Second quarter 2023 net revenues¹ increased 4% compared to the second quarter of 2022. Solutions businesses² revenues increased 6% with organic growth³ also at 6%.

Annualized Recurring Revenue (ARR)⁴ increased 6% compared to the second quarter of 2022. Annualized SaaS revenues increased 11% and represented 36% of ARR.

Anti-Financial Crime revenue increased 19% compared to the second quarter of 2022. Large financial institutions are accelerating their adoption of Verafin’s fraud detection and anti-money laundering solutions, including the previously announced signing of two Tier 1 clients and two Tier 2 clients in the second quarter.

Second quarter 2023 GAAP diluted earnings per share decreased 13% compared to the second quarter of 2022. Second quarter 2023 non-GAAP³ diluted earnings per share increased 3% compared to the second quarter of 2022.

The company returned $109 million to shareholders in the second quarter of 2023 through dividends.

(US$ millions, except per share)

Solutions Businesses Revenues

Trading Services Net Revenues

Net Revenues*

ARR

GAAP Diluted EPS

Non-GAAP Diluted EPS

Net revenues include Other revenues of $1 million in the second quarter of 2023 and $4 million in the second quarter 2022.

Second quarter 2023 net revenues were $925 million, an increase of $32 million, or 4%, from $893 million in the prior year period. Net revenues reflected a $36 million, or 4%, positive impact from organic growth, including positive contributions from all segments, partially offset by a $2 million decrease from the impact of changes in FX rates and a $2 million decrease from the net impact of an acquisition and divestiture.

Solutions Businesses revenues were $674 million in the second quarter of 2023, an increase of $37 million, or 6% with organic growth also of 6%. ARR, which reflects the majority of the Solutions Businesses revenues and excludes the AUM and transaction licensing components of Index, increased 6% from the prior year period.

Trading Services net revenues were $250 million in the second quarter of 2023, a decrease of $2 million, or 1%. The decrease reflects flat organic growth and a $2 million negative impact from changes in FX rates.

Second quarter 2023 GAAP operating expenses increased $62 million, or 13%, versus the prior year period. The increase primarily reflects higher merger and strategic initiatives expense related to the Adenza acquisition, higher restructuring expenses associated with the launch of our divisional alignment program in the fourth quarter of 2022, and higher employee compensation costs, partially offset by lower general and administrative expense.

Second quarter 2023 non-GAAP operating expenses increased $28 million, or 7% versus the prior year period. The increase primarily reflects increased expenses associated with the continued investment in our people and our businesses to drive long term growth, partially offset by changes in FX rates.

The company did not repurchase any of its common stock during the second quarter of 2023. As of June 30, 2023, there was $491 million remaining under the board authorized share repurchase program.

The company is updating its 2023 non-GAAP operating expense guidance to a range of $1,785 million to $1,815 million. Nasdaq expects its 2023 non-GAAP tax rate to be in the range of 24% to 26%.

Nasdaq announced the acquisition of Adenza. In June, Nasdaq announced it entered into a definitive agreement to acquire Adenza for $10.5 billion in cash and stock. The transaction supercharges Nasdaq’s ability to become a leading provider of capital markets risk and regulatory technology. Adenza operates two leading software platforms: Calypso’s front-to-back suite of capital markets risk management, treasury, cash, collateral management, and post-trade solutions; and AxiomSL’s regulatory reporting, global shareholder disclosure, capital and liquidity management, transaction and ESG reporting solutions. Adenza expands Nasdaq’s serviceable addressable market by approximately 40% by adding a solidly expanding market opportunity with powerful secular growth drivers across regulatory and market reforms, digitization and modernization, and vendor simplification as financial institutions move from in-house to trusted-partner solutions.

Nasdaq secured approximately $5 billion in financing for the proposed acquisition of Adenza through an oversubscribed debt offering. Nasdaq secured financing through a successful bond issuance of $4.25 billion in US dollar denominated debt across 2, 5, 10, 30 and 40 year terms and a 750 million Euro denominated 8-year bond with an attractive weighted average interest rate of just under 5.5%.

In Marketplace Technology, two leading Latin American exchanges, DCV and B3, adopted Nasdaq’s post-trade technology. Chile’s central securities depository, Depósito Central de Valores (DCV), has launched Nasdaq Central Security Depository platform for issuing and settling digital securities. Separately, Nasdaq signed a 10-plus year partnership with Brazil’s largest stock exchange, Brasil, Bolsa, Balcão (B3), to build a next generation clearing solution under which B3 will migrate to Nasdaq’s real-time clearing platform and work as a product roadmap development partner.

Nasdaq announced its plan to sell its European energy trading and clearing business. As part of its focus on prioritizing high value opportunities, Nasdaq entered into an agreement to sell its European energy trading and clearing business, subject to regulatory approval, but remains committed to being a leading European market operator.

Verafin accelerated its large customer momentum signing four significant new bank clients in the second quarter. As we previously announced, Verafin signed two Tier 1 bank customers and signed two additional Tier 2 banks to its anti-fraud solutions. Verafin’s continuing growth with large financial institutions reflects the differentiated value of its SaaS enabled anti-money laundering and fraud prevention solutions data consortium.

Nasdaq executed second-highest ever one-day Closing Cross volume in June. During the annual Russell U.S. indexes reconstitution, which occurred in late June, Nasdaq successfully executed approximately 2.6 billion shares representing $62 billion dollars in market value in 0.86 seconds across Nasdaq-listed securities. This represented the second highest volume of shares crossed since implementing the Closing Cross in 2004, demonstrating Nasdaq’s robust and resilient market infrastructure.

