NASDAQ (NDAQ) Tops Q3 EPS by 8c, Revenues Beat

NASDAQ (NASDAQ: NDAQ) reported Q3 EPS of $1.53, $0.08 better than the analyst estimate of $1.45. Revenue for the quarter came in at $715 million versus the consensus estimate of $688.02 million.

• Third quarter 2020 net revenues1 were $715 million, an increase of 13% over the third quarter of 2019. Compared to the prior year period, revenues in the non-trading segments2 increased 12% primarily due to organic growth while Market Services revenues increased 15%, due to elevated trading volumes in U.S. equities and options.
• The GAAP operating margin was 46% in the third quarter of 2020, up from 36% in the prior year period, while the non-GAAP3 operating margin of 52% increased from 50% in the prior year period.
• Third quarter 2020 GAAP diluted earnings per share, or EPS, was $1.58, up 76% from $0.90 in the third quarter of 2019. Third quarter 2020 non-GAAP diluted EPS was $1.53, up 20% from $1.27 in the third quarter of 2019.
• During the third quarter of 2020, the company returned $115 million to shareholders through share repurchases and dividends, and in the first nine months of 2020, returned $425 million through $239 million in dividends and $186 million in share repurchases.
• Nasdaq's senior management will hold an Investor Day on November 10, 2020 to discuss its operations and strategy, the first since detailing the "strategic pivot" and related performance objectives in early 2018.

"Our third quarter results highlight the strength of Nasdaq's diversified product offerings and business model, capitalizing on opportunities presented by 2020's capital markets backdrop, including elevated trading volumes, rising index valuations and robust IPO issuance, while also continuing to execute against the secular opportunities arising from our clients' evolving longer-term needs," said Adena Friedman, President and CEO, Nasdaq. "Nasdaq’s resilience and agility to adjust to the unique operating environment presented by COVID-19 is not only demonstrated in our current results, but also in the team’s continued focus on advancing Nasdaq as a technology and analytics provider, including our recently announced expansion of our Reg-Tech offerings into anti-money laundering."

"Nasdaq continues to be well positioned from an operational and capital perspective despite the uncertainties and challenges presented by COVID-19, as reflected by the resilient and strong performance of our businesses and the reduction of net leverage over the course of 2020," said Michael Ptasznik, Executive Vice President and Chief Financial Officer, Nasdaq. "In turn, we continue to execute on our capital plan, including investing in infrastructure, deploying capital in attractive long term opportunities as well as delivering on our dividend growth and share repurchase objectives through the return of $425 million to shareholders during the first nine months of 2020."

For earnings history and earnings-related data on NASDAQ (NDAQ) click here.

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