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Nasdaq (NDAQ) Beats on Q3 Earnings, Cuts Expense View
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Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2022 adjusted earnings per share of 68 cents, beating the Zacks Consensus Estimate of 65 cents by 4.6%. The bottom line improved 15% year over year.
The improvement was mainly driven by solid results in both segments.
Nasdaq’s revenues of $890 million increased 6% year over year. The upside can primarily be attributed to a $77 million impact of organic growth, partially offset by a $22 million decrease from the impact of changes in FX rates and a $3 million decrease due to the net impact of acquisitions and divestitures. The top line missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR.
Adjusted operating expenses were $417 million, up 5% from the year-ago period. The increase was due to an organic increase of 10%, partially offset by a $19 million decrease from the impact of changes in FX rates and a $1 million decrease from the net impact of acquisition and divestitures.
The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
Segment Details
Net revenues at Market Services were up 4% from the year-ago quarter to $305 million, driven by an 8% positive impact from organic growth, partially offset by an $11 million decrease from the impact of changes in FX rates.
Revenues at the Solutions segments increased 8% year over year to $584 million, driven by a 10% positive impact from organic growth and a $1 million increase from acquisitions, partially offset by an $11 million decrease from the impact of changes in FX rates.
Financial Update
Nasdaq had cash and cash equivalents of $352 million as of Sep 30, 2022, down 16.6% from the 2021-end level. Long-term debt decreased 5% from the 2021-end level to $4.6 billion as of Sep 30, 2022.
Stockholder’s equity decreased 8.1% from 2021 end to $5.9 billion as of Sep 30, 2022.
Capital Deployment
NDAQ bought back shares worth $663 million in the first nine months of 2022. As of Sep 30, 2022, there was $293 million remaining under authorization.
The board approved a quarterly dividend of 20 cents per share. The dividend will be paid out on Dec 16, 2022 to shareholders of record on Dec 2, 2022.
Guidance
Nasdaq expects 2022 non-GAAP operating expenses in the range of $1.70 billion to $1.72 billion, down from the prior expectation of $1.71 billion to $1.74 billion.
NDAQ forecasts a non-GAAP tax rate in the range of 24% to 25% in 2022.
MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2022 earnings per share of $1.58, which beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year in the quarter under review. Revenues however fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.
Upcoming Releases
CME Group Inc. (CME - Free Report) is slated to release third-quarter 2022 earnings on Oct 26. The Zacks Consensus Estimate for the third quarter is pegged at $1.93 per share, indicating an increase of 20.6% from the year-ago reported figure.
CME Group beat estimates in the last four reported quarters.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release third-quarter 2022 earnings on Aug 4. The Zacks Consensus Estimate for the third quarter is pegged at $1.27, indicating a decrease of 2.3% from the year-ago reported figure.
Intercontinental Exchange beat estimates in the last four reported quarters.
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Nasdaq (NDAQ) Beats on Q3 Earnings, Cuts Expense View
Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2022 adjusted earnings per share of 68 cents, beating the Zacks Consensus Estimate of 65 cents by 4.6%. The bottom line improved 15% year over year.
The improvement was mainly driven by solid results in both segments.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. price-consensus-eps-surprise-chart | Nasdaq, Inc. Quote
Performance in Detail
Nasdaq’s revenues of $890 million increased 6% year over year. The upside can primarily be attributed to a $77 million impact of organic growth, partially offset by a $22 million decrease from the impact of changes in FX rates and a $3 million decrease due to the net impact of acquisitions and divestitures. The top line missed the Zacks Consensus Estimate by 0.1%.
Annualized recurring revenue (ARR) increased 8% year over year. Annualized SaaS revenues increased 13% and represented 35% of ARR.
Adjusted operating expenses were $417 million, up 5% from the year-ago period. The increase was due to an organic increase of 10%, partially offset by a $19 million decrease from the impact of changes in FX rates and a $1 million decrease from the net impact of acquisition and divestitures.
The Nasdaq stock market welcomed 98 new company listings in the third quarter of 2022, including 35 IPOs. The number of listed companies was 4,296 at quarter end.
Segment Details
Net revenues at Market Services were up 4% from the year-ago quarter to $305 million, driven by an 8% positive impact from organic growth, partially offset by an $11 million decrease from the impact of changes in FX rates.
Revenues at the Solutions segments increased 8% year over year to $584 million, driven by a 10% positive impact from organic growth and a $1 million increase from acquisitions, partially offset by an $11 million decrease from the impact of changes in FX rates.
Financial Update
Nasdaq had cash and cash equivalents of $352 million as of Sep 30, 2022, down 16.6% from the 2021-end level. Long-term debt decreased 5% from the 2021-end level to $4.6 billion as of Sep 30, 2022.
Stockholder’s equity decreased 8.1% from 2021 end to $5.9 billion as of Sep 30, 2022.
Capital Deployment
NDAQ bought back shares worth $663 million in the first nine months of 2022. As of Sep 30, 2022, there was $293 million remaining under authorization.
The board approved a quarterly dividend of 20 cents per share. The dividend will be paid out on Dec 16, 2022 to shareholders of record on Dec 2, 2022.
Guidance
Nasdaq expects 2022 non-GAAP operating expenses in the range of $1.70 billion to $1.72 billion, down from the prior expectation of $1.71 billion to $1.74 billion.
NDAQ forecasts a non-GAAP tax rate in the range of 24% to 25% 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.
Performance of Another Industry Participant
MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2022 earnings per share of $1.58, which beat the Zacks Consensus Estimate by 6% and improved nearly 4% year over year. Total revenues amounted to $172.1 million, rising 6% year over year in the quarter under review. Revenues however fell short of the consensus mark by a whisker.
Active clients of MarketAxess totaled 1,972 in the third quarter, which increased 7% year over year. Active international clients attained a record figure of 993 in the quarter under review. The figure advanced 6% year over year. Commission revenues of $153.2 million climbed 7.2% year over year.
Upcoming Releases
CME Group Inc. (CME - Free Report) is slated to release third-quarter 2022 earnings on Oct 26. The Zacks Consensus Estimate for the third quarter is pegged at $1.93 per share, indicating an increase of 20.6% from the year-ago reported figure.
CME Group beat estimates in the last four reported quarters.
Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release third-quarter 2022 earnings on Aug 4. The Zacks Consensus Estimate for the third quarter is pegged at $1.27, indicating a decrease of 2.3% from the year-ago reported figure.
Intercontinental Exchange beat estimates in the last four reported quarters.