N E W S     R E L E A S E

Third quarter 2020 net revenues¹ were $715 million, an increase of 13% over the third quarter of 2019. Compared to the prior year period, revenues in the non-trading segments² increased 12% primarily due to organic growth while Market Services revenues increased 15%, due to elevated trading volumes in U.S. equities and options.

The GAAP operating margin was 46% in the third quarter of 2020, up from 36% in the prior year period, while the non-GAAP³ operating margin of 52% increased from 50% in the prior year period.

Third quarter 2020 GAAP diluted earnings per share, or EPS, was $1.58, up 76% from $0.90 in the third quarter of 2019. Third quarter 2020 non-GAAP diluted EPS was $1.53, up 20% from $1.27 in the third quarter of 2019.

During the third quarter of 2020, the company returned $115 million to shareholders through share repurchases and dividends, and in the first nine months of 2020, returned $425 million through $239 million in dividends and $186 million in share repurchases.

Nasdaq’s senior management will hold an Investor Day on November 10, 2020 to discuss its operations and strategy, the first since detailing the “strategic pivot” and related performance objectives in early 2018.

Represents revenues less transaction-based expenses.

Constitutes revenues from Market Technology, Information Services and Corporate Services segments.

Refer to our reconciliations of U.S. GAAP to non-GAAP net income, diluted earnings per share, operating income and operating expenses, included in the attached schedules.

U.S. GAAP operating expense and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.

Annualized Recurring Revenue (ARR) for a given period is the annualized revenue of active Market Technology support and SaaS subscription contracts. ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

CFO Michael Ptasznik decides to retire after a successful 30-year career in the accounting and financial services profession, and will be succeeded by Ann Dennison, Nasdaq’s Controller and Chief Accounting Officer. In a separate announcement today, Nasdaq said that Michael Ptasznik has decided to retire from his position as Chief Financial Officer effective February 28, 2021. Mr. Ptasznik will be succeeded by Ann Dennison, Nasdaq’s Senior Vice President, Controller and Chief Accounting Officer. Ms. Dennison will assume the role of Chief Financial Officer effective March 1, 2021.

Nasdaq is launching several new licensed index products building on the momentum established by record AUM and trading volume in licensed index ETPs and derivatives in the third quarter of 2020. Overall AUM in ETPs benchmarked to Nasdaq’s proprietary indexes totaled $313 billion as of September 30, 2020, an increase of 51% compared to September 30, 2019. The increase in AUM was led by an 83% rise year-over-year in ETP assets linked to Nasdaq-100 indexes. During the period, Nasdaq announced the launch of two new licensed index futures contracts, the Nasdaq-100 Volatility Index (VOLQ) and the Nasdaq Veles California Water Index (NQH20). In October 2020, Invesco announced the launch of the Invesco QQQ Innovation Suite, which offers investors access to additional investment products tied to the Nasdaq-100 Index and new Nasdaq Next Generation 100 Index.

Nasdaq continues to see strong client traction in its Market Technology segment and expands its financial crime solution set with a new anti-money laundering solution. New order intake totaled $84 million during the third quarter of 2020, including four new customers. During the first nine months of 2020, Nasdaq signed nine new market infrastructure operator clients, including seven new SaaS marketplace customers, reinforcing the shift toward SaaS and service client deployments. Nasdaq announced the launch of the cloud-deployed Nasdaq Automated Investigator, an automated solution for investigating anti-money laundering for retail and commercial banks and other financial institutions.

The Nasdaq Stock Market led U.S. exchanges for IPOs during the first nine months of 2020. In the third quarter of 2020, The Nasdaq Stock Market welcomed 144 new U.S. listings, including 105 IPOs, compared to 41 IPOs in the third quarter of 2019. Nasdaq’s IPO win rate totaled 65% during the third quarter of 2020, with a 79% IPO win rate among operating companies¹. The U.S. IPO win rate totaled 66% during the first nine months of 2020 and 81% among operating companies. Highlights during the third quarter included IPOs from GoodRX, Li Auto, Jamf Holding Corp and nCino, as well as six listings switches with an aggregate global market capitalization of $187 billion, including AstraZeneca PLC and Keurig Dr Pepper Inc.

Nasdaq’s Market Services segment maintains strong competitive positioning in U.S. and Europe and sets a new quarterly trading volume record in U.S. options. In the third quarter of 2020, Nasdaq’s U.S. options market set a quarterly record of 660 million contracts traded, an increase of 52% year over year. During the period, U.S. cash equities market share improved from the second quarter of 2020 as the combined matched market share executed on Nasdaq’s exchanges totaled 19.4%², U.S. options share totaled 36.7%³ and Nordic equities totaled 77.5%.

