven by overall strong operating performance across segments, with higher trading volumes and robust fee-driven revenue, particularly from the U.S. market. This builds on previous period trends of increased industry activity that continued into Q1 2025.

    Net Income

    Increased by approximately 70% (from $233 million to $395 million)

    The Net Income surge was due to a combination of substantially higher revenue and improved expense management, including lower effective tax rates and reduced interest expense. This marks an improvement over Q1 2024, where performance was solid but not as amplified.

    Operating Income

    Increased by approximately 33% (from $410 million to $547 million)

    Operating Income grew as a result of higher revenues coupled with better operating margins—improving from a 56% margin in Q1 2024 to 62% in Q1 2025—indicating effective cost control and operational synergies relative to the previous period.

    Market Services Segment Revenue

    Increased by approximately 43% (from $794 million to $1,134 million)

    The Market Services segment saw substantial growth driven by higher transaction-based revenues across key product lines such as U.S. equity derivative trading and cash equity trading, with increases around 24% and 25% respectively. This continued strong performance compared to the prior period where sectoral improvements were already in motion.

    Index Revenue

    Increased by about 15% (from $168 million to $193 million)

    Index Revenue benefited from higher average assets under management in Nasdaq-linked exchange-traded products and increased trading volumes on futures contracts, reflecting sustained growth trends from earlier fiscal periods.

    Geographic Mix (United States)

    In Q1 2025, the U.S. contributed $1,700 million (81% of total revenue) compared to lower prior ratios

    The rising United States contribution is attributable to stronger domestic trading activity and higher transaction volumes in U.S. markets, which built upon previous improvements from Q1 2024, reinforcing the dominant role of the U.S. in Nasdaq’s revenue mix.

    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Non-GAAP Expense Guidance

    FY 2025

    $2.245 billion to $2.325 billion

    $2.265 billion to $2.325 billion

    raised

    Non-GAAP Tax Rate Guidance

    FY 2025

    22.5% to 24.5%

    22.5% to 24.5%

    no change

    Gross Leverage Ratio Guidance

    FY 2025

    no prior guidance

    3.3x (expected in Q2/Q3 2025)

    no prior guidance

    Capital Access Platforms Revenue Growth

    FY 2025

    5% to 8%

    5% to 8%

    no change

    Financial Technology Division Revenue Growth

    FY 2025

    10% to 14% with detailed subdivision guidance

    Within its medium-term outlook with subdivisions at the low end or well within range

    no change

    Efficiency Program Benefit

    FY 2025

    2 percentage point reduction to expense growth

    2 percentage point benefit to expense growth

    no change

    Dividend

    FY 2025

    no prior guidance

    $0.27 per share (a 13% increase)

    no prior guidance

    Cross-Sell Revenue

    FY 2025

    no prior guidance

    Exceed $100 million in run-rate revenue by end of 2027

    no prior guidance

    MetricPeriodGuidanceActualPerformance
    Financial Technology Division Growth
    Q1 2025 (y/y)
    10% to 14%
    10.2% (432Vs. 392)
    Met
    Financial Crime Management Tech
    Q1 2025 (y/y)
    Mid-20s
    20.3% (77Vs. 64)
    Missed
    Regulatory Technology
    Q1 2025 (y/y)
    High single to low double digits
    12.2% (101Vs. 90)
    Met
    Capital Markets Technology
    Q1 2025 (y/y)
    High single to low double digits
    6.7% (254Vs. 238)
    Missed
    Capital Access Platforms Growth
    Q1 2025 (y/y)
    5% to 8%
    7.5% (515Vs. 479)
    Met
    Data & Listings
    Q1 2025 (y/y)
    Low single digits
    3.2% (192Vs. 186)
    Met
    Index
    Q1 2025 (y/y)
    Above mid- to high single digits
    14.9% (193Vs. 168)
    Beat
    TopicPrevious MentionsCurrent PeriodTrend

    Index Business Growth and Diversification

    Q2–Q4 2024: Consistently reported robust revenue growth, strong net inflows, and significant product innovation (e.g. record ETP AUM, new product launches, international and institutional diversification)

    Q1 2025: Continued strong revenue growth (26% growth), record average ETP AUM, and a marked diversification with 50% of inflows coming from non‐Nasdaq 100 products.

    Positive & Consistent: Driven by ongoing product innovation and diversification, sentiment remains upbeat.

    Fintech and Financial Crime Management Technology Expansion

    Q2–Q4 2024: Demonstrated solid revenue and ARR growth across Verafin, AxiomSL, and Calypso with emphasis on AI features, client wins, and early signs of global expansion

    Q1 2025: Reported steady fintech division growth with notable advances in AI-powered tools (e.g., Gen AI entity research copilot), new SMB client wins, and improved client signings along with global expansion preparations.

    Positive: Growth in client adoption and the integration of AI capabilities bolster long‑term prospects.

    International Expansion Across Key Segments

    Q2–Q4 2024: Emphasized broad global initiatives—from Verafin’s European launch and regulatory technology wins in France, India, and the Philippines to expanded Capital Markets and index product launches outside the U.S.

    Q1 2025: Focus shifted more to expanding the index business internationally via diversification beyond the Nasdaq 100, evidenced by 50% of inflows coming from non‑Nasdaq 100 products.

    Mixed but Upward: While previous periods highlighted a broad international push, Q1 2025 shows a concentrated focus on index product diversification with sustained global ambitions.

