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Nasdaq (NDAQ) Beats on Q3 Earnings, Tightens Expense View
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Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2021 adjusted earnings per share of $1.78, beating the Zacks Consensus Estimate of $1.72 by 3.5%. The bottom line increased 16% year over year.
The improvement reflects consistent long-term growth in the Anti Financial Crime, Index and Analytics offerings, the benefits of the materially-expanded listed issuer base in Corporate Platforms segment, and robust performance of the marketplace and connectivity platforms comprising Market Services business.
Shares gained nearly 1% in the pre-market trading session, reflecting the outperformance.
Nasdaq’s revenues of $838 million increased 17% year over year. The upside was primarily attributable to a $96 million impact from organic growth, a $25 million increase from the inclusion of revenues from the acquisition and divestitures, and a $2 million increase from the impact of favorable changes in FX rates. The top line beat the Zacks Consensus Estimate by 1.5%.
Adjusted operating expenses were $397 million, up 15% from the year-ago period owing to a $26 million organic increase, a $21 million impact of acquisitions and divestitures and a $4 million increase from changes in FX rates.
Operating margin of 53% expanded 100 basis points year over year.
Nasdaq witnessed 147 IPOs in the third quarter, representing $29 billion in capital raised, including 80 operating company IPOs and 67 IPOs of special purpose acquisition companies. In the reported quarter, the Nasdaq welcomed 223 new listings.
Segment Details
Net revenues at Market Services were up 15% from the year-ago quarter to $295 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 Platform increased 18.3% year over year to $155 million, driven by higher listings services revenues as well as IR & ESG revenues.
Investment Intelligence revenues rose 15.3% year over year to $272 million. Higher index and analytics revenues drove the upside.
Revenues at Market Technology increased 32.6% year over year to $114 million, largely due to higher revenues at anti-financial crime technology.
Financial Update
Nasdaq had cash and cash equivalents of $303 million as of Sep 30, 2021, down from $2.7 billion at 2020-end level. Long-term debt decreased 1.7% from 2020-end level to $5.4 billion as of Sep 30, 2021.
Capital Deployment
Nasdaq returned $1.145 billion in the first nine months of 2021, including $885 million in share repurchases and $260 million in dividends.
As of Sep 30, 2021, Nasdaq had $984 million remaining under its share repurchase authorization.
Guidance
Nasdaq tightened its 2021 non-GAAP operating expense guidance to a range of $1.61 billion to $1.62 billion from $1.59 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 third-quarter earnings on Oct 27. The Zacks Consensus Estimate for the bottom line is pegged at $1.55.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release third-quarter earnings on Oct 28. The Zacks Consensus Estimate for earnings is pegged at $1.23.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to release second-quarter earnings on Oct 29. The Zacks Consensus Estimate for earnings is pegged at $1.43.
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Nasdaq (NDAQ) Beats on Q3 Earnings, Tightens Expense View
Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2021 adjusted earnings per share of $1.78, beating the Zacks Consensus Estimate of $1.72 by 3.5%. The bottom line increased 16% year over year.
The improvement reflects consistent long-term growth in the Anti Financial Crime, Index and Analytics offerings, the benefits of the materially-expanded listed issuer base in Corporate Platforms segment, and robust performance of the marketplace and connectivity platforms comprising Market Services business.
Shares gained nearly 1% in the pre-market trading session, reflecting 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 $838 million increased 17% year over year. The upside was primarily attributable to a $96 million impact from organic growth, a $25 million increase from the inclusion of revenues from the acquisition and divestitures, and a $2 million increase from the impact of favorable changes in FX rates. The top line beat the Zacks Consensus Estimate by 1.5%.
Adjusted operating expenses were $397 million, up 15% from the year-ago period owing to a $26 million organic increase, a $21 million impact of acquisitions and divestitures and a $4 million increase from changes in FX rates.
Operating margin of 53% expanded 100 basis points year over year.
Nasdaq witnessed 147 IPOs in the third quarter, representing $29 billion in capital raised, including 80 operating company IPOs and 67 IPOs of special purpose acquisition companies. In the reported quarter, the Nasdaq welcomed 223 new listings.
Segment Details
Net revenues at Market Services were up 15% from the year-ago quarter to $295 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 Platform increased 18.3% year over year to $155 million, driven by higher listings services revenues as well as IR & ESG revenues.
Investment Intelligence revenues rose 15.3% year over year to $272 million. Higher index and analytics revenues drove the upside.
Revenues at Market Technology increased 32.6% year over year to $114 million, largely due to higher revenues at anti-financial crime technology.
Financial Update
Nasdaq had cash and cash equivalents of $303 million as of Sep 30, 2021, down from $2.7 billion at 2020-end level. Long-term debt decreased 1.7% from 2020-end level to $5.4 billion as of Sep 30, 2021.
Capital Deployment
Nasdaq returned $1.145 billion in the first nine months of 2021, including $885 million in share repurchases and $260 million in dividends.
As of Sep 30, 2021, Nasdaq had $984 million remaining under its share repurchase authorization.
Guidance
Nasdaq tightened its 2021 non-GAAP operating expense guidance to a range of $1.61 billion to $1.62 billion from $1.59 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 third-quarter earnings on Oct 27. The Zacks Consensus Estimate for the bottom line is pegged at $1.55.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release third-quarter earnings on Oct 28. The Zacks Consensus Estimate for earnings is pegged at $1.23.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to release second-quarter earnings on Oct 29. The Zacks Consensus Estimate for earnings is pegged at $1.43.