Nasdaq launches purpose initiative to advance inclusive growth and prosperity. The Purpose Initiative comprises the company’s philanthropic, community outreach, corporate sustainability, and employee volunteerism programs, all designed to leverage Nasdaq’s unique place at the center of capital creation, markets, and technology and drive stronger economies, more equitable opportunities and contribute to a more sustainable world.

Operating companies exclude special purpose acquisition companies.

In the third quarter of 2020, the combined U.S. cash equities matched market share executed on Nasdaq’s exchanges consisted of 18.0% at The Nasdaq Stock Market, 0.8% at Nasdaq BX and 0.6% at Nasdaq PSX.

In the third quarter of 2020, the combined U.S. options matched market share executed on Nasdaq’s exchanges consisted of 12.8% at Nasdaq PHLX, 9.6% at The Nasdaq Options Market, 6.9% at Nasdaq ISE, 6.3% at Nasdaq GEMX, 0.9% at Nasdaq MRX and 0.2% at Nasdaq BX.

MEDIA RELATIONS CONTACT:

Allan Schoenberg

+1.212.231.5534

allan.schoenberg@nasdaq.com

Revenues:

Market Services

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Total Market Services revenues less transaction-based expenses

Corporate Services

Information Services

Market Technology

Revenues less transaction-based expenses

Operating Expenses:

Compensation and benefits

Professional and contract services

Computer operations and data communications

Occupancy

General, administrative and other

Marketing and advertising

Depreciation and amortization

Regulatory

Merger and strategic initiatives

Restructuring charges

Total operating expenses

Operating income

Interest income

Interest expense

Other income

Net income from unconsolidated investees

Income before income taxes

Income tax provision

Net income attributable to Nasdaq

Per share information:

Basic earnings per share

Diluted earnings per share

Cash dividends declared per common share

Weighted-average common shares outstanding for earnings per share:

Basic

Diluted

MARKET SERVICES REVENUES

Equity Derivative Trading and Clearing Revenues

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Total net equity derivative trading and clearing revenues

Cash Equity Trading Revenues

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Total net cash equity trading revenues

Fixed Income and Commodities Trading and Clearing Revenues

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Total net fixed income and commodities trading and clearing revenues

Trade Management Services Revenues

Total Net Market Services revenues

CORPORATE SERVICES REVENUES

Listings Services revenues

Corporate Solutions revenues

Total Corporate Services revenue

INFORMATION SERVICES REVENUES

Market Data revenues

Index revenues

Investment Data & Analytics revenues

Total Information Services revenues

MARKET TECHNOLOGY REVENUES

REVENUES LESS TRANSACTION-BASED EXPENSES

Assets

Current assets:

Cash and cash equivalents

Restricted cash and cash equivalents

Financial investments

Receivables, net

Default funds and margin deposits

Other current assets

Total current assets

Property and equipment, net

Goodwill

Intangible assets, net

Operating lease assets

Other non-current assets

Total assets

Liabilities

Current liabilities:

Accounts payable and accrued expenses

Section 31 fees payable to SEC

Accrued personnel costs

Deferred revenue

Other current liabilities

Default funds and margin deposits

Short-term debt

Total current liabilities

Long-term debt

Deferred tax liabilities, net

Operating lease liabilities

Other non-current liabilities

Total liabilities

Commitments and contingencies

Equity

Nasdaq stockholders’ equity:

Common stock

Additional paid-in capital

Common stock in treasury, at cost

Accumulated other comprehensive loss

Retained earnings

Total Nasdaq stockholders’ equity

Noncontrolling interests

Total equity

Total liabilities and equity

U.S. GAAP net income attributable to Nasdaq

Non-GAAP adjustments:

Amortization expense of acquired intangible assets ⁽¹⁾

Merger and strategic initiatives ⁽²⁾

Restructuring charges ⁽³⁾

Net income from unconsolidated investee ⁽⁴⁾

Charitable donations ⁽⁵⁾

Provision for notes receivable ⁽⁵⁾

Other ⁽⁵⁾

Total non-GAAP adjustments

Non-GAAP adjustment to the income tax provision ⁽⁶⁾

Total non-GAAP adjustments, net of tax

Non-GAAP net income attributable to Nasdaq

U.S. GAAP diluted earnings per share

Total adjustments from non-GAAP net income above

Non-GAAP diluted earnings per share

Weighted-average diluted common shares outstanding for earnings per share

We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.

In September 2019, we initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of consulting services, asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.

Primarily represents net income recognized from our equity interest in OCC. In February 2019, the SEC disapproved the OCC rule change that established OCC’s 2015 capital plan and OCC suspended customer rebates and dividends to owners. We will continue to exclude net income related to our share of OCC’s earnings for purposes of calculating non-GAAP measures as our income on this investment may vary significantly compared to prior years. This will provide a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.

