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Nasdaq (NDAQ) Tops on Q2 Earnings on Solid Solutions Revenues
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Nasdaq (NDAQ - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 69 cents, beating the Zacks Consensus Estimate by 7.8%. The outperformance came on the back of broad-based growth across three divisions and another quarter of double-digit Solutions growth.
However, the bottom line declined 2.8% year over year on higher expenses.
Performance in Detail
Nasdaq’s revenues of $1.2 billion increased 25% year over year. The upside can primarily be attributed to a $168 million benefit related to the acquisition of Adenza, partially offset by a $2-million decline from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 2.7%.
Annualized Recurring Revenue (ARR) increased 29% year over year to $2.7 billion.
Market Services net revenues were $250 million, up 3%. The upside was driven by a $7-million increase in U.S. cash equities and a $2-million increase in European cash equities, partially offset by a $4-million decline in U.S. tape plan revenues. The Zacks Consensus Estimate is pegged at $243.7 million. Our estimate was pegged at $238.1 million.
Revenues at the Solutions business increased 34% year over year to $901 million, reflecting strong growth from Index and Financial Technology. Organic growth was 13%.
Adjusted operating expenses were $539 million, up 22.2% from the year-ago period. The increase primarily reflects the inclusion of $67 million of AxiomSL and Calypso non-GAAP operating expenses. Our estimate for operating expenses was $587.6 million.
Adjusted operating margin of 53% expanded 100 basis points year over year.
The Nasdaq stock market welcomed 84 new company listings in second-quarter 2024, including 39 initial public offerings. The number of listed companies was 4,004 at the quarter end.
Financial Update
NDAQ had cash and cash equivalents of $440 million as of Jun 30, 2024, down 7% from the 2023 end level. Long-term debt increased to $9.2 billion as of Jun 30, 2024, down 9% from the 2023 end level.
Nasdaq generated $460 million in cash flow from operations.
Capital Deployment
Nasdaq returned $138 million to shareholders in the first quarter of 2024 through dividends, bought back shares worth $58 million and repaid the $174 million remaining balance of the term loan.
The board of directors approved a quarterly dividend of 24 cents per share. The dividend will be paid out on Sep 27, 2024, to shareholders of record at the close of business on Sep 13, 2024.
As of Jun 30, 2024, $1.8 billion remained under the board-authorized share repurchase program.
Guidance
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.145-$2.185 billion from $2.125 billion to $2.185 billion, guided earlier.
Nasdaq forecasts a 2024 non-GAAP tax rate in the range of 24.5-26.5%.
CME Group (CME - Free Report) reported second-quarter 2024 adjusted EPS of $2.56, beating the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year upside was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Upcoming Releases
Intercontinental Exchange (ICE - Free Report) will report second-quarter 2024 results on Aug 1, before market open. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.48, indicating an increase of 3.5% from the year-ago quarter’s reported figure.
ICE’s earnings beat estimates in each of the last four quarters.
Cboe Global Markets (CBOE - Free Report) will report second-quarter 2024 results on Aug 2, before market open. The Zacks Consensus Estimate for second-quarter EPS is pegged at $2.09, suggesting an increase of 17.4% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four reported quarters.
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Nasdaq (NDAQ) Tops on Q2 Earnings on Solid Solutions Revenues
Nasdaq (NDAQ - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 69 cents, beating the Zacks Consensus Estimate by 7.8%. The outperformance came on the back of broad-based growth across three divisions and another quarter of double-digit Solutions growth.
However, the bottom line declined 2.8% year over year on higher expenses.
Performance in Detail
Nasdaq’s revenues of $1.2 billion increased 25% year over year. The upside can primarily be attributed to a $168 million benefit related to the acquisition of Adenza, partially offset by a $2-million decline from the impact of changes in FX rates. The top line beat the Zacks Consensus Estimate by 2.7%.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. price-consensus-eps-surprise-chart | Nasdaq, Inc. Quote
Annualized Recurring Revenue (ARR) increased 29% year over year to $2.7 billion.
Market Services net revenues were $250 million, up 3%. The upside was driven by a $7-million increase in U.S. cash equities and a $2-million increase in European cash equities, partially offset by a $4-million decline in U.S. tape plan revenues. The Zacks Consensus Estimate is pegged at $243.7 million. Our estimate was pegged at $238.1 million.
Revenues at the Solutions business increased 34% year over year to $901 million, reflecting strong growth from Index and Financial Technology. Organic growth was 13%.
Adjusted operating expenses were $539 million, up 22.2% from the year-ago period. The increase primarily reflects the inclusion of $67 million of AxiomSL and Calypso non-GAAP operating expenses. Our estimate for operating expenses was $587.6 million.
Adjusted operating margin of 53% expanded 100 basis points year over year.
The Nasdaq stock market welcomed 84 new company listings in second-quarter 2024, including 39 initial public offerings. The number of listed companies was 4,004 at the quarter end.
Financial Update
NDAQ had cash and cash equivalents of $440 million as of Jun 30, 2024, down 7% from the 2023 end level. Long-term debt increased to $9.2 billion as of Jun 30, 2024, down 9% from the 2023 end level.
Nasdaq generated $460 million in cash flow from operations.
Capital Deployment
Nasdaq returned $138 million to shareholders in the first quarter of 2024 through dividends, bought back shares worth $58 million and repaid the $174 million remaining balance of the term loan.
The board of directors approved a quarterly dividend of 24 cents per share. The dividend will be paid out on Sep 27, 2024, to shareholders of record at the close of business on Sep 13, 2024.
As of Jun 30, 2024, $1.8 billion remained under the board-authorized share repurchase program.
Guidance
Nasdaq expects 2024 non-GAAP operating expenses to be in the range of $2.145-$2.185 billion from $2.125 billion to $2.185 billion, guided earlier.
Nasdaq forecasts a 2024 non-GAAP tax rate in the range of 24.5-26.5%.
Zacks Rank
Nasdaq carries a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of a Peer
CME Group (CME - Free Report) reported second-quarter 2024 adjusted EPS of $2.56, beating the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year upside was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Upcoming Releases
Intercontinental Exchange (ICE - Free Report) will report second-quarter 2024 results on Aug 1, before market open. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.48, indicating an increase of 3.5% from the year-ago quarter’s reported figure.
ICE’s earnings beat estimates in each of the last four quarters.
Cboe Global Markets (CBOE - Free Report) will report second-quarter 2024 results on Aug 2, before market open. The Zacks Consensus Estimate for second-quarter EPS is pegged at $2.09, suggesting an increase of 17.4% from the year-ago quarter’s reported figure.
CBOE’s earnings beat estimates in each of the last four reported quarters.