Nasdaq Q3 Results: Net Revenues Down, Organic Growth Up

In the third quarter of this year, net revenues came in at $600 million.

Nasdaq, a stock exchange operator, has announced its third quarter results for its 2018 fiscal year. The firm, which is also a provider of financial technology, saw an annual decline in net revenues during the period.

In the third quarter of this year, net revenues were $600 million. This is down by $3 million from the same time period last year. However, despite the decline, the net revenues did include a positive $28 million in organic growth, which translates to five percent.

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In addition, the quarter also benefited from a $22 million impact from the inclusion of revenues received from the acquisition of eVestment. Unfortunately for the firm, these bonuses were offset by a loss of $46 million, which was the result of the divestiture of the Public Relations Solutions and Digital Media Services businesses. This is in addition to a $7 million unfavorable impact from changes in foreign exchange rates.

Adena Friedman, CEO of New-York based stock exchange operator, Nasdaq
Adena Friedman

Commenting on the revenue, Adena Friedman, President and CEO of Nasdaq, said: “Third quarter revenue exhibited solid organic revenue growth across our franchise, in-line with our longer-term outlook. The continued strong growth in market technology, index, and analytics, which are areas where we’ve shifted more of our resources, enhances our confidence in our new strategic direction.”

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“As we look forward, we remain focused in the near-term on the early implementation of our strategic re-alignment to maximize opportunities as a technology and analytics provider, while ensuring we continue to achieve the highest possible effectiveness in our foundational marketplace businesses.”

Nasdaq Revenues by Sector

Taking a more specific look, equity derivatives trading and clearing, which contributes to 11 percent of total net revenues for the exchange operator, was up by $6 million year-on-year in the third quarter of this year, reaching $68 million. According to the statement from the firm, the increase was largely due to higher US industry trading volumes and net capture rate. However, gains were slightly offset by lower US market share.

Cash Equity Trading, which also makes up 11 percent of net revenues, experienced net revenues of $63 million. In comparison to the prior year period, this is up by $1 million. Despite a lower net capture rate, this sector was bolstered by higher trading volumes in the US and higher market share in the country.

Contributing to three percent of total net revenues are fixed income and commodities trading and clearing. For this sector, net income was $19 million in the third quarter. Comparing this to the same time last year, this is down by $1 million. Nasdaq largely attributes this loss to a decline in revenues for US fixed income products. 

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