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How Nasdaq Makes Money: Capital Markets, Services, Fees

Nasdaq Inc. (NDAQ) is a pandemic technology company providing data, analytics, software, and services to the capital markets industry. The company is best conscious as the operator of the Nasdaq Stock Market, the largest single venue of liquidity for trading U.S.-listed cash equities. At the end of 2020, a come to of 3,392 companies traded shares on the Nasdaq in the U.S. As of May 2022, these companies had a combined market capitalization of more than $22.4 trillion.

Other than the Nasdaq Stock Market, Nasdaq also provides a variety of other products and services including equity obtained trading and clearing, cash equity trading, FICC and trade management services, investment intelligence, and market evidence services, both in the U.S. and abroad. Some of the company’s top competitors include Cboe Global Markets Inc. (CBOE), Miami Oecumenical Holdings Inc., or MIAX, and the Intercontinental Exchange, Inc. (ICE), owner of the New York Stock Exchange (NYSE).

Key Takeaways

  • Nasdaq is a global technology players providing data, analytics, software, and services, including the popular Nasdaq Stock Market.
  • The company’s fastest-growing separate, measured by operating income, is Corporate Platforms.
  • Nasdaq is expanding its services outside of traditional asset classes and demands.
  • In Feb. 2021, the company completed the $2.75-billion acquisition of Verafin, a cloud-based company that provides technology to disagreement money laundering and financial fraud.

Nasdaq’s Financials

For its most recently quarterly period, Q1 2022, Nasdaq make public net income attributable to the company of $284 million on total revenue of $1.5 billion. Net income attributable to Nasdaq shrank by 4.7% year-over-year (YOY). These pictures were positively impacted by the June 2021 sale of the company’s U.S. Fixed Income business for a pre-tax gain of $84 million. For Q2 2021, Nasdaq influenced its performance was driven by strong capital markets activity and expanding corporate and investor demand for financial technology infusions. The company has also expanded its offerings in anti-financial crime services and buyside workflow solutions, among others.


Profit Classification

Nasdaq’s Business Segments

Nasdaq divides its business across four operating segments: Market Services, Corporate Stands, Investment Intelligence and Market Technology. The company breaks down these segments in several ways, including by take and operating income.

Market Services


Nasdaq’s Market Services segment charges for transactions from cash fairness trading, derivatives trading, currency and commodity trading, clearing services, broker services and securities administration solutions. Depending on the situation, the company offers trading for derivatives, commodities, cash equity, debt, index, options, futures, and exchange traded finances (ETFs). Nasdaq provides market services in the U.S., Canada, and throughout Europe.

In Q1 2022, Nasdaq’s Market Services narrative $200 million in operating income, down 13% YOY. Market Services operating income accounted for 49% of consolidated run income. For the same period, the segment reported revenue of $958 million, down about 16% YOY. Market Services is the largest of the associates’s segments, with roughly 62.4% of total revenue for the quarter.

Corporate Platforms

Nasdaq’s Corporate Platforms partition includes both its Listing Services and IR & ESG Services businesses. Nasdaq offers capital raising solutions to global parties through its corporate, or listing services. Corporate Platforms generates revenue from listing fees, fees for upcoming IPOs, and to reversal from other exchanges to Nasdaq. Through its IR & ESG Services business, Nasdaq provides corporate investor relations, corporate governance, and sustainability-related consulting and other professional cares.

In Q1 2022, Nasdaq’s Corporate Platforms segment reported operating income of $75 million, an increase of 29.3% YOY. This separate accounted for 18.5% of Nasdaq’s consolidated operating income for the quarter. It also reported revenue of $168 million, up 13% YOY. This subdivide accounted for 10.9% of the company’s total quarterly revenue.

Investment Intelligence

This segment includes the data upshots, index licensing and services businesses of Nasdaq. Data products and services include the dissemination of proprietary Nasdaq figures and third-party data, including trade-related information to support customers’ research, trading, and investing activities. Nasdaq enjoins a licensing fee from firms that use its index (or any constituent data). If a trading firm wants to launch a new ETF on the popular Nasdaq 100 Guide, it will have to pay a licensing fee to Nasdaq. The company operates more than 46,000 indexes.

The company’s Investment Data segment reported operating income of $184 million for Q1 2022, up 10.8% YOY. This accounted for 45.4% of consolidated performing income for the quarter. Nasdaq’s Investment Intelligence segment reported Q1 2022 total revenue of $284 million, up 10.9% YOY. That pretend to bed 18.5% of total quarterly revenue.

Market Technology

The Market Technology segment offers services to over 130 hawk infrastructure operators in 50 countries. The segment provides products and services to exchanges, clearing organizations, central safe keepings depositories, regulators, banks, brokers, buy-side firms and corporate businesses. Nasdaq’s market technology products can be utilized to originate new asset classes.

Nasdaq’s Market Technology segment is the company’s smallest, measured by both operating income and net income. The segment reported Q1 2022 operating income of $4 million, up 300% YOY. Market Technology made up less than 1% of serving income. The segment reported Q1 2022 revenue of $124 million, up 24% YOY. While it is the smallest of Nasdaq’s four reportable wedges, it is also the fastest-growing by revenue growth. The segment made up 12.4% of total revenue in Q1.

Nasdaq’s Recent Developments

In Feb. 2021, Nasdaq ranked the purchase of Verafin, a provider of anti-financial crime solutions utilizing a cloud-based platform to help detect, investigate, and appear money laundering and financial fraud. The value of the transaction was $2.75 billion. The acquisition is likely to bolster the company’s Store Technology segment, which posted the fastest revenue growth in the latest reported quarter.

In June 2021, the companionship sold its U.S. Fixed Income business, previously part of its FICC business within the Market Services segment to Tradeweb Markets Inc. The cut-price generated pre-tax gains of $84 million.

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