Nasdaq’s revenue beats on strong demand for fintech products

By Thomson Reuters Apr 25, 2024 | 6:03 AM

(Reuters) – Nasdaq beat estimates for first-quarter revenue on Thursday, driven by strong demand for its financial technology products used by traders and investors to navigate the capital markets.

Revenue from its financial technology unit surged 71% to $392 million in the first quarter, while revenue from its index business jumped 53% to $168 million.

The transatlantic exchange operator has expanded its business beyond trading and listing to create a more steady and sustainable source of revenue by offering products that focus on anti-financial crime and compliance.

Nasdaq, like its peers, has been on an acquisition spree to diversify its portfolio of technology and intellectual property after regulations in 2005 opened the equities trading market up to competition from brokers.

Net revenue in the first quarter jumped 22% to $1.12 billion. Analysts on average had expected $1.11 billion, according to LSEG data.

The company’s adjusted profit of 63 cents per share in the three months ended March 31 missed analysts’ expectations of 65 cents.

The push towards products and solutions helped offset a deceleration in trading activity in U.S. equities as markets took a breather following a period of prolonged volatility.

U.S. equity matched shares volumes declined to 116.7 billion in the first quarter from 121.8 billion a year earlier. U.S. equity options volumes fell to 773 million contracts from 811 million contracts.

Some of the biggest names that listed their shares on the Nasdaq exchange in New York during the quarter include AI-focused chip firm Astera Labs and biotech firm Kyverna Therapeutics.

Total new listings on the Nasdaq Stock Market in the quarter were 79, compared with 81 in the year-earlier period.

As of last close, shares of Nasdaq were up about 6% so far this year, broadly in line with gains in the benchmark S&P 500 index.

(Reporting by Manya Saini in Bengaluru; Editing by Anil D’Silva)