Nasdaq beats Wall Street profit estimates as market swings fuel trading surge

By Pritam Biswas and Prakhar Srivastava

April ‌23 (Reuters) - Exchange operator ​Nasdaq beat ​estimates for first-quarter profit on Thursday, benefiting from higher trading volumes as investors scrambled to rebalance their portfolios in an uncertain macroeconomic environment.

Artificial intelligence-linked stocks drew early ‌investor interest this year, but concerns about a potential bubble in the sector ⁠pulled markets in the opposite direction, leaving the tech-heavy exchange mixed and pushing up trading volumes.

Effects of escalations in the ‌Middle East also spilled into the ‌markets late in the quarter, as price swings forced investors to rejig their portfolios to hedge losses.

Market volatility benefits exchanges because it drives up trading volumes, which contributes directly to the ​companies' top lines.

The benchmark S&P 500 index lost 4.6% in the quarter.

Nasdaq's market services revenue ‍from trading grew 13% to $317 million in the reported quarter, helped by record U.S. cash equities and ⁠equity options volumes.

DIVERSIFICATION HELPS PROFIT

Nasdaq has widened its footprint into financial technology and software, building predictable, recurring revenue streams that are less ​exposed to the market's swings.

Revenue from the company's financial technology unit increased 20%, helped by a strong capital markets performance. Its index business jumped 14%.

Adjusted profit ​came in at 96 cents per share, beating estimates ‌of 93 cents, according to data compiled by LSEG.

Shares of the company were up 1.5% in early morning trading. They were down about 11% so far ⁠this year, underperforming most of the bigger exchanges in the country.

Derivatives exchange CME Group reported a rise in first-quarter profit on Wednesday, also helped by hedging demand that boosted average daily volumes across all its six asset ⁠classes.

New York Stock Exchange-parent Intercontinental Exchange is set to report its quarterly earnings next week.

LISTINGS ON TRACK

Nasdaq's total new ​listings ‍rose to 176 in the first quarter from 170 a year earlier, boosting the company's data and listing services revenue by 11.5%.

The market for initial public offerings remained uneven during the quarter, with several companies delaying listings ‌amid heightened volatility, disappointing expectations that 2026 would mark a broader IPO recovery.

CEO Adena Friedman, however, said issuer engagement remained strong and companies in Nasdaq's ‌pipeline were preparing for market entry.

"We are seeing an encouraging environment for improving IPO activity entering the second ⁠quarter," she said on the post-earnings call.

Nasdaq ‌has already secured the IPOs ​of Arxis and Kailera Therapeutics in the second quarter ending June, which raised $1.13 billion and $625 million, respectively.

(Reporting by Pritam Biswas and Prakhar Srivastava in Bengaluru; Editing by ‌Shinjini Ganguli)

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