Second quarter 2021 net revenues¹ were $846 million, an increase of 21% over the second quarter of 2020. Compared to the prior year period, Solutions segments² revenues increased 26% while Market Services revenues increased 13%.

Annualized Recurring Revenue (ARR)³ was $1,808 million in the second quarter of 2021, an increase of 22% from the prior year period.

Second quarter 2021 GAAP diluted earnings per share of $2.05 increased 41% compared to $1.45 in the second quarter of 2020. Second quarter 2021 non-GAAP⁴ diluted earnings per share of $1.90 increased 23% from $1.54 in the second quarter of 2020.

During the first six months of 2021, the company returned $579 million of cash to investors, including $410 million in share repurchases and $169 million in dividends.

Market Services - Net revenues were $312 million in the second quarter of 2021, an increase of $36 million, or 13%.

Equity Derivative Trading and Clearing - Net revenues increased $20 million, or 24%, in the second quarter of 2021. The increase primarily reflects higher U.S. industry trading volumes.

Cash Equity Trading - Net revenues increased $4 million, or 4%, in the second quarter of 2021. The increase primarily reflects higher U.S. net capture rates, higher European value traded and the impact of changes in FX rates, partially offset by lower U.S. industry trading volumes and U.S. market share.

Fixed Income and Commodities Trading and Clearing - Net revenues increased $3 million, or 21%, in the second quarter of 2021, primarily due to the impact of changes in FX rates and higher European products revenues.

Trade Management Services - Revenues increased $9 million, or 12%, in the second quarter of 2021, primarily due to increased demand for connectivity services.

Corporate Platforms - Revenues were $154 million in the second quarter of 2021, up $28 million, or 22%.

Listing Services - Revenues increased $24 million, or 32%, in the second quarter of 2021. The increase was primarily driven by higher U.S. listing revenues due to an increase in the overall number of listed companies and higher Nasdaq Private Markets revenues.

IR & ESG Services - Revenues increased $4 million, or 8%, in the second quarter of 2021, primarily due to an increase in IR services revenue from strong sales and higher retention rates along with increases across all our ESG product lines.

Investment Intelligence - Revenues were $263 million in the second quarter of 2021, up $50 million, or 23%.

Market Data - Revenues increased $5 million, or 5%, in the second quarter of 2021. The increase reflects organic growth in proprietary data products from new sales, including continued expansion geographically.

Index - Revenues increased $39 million, or 57%, in the second quarter of 2021. The increase was primarily driven by higher assets under management in exchange traded products linked to Nasdaq indexes and increased futures trading linked to the Nasdaq-100 Index.

Analytics - Revenues increased $6 million, or 14%, in the second quarter of 2021, primarily due to growth in our eVestment platform driven by new sales, strong retention, and higher average revenue per client from expanded offerings.

Market Technology - Revenues were $117 million in the second quarter of 2021, up $33 million, or 39%, driven primarily by $27 million associated with the Verafin acquisition, $4 million in organic increase, and $2 million due to changes in FX rates.

Anti Financial Crime Technology - Revenues increased $29 million, or 88%, in the second quarter of 2021. The increase is due to the inclusion of revenues from our acquisition of Verafin and continued growth in surveillance solutions.

Marketplace Infrastructure Technology - Revenues increased $4 million, or 8%, in the second quarter of 2021, primarily due to growth in support licensing and SaaS revenues and the impact from changes in FX rates.

Index and Analytic revenues continue strong growth and launch several new products. During the second quarter of 2021, Nasdaq’s Investment Intelligence segment’s Index and Analytics revenues saw increases of 57% and 14%, respectively, versus the prior-year period. Index growth was driven by increased demand for both licensed ETPs and licensed index futures contracts. During the second quarter of 2021, 15 new licensed ETPs were introduced, including 12 ETPs launched outside the U.S., including the Hashdex Nasdaq Crypto ETF. Nasdaq’s analytics offerings through our eVestment platform saw continued strong new sales and user adoption across both asset owners and asset managers. The expanded suite of solutions are also resulting in higher ARR per client.

Nasdaq acquired a majority interest in Puro.earth and launched the ESG Data Hub to further expand Nasdaq’s growing suite of products supporting sustainable investment decisions. Nasdaq acquired a majority stake in Puro.earth, a leading marketplace for carbon removal and the world’s first marketplace to offer industrial carbon removal instruments that are verifiable and tradable through an open, online platform. Nasdaq also launched the ESG Data Hub that connects investors with expert-led ESG data sets from leading providers across a wide spectrum of areas, including gender diversity, carbon emissions and climate risk.

