What To Watch For In NASDAQ’s Q2 Earnings

NASDAQ (NASDAQ:NDAQ) is scheduled to announce its second quarter earnings on Wednesday, July 26th. The previous year saw revenue growth of around 9%, primarily due to non-trading businesses. The revenues from non-trading segments grew at a rapid pace, aided by the acquisitions of Marketwired and Boardvantage in the previous year, as well as enhanced data and technology offerings. We forecast around 5% growth in NASDAQ’s non-trading revenues for the full year, and believe that the Q2 results will reflect similar growth.

Non-trading businesses – which include information, technology and listing services, and account for over 60% of the company’s overall revenue – are likely to drive growth, with increased demand for data and technology-related products and services. In-house products such as IR Insights and Influencer have attracted a lot of customers since launch in 2016, and we expect increased adoption in the near term as well.

The market services segment, which contributes around 37% of NASDAQ’s overall revenues, grew by about 8% in the previous quarter. The acquisition of ISE has secured NASDAQ the leading position in equity options trading. With around a 40% market share in the U.S., volumes have gone up by 75% year over year. However, declining market share in the cash equity and fixed income asset classes is likely to offset the growth in trading commissions.  This is due to tough competition from exchanges such as IEX, and the fact that  the company’s offerings remain limited to equity products.

Please refer to the full Trefis analysis for Nasdaq

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