On July 25, 2024, Nasdaq Inc (NDAQ, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Founded in 1971, Nasdaq is primarily known for its equity exchange, but it also offers market data, Nasdaq-branded indexes, listing services, and financial compliance services through its various segments.
Q2 2024 Financial Highlights
Nasdaq Inc (NDAQ, Financial) reported net revenues of $1,159 million for Q2 2024, a 25% increase year-over-year, surpassing the analyst estimate of $1,130.64 million. However, the GAAP diluted earnings per share (EPS) came in at $0.38, falling short of the estimated $0.44. Non-GAAP diluted EPS was $0.69, a 3% decrease year-over-year.
Company Overview
Nasdaq's business is diversified across several segments. Market services account for about 35% of sales, information services contribute 30%, corporate services make up 20%, and market technology represents 15%. This diversification helps Nasdaq maintain stability and growth across different market conditions.
Performance and Challenges
The company experienced broad-based growth across its three divisions, with double-digit growth in its Solutions segment. Solutions revenues increased by 34% year-over-year to $901 million. Market Services net revenues grew by 3% to $250 million. Despite these gains, the GAAP diluted EPS decreased by 30% year-over-year, indicating some challenges in maintaining profitability.
Financial Achievements
Nasdaq's non-GAAP operating income rose by 28% to $620 million, demonstrating strong operational efficiency. The company also achieved a 29% increase in Annual Recurring Revenue (ARR) to $2,668 million. These metrics are crucial for assessing the company's long-term financial health and operational success.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Revenues | $1,159 million | $925 million | 25% |
| GAAP Operating Income | $423 million | $382 million | 11% |
| Non-GAAP Operating Income | $620 million | $484 million | 28% |
| GAAP Diluted EPS | $0.38 | $0.54 | (30%) |
| Non-GAAP Diluted EPS | $0.69 | $0.71 | (3%) |
Balance Sheet and Cash Flow
As of June 30, 2024, Nasdaq reported total assets of $30,210 million, down from $32,294 million at the end of 2023. The company's cash and cash equivalents stood at $416 million, a slight decrease from $453 million. Total liabilities were $19,302 million, compared to $21,467 million at the end of 2023, indicating a reduction in debt and other obligations.
Commentary
Adena Friedman, Chair and CEO, stated, “Nasdaq’s strong financial and operational results were underpinned by broad-based growth across our three divisions and another quarter of double-digit Solutions growth. We continued the momentum in our Financial Technology division as financial institutions remain focused on resilience, risk management, and infrastructure modernization.”
Sarah Youngwood, Executive Vice President and CFO, added, “Nasdaq delivered a quarter of strong top-line growth and positive operating leverage. We successfully executed on our first deleveraging goal and achieved our year-end 2024 actioned synergy target six months in advance.”
Analysis
Nasdaq Inc (NDAQ, Financial) demonstrated robust revenue growth and operational efficiency in Q2 2024, outperforming revenue estimates but falling short on EPS. The company's diversified business model and strong performance in the Solutions segment are positive indicators for future growth. However, the decline in GAAP EPS suggests that Nasdaq may face challenges in maintaining profitability amid rising costs and other financial pressures.
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Explore the complete 8-K earnings release (here) from Nasdaq Inc for further details.