    Regulatory and Market Environment Challenges

    Q2–Q4 2024: Issues included a muted IPO environment, delisting challenges, evolving regulatory requirements (ESG, SEC tick rule, Basel III/V changes), and adjustments in public markets

    Q1 2025: Addressed market volatility affecting IPO timing and ongoing regulatory headwinds (e.g. delays and adjustments in delisting and regulatory implementations).

    Steady/Mixed: Persistent challenges remain though some optimism about later-year improvement; overall sentiment is cautiously balanced.

    AWS Partnership and Technology Modernization

    Q2–Q4 2024: No specific commentary on AWS or tech modernization in available excerpts.

    Q1 2025: Emphasis on a long‐term, hybrid cloud partnership with AWS designed to modernize market infrastructure, increase scalability, and bolster connectivity, with concrete examples of rollout in key markets.

    Emergent & Strategic: Newly introduced in Q1 2025, this topic is positioned as a key enabler for long‑term competitiveness and innovation.

    Integration and Cross-Selling Strategies for Acquired Platforms

    Q2–Q4 2024: Repeated emphasis on integrating AxiomSL and Calypso (and the Adenza acquisition), achieving significant net expense synergies and generating early cross-sell wins (e.g., 7–11 cross-sells, with advanced campaigns)

    Q1 2025: Continued integration progress with reported cross-sells (e.g., 19 cross-sells since acquisition, 2 in Q1) and expanded efficiency programs to target higher synergy levels, reaffirming the long-term $100M cross-sell goal.

    Progressing Well: Integration and cross-selling remain a consistent strength, with sentiment positive as synergies deepen and targets remain on track.

    Domestic Expansion and Enhanced Client Engagement

    Q2–Q4 2024: Q3 noted domestic upgrades such as migration to Fusion for U.S. markets and enhanced client engagement through cross-sell campaigns, though explicit “domestic expansion” details were limited in Q4

    Q1 2025: While “domestic expansion” was not explicitly highlighted, enhanced client engagement was evident via improved sales cycles, strong new client signings, and AI tool adoption across fintech solutions.

    Neutral to Positive: Domestic client engagement remains a consistent focus, albeit without new emphasis on geographic expansion, maintaining overall positive interaction with clients.

    Capital Management and Revenue Growth Normalization

    Q2–Q4 2024: Consistent focus on deleveraging (reduction in leverage ratios), pricing improvements, dividend increases, and opportunistic share repurchases, with clear metrics across segments

    Q1 2025: Continued emphasis with further deleveraging, dividend hikes (13% increase), share repurchases, and steady double-digit revenue growth with normalized revenue drivers across divisions.

    Stably Positive: Ongoing disciplined capital management strategies support stable revenue growth and long-term shareholder returns.

    Traditional Corporate Solutions and Data/Listings Segment Challenges

    Q2–Q4 2024: Faced headwinds from a slow IPO/delisting environment, lower conversion rates, and amortization of listing fees, with mixed performance between modest growth and significant revenue headwinds due to delistings

    Q1 2025: Continued to battle challenges as delistings and lower amortization impacts persist even as new listings and pricing improvements help offset some headwinds; overall growth remains modest.

    Negative/Persistent: These segments continue to face structural challenges and headwinds, suggesting potential areas for future strategic attention.

    1. Revenue Delays
      Q: Impact on Q2 revenue from client decision delays?
      A: Management explained that some larger deals are taking longer to finalize, which may delay Q2 revenue, though the overall pipeline remains strong and robust in supporting future growth.

    2. Sales Cycle
      Q: Are fintech sales cycles lengthening significantly?
      A: They noted that while larger deals are moving at a slower pace due to higher-level decision-making, client engagement across fintech remains very healthy, ensuring steady long-term growth.

    3. Expense Guidance
      Q: What drove the raised expense guidance low end?
      A: Management attributed the upward revision to strong first‐quarter performance coupled with FX benefits and added operational investments, reflecting disciplined expense management.

    4. Crypto & Regulation
      Q: How is regulatory uncertainty impacting Axiom and crypto?
      A: They observed that while U.S. regulatory clarity remains pending—slightly delaying some implementations—the diversified Axiom business and emerging crypto opportunities could offset these headwinds if regulation stabilizes.

    5. IPO Environment
      Q: What's the current IPO and listing sentiment?
      A: The leadership noted a significant increase in IPO activity despite market volatility, with firms remaining patient and valuing the U.S. market’s global capital access, even amid tariff concerns.

    6. AWS Partnership
      Q: How will the AWS collaboration affect infrastructure revenue?
      A: Management described the partnership as a long-term play to enhance scalability, security, and market connectivity, which is expected to drive efficiencies and support future revenue growth.

    7. Texas Expansion
      Q: Why open a regional headquarters in Texas?
      A: They emphasized that establishing a local hub in Texas is aimed at better serving the region’s sizable client base while integrating local insights with global market reach.

    8. Capital Markets
      Q: What drove capital markets’ Calypso performance?
      A: The team clarified that strong legacy business performance and recent infrastructure enhancements, including improved connectivity services, continue to underpin robust growth in capital markets.

    9. Verafin Growth
      Q: How is Verafin progressing with AI and European expansion?
      A: Management highlighted that embedded AI features, such as the entity research copilot, are driving usage increases, with steady upselling in the SMB space and promising, though gradual, traction in Europe.