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NASDAQ, INC. (NDAQ)·Q3 2025 Earnings Summary

Executive Summary

  • Nasdaq delivered a solid Q3 with net revenue of $1.315B (+15% YoY) and non-GAAP diluted EPS of $0.88 (+19% YoY), marking its first quarter with Solutions revenue over $1.0B and ARR topping $3.0B .
  • Versus Wall Street consensus, results were modest beats: EPS $0.88 vs $0.85*, revenue $1.315B vs $1.301B*, and EBITDA $777M vs $752M*; operating margin expanded to 56% .
  • Guidance updated: FY2025 non-GAAP OpEx range raised to $2.305–$2.335B (from $2.295–$2.335B), non-GAAP tax rate lowered to 22.5–23.5% due to discrete items .
  • Strategic catalysts: SEC filing to enable trading of tokenized securities, record index ETP AUM ($829B) and $91B TTM net inflows, and continued deleveraging to 3.1x gross leverage; dividend maintained at $0.27 .

What Went Well and What Went Wrong

What Went Well

  • “Solutions quarterly revenues were over $1 billion for the first time... ARR grew 9% to $3 billion” (Adena Friedman) .
  • Record Index franchise momentum: $17B net inflows in Q3, $91B TTM; period-end ETP AUM reached $829B, average AUM $777B—both all-time highs .
  • FinTech strength: revenue +13% YoY with 65 new clients, 97 upsells, and 4 cross-sells; Verafin signed Goldman Sachs for consortium-based payments fraud solution (cross-sell) and launched Agentic AI workers (Digital Sanctions Analyst now live) .

What Went Wrong

  • Market Services headwinds included “lower share in U.S. options, lower capture in U.S. equities,” and lower state plan revenue vs prior year quarter despite strong volumes (CFO) .
  • Corporate Solutions demand “remains muted,” with revenue essentially flat, though net retention trends improved (CFO) .
  • RegTech professional services revenue declined YoY; management expects recovery to start in Q4 and early 2026 (CFO) .

Financial Results

Core Financials vs Prior Quarters

MetricQ1 2025Q2 2025Q3 2025
Net Revenue (Revenues less transaction-based expenses) ($USD Billions)$1.237 $1.306 $1.315
GAAP Diluted EPS ($)$0.68 $0.78 $0.73
Non-GAAP Diluted EPS ($)$0.79 $0.85 $0.88
Non-GAAP Operating Margin (%)55% 55% 56%
Solutions Revenue ($USD Billions)$0.947 $0.991 $1.003
Market Services Net Revenue ($USD Millions)$281 $306 $303
ARR ($USD Billions)$2.831 $2.931 $3.007

YoY vs Q3 2024

MetricQ3 2025 YoY Change
Net Revenue Growth (%)+15%
Solutions Revenue Growth (%)+15%
Market Services Net Revenue Growth (%)+14%
GAAP Diluted EPS Growth (%)+38%
Non-GAAP Diluted EPS Growth (%)+19%

Segment Breakdown (Q3 2025)

SegmentRevenue ($USD Millions)Notes
Capital Access Platforms$546 Data & Listings $204; Index $206; Workflow & Insights $136
Financial Technology$457 FinCrime $84; RegTech $109; Capital Markets Tech $264
Market Services (Net)$303 Net of rebates/fees

KPIs

KPIQ3 2025Context
ETP AUM (period-end) ($USD Billions)$829 Record level
ETP AUM (average) ($USD Billions)$777 Record level
TTM Net Inflows ($USD Billions)$91 Record TTM inflows
U.S. Options ADV (industry, millions)55.8 Elevated volumes
U.S. Total Market Share (incl. TRF) (%)61.7% Robust share
U.S. IPOs (quarter count)76 (Nasdaq Stock Market) Largest European IPO (Verisure) in Oct noted
Cash from Operations ($USD Millions)$221 Quarter
Dividend per Share ($)$0.27 Declared Oct 21

Results vs S&P Global Consensus

MetricConsensus (Q3 2025)Actual (Q3 2025)Surprise
Primary EPS ($)0.85*0.88 +$0.03
Revenue ($USD Billions)1.301*1.315 +$0.014
EBITDA ($USD Millions)752*777*+$25

Values retrieved from S&P Global.
Notes: Revenue consensus for NDAQ typically refers to net revenue (revenues less transaction-based expenses), aligning with reported $1.315B .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Operating Expenses ($USD Millions)FY2025$2,295–$2,335 (Q2 guide) $2,305–$2,335 Raised low end
Non-GAAP Tax Rate (%)FY202522.5–24.5% (Q1/Q2 guides) 22.5–23.5% Lowered
Dividend per Share ($)Q4 2025$0.27 (ongoing) $0.27 (Dec 19 payable) Maintained
CAP revenue/cost impact from Solovis saleQ4 2025 onward—Rev −$7–$8M/quarter; costs −$6M/quarter Headwind
Professional Services (RegTech)Q4 2025/Early 2026Decline vs PY (Q3) “Start to improve in Q4 and early 2026” Recovery expected
Gross Leverage (times)FY2025 YE target3.0x by YE (implied) 3.1x achieved in Q3; target 3.0x by YE ex-FX On track

