First quarter 2021 net revenues¹ were $851 million, an increase of 21% over the first quarter of 2020. Compared to the prior year period, Solutions segments² revenues increased 22% while Market Services revenues increased 20%.

Annualized Recurring Revenue (ARR)³ was $1,760 million in the first quarter of 2021, an increase of 21% from the prior year period.

First quarter 2021 GAAP diluted earnings per share of $1.78 increased 46% compared to $1.22 in the first quarter of 2020. First quarter 2021 non-GAAP⁴ diluted earnings per share of $1.96 increased 31% from $1.50 in the first quarter of 2020.

Nasdaq advanced its strategic positioning by completing the acquisition of Verafin, establishing the company as a leading anti-financial crime technology provider.

Also in the first quarter of 2021, Nasdaq agreed to sell its U.S. Fixed Income business, which will allow the company to concentrate resources on its technology, analytics and ESG opportunities.

The company is announcing a 10% increase to the quarterly dividend, to $0.54 per share, and returned $243 million of cash to investors in the first quarter of 2021, including $162 million in share repurchases.

Nasdaq accelerates the company’s evolution as a leading SaaS technology provider of anti-financial crime solutions by completing the acquisition of Verafin. In February 2021, Nasdaq completed the acquisition of Verafin, an industry pioneer in anti-financial crime technology solutions. The acquisition strengthens Nasdaq’s existing regulatory and anti-financial crime solutions, while expanding Verafin’s reach to serve a global ecosystem of Tier-1 and Tier-2 banks and broker-dealers.

ETP assets under management tracking Nasdaq indexes and derivative product volume tracking Nasdaq indexes each set new quarterly records. Overall AUM in ETPs benchmarked to Nasdaq’s proprietary indexes totaled $385 billion as of March 31, 2021, an increase of 87% compared to March 31, 2020. Additionally, the number of futures and options on futures contracts tracking Nasdaq indexes set a quarterly record with 105 million contracts traded, an increase of 31% from 80 million in the first quarter of 2020. There are 17 products tracking Nasdaq indexes which launched in the first quarter of 2021, including 13 outside of the U.S.

Nasdaq’s analytics business led by eVestment and Solovis delivered strong retention and sales growth during the first quarter of 2021. The eVestment and Solovis analytics businesses continue to see increased growth, not only due to increased number of users, but also in both new sales and retention compared to the prior year period. On a sequential basis, new sales were up 23% from the fourth quarter of 2020, reflecting both a rebound in institutional investment industry demand following some temporary contraction in 2020, as well as increasing realization of synergies across the suite of solutions. These synergies helped to drive 28 new accounts to Solovis in the first quarter of 2021.

The Nasdaq Stock Market led U.S. exchanges for IPOs during the first quarter of 2021. The Nasdaq Stock Market led U.S. exchanges with a 69% total IPO win rate, including a 77% win rate among operating companies⁶ and a 66% win rate among special purpose acquisition companies. In the first quarter of 2021, The Nasdaq Stock Market welcomed 275 IPOs representing $74 billion in capital raised, including 79 operating company IPOs such as Bumble, Qualtrics, Affirm, Playtika and Petco, as well as 196 IPOs from special purpose acquisition companies.

Nasdaq’s Market Services segment sets new quarterly trading volume records in U.S. options and U.S. equities in the first quarter of 2021. In the first quarter of 2021, Nasdaq’s U.S. options market set a quarterly record of 892 million contracts traded, an increase of 57% year over year. Additionally, Nasdaq led all exchanges during the period in total volume traded for options inclusive of both multiply-listed equity options and index options products. Nasdaq’s U.S. equities markets set a quarterly record of 153 billion shares traded, an increase of 20% year over year.

Nasdaq agrees to sell its U.S. Fixed Income business to Tradeweb Markets. Nasdaq’s decision to sell its U.S. Fixed Income business aligns with its corporate strategy to concentrate its resources and capital to maximize its potential as a major technology and analytics provider to the global capital markets. The transaction is expected to close later in 2021 subject to satisfaction of customary closing conditions, including the receipt of required regulatory approvals.

Represents revenues less transaction-based expenses.

Constitutes revenues from Market Technology, Investment Intelligence and Corporate Platforms segments.

Annualized Recurring Revenue (ARR) for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature or where the contract value fluctuates based on defined metrics. 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.

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.

Operating companies exclude special purpose acquisition companies and when a special purpose acquisition company completes an acquisition.

Revenues:

Market Services

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Total Market Services revenues less transaction-based expenses

Corporate Platforms

Investment Intelligence

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 (loss) 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 PLATFORMS REVENUES

Listings Services revenues

IR & ESG Services revenues

Total Corporate Platforms revenues

INVESTMENT INTELLIGENCE REVENUES

Market Data revenues

Index revenues

Analytics revenues

Total Investment Intelligence revenues

MARKET TECHNOLOGY REVENUES

Marketplace Infrastructure Technology revenues

Anti Financial Crime Technology revenues

Total 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 expense ⁽²⁾

Restructuring charges ⁽³⁾

Net (income) loss from unconsolidated investees ⁽⁴⁾

Extinguishment of debt ⁽⁵⁾

Charitable donations ⁽⁵⁾

Other

Total non-GAAP adjustments

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

Excess tax benefits related to employee share-based compensation

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

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.

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 third party consulting costs and non-cash items such as 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 the earnings and losses recognized from our equity interest in the Options Clearing Corporation, or OCC. We will continue to exclude the earnings and losses 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 donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 2020.

The non-GAAP adjustment to the income tax provision primarily includes the tax impact of each non-GAAP adjustment. In addition, for the three months ended December 31, 2020, we recorded a tax benefit related to favorable audit settlements and a release of tax reserves due to the expiration of the statute of limitations, partially offset with an increase to certain tax reserves related to certain tax filings.

U.S. GAAP operating income

Non-GAAP adjustments:

Amortization expense of acquired intangible assets ⁽¹⁾

Merger and strategic initiatives expense ⁽²⁾

Restructuring charges ⁽³⁾

Extinguishment of debt ⁽⁴⁾

Charitable donations ⁽⁴⁾

Other

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.

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 third party consulting costs and non-cash items such as 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 donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 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 expense ⁽²⁾

Restructuring charges ⁽³⁾

Extinguishment of debt ⁽⁴⁾

Charitable donations ⁽⁴⁾

Other

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.

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 third party consulting costs and non-cash items such as 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 donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 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 Nasdaq Baltic fixed income contracts

Commodities

Power contracts cleared (TWh) ⁽³⁾

Corporate Platforms

Initial public offerings

The Nasdaq Stock Market ⁽⁴⁾

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⁾

Investment Intelligence

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. As of March 31, 2021, of the 275 IPOs, 196 were SPACs. As of December 31, 2020, of the 142 IPOs, 77 were SPACs. As of March 31, 2020, of the 27 IPOs, 7 were SPACs.

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 410 ETPs as of March 31, 2021, 412 ETPs as of December 31, 2020, and 412 ETPs as of March 31, 2020.

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

Total contract value of orders signed during the period.

Annualized Recurring Revenue, or 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 recurring 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.