Nasdaq Revenue Soars on Fintech Demand

Nasdaq reported stronger-than-expected revenue for the first quarter, primarily driven by a surge in demand for its financial technology products. Revenue from its financial technology unit soared 71% to $392 million, while revenue from its index business increased 53% to $168 million. The transatlantic exchange operator, which has expanded its focus beyond traditional trading and listing, has found success with products centred on anti-financial crime and compliance.

In the first quarter, Nasdaq’s net revenue rose by 22% to $1.12 billion, slightly exceeding analysts’ expectations of $1.11 billion, according to LSEG data. The company’s adjusted profit for the quarter stood at 63 cents per share, falling short of the expected 65 cents.

Nasdaq, like its peers, has strategically diversified its business to mitigate the impact of reduced trading activity in U.S. equities. The push toward products and solutions helped to balance a decline in trading activity. U.S. equity matched shares volumes dropped to 116.7 billion in the first quarter, down from 121.8 billion a year earlier. Similarly, U.S. equity options volumes decreased to 773 million contracts from 811 million contracts over the same period.

The acquisition spree that Nasdaq has embarked on in recent years has allowed it to offer a wider range of technology and intellectual property-based products. This trend emerged after regulations in 2005 opened the equities trading market to competition from brokers, encouraging Nasdaq to find new revenue streams.

While new listings on the Nasdaq Stock Market remained relatively stable, with 79 in the first quarter compared to 81 a year earlier, some notable companies joined the exchange, including AI-focused chip firm Astera Labs and biotech firm Kyverna Therapeutics.

Nasdaq’s share price has seen moderate growth, with an increase of about 6% so far this year, aligning with gains in the S&P 500 index. This growth reflects the company’s efforts to expand its revenue sources amid shifting market dynamics.