NDAQ Beats on Q1 Earnings, Tweaks Expense View, Raises Dividend

Nasdaq NDAQ reported first-quarter 2025 adjusted earnings per share of 79 cents, which beat the Zacks Consensus Estimate by 2%. The bottom line improved 25.4% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.).

Shares gained 1.3% in the pre-market trading session to reflect the outperformance.

The year-over-year improvement was mainly driven by higher revenues across divisions and organic growth, partially offset by higher expenses.

Performance in Detail

Nasdaq’s net revenues of $1.2 billion increased 12.5% year over year. The top line beat the Zacks Consensus Estimate by 0.1%.

Nasdaq, Inc. Price, Consensus and EPS Surprise

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

Annualized Recurring Revenue (ARR) increased 8% year over year to $2.8 billion. Organic growth was 9%.

Annualized SaaS revenues increased 14% and represented 37% of ARR.

Capital Access Platforms' revenues, adjusted, were $479 million, up 11%. The increase was primarily driven by higher revenues from all business lines. Our estimate was $532.4 million.

Financial Technology revenues, adjusted, were $395 million, up 10%, also driven by higher revenues from all business lines. Our estimate was $421.6 million.

Revenues at the Solutions business increased 11% year over year to $947 million, reflecting strong growth from Index and Financial Technology.
Market Services net revenues increased 19% year over year to $281 million. Our estimate was $251 million.

Adjusted operating expenses were $555 million, up 5.9% from the year-ago period or 7% on an organic basis. The organic increase reflected higher investments in technology and people to drive innovation and long-term growth, partially offset by the benefit of synergies.  Our estimate for operating expenses was $572 million.

Adjusted operating income of $682 million increased 15% year over year. Our estimate was $641 million.

The company’s operating margin of 55% expanded 200 basis points year over year.

The Nasdaq stock market welcomed 170 new company listings, including 63 initial public offerings. The number of listed companies was 4,139 at quarter end.

Financial Update

Nasdaq had cash and cash equivalents of $708 million as of March 31, 2025, which increased 17% from the end of 2024.

Long-term debt was $8.9 billion as of March 31, 2025, which decreased 1.7% from the end of 2024.

Nasdaq generated $663 million in cash flow from operations in the reported quarter.

Capital Deployment

Nasdaq returned $138 million to shareholders in the first quarter of 2025 through dividends and $115 million through repurchases of common stock. Nasdaq also repurchased $279 million of senior unsecured notes in the quarter.

The board of directors approved a dividend of 27 cents per share, an increase of 13%. The dividend will be paid out on June 27, 2025, to shareholders of record at the close of business on June 13, 2025.

As of March 31, 2025, $1.6 billion remained under the board-authorized share repurchase program.

2025 Guidance

Nasdaq expects 2025 non-GAAP operating expenses to be in the range of $2,265-$2,325 million compared wth $2,245-$2,325 million guided earlier.

Nasdaq forecasts 2025 non-GAAP tax rate to be in the range of 22.5-24.5%.

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.

Peer Release

CME Group CME reported first-quarter 2025 operating income of $2.80 per share, which beat the Zacks Consensus Estimate by 0.4%. The bottom line improved 12% year over year.  CME Group’s revenues of $1.6 billion increased 10.4% year over year. The top line, however, missed the Zacks Consensus Estimate by 0.5%.

Operating income increased 15.5% from the prior-year quarter to $1.1 billion. Our estimate was $1 billion. Given heightened economic uncertainty, ADV was a record 29.8 million contracts. Commodities grew 19%, financials increased 12%, and ADV outside the United States reached a new high of 8.8 million contracts, up 19% year over year. The total average rate per contract was 68.6 cents.

Upcoming Releases

Intercontinental Exchange ICE will report first-quarter 2025 results on May 1, before market open. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $1.70, suggesting an increase of 14.9% from the year-ago quarter’s reported figure.

ICE’s earnings beat estimates in two of the last four quarters, while meeting estimates in the other two.

Cboe Global Markets CBOE will report first-quarter 2025 results on May 2, before market open. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.29, suggesting an increase of 6.5% from the year-ago quarter’s reported figure.

CBOE’s earnings beat estimates in three of the last four quarters and missed in one.

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This article originally published on Zacks Investment Research (zacks.com).

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