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Nasdaq (NDAQ) Beats on Q1 Earnings, Tweaks Expense View

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Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.97, beating the Zacks Consensus Estimate of $1.93 by 2.1%. The bottom line improved 0.5% year over year.The improvement was mainly driven by solid results at the Solutions segment.

Nasdaq, Inc. Price, Consensus and EPS Surprise

Nasdaq, Inc. Price, Consensus and EPS Surprise

Nasdaq, Inc. price-consensus-eps-surprise-chart | Nasdaq, Inc. Quote

Shares gained 1% in the pre-market trading session to reflect the outperformance.

Performance in Detail

Nasdaq’s revenues of $892 million increased 5% year over year. The upside can primarily be attributed to a $51 million impact from organic growth and a $4 million increase from the net impact of acquisitions and divestitures. It was partially offset by a $14 million decrease from the impact of changes in FX rates. The top line matched the Zacks Consensus Estimate.

Net revenues at Market Services were down 6% from the year-ago quarter to $315 million, the second-highest quarterly revenues. This downside was largely owing to a 4% organic decline and a $6 million decrease from the impact of changes in the FX rate.

Revenues at the Solutions segments increased 15% year over year to $576 million, driven by a 13% positive impact from organic growth and a 4% increase from the inclusion of revenues from the acquisition of Verafin, partially offset by an $8 million decrease from the impact of changes in FX rates.

Adjusted operating expenses were $428 million, up 9% from the year-ago period. The increase was due to an organic increase of 9% from the prior-year period and a 2% increase from the net impact of acquisitions and divestitures. It was partially offset by a $10 million decrease from changes in FX rates.

The operating margin of 51% contracted 200 basis points year over year.

The Nasdaq stock market welcomed 110 new company listings in the first quarter of 2022, including 70 IPOs. The number of listed companies was 4,242 at quarter end.

Financial Update

Nasdaq had cash and cash equivalents of $486 million as of Mar 31, 2022, up 3.7% from the 2021-end level. Long-term debt decreased 0.2% from the 2021-end level to $4.8 billion as of Dec 31, 2021.

Capital Deployment

Nasdaq returned $556 million to shareholders in the reported quarter, including $467 million in share repurchases and $89 million in dividends.

The board of directors approved an 11% hike in its dividend to 60 cents per share. The dividend will be paid out on Jun 24, 2022 to shareholders of record at the close of Jun 10, 2022.

As of Mar 31, 2022, $459 million remained under the board authorized share repurchase program.

Nasdaq targets a 3-for-1 stock split in the form of a stock dividend and thus is in the process of seeking approval from shareholders and the SEC.

Guidance

Nasdaq expects 2022 non-GAAP operating expenses in the range of $1.70 billion to $1.76 billion, narrowed from the prior expectation of $1.68 billion to $1.76 billion.

Nasdaq forecasts non-GAAP tax rate in the range of 24% to 26% in 2022.

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 2022 earnings on Apr 27. The Zacks Consensus Estimate for the first quarter is pegged at $1.96 per share, indicating an increase of 9.5% from the year-ago reported figure.

CME Group beat estimates in all quarters of 2021.

Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release first-quarter 2022 earnings on May 5. The Zacks Consensus Estimate for the first quarter is pegged at $1.42, indicating an increase of 6% from the year-ago reported figure.

Intercontinental Exchange beat estimates in all quarters of 2021.

Cboe Global Markets, Inc. (CBOE - Free Report) is set to release first-quarter 2022 earnings on Apr 29. The Zacks Consensus Estimate for the first quarter is pegged at $1.67, indicating an increase of 9.2% from the year-ago reported figure.

Cboe Global beat estimates in all quarters of 2021.