Nasdaq maintained listings leadership in the U.S. The Nasdaq Stock Market led U.S. exchanges for operating company IPOs with a 77% total win rate during the first half of 2023. The Nasdaq Stock Market featured two of the three largest U.S. operating company IPOs by capital raised, with a strong pipeline of companies on file and committed to list with Nasdaq.

Represents revenues less transaction-based expenses.

Constitutes revenues from our Capital Access Platforms and Anti-Financial Crime segments and Marketplace Technology business within Market Platforms.

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

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.

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.

Revenues:

Market Platforms

Capital Access Platforms

Anti-Financial Crime

Other Revenues

Total revenues

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

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 (loss) income

Net (loss) income from unconsolidated investees

Income before income taxes

Income tax provision

Net income

Net loss attributable to noncontrolling interests

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 PLATFORMS

Trading Services revenues

Transaction-based expenses:

Transaction rebates

Brokerage, clearance and exchange fees

Trading Services revenues, net

Marketplace Technology revenues

Total Market Platforms revenues

CAPITAL ACCESS PLATFORMS

Data and Listing Services revenues

Index revenues

Workflow and Insights revenues

Total Capital Access Platforms revenues

ANTI-FINANCIAL CRIME

OTHER REVENUES

REVENUES LESS TRANSACTION-BASED EXPENSES

Assets

Current assets:

Cash and cash equivalents

Restricted cash and cash equivalents

Default funds and margin deposits

Financial investments

Receivables, net

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⁾

Lease asset impairments ⁽⁴⁾

Net loss (income) from unconsolidated investees ⁽⁵⁾

Extinguishment of debt ⁽⁶⁾

Other ⁽⁷⁾

Total non-GAAP adjustments

Non-GAAP adjustment to the income tax provision ⁽⁸⁾

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. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three and six months ended June 30, 2023, these costs primarily relate to our acquisition of Adenza.

In October 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period.

During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the three and six months ended June 30, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.

We exclude our share of the earnings and losses of our equity method investments, primarily our equity interest in the Options Clearing Corporation, or OCC and Nasdaq Private Market, LLC. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.

For the three and six months ended June 30, 2022, we recorded a loss on early extinguishment of debt. The charge for both periods is recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income.

We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. For the three and six months ended June 30, 2023 and June 30, 2022, these items primarily included investment gains and losses related to our corporate venture program. For the three and six months ended June 30, 2023, these charges also included an insurance recovery related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our 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⁾

Lease asset impairments ⁽⁴⁾

Extinguishment of debt ⁽⁵⁾

Other ⁽⁶⁾

Total non-GAAP adjustments

Non-GAAP operating income

Revenues less transaction-based expenses

U.S. GAAP operating margin ⁽⁷⁾

Non-GAAP operating margin ⁽⁸⁾

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. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three and six months ended June 30, 2023, these costs primarily relate to our acquisition of Adenza.

In October 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period.

During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the three and six months ended June 30, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.

For the three and six months ended June 30, 2022, we recorded a loss on early extinguishment of debt. The charge for both periods is recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income.

We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. For the three and six months ended June 30, 2023, these items primarily included insurance recovery related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our 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⁾

Lease asset impairments ⁽⁴⁾

Extinguishment of debt ⁽⁵⁾

Other ⁽⁶⁾

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. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three and six months ended June 30, 2023, these costs primarily relate to our acquisition of Adenza.

In October 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period.

During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the three and six months ended June 30, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.

For the three and six months ended June 30, 2022, we recorded a loss on early extinguishment of debt. The charge for both periods is recorded in general, administrative and other expense in our Condensed Consolidated Statements of Income.

We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. For the three and six months ended June 30, 2023, these items primarily included insurance recovery related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income.

Trading Services

Solutions Businesses ⁽²⁾

Other

Revenues less transaction-based expenses

Other impacts includes acquisition, divestiture and the impact of changes in FX rates.

Represents Capital Access Platforms and Anti-Financial Crime segments and the Marketplace Technology business within the Market Platforms segment.

Market Platforms

Annualized recurring revenues (in millions) ⁽¹⁾

Trading 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 of options and futures contracts ⁽²⁾

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 ⁽³⁾

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

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

Commodities

Power contracts cleared (TWh) ⁽⁴⁾

Marketplace Technology

Order intake (in millions) ⁽⁵⁾

Capital Access Platforms

Annualized recurring revenues (in millions) ⁽¹⁾

Initial public offerings

The Nasdaq Stock Market ⁽⁶⁾

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic

Total new listings

The Nasdaq Stock Market ⁽⁶⁾

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic ⁽⁷⁾

Number of listed companies

The Nasdaq Stock Market ⁽⁸⁾

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic ⁽⁹⁾

Index

Number of licensed exchange traded products (ETPs)

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

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

TTM ⁽¹⁰⁾ net inflows ETP AUM tracking Nasdaq indexes (in billions)

TTM ⁽¹⁰⁾ net (depreciation) appreciation ETP AUM tracking Nasdaq indexes (in billions)

Anti-Financial Crime

Annualized recurring revenues (in millions) ⁽¹⁾

Total signed ARR ⁽¹¹⁾

Annualized Recurring Revenue, or ARR, for a given period is the annualized revenue of support services 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.

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).

Represents the total contract value of orders signed in the period.

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, 2023 and 2022, IPOs included 5 and 16 SPACs, respectively. For the six months ended June 30, 2023 and 2022, IPOs included 15 and 59 SPACs, respectively.

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 for the six months ended June 30, 2023 and 2022 included 547 ETPs and 465 ETPs, respectively.

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 signed ARR includes ARR recognized as revenue in the current period as well as ARR for new contracts signed but not yet commenced.