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NDAQ Q3 Earnings Beat Estimates on Index and FinTech Growth
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Key Takeaways
Nasdaq's Q3 revenues rose 13% to $1.48 billion, while non-GAAP EPS increased 18% to $1.04.
Solutions revenues grew 17% to $1.17B, with annualized recurring revenues climbing 12% to $3.37B.
Operating margins expanded to 57%, as Nasdaq returned $496B through dividends and share repurchases.
Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2026 non-GAAP earnings of $1.04 per share, which increased 18% year over year. The figure beat the Zacks Consensus Estimate of $1.02 by 1.96%.
Net revenues increased 13% to $1.48 billion and topped the consensus estimate of $1.46 billion by 1.4%. Growth was driven by strong Index and Financial Technology performance. Annualized recurring revenues rose 12% to $3.37 billion, with organic growth reaching 14%.
Solutions revenues advanced 17% year over year to $1.17 billion, representing 79% of net revenues, up from 76% in the prior-year quarter. Organic growth reached 18%, marking the sixth consecutive quarter of double-digit organic growth.
Annualized SaaS revenues increased 12% to $1.27 billion, with organic growth of 16%. SaaS accounted for 38% of ARR, reflecting Nasdaq's expanding subscription-based business and recurring revenue contribution.
Nasdaq Capital Access Benefits From Index Strength
Capital Access Platforms revenues climbed 20% to $641 million. Index revenues surged 39% to $286 million, supported by higher exchange-traded product assets under management and record derivatives volumes. Data and Listing Services revenues rose 10% to $224 million, while Workflow and Insights revenues increased 6% to $131 million.
Average Index ETP assets under management reached a record $1.11 trillion, up $331 billion year over year. Net inflows totaled $49 billion during the quarter and a record $141 billion over the trailing 12 months. Nasdaq launched 32 new Index products and welcomed eight of the 10 largest operating-company IPOs during the quarter.
Financial Technology revenues increased 16% to $529 million, with organic growth matching the reported rate. Financial Crime Management Technology revenues rose 23% to $103 million, Regulatory Technology revenues advanced 13% to $123 million, and Capital Markets Technology revenues increased 15% to $303 million on a reported basis.
Financial Technology ARR increased 18% to $1.95 billion. The division signed 54 new clients, five cross-sells and 135 upsells, while cloud-based solutions represented 85% of annual contract value bookings.
Nasdaq Verafin signed 45 small- and medium-sized bank clients and three enterprise deals. Its Agentic AI Workforce expanded to more than 850 clients. Regulatory Technology added 10 new clients and 86 upsells, reflecting demand for cloud infrastructure, AI and regulatory solutions.
Nasdaq Market Services Sets Q3 Revenue Record
Market Services net revenues increased 2% to a third-quarter record of $309 million. U.S. cash equities revenues advanced 15% to $114 million, supported by higher market share and a near-record capture rate. European cash equities revenues rose to $30 million, while U.S. tape plan revenues totaled $33 million.
U.S. equity derivatives revenues declined 12% to $110 million due to lower capture rates and market share, partially offset by higher industry volumes. Nasdaq held a 28.1% matched market share in U.S. multi-listed options and a 14.5% share in U.S.-listed cash equities. Its European cash equities market share reached 75%.
NDAQ Margins Expand as Cash Flow Supports Returns
Non-GAAP operating income increased 15% to $843 million. The non-GAAP operating margin expanded 100 basis points to 57%, as revenue growth outpaced the 9% increase in non-GAAP operating expenses to $638 million. Higher compensation costs and technology investments contributed to the expense increase.
Cash flow from operations totaled $521 million, while free cash flow reached $616 million. Nasdaq returned $173 million through dividends and $323 million through share repurchases. Cash and cash equivalents stood at $365 million at quarter-end, while long-term debt totaled $8.47 billion.
The company's gross leverage ratio improved to 2.5 times from 2.6 times in the preceding quarter, reflecting continued deleveraging.
Nasdaq Raises Expense Outlook for 2026
Nasdaq updated its 2026 non-GAAP operating expense guidance to $2.550-$2.580 billion from the previous range of $2.530-$2.570 billion. The revision follows increased compensation costs tied to revenue execution and continued investments in technology.
NDAQ maintained its non-GAAP tax rate guidance at 22.5-24.5%.
Strategically, Nasdaq established Digital Liquidity Networks to advance digital assets and market modernization. It also completed the acquisition of LeveL Markets early in the fourth quarter and remains on track to introduce 23/5 trading on Dec. 6, 2026, expanding access to U.S.-listed equities.
CME Group Inc. (CME - Free Report) reported third-quarter 2026 adjusted earnings per share of $3.02, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 12.7% year over year. CME Group’s revenues of $1.73 billion increased 13% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees, market data and information services, and other factors. The top line beat the Zacks Consensus Estimate by 1.2%.
Total expenses rose 5.5% year over year to $595.9 million, attributable to higher technology, depreciation and amortization, licensing and other fee agreements, and other expenses. Operating income increased 17.3% from the prior-year quarter to $1.14 billion.
Upcoming Releases
Intercontinental Exchange Inc. (ICE - Free Report) is set to report third-quarter 2026 results on Oct. 29, before market open. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.97, suggesting an increase of 15.2% from the year-ago quarter’s reported figure.
ICE’s earnings beat estimates in each of the last four quarters.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to report third-quarter 2026 results on Oct. 30, before market open. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $3.40, suggesting an increase of 27.3% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four quarters.
