Will NASDAQ’s Transaction-Based Revenues Recover In 2016?

June 29th, 2016 by Trefis Team
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NASDAQ’s transaction-based revenues include revenues from equity derivative trading and clearing, cash equity trading, fixed income, currency and commodities (FICC) trading and clearing, and the access and broker services businesses. The revenues – excluding transaction expenses – fell 7% in 2015 compared to 2014. The most significant declines were seen in equity derivative and FICC revenues. Equity derivative revenues were down almost 20% year-on-year (y-o-y), primarily due to a decrease in U.S. gross revenue capture and a decline in its overall market share, while FICC revenues dropped 25% due to the termination of an eSpeed (an acquisition made by NASDAQ in 2013) technology licensing customer contract.

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However, we expect NASDAQ’s transaction-based revenues to recover in 2016, making strides in equity derivatives and cash equity revenues. While the increase in equity derivatives revenues will largely be a result of its acquisition of ISE, we attribute the expected 6% y-o-y gain in cash equity revenues to a higher volume forecast of U.S. cash equities and the expansion of its equities footprint in North America through the acquisition of Chi-X Canada.

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See the links below for more information and analysis about NASDAQ:

Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for Nasdaq

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