Nasdaq, Inc. (NDAQ) 4Q25 Earnings Review
Earnings Beat Street Forecast; Organic Growth Accelerates in 4Q25
EPS Beats Consensus Forecast As Revenue Comes in 1% Ahead of Estimates
NDAQ reported 4Q25 earnings prior to market open today. Total net revenue came in at $1,392M, up 6% Q/Q and up 13% Y/Y. The sequential increase in revenue was due to a 9% Q/Q (+14% Y/Y) increase in Financial Technology revenue to $498M and a 6% Q/Q (+13% Y/Y) increase in Capital Access Platforms revenue to $572M. Market Services revenue was up 3% Q/Q (+16% Y/Y) to $311M and other revenue was down 35% Q/Q (-35% Y/Y) to $11M due to NDAQ’s sale of the Solovis business in October. On the expense side, total adjusted operating expenses came in at $609M, which was up 4% sequentially (+10% Y/Y) and drove operating margins to 56.3% (up 60bps Q/Q and up 160bps Y/Y). Non-operating expense came in at $80M (+4% Q/Q, -13% Y/Y) and adjusted diluted EPS came in at $0.96, up 9% Q/Q (+27% Y/Y).
Relative to consensus estimates, revenue came in 1% above the consensus forecast of $1,373M. Meanwhile, operating expenses were 1% above the street and adjusted EPS came in 4% ahead of consensus.
In terms of key operating metrics, volume detail for the quarter was known coming into today’s print, however, new revenue metrics from today’s print include revenue detail for the Market Services businesses and total ARR detail across NDAQ’s more subscription focused businesses. Within Market Services, U.S. equity derivative revenue was down 6% Q/Q (+10% Y/Y), U.S. equities revenue was up 6% Q/Q (+19% Y/Y), E.U. equities revenue was up 4% Q/Q (+16% Y/Y) and E.U. derivatives revenue was up 22% Q/Q (+23% Y/Y). ARR for Capital Access Platforms increased 2% Q/Q (+8% Y/Y) to $1,340M and ARR for Financial Technology increased 3% Q/Q (+14% Y/Y) to $1,711M.
NDAQ Earnings Summary and Key Operating Metrics
Source: company data and Tikr.com
Highlights from NDAQ Earnings Call, Presentation and Press Release
In terms of the outlook going forward, NDAQ 0.00%↑ management touched on several details during the earnings call that are worth highlighting:
Revenue Synergies – Remain on track to surpass $100M in synergies from cross sells by the end of 2027. Cross sells remain over 15% of the Fin Tech division sales pipeline
Expense Synergies – Surpassed upsized expense synergy plan with $160M actioned by the end of 2025
Expenses Guidance – Adjusted expense outlook for 2026 $2.455B – $2.535B. Reflects organic growth rate at the midpoint of 7%. Expense guide includes in-year benefit of actioned synergies, $25M decline due to divestiture of Solovis, increased expense from a small acquisition and $20M increase from FX as well as organic growth investment and innovation investments related to AI
Tax Rate Guidance – Anticipate tax rate in a range of 22.5% - 24.5% as one time items in 2025 not expected to recur
Deleveraging – Gross leverage ended 2025 at 2.9x, down 0.2x Q/Q and surpassing NDAQ’s expectation of 3.0x by year end as NDAQ repurchased $100M in debt during 4Q
Prediction Markets – Prediction markets space is currently very dynamic with the regulatory environment not fully settled. Nasdaq is focused on what benefits its markets can offer investors that fit within its risk tolerance levels and within the regulatory mandate it has. One thing NDAQ is looking into is the potential for event options that fit within its regulated markets. Through its Market Technology business, Nasdaq can provide tech to the prediction markets and NDAQ is able to provide data distribution through its data platforms. So, while NDAQ is not currently active in prediction markets trading, it can have exposure to the space
IPO Environment – See signs of accelerating capital markets activity supported by Fed cuts and healthy pipeline of late-stage private companies. New issuance year should be “active”. Saw some disruption to IPO activity in 4Q25 due to government shutdown but companies that were unable to IPO in 4Q are looking to 1Q and 2Q of this year. Within listings business anticipate $9M Y/Y revenue headwind each quarter due to delistings from previous year, impact from proposed changes to listings standards, and amortization roll-off from prior period initial listing fees
New Options Expiries for Mag 7 – Monday, Wednesday and Friday options give clients more opportunity to manage risk in shorter-dated ways. Think this will continue to drive volumes in the market from increased retail and institutional players. Seeing increase in equity options trading due to ETF options overlay, which has been big structural driver of higher institutional activity of late