View the Zacks #1 Rank List
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NDAQ Q3 Earnings Beat Estimates on Index and FinTech Growth
Key Takeaways
Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2026 non-GAAP earnings of $1.04 per share, which increased 18% year over year. The figure beat the Zacks Consensus Estimate of $1.02 by 1.96%.
Net revenues increased 13% to $1.48 billion and topped the consensus estimate of $1.46 billion by 1.4%. Growth was driven by strong Index and Financial Technology performance. Annualized recurring revenues rose 12% to $3.37 billion, with organic growth reaching 14%.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. price-consensus-eps-surprise-chart | Nasdaq, Inc. Quote
NDAQ Solutions Revenues Maintain Strong Momentum
Solutions revenues advanced 17% year over year to $1.17 billion, representing 79% of net revenues, up from 76% in the prior-year quarter. Organic growth reached 18%, marking the sixth consecutive quarter of double-digit organic growth.
Annualized SaaS revenues increased 12% to $1.27 billion, with organic growth of 16%. SaaS accounted for 38% of ARR, reflecting Nasdaq's expanding subscription-based business and recurring revenue contribution.
Nasdaq Capital Access Benefits From Index Strength
Capital Access Platforms revenues climbed 20% to $641 million. Index revenues surged 39% to $286 million, supported by higher exchange-traded product assets under management and record derivatives volumes. Data and Listing Services revenues rose 10% to $224 million, while Workflow and Insights revenues increased 6% to $131 million.
Average Index ETP assets under management reached a record $1.11 trillion, up $331 billion year over year. Net inflows totaled $49 billion during the quarter and a record $141 billion over the trailing 12 months. Nasdaq launched 32 new Index products and welcomed eight of the 10 largest operating-company IPOs during the quarter.
NDAQ Financial Technology Delivers Broad-Based Growth
Financial Technology revenues increased 16% to $529 million, with organic growth matching the reported rate. Financial Crime Management Technology revenues rose 23% to $103 million, Regulatory Technology revenues advanced 13% to $123 million, and Capital Markets Technology revenues increased 15% to $303 million on a reported basis.
Financial Technology ARR increased 18% to $1.95 billion. The division signed 54 new clients, five cross-sells and 135 upsells, while cloud-based solutions represented 85% of annual contract value bookings.
Nasdaq Verafin signed 45 small- and medium-sized bank clients and three enterprise deals. Its Agentic AI Workforce expanded to more than 850 clients. Regulatory Technology added 10 new clients and 86 upsells, reflecting demand for cloud infrastructure, AI and regulatory solutions.
Nasdaq Market Services Sets Q3 Revenue Record
Market Services net revenues increased 2% to a third-quarter record of $309 million. U.S. cash equities revenues advanced 15% to $114 million, supported by higher market share and a near-record capture rate. European cash equities revenues rose to $30 million, while U.S. tape plan revenues totaled $33 million.
U.S. equity derivatives revenues declined 12% to $110 million due to lower capture rates and market share, partially offset by higher industry volumes. Nasdaq held a 28.1% matched market share in U.S. multi-listed options and a 14.5% share in U.S.-listed cash equities. Its European cash equities market share reached 75%.
NDAQ Margins Expand as Cash Flow Supports Returns
Non-GAAP operating income increased 15% to $843 million. The non-GAAP operating margin expanded 100 basis points to 57%, as revenue growth outpaced the 9% increase in non-GAAP operating expenses to $638 million. Higher compensation costs and technology investments contributed to the expense increase.
Cash flow from operations totaled $521 million, while free cash flow reached $616 million. Nasdaq returned $173 million through dividends and $323 million through share repurchases. Cash and cash equivalents stood at $365 million at quarter-end, while long-term debt totaled $8.47 billion.
The company's gross leverage ratio improved to 2.5 times from 2.6 times in the preceding quarter, reflecting continued deleveraging.
Nasdaq Raises Expense Outlook for 2026
Nasdaq updated its 2026 non-GAAP operating expense guidance to $2.550-$2.580 billion from the previous range of $2.530-$2.570 billion. The revision follows increased compensation costs tied to revenue execution and continued investments in technology.
NDAQ maintained its non-GAAP tax rate guidance at 22.5-24.5%.
Strategically, Nasdaq established Digital Liquidity Networks to advance digital assets and market modernization. It also completed the acquisition of LeveL Markets early in the fourth quarter and remains on track to introduce 23/5 trading on Dec. 6, 2026, expanding access to U.S.-listed equities.
Zacks Rank
NDAQ currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of an Industry Player
CME Group Inc. (CME - Free Report) reported third-quarter 2026 adjusted earnings per share of $3.02, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 12.7% year over year. CME Group’s revenues of $1.73 billion increased 13% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees, market data and information services, and other factors. The top line beat the Zacks Consensus Estimate by 1.2%.
Total expenses rose 5.5% year over year to $595.9 million, attributable to higher technology, depreciation and amortization, licensing and other fee agreements, and other expenses. Operating income increased 17.3% from the prior-year quarter to $1.14 billion.
Upcoming Releases
Intercontinental Exchange Inc. (ICE - Free Report) is set to report third-quarter 2026 results on Oct. 29, before market open. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.97, suggesting an increase of 15.2% from the year-ago quarter’s reported figure.
ICE’s earnings beat estimates in each of the last four quarters.
Cboe Global Markets, Inc. (CBOE - Free Report) is set to report third-quarter 2026 results on Oct. 30, before market open. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $3.40, suggesting an increase of 27.3% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four quarters.