Nasdaq registers rise in net income in Q2 2020

Maria Nikolova

On a GAAP basis, net income in the second quarter of 2020 was $241 million, or diluted EPS of $1.45, compared to $174 million, or $1.04 per diluted share, in the second quarter of 2019.

Nasdaq Inc (NASDAQ:NDAQ) today posted its financial results for the second quarter of 2020, with revenues and income marking a rise from a year earlier.

On a GAAP basis, net income in the second quarter of 2020 was $241 million, or diluted EPS of $1.45, compared to $174 million, or $1.04 per diluted share, in the second quarter of 2019.

On a non-GAAP basis, net income in the second quarter of 2020 was $256 million, or $1.54 per diluted share, compared to $203 million, or $1.22 per diluted share, in the second quarter of 2019.

Second quarter 2020 net revenues amounted to $699 million, an increase of 12% over the second 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 22%, driven by record trading volumes in U.S. equities and options.

Across segments, Market Services generated net revenues of $276 million in the second quarter of 2020, an increase of $49 million, or 22%, when compared to the second quarter of 2019.

Equity Derivative Trading and Clearing registered net revenues of $83 million in the second quarter of 2020, up $11 million from the second quarter of 2019. The increase reflects higher U.S. industry trading volumes, partially offset by lower overall U.S. equity option market share and net capture rate.

Cash Equity Trading saw net revenues of $106 million in the second quarter of 2020, up $40 million from the second quarter of 2019. The increase primarily reflects higher U.S. and European industry trading volumes and a higher U.S. capture rate, partially offset by lower overall U.S. matched market share.

Fixed Income and Commodities Trading and Clearing marked net revenues of $14 million in the second quarter of 2020, down $2 million from the second quarter of 2019. The decrease was driven by lower U.S. fixed income volumes and the sale of the core assets of Nasdaq’s NFX business in 2019, partially offset by higher European products revenues.

Trade Management Services registered revenues of $73 million in the second quarter of 2020, unchanged from the second quarter of 2019.

Corporate Services registered revenues of $126 million in the second quarter of 2020, up $3 million, or 2%, compared to the second quarter of 2019.

Listing Services revenues were $74 million in the second quarter of 2020, unchanged from the second quarter of 2019. Higher U.S. Listing revenues were offset by lower event-related revenues at the Nasdaq MarketSite and lower Nasdaq Private Market program activity, both mainly due to the business impact of COVID-19.

Corporate Solutions reported revenues of $52 million in the second quarter of 2020, an increase of $3 million from the second quarter of 2019, due to increases in both IR intelligence revenues and governance solutions revenues.

Information Services registered revenues of $213 million in the second quarter of 2020, up $19 million, or 10%, from the second quarter of 2019.

Market Data revenues were $101 million in the second quarter of 2020, up $1 million from the second quarter of 2019, with organic growth in U.S. proprietary products from new sales, including continued expansion geographically, partially offset by lower shared tape plan revenue.

Index revenues were $68 million in the second quarter of 2020, up $13 million from the second quarter of 2019, primarily driven by higher licensing revenue from higher average assets under management (AUM) in exchange traded products (ETPs) linked to Nasdaq indexes, higher licensing revenue from futures trading linked to the Nasdaq 100 Index and higher index data revenues.

Investment Data & Analytics reported revenues of $44 million in the second quarter of 2020, up $5 million from the second quarter of 2019, primarily due to the acquisition of Solovis and growth in eVestment.

Market Technology reported revenues of $84 million in the second quarter of 2020, up $5 million, or 6%, from the second quarter of 2019. Nasdaq continued to see strong client traction in its Market Technology segment with five new SaaS marketplace clients and launches the Marketplace Services Platform. New order intake totaled $38 million during the second quarter of 2020, driven by strong new order intake in our market and trade surveillance business and the signing of five new SaaS marketplace customers, including surveillance deals with Tradeweb and the National Futures Association. Robinhood, the U.S. retail brokerage, has also selected Nasdaq for its Nasdaq Trade Surveillance technology to monitor their markets.

Nasdaq also announced the launch of the Marketplace Services Platform, a SaaS platform which provides next-generation capabilities spanning the transaction lifecycle to facilitate exchange of assets, services and information across various types of market ecosystems. LEX, a commercial real estate securities marketplace, announced they will collaborate with Nasdaq to use the Marketplace Services Platform as the underlying technology for LEX’s alternative trading system.

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