Tokenization / Blockchain – Blockchain native equities trading is going to be challenging given U.S. equity volumes, message traffic into the exchanges, and latency. NDAQ’s proposal allows for tokenization benefits such as ease of collateral management without impacting U.S. equity market structure
Financial Technology Revenue – Signed 129 new clients, 143 upsells and 12 cross sells in the quarter, brining total for the year to 291 new clients, 462 upsells and 25 cross sells. Financial Crime Management signed 119 new SMB clients in 4Q. Sequential improvement in 4Q revenue was driven by professional services fees related to SMB and enterprise client implementation. Does not expect to maintain these levels in 1H26 due to implementation timing for deals signed in 2H25
Capital and Capital Return – Continue to focus on investment in organic growth, maintaining its dividend (targeting payout of 35-38%) followed by continued opportunistic debt repayments and share repurchases. Large scale M&A not a huge focus currently. Would look toward bolt on deals but evaluating any potential deals with build vs. buy framework
U.S. Options Capture Rate – Came in lower in 4Q due to Options Regulatory Fee (ORF) being mostly recovered during first 3 quarters of the year and mix shifts towards lower revenue capture trades driven by high volume in 4Q
Key Financial Highlights
NDAQ showed solid revenue growth of 13% Y/Y, posting revenue of a record $1,392M. Meanwhile, operating expense growth remained slightly more subdued with total expenses growing 10% Y/Y in the quarter to $609M. This allowed operating margins to expand to 56.3% in the quarter, up 160bps Y/Y.
NDAQ Revenue, Expenses and Margins
Source: company documents
NDAQ grew revenue across the board with Capital Access Platforms, Financial Technology and Market Services revenues all posting Y/Y revenue growth with record quarterly revenues set across the board.
NDAQ Revenue by Segment
Source: company documents
The revenue mix between transaction-based revenue and non-transaction-based was consistent with what we have seen in recent quarters with transaction-based revenue making up about 20% of the overall mix.
NDAQ Revenue Mix
Source: company documents
ARR growth was also solid with total ARR growing double digits Y/Y and growth seen across all major components.
NDAQ ARR Breakdown
Source: company documents
In terms of other key business metrics, ETP AUM tracking Nasdaq’s indices continued to grow at a rapid pace, with ETP AUM up 36% Y/Y to $882B. Total listings also grew solidly in 4Q, up 7% Y/Y, with 2% growth in listed companies on Nasdaq, 45% growth in ETP listings on Nasdaq and 5% contraction in companies listed on Nasdaq’s Nordic and Baltic markets. Additionally, IPO activity remained solid to close out the year (despite the U.S. government shutdown) with Nasdaq reporting 70 IPOs across its marketplaces.
Source: company documents
Source: company documents
Source: company documents
Broad Thoughts / Outlook
I thought this was a strong quarter from NDAQ as organic growth accelerated across most business lines, with total Solutions Revenue organic growth of 12% (above the high end of NDAQ’s medium-term outlook range of 8-11%), and NDAQ continued to increase expense synergies actioned from the Adenza acquisition. Capital Access Platforms revenue continues to be impressive with 12% organic growth in the quarter (medium-term outlook 5-8%), driven by another quarter of really strong growth in Index (organic growth 23%) and it was great to see Data and Listings growth accelerate to 7%. Within Financial Technology, every subdivision was at or above the implied mid-point of the medium-term outlook range.
NDAQ Organic Growth Rates
Source: 4Q25 Earnings Presentation
I quickly put together the below charts, which I found to be very powerful indicators of NDAQ’s organic growth rates relative to target.
Two of three subdivisions within the Capital Access Platforms division showed organic growth above the medium term outlook range and growth accelerating in 4Q.
Source: company documents
Source: company documents
Source: company documents
Which led overall Capital Access Platforms revenue growth to accelerate in 4Q and come in well above the mid-point of the medium-term outlook range.
Source: company documents
And, two of three Financial Technology subdivisions showed accelerating organic growth in the quarter.
Source: company documents
Source: company documents
Source: company documents
And overall division organic growth came in at the mid-point of the medium-term outlook range.
Source: company documents
This led the combined performance of the Solutions businesses to accelerate in 4Q25 and exit the year with revenue growth above the high end of the medium term outlook range.
