Highlights From NASDAQ’s Q2 Earnings

by Trefis Team
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Nasdaq OMX Group
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After an impressive start to the year, NASDAQ (NASDAQ:NDAQ) continued its strong performance in the second quarter, with revenue of $602 million up 8% over the same period last year. The company’s focus on growing its non-trading lines of business has helped it perform strongly despite a somewhat less volatile period leading to low trading volume. The rise in non-trading business segments – including Corporate Solutions, Market Technology and Information Services – is attributable to both organic growth as well as acquisitions. The Market Services segment saw revenue growth solely due to acquisitions, and otherwise would have seen a decline driven by unfavorable trading conditions. The company’s operating margins improved by nearly 9 percentage points, primarily due non-trading business margin expansion, as well as restructuring expenses in the prior year period.

Non-Trading Businesses Continued Growth Due To Acquisitions, Proprietary Products
NASDAQ’s non-trading business lines generate around 63% of the company’s overall revenues. These businesses grew by around 4% in the second quarter. The growth in the Information Services segment was supported by increased adoption of its in-house products such as IR Insights and Influencer. The Corporate Services segment grew primarily due to the revenue addition from the acquisition of Marketwired and Boardvantage. The Market Technology segment grew organically due to increased uptake of software licensing and support, surveillance, and advisory. Increased demand for data and technology-related products and services is likely to sustain the growth momentum for these segments.

Market Services Has Grown Due To Acquisitions

The company generates about  37% of its revenue from Market Services, and the segment has grown by over 14% year on year. The growth due to acquisitions was partially offset by the decline in trading volumes resulting from unfavorable economic conditions and increased competition. The equity options volumes picked up pace following the acquisition of ISE, which gave NASDAQ a 42% market share in the U.S. equity options market.

Please refer to the full Trefis analysis for Nasdaq

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