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Nasdaq (NDAQ) Beats on Q1 Earnings & Revenues, Ups Dividend
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Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2021 adjusted earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.74 by 12.6%. The bottom line increased 31% year over year.
The improvement was primarily driven by organic growth, favorable changes in foreign exchange rates, margin expansion and solid segmental performance.
Shares gained 1.4% in the pre-market trading session to reflect the outperformance.
Nasdaq’s revenues of $851 million increased 21% year over year. The upside was primarily attributable to a $118 million positive impact from organic growth, an $18 million impact of favorable changes in foreign exchange rates and a $14 million increase from the inclusion of revenues from acquisitions. The top line beat the Zacks Consensus Estimate by 2.8%.
Adjusted operating expenses were $393 million, up 17% from the year-ago period owing to a $24 million organic increase, an $18 million increase from acquisitions and a $15 million increase from changes in FX rates.
Operating margin of 54% expanded 200 basis points year over year.
Nasdaq witnessed 275 IPOs in the first quarter, representing $74 billion in capital raised, including 79 operating company IPOs as well as 196 IPOs from special purpose acquisition companies. In the reported quarter, the Nasdaq welcomed 319 new listings.
Segment Details
Net revenues at Market Services were up 20% from the year-ago quarter to $338 million. This upside was largely due to higher revenues from equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and trade management services.
Revenues at Corporate Services increased 21% year over year to $155 million, driven by higher listings services revenues as well as IR & ESG revenues.
Investment Intelligence revenues rose 22% year over year to $258 million. Higher market data, index and analytics revenues drove the upside.
Revenues at Market Technology increased 23% year over year to $100 million, largely due to higher revenues at marketplace infrastructure technology as well as anti-financial crime technology.
Financial Update
Nasdaq had cash and cash equivalents of $774 million as of Mar 31, 2021, down more than three-fold from 2020-end level. Long-term debt decreased 1.6% from 2019-end level to $5.5 billion as of Mar 31, 2021.
Capital Deployment
Nasdaq returned $243 million in the first quarter of 2021, including $162 million in share repurchases.
As of Mar 31, 2021, Nasdaq had $248 million remaining under its share repurchase authorization.
Dividend Update
The board of directors approved a 10% increase in quarterly dividend to 54 cents per share. The dividend is payable on Jun 25, 2021 to shareholders of record as of Jun 11, 2021.
Guidance
Nasdaq provided 2021 non-GAAP operating expense guidance in the range of $1.5 billion to $1.62 billion, revised from $1.55 billion to $1.62 billion guided earlier.
Non-GAAP tax rate is still estimated to be in the range of 25% to 27% in 2021.
CME Group Inc. (CME - Free Report) is slated to release first-quarter earnings on Apr 28. The Zacks Consensus Estimate for the first quarter is pegged at $1.75.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release first-quarter earnings on Apr 29. The Zacks Consensus Estimate for the first quarter is pegged at $1.30.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to release first-quarter earnings on Apr 30. The Zacks Consensus Estimate for the first quarter is pegged at $1.39.
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Nasdaq (NDAQ) Beats on Q1 Earnings & Revenues, Ups Dividend
Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2021 adjusted earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.74 by 12.6%. The bottom line increased 31% year over year.
The improvement was primarily driven by organic growth, favorable changes in foreign exchange rates, margin expansion and solid segmental performance.
Shares gained 1.4% in the pre-market trading session to reflect the outperformance.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. price-consensus-eps-surprise-chart | Nasdaq, Inc. Quote
Performance in Detail
Nasdaq’s revenues of $851 million increased 21% year over year. The upside was primarily attributable to a $118 million positive impact from organic growth, an $18 million impact of favorable changes in foreign exchange rates and a $14 million increase from the inclusion of revenues from acquisitions. The top line beat the Zacks Consensus Estimate by 2.8%.
Adjusted operating expenses were $393 million, up 17% from the year-ago period owing to a $24 million organic increase, an $18 million increase from acquisitions and a $15 million increase from changes in FX rates.
Operating margin of 54% expanded 200 basis points year over year.
Nasdaq witnessed 275 IPOs in the first quarter, representing $74 billion in capital raised, including 79 operating company IPOs as well as 196 IPOs from special purpose acquisition companies. In the reported quarter, the Nasdaq welcomed 319 new listings.
Segment Details
Net revenues at Market Services were up 20% from the year-ago quarter to $338 million. This upside was largely due to higher revenues from equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and trade management services.
Revenues at Corporate Services increased 21% year over year to $155 million, driven by higher listings services revenues as well as IR & ESG revenues.
Investment Intelligence revenues rose 22% year over year to $258 million. Higher market data, index and analytics revenues drove the upside.
Revenues at Market Technology increased 23% year over year to $100 million, largely due to higher revenues at marketplace infrastructure technology as well as anti-financial crime technology.
Financial Update
Nasdaq had cash and cash equivalents of $774 million as of Mar 31, 2021, down more than three-fold from 2020-end level. Long-term debt decreased 1.6% from 2019-end level to $5.5 billion as of Mar 31, 2021.
Capital Deployment
Nasdaq returned $243 million in the first quarter of 2021, including $162 million in share repurchases.
As of Mar 31, 2021, Nasdaq had $248 million remaining under its share repurchase authorization.
Dividend Update
The board of directors approved a 10% increase in quarterly dividend to 54 cents per share. The dividend is payable on Jun 25, 2021 to shareholders of record as of Jun 11, 2021.
Guidance
Nasdaq provided 2021 non-GAAP operating expense guidance in the range of $1.5 billion to $1.62 billion, revised from $1.55 billion to $1.62 billion guided earlier.
Non-GAAP tax rate is still estimated to be in the range of 25% to 27% in 2021.
Zacks Rank
Nasdaq currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
CME Group Inc. (CME - Free Report) is slated to release first-quarter earnings on Apr 28. The Zacks Consensus Estimate for the first quarter is pegged at $1.75.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release first-quarter earnings on Apr 29. The Zacks Consensus Estimate for the first quarter is pegged at $1.30.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to release first-quarter earnings on Apr 30. The Zacks Consensus Estimate for the first quarter is pegged at $1.39.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>