The Nasdaq Stock Market led U.S. exchanges for IPOs during the second quarter of 2021 with a 78% IPO win rate. In the second quarter of 2021, The Nasdaq Stock Market welcomed 135 IPOs representing $32 billion in capital raised, including 88 operating company⁶ IPOs such as AppLovin, Marqueta, The Honest Company, Confluent, monday.com and TuSimple as well as 47 special purpose acquisition companies. The Nasdaq Stock Market also welcomed Coinbase, the largest ever direct listing.

Nasdaq led all exchanges during the second quarter of 2021 in total options volume traded and set a record for number of shares traded during the 2021 Russell U.S. Indexes reconstitution. In the second quarter of 2021, Nasdaq’s U.S. options market traded 782 million multiply-listed equity option contracts, an increase of 28% year over year, and led all exchanges during the period in total volume traded for options inclusive of both multiply-listed equity options and index options products. The Nasdaq Closing Cross achieved a record day for rebalancing Nasdaq-listed securities in the family of Russell U.S. Indexes during their annual reconstitution with 2.37 billion shares representing $80.9 billion executed in 1.97 seconds.

Nasdaq completed the sale of its U.S. Fixed Income business, Nasdaq Fixed Income, 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, analytics and market infrastructure provider to the global capital markets. Nasdaq intends to use the proceeds from the sale of Nasdaq Fixed Income, available tax benefits and related working and clearing capital, as well as other sources of cash, to repurchase shares in order to offset longer-term dilution to non-GAAP earnings per share.

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 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.

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

Net gain on divestiture of business

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:

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

Anti Financial Crime Technology revenues

Marketplace Infrastructure 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 gain on divestiture of business ⁽⁴⁾

Net income from unconsolidated investee ⁽⁵⁾

Charitable donations ⁽⁶⁾

Other

Total non-GAAP adjustments

Non-GAAP adjustment to the income tax provision ⁽⁷⁾

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 represented a fundamental shift in our strategy and technology as well as executive re-alignment and were 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 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 as well as third party consulting costs.

In June 2021, we completed the sale of our U.S. Fixed Income business, which was part of our Fixed Income and Commodities Trading and Clearing business within our Market Services segment and recognized a pre-tax gain on the sale of $84 million, net of disposal costs. The pre-tax gain is included in net gain on divestiture of business in the Condensed Consolidated Statements of Income for the three months ended June 30, 2021.

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 provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.

For the three months ended June 30, 2020, charitable donations were made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities which are recorded in general, administrative and other expense in the Condensed Consolidated Statements of Income.

The non-GAAP adjustment to the income tax provision primarily includes the tax impact of each non-GAAP adjustment.

U.S. GAAP operating income

Non-GAAP adjustments:

Amortization expense of acquired intangible assets ⁽¹⁾

Merger and strategic initiatives expense ⁽²⁾

Restructuring charges ⁽³⁾

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.

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 represented a fundamental shift in our strategy and technology as well as executive re-alignment and were 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 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 as well as third party consulting costs.

For the three months ended June 30, 2020, charitable donations were made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities which are recorded in general, administrative and other expense in the Condensed Consolidated Statements of Income.

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⁾

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.

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 represented a fundamental shift in our strategy and technology as well as executive re-alignment and were 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 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 as well as third party consulting costs.

For the three months ended June 30, 2020, charitable donations were made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities which are recorded in general, administrative and other expense in the Condensed Consolidated Statements of Income.

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)

TTM ⁽⁸⁾ net inflows in ETP AUM tracking Nasdaq indexes (in billions)

Market Technology

Order intake (in millions) ⁽⁹⁾

Annualized recurring revenues (in millions) ⁽¹⁰⁾

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. For the three months ended June 30, 2021, of the 135 IPOs, 47 were SPACs. For the three months ended March 31, 2021, of the 275 IPOs,196 were SPACs. For the three months ended June 30, 2020, of the 42 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 419 ETPs as of June 30, 2021, 410 as of March 31, 2021, and 410 as of June 30, 2020.

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

Trailing 12-months.

Total contract value of orders signed during the period, excluding Verafin.

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 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 during the reporting period used in calculating ARR may or may not be extended or renewed by our customers.