We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include a provision for notes receivable associated with the funding of technology development for the consolidated audit trail for the three months ended September 30, 2020 and September 30, 2019 and charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities for the three months ended June 30, 2020.

The non-GAAP adjustment to the income tax provision primarily includes the tax impact of each non-GAAP adjustment and for the three months ended June 30, 2020 a tax benefit on previously disallowed compensation related deductions.

U.S. GAAP operating income

Non-GAAP adjustments:

Amortization expense of acquired intangible assets ⁽¹⁾

Merger and strategic initiatives ⁽²⁾

Restructuring charges ⁽³⁾

Charitable donations ⁽⁴⁾

Provision for notes receivable ⁽⁴⁾

Other ⁽⁴⁾

Total non-GAAP adjustments

Non-GAAP operating income

Revenues less transaction-based expenses

U.S. GAAP operating margin ⁽⁵⁾

Non-GAAP operating margin ⁽⁶⁾

We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.

In September 2019, we initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of consulting services, asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.

We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include a provision for notes receivable associated with the funding of technology development for the consolidated audit trail for the three months ended September 30, 2020 and September 30, 2019 and charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities for the three months ended June 30, 2020.

U.S. GAAP operating margin equals U.S. GAAP operating income divided by revenues less transaction-based expenses.

Non-GAAP operating margin equals non-GAAP operating income divided by revenues less transaction-based expenses.

U.S. GAAP operating expenses

Non-GAAP adjustments:

Amortization expense of acquired intangible assets ⁽¹⁾

Merger and strategic initiatives ⁽²⁾

Restructuring charges ⁽³⁾

Charitable donations ⁽⁴⁾

Provision for notes receivable ⁽⁴⁾

Other ⁽⁴⁾

Total non-GAAP adjustments

Non-GAAP operating expenses

We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.

In September 2019, we initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of consulting services, asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.

We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include a provision for notes receivable associated with the funding of technology development for the consolidated audit trail for the three months ended September 30, 2020 and September 30, 2019 and charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities for the three months ended June 30, 2020.

Market Services

Equity Derivative Trading and Clearing

U.S. equity options

Total industry average daily volume (in millions)

Nasdaq PHLX matched market share

The Nasdaq Options Market matched market share

Nasdaq BX Options matched market share

Nasdaq ISE Options matched market share

Nasdaq GEMX Options matched market share

Nasdaq MRX Options matched market share

Total matched market share executed on Nasdaq’s exchanges

Nasdaq Nordic and Nasdaq Baltic options and futures

Total average daily volume options and futures contracts ⁽¹⁾

Cash Equity Trading

Total U.S.-listed securities

Total industry average daily share volume (in billions)

Matched share volume (in billions)

The Nasdaq Stock Market matched market share

Nasdaq BX matched market share

Nasdaq PSX matched market share

Total matched market share executed on Nasdaq’s exchanges

Market share reported to the FINRA/Nasdaq Trade Reporting Facility

Total market share ⁽²⁾

Nasdaq Nordic and Nasdaq Baltic securities

Average daily number of equity trades executed on Nasdaq’s exchanges

Total average daily value of shares traded (in billions)

Total market share executed on Nasdaq’s exchanges

Fixed Income and Commodities Trading and Clearing

Fixed Income

U.S. fixed income volume ($ billions traded)

Total average daily volume of Nasdaq Nordic and traded Nasdaq  Baltic fixed income contracts

Commodities

Power contracts cleared (TWh) ⁽³⁾

Corporate Services

Initial public offerings

The Nasdaq Stock Market

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic

Total new listings

The Nasdaq Stock Market ⁽⁴⁾

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic ⁽⁵⁾

Number of listed companies

The Nasdaq Stock Market ⁽⁶⁾

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic ⁽⁷⁾

Information Services

Number of licensed exchange traded products (ETPs)

ETP assets under management (AUM) tracking Nasdaq indexes (in billions)

Market Technology

Order intake (in millions) ⁽⁸⁾

Annualized recurring revenues (in millions) ⁽⁹⁾

Includes Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement.

Includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the Financial Industry Regulatory Authority/Nasdaq Trade Reporting Facility.

Transactions executed on Nasdaq Commodities or OTC and reported for clearing to Nasdaq Commodities measured by Terawatt hours (TWh).

New listings include IPOs, including issuers that switched from other listing venues, closed-end funds and separately listed ETPs.

New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.

Number of total listings on The Nasdaq Stock Market at period end, including 409 ETPs as of September 30, 2020, 410 ETPs as of June 30, 2020, and 382 ETPs as of September 30, 2019.

Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North at period end.

Total contract value of orders signed during the period.

Annualized Recurring Revenue, or ARR, for a given period is the annualized revenue of Market Technology support and SaaS subscription contracts. ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts during the reporting period used in calculating ARR may or may not be extended or renewed by our customers.