Results beat Wall Street expectations.
Nasdaq has transformed from a US-focused exchange operator to a global business services company that includes markets in the US, Canada and the Nordic region, as well as investor, public relations, technology and data services. In the quarter, it completed a $ 1.1 billion deal for options-exchange operator International Securities Exchange, a move that gives it control of nearly 40% of the US options market. It also completed its $ 200 million acquisition of portal systems provider Boardvantage, an online platform for company directors.
For the quarter, Nasdaq reported a profit of $ 70 million, or 42 cents a share, down from $ 133 million, or 77 cents a share, a year prior. The second quarter was hit by restructuring and merger-related charges. Excluding these charges and other items, per-share earnings were 91 cents.
Revenues increased to 7.9% to $ 559 million. Analysts polled by Thomson Reuters had expected adjusted per-share profit of 88 cents on revenue of $ 548 million.
For the latest quarter, market services revenue, which contributes 35% to the exchange’s top line, increased 2.6% to $ 194 million on an acquisition and on higher US derivatives trading and more demand for network connectivity. Exchanges typically benefit from periods of heightened volatility because the more people trade, the more fees they collect on transactions.
The Boardvantage acquisition and another deal helped increase revenue in its technology solutions segment by 20.7% to $ 163 million.
The company’s information-services segment posted a 4.7% revenue increase, climbing to $ 134 million, on higher revenue from proprietary data and higher audit collection.
The market for initial public offerings recovered somewhat in the quarter; Nasdaq said it had 50 IPOs in the quarter, including 25 US-based ones. Listing services revenue increased 3% to $ 68 million.
Write to Austen Hufford at firstname.lastname@example.org
This story was first published by The Wall Street Journal