Nasdaq registers drop in net income in Q1 2020

Maria Nikolova

Net income attributable to Nasdaq amounted to $203 million in the first quarter of 2020, down from $247 million in the year-ago quarter.

Nasdaq Inc (NASDAQ:NDAQ) today posted its financial report for the first three months of 2020, with net income down in annual terms.

On a GAAP basis, net income in the first quarter of 2020 was $203 million, or diluted earnings per share of $1.22, compared to $247 million, or $1.48 per diluted share, in the first quarter of 2019.

On a non-GAAP basis, net income in the first quarter of 2020 was $251 million, or $1.50 per diluted share, compared to $204 million, or $1.22 per diluted share, in the first quarter of 2019.

First quarter 2020 net revenues were $701 million, an increase of 11% over the first quarter of 2019. Compared to the prior year period, revenues in the non-trading segments increased 7%, primarily due to organic growth, while Market Services revenues rose 21%, due to historic trading volumes primarily in the second half of the first quarter.

The Equity Derivative Trading and Clearing saw revenues of $94 million in the first quarter of 2020, up $22 million from the first quarter of 2019. The increase primarily reflects higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq’s exchanges and a lower U.S. net capture rate.

Net cash equity trading revenues were $98 million in the first quarter of 2020, up $29 million from the first quarter of 2019, whereas net fixed income and commodities trading and clearing revenues were $17 million in the first quarter of 2020, down $2 million from the first quarter of 2019.

Trade management services revenues were $72 million in the first quarter of 2020, down $1 million compared to the first quarter of 2019, whereas the Corporate Services segment registered revenues of $128 million in the first quarter of 2020, up $7 million, or 6%, compared to the first quarter of 2019.

Listing services revenues were $75 million in the first quarter of 2020, up $4 million from the first quarter of 2019.

Market data revenues were $97 million in the first quarter of 2020, down $3 million from the first quarter of 2019, due to $5 million lower collections from under reported usage partially offset by organic growth in U.S. proprietary products.

Investment data & analytics revenues were $41 million in the first quarter of 2020, up $2 million from the first quarter of 2019, primarily due to growth in eVestment.

Market Technology revenues were $81 million in the first quarter of 2020, up $4 million, or 5%, from the first quarter of 2019. The increase is due to higher SaaS surveillance revenues and an increase in software delivery and support projects, partially offset by a decrease in change request revenues and an unfavorable impact from foreign exchange of $2 million.

The GAAP operating margin was 39% in the first quarter of 2020, down from 43% in the prior year period, due to bond refinancing costs, while the non-GAAP operating margin of 52% increased from 49% in the prior year.

During the first quarter of 2020, the company strengthened its balance sheet by increasing cash reserves to address any potential short-term funding risks due to the effects of COVID-19.

Additionally, Nasdaq refinanced all of its 3.875% senior notes due 2021, extending the nearest bond maturity to May 2023.

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