Nasdaq (NDAQ) Q2 2024 earnings summary

Executive summary

• Net revenues for Q2 2024 reached $1.2 billion, up 25% year-over-year and 10% pro forma, driven by double-digit Solutions growth and strong performance across all divisions.

• Financial Technology revenues surged 78.7% to $420 million, with 16% pro forma growth, reflecting robust demand for risk and compliance solutions and Adenza's impact.

• Integration of Adenza is ahead of schedule, with over 70% of $80 million net expense synergies actioned and year-end 2024 synergy target achieved six months early.

• GAAP diluted EPS fell 30% year-over-year, while non-GAAP diluted EPS was $0.69, down 3% but up 7% organically; net income attributable to Nasdaq was $222 million (GAAP) and $397 million (non-GAAP).

• Returned $138 million to shareholders via dividends and $58 million through share repurchases in Q2 2024; repaid $174 million in commercial paper, advancing deleveraging goals.

Financial highlights

• Solutions revenues rose 34% year-over-year to $901 million, or 13% pro forma, led by Index and Financial Technology segments.

• Market Services net revenues increased 3% year-over-year to $250 million, driven by higher U.S. and European cash equities, partially offset by lower U.S. tape plan revenue.

• Free cash flow was $328 million, with a near 100% conversion ratio over the trailing 12 months.

• Dividend per share increased 9% to $0.24; $60 million in share repurchases were made.

• GAAP operating expenses rose 36% to $736 million, mainly due to the Adenza acquisition, increased amortization, and restructuring charges.

Outlook and guidance

• 2024 non-GAAP operating expense guidance set at $2.145–$2.185 billion; non-GAAP tax rate expected between 24.5%–26.5%.

• By 2025, expects $30 million in annual run-rate operating efficiencies and $80 million of net expense synergies from Adenza.

• Management expects durable organic growth, profitability, and continued progress on capital allocation priorities.

• Capital Access Platforms and Market Services projected for 5–8% annual growth; Solutions revenues expected to grow 10–14% annually.

• Continued focus on deleveraging and offsetting employee dilution.