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 & Q-1)Current Period (Q3 2025)Trend
AI initiativesQ1: IR/Verafin Co-Pilot adoption; 1,200 clients . Q2: Agentic AI workforce announced; >80% workflow reduction potential .Agentic AI Digital Sanctions Analyst launched; >800 BoardVantage AI opt-ins .Scaling deployments; growing client adoption
TokenizationQ2: Calypso POC for on-chain collateral .SEC filing to allow trading in tokenized form with DTCC two settlement paths (unchanged settlement cycles initially) .From POC to regulatory proposal
IPO/listingsQ1: 45 opco listings; high-profile transfers (Shopify, Thomson Reuters) . Q2: 38 U.S. opco IPOs; 79% win rate .Q3: $6B proceeds; robust pipeline; Verisure IPO in Oct (largest since 2022) .Improving activity; pipeline strengthening
Reg/LegalQ1: 24/5 trading plan targeted for H2 2026 (subject to approval) .Q3: Macro mixed; SEC moves improving public company experience; smart deregulation narrative .Supportive regulatory momentum
FinCrime (Verafin)Q1: 35 new SMB clients; enterprise land & expand . Q2: 46 SMB adds; POC with European Tier 1 bank .Q3: 55 SMB adds; Goldman Sachs cross-sell; enterprise implementations elongate ARR flow-in .Enterprise traction rising; ARR realization lag
RegTech (AxiomSL/Surveillance)Q1: Tier 1 bank expansion; upsells . Q2: New clients; upsells; European regulator wins .Q3: CFTC surveillance win; Tier 1 cloud deployment early Q4; professional services revenue down YoY (recovery expected) .Strong sales; PS revenue trough nearing
Market ServicesQ1/Q2: record U.S. equities/options volumes .Q3: record U.S. derivatives revenue; index options volumes hit records; some share/capture pressure in U.S. options/equities .Volumes strong; competitive share dynamics

Management Commentary

  • “We delivered $1.3 billion in net revenue… Solutions quarterly revenues were over $1 billion for the first time… ARR grew 9% to $3 billion” — Adena Friedman .
  • “We are pioneering… enabling equities and ETFs to be traded… in traditional and tokenized form… working with DTCC on two settlement paths… not changing overall settlement cycles initially” — Adena Friedman .
  • “Operating expense was $583 million… operating margin of 56% and EBITDA margin of 58%… net income of $511 million and diluted EPS of $0.88” — Sarah Youngwood .
  • “Cross-sells accounted for over 15% of FinTech pipeline; we remain on track to surpass $100 million in run-rate revenue from cross-sells by end of 2027” — Adena Friedman .

Q&A Highlights

  • Digital assets/tokenization: Broader opportunity across FinTech (trading/surveillance/collateral), index products, and potential market operator role as regulatory clarity improves; mechanics explained for tokenized settlement via DTCC paths .
  • FinCrime (Verafin): SMB growth robust; enterprise implementations elongate ARR conversion; European POC progressing; BioCatch partnership integrates pre-transaction signals to reduce fraud .
  • Capital Markets Technology: Strong demand for connectivity and data center capacity; robust Calypso demand incl. Latin America; continued upsells .
  • AI impact: Focus on automation in product development and client implementation; data differentiation; agentic AI reduces workflow time by up to 80% in some cases .
  • RegTech/CFTC: Regulator adoption catalyzes member firm uptake; Tier 1 bank cloud deployment for AxiomSL early Q4 .

Estimates Context

  • EPS beat: $0.88 vs $0.85 consensus*, reflecting operating leverage and top-line strength .
  • Revenue beat: $1.315B net revenue vs $1.301B consensus*, aided by Solutions (+10% organic) and Market Services (+13% organic) .
  • EBITDA beat: $777M vs $752M consensus*, consistent with margin expansion to 56% operating margin .
  • Near-term estimates may drift higher in FinTech on enterprise ramps (Verafin, AxiomSL) and sustained index AUM tailwinds, with CAP modestly trimmed for Solovis sale impact .

Values retrieved from S&P Global.

MetricQ3 2025 ConsensusQ4 2025 Consensus
Primary EPS ($)0.85*0.91*
Revenue ($USD Billions)1.301*1.357*
EBITDA ($USD Millions)752*804*
# Revenue Estimates12*8*
# EPS Estimates17*15*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Positive print: Clean beats on EPS, net revenue, and EBITDA with margin expansion; ARR and Solutions milestones underscore transition to a platform-driven model .
  • Structural catalysts: Tokenization filing with SEC and DTCC collaboration, growing AI feature adoption across Verafin and BoardVantage, and accelerated cross-sell funnel support multi-year revenue durability .
  • Index tailwinds: Record AUM and sustained net inflows continue to bolster CAP; watch AUM levels and product launches as incremental revenue drivers .
  • Market Services watchpoints: Elevated volumes persist, but competitive share/capture in U.S. options/equities warrants monitoring for pricing/mix impacts .
  • Expense/tax guidance: Slightly higher OpEx to fund growth; lower tax rate boosts FY EPS; balance of deleveraging (target ~3.0x YE) and buybacks remains supportive .
  • Near-term trade setup: Stock likely sensitive to regulatory progress on tokenization, Q4 enterprise FinTech revenue conversion, and continued index inflows; Q4 consensus EPS ~$0.91* offers a bar for momentum continuation. Values retrieved from S&P Global.