Nasdaq, Inc. (NDAQ) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Nasdaq, Inc. operates as a global technology company serving capital markets through three primary segments: Capital Access Platforms (Data, Listing Services, Index, Workflow & Insights), Financial Technology (Financial Crime, Regulatory, and Capital Markets Technology), and Market Services (Equity derivatives, cash equity trading, and clearing). The company reported strong performance in listing services and index assets under management (AUM), with record U.S. equity derivatives revenue.
Key Financial Metrics
| Metric (in millions, except per share) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Total Revenues | $1,958 | $1,902 | $6,138 | $5,370 |
| Revenues less Transaction Expenses | $1,315 | $1,146 | $3,857 | $3,422 |
| Operating Income | $586 | $448 | $1,702 | $1,281 |
| Net Income (Attributable to Nasdaq) | $423 | $306 | $1,270 | $762 |
| Diluted EPS | $0.73 | $0.53 | $2.19 | $1.32 |
| Operating Cash Flow (9M) | $1,630 | $1,234 | - | - |
| Debt Obligations (Total) | $9,098 | - | - | - |
| Cash & Cash Equivalents | $470 | - | - | - |
Note: Transaction-based expenses (rebates and fees) are deducted from gross revenues to arrive at "Revenues less transaction-based expenses," a key metric for the Market Services segment.
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 3.0% in Q3 and 14.3% for the nine months ended September 30, 2025, compared to the prior year. Financial Technology revenues grew 23.3% in Q3, driven by Regulatory Technology (up 61.6%) and Financial Crime Management Technology (up 22.0%).
- Profitability: Operating income surged 31.0% in Q3 and 32.9% for the nine-month period. Net income attributable to Nasdaq increased 38.4% in Q3 and 66.6% for the nine months.
- Segment Performance:
- Capital Access Platforms: Index AUM reached a record $829 billion with $17 billion in net inflows for Q3. Listing Services saw U.S. operating companies raise $6.0 billion in proceeds.
- Market Services: While gross revenues declined 7.4% in Q3 due to lower Section 31 fees (a pass-through fee), net revenues increased 14.1% due to higher trading volumes in U.S. equity derivatives and cash equity trading.
- Divestitures: Completed the sale of the Nordic power futures business in June 2025 and the Nasdaq Risk Modelling for Catastrophes business in April 2025. Agreed to sell Nasdaq Solovis in September 2025 (closing in October 2025).
- Debt Reduction: Repaid the $400 million 2025 Notes in full in Q2 2025 and repurchased $279 million of other senior notes in Q1 2025, resulting in a $19 million gain on extinguishment of debt.
Guidance, Outlook, and Risks
- Outlook: Management highlighted strong momentum in recurring revenue (ARR) and the Financial Technology segment. The company expects to continue investing in technology, particularly cloud initiatives and AI capabilities.
- Restructuring: The "Adenza Restructuring" program has achieved over $150 million in net expense synergies. Management expects to incur up to approximately $140 million in total pre-tax charges for this program, with initiatives actioned by the end of 2025.
- Capital Return:
- Dividends: Declared a quarterly dividend of $0.27 per share for Q3 2025. A subsequent dividend of $0.27 per share was approved in October 2025.
- Share Repurchases: Repurchased $330 million of common stock in the first nine months of 2025. In October 2025, entered into a variable notional Accelerated Share Repurchase (ASR) agreement with a $250 million prepayment.
- Risks:
- Regulatory: Ongoing inspection by the European Commission regarding potential competition law concerns related to Nordic financial derivatives trading.
- Market Conditions: Exposure to global economic conditions, interest rate fluctuations, and geopolitical instability. A U.S. federal government shutdown could temporarily impact business.
- Integration: Risks associated with integrating acquired businesses (e.g., Adenza) and realizing expected synergies.
Investor Verification Checklist
- Divestiture Gains: Verify the timing and magnitude of gains from the Nordic power futures and Solovis sales, which may impact future earnings comparisons.
- Section 31 Fees: Monitor SEC fee rate changes, as these are pass-through items that affect gross revenue but not net revenue; recent rate decreases impacted Q3 gross revenue figures.
- Restructuring Costs: Track remaining restructuring charges expected in late 2025 and early 2026 related to the Adenza integration.
- Regulatory Investigation: Follow updates on the European Commission's inspection regarding Nordic derivatives trading for potential fines or operational changes.
- Debt Maturities: Review the schedule of debt maturities, noting the repayment of the 2025 Notes and the remaining weighted average interest rate of approximately 3.83%.