Nasdaq Reports Solid Revenues in Q2, Trading Revenues Slump

The fixed-income and commodities trading and clearing unit reported a $5 million YoY drop in revenues.

Nasdaq has published its financial results for its second quarter of 2019, revealing an uptick in net revenues which was primarily driven by growth from the New York-headquartered firm’s non-trading businesses.

During the second quarter, net revenues were $623 million. This is higher by $8 million or 1.3 percent from $615 million in the same quarter of 2018. However, it is lower than the $634 million net revenues reported in the first quarter of 2019.

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This figure was driven by a four percent impact from organic growth, as well as the inclusion of revenues for the acquisitions of Cinnober and QuandI.

However, net revenues were also partially offset by a $10 million unfavorable impact from changes in foreign exchange (forex) rates, and a $17 million negative impact from divestitures.

Taking a look at the GAAP (Generally Accepted Accounting Principles) figures, net income in the second quarter increased by 7.4 percent from $162 million in Q2 of 2018 to $174 million in the current period.

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Operating expenses for the quarter were $367 million. This represents an increase of 6.1 percent or $21 million from the $346 million in the second quarter of 2018. This was primarily driven by higher general and administrative expenses as well as higher merger and strategic initiatives expense.

Trading revenues fall for Nasdaq YoY in Q2

The trading sector of Nasdaq overall did not achieve a solid performance during the quarter. Market services, which contribute to 36 percent of total net revenues, fell by four percent or $10 million down to $227 million.

The fixed-income and commodities trading and clearing unit, also reported a $5 million or 45.5 percent drop in revenues, coming in at $16 million in Q2 of 2019. This decline was largely driven by a drop in revenues related to U.S. fixed income and in revenues in European commodities products.

Net equity derivative trading and clearing revenues were $72 million in the second quarter of this year. This figure is unchanged on a year-on-year comparison. Trade management services also remained unchanged on an annual review.

Adena Friedman, CEO of Nasdaq
Adena Friedman, the CEO of Nasdaq

Commenting on the results, Adena Friedman, President and CEO, Nasdaq said: “Our solid second quarter 2019 results serve as an encouraging data point as we execute against our strategy to maximize the ways we deliver to our customers both in our marketplace core, as well as through our expanding technology and analytics offering.”

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