Nasdaq posts record quarterly revenue, warns of cooling IPO market

NEW YORK — Nasdaq Inc. reported record third-quarter revenue and a profit beat on Oct. 22, even as the exchange operator's chief executive said the market for new stock listings had cooled over the summer, with several prospective issuers delaying planned debuts.

The results, filed with the Securities and Exchange Commission, showed the New York-based company's transformation from a stock exchange into a diversified financial-technology and data business continuing to pay off. But the warning about initial public offerings pointed to broader strains in markets, including a jump in long-term Treasury yields and renewed inflation concerns following an energy-price shock tied to conflict in the Middle East.

Record results across every division

Nasdaq's net revenue reached $1.48 billion in the quarter, up 13 percent from a year earlier, or 14 percent on an organic basis that strips out acquisitions and currency effects, according to the company's earnings release. Non-GAAP diluted earnings per share were $1.04, up 19 percent and two cents above the Wall Street consensus of $1.02, while GAAP diluted earnings per share rose 31 percent to 96 cents.

Net income attributable to the company was $540 million on a GAAP basis, up from $423 million a year earlier; on a non-GAAP basis it was $588 million, versus $511 million.

Growth was broad-based across the company's lines of business, according to a presentation Nasdaq gave investors. Solutions revenue, which spans index products, market data and listing services, regulatory technology and anti-financial-crime software, rose 17 percent to $1.17 billion. The company's Index business grew 39 percent to $286 million, with $49 billion of net inflows into Nasdaq-linked funds during the quarter. Financial Technology revenue climbed 16 percent to $529 million, led by a 23 percent increase in financial-crime-management software. Market Services, the trading and clearing business that includes Nasdaq's exchanges, grew a more modest 2 percent to $309 million.

Annualized recurring revenue, a measure the company highlights to show the durability of its software and data businesses, reached $3.4 billion, up 12 percent.

Nasdaq's board also raised the quarterly dividend to 31 cents a share from 27 cents, payable Dec. 18 to shareholders of record on Dec. 4, according to a separate exhibit filed with the earnings release. The company bought back $323 million of its own stock in the quarter and has repurchased $1.2 billion of shares so far this year, Chief Executive Adena Friedman told analysts on a call to discuss the results.

Shares of Nasdaq rose in premarket trading after the release and went on to touch an intraday record near $102 later that day, according to Investing.com, before finishing the session up sharply from Wednesday's close.

A cooling IPO pipeline

The earnings beat was accompanied by a more cautious note on new listings, the business of bringing companies public that Nasdaq has long used to burnish its reputation as the exchange of choice for growth and technology companies. New listings fell to 167 in the quarter from 205 a year earlier, Friedman said on the call, describing the slowdown as a modest softening tied to broader market jitters.

Wearable-technology maker Oura postponed a planned Nasdaq listing in September, and nuclear-services company Holtec withdrew its U.S. initial public offering plans altogether, according to a Reuters report. Friedman attributed the pullback in part to a run-up in long-term bond yields and renewed inflation worries following a spike in energy prices tied to Middle East tensions, which she said had prompted some executives to reconsider timing rather than abandon plans to go public.

"The listings pipeline remains robust," Friedman told analysts, even as she acknowledged that some prospective issuers were "re-evaluating the timing of their IPOs" amid the recent bout of market turbulence.

Betting on a market that never sleeps

Even as it flagged softer listings activity, Nasdaq pressed ahead with an ambitious plan to extend U.S. equity trading hours. The company said it remains on track to launch "23/5" trading — nearly round-the-clock dealing, five days a week — on the Nasdaq Stock Market on Dec. 6, describing the move as a step toward what Friedman called an "always-on" future for markets.

To support that shift, Nasdaq has created a new unit called Digital Liquidity Networks, folding in the company's investments in tokenization and extended-hours trading infrastructure. The division absorbs LeveL ATS, an alternative trading system Nasdaq acquired this month that ranks as the third-largest in the United States by trading volume; the deal is expected to add $7 million to $8 million to fourth-quarter revenue.

The company's regulatory-technology arm also picked up new surveillance clients among crypto-trading venues, including Kalshi and Kraken, as digital-asset platforms seek the kind of market-monitoring tools long used by traditional exchanges. Separately, Nasdaq's financial-crime unit, Verafin, said more than 850 clients are now using two newly launched artificial-intelligence tools, an Agentic AML Analyst and an Agentic Fraud Analyst, that automate parts of anti-money-laundering investigations.

Who is affected, and what comes next

The results matter well beyond Nasdaq's own shareholders. Companies weighing when to go public are watching bond yields and volatility as closely as Nasdaq's own listings team. Brokerages, market-making firms and clearing houses that trade on Nasdaq's venues will need to adapt to longer trading days once 23/5 trading begins, a change rival exchanges are likely to respond to in some form over time.

For now, Nasdaq raised its full-year guidance for non-GAAP operating expenses slightly, to a range of $2.55 billion to $2.58 billion, while keeping its tax-rate outlook unchanged. The company's next test will be whether the December launch of extended trading hours proceeds smoothly, and whether the IPO market it depends on for new listings stabilizes as interest-rate and geopolitical pressures evolve.