Executive Summary / Key Takeaways

• Nasdaq, Inc. ($NDAQ) is transforming into a diversified technology powerhouse, leveraging its mission-critical solutions and AI-driven innovation to enhance its competitive position across global capital markets.
• The company delivered robust financial performance in Q3 2025, with net revenue up 15% and diluted EPS increasing by 38.4% year-over-year, driven by strong growth in its Capital Access Platforms and Financial Technology segments.
• Strategic initiatives, including the successful integration of Adenza and an expanded $140 million efficiency program, are yielding significant expense synergies and driving cross-sell opportunities, with 26 cross-sells since the Adenza acquisition.
• Nasdaq's commitment to technological differentiation, particularly in AI-powered surveillance and financial crime management, and its innovative approach to digital assets, are critical to its long-term growth and competitive moat.
• Despite macroeconomic and regulatory uncertainties, Nasdaq maintains a confident outlook for 2025, expecting full-year revenue growth within its medium-term ranges for its Solutions divisions, underpinned by U.S. economic resilience and an anticipated rebound in IPO activity.

A Foundation of Innovation: Powering Global Capital Markets

Nasdaq, Inc. is a global technology company that serves as a foundational pillar for corporate clients, investment managers, banks, brokers, and exchange operators worldwide. Its core mission is to deliver world-leading platforms that enhance the liquidity, transparency, and integrity of the global economy. This ambition is realized through a diversified offering of data, analytics, software, exchange capabilities, and client-centric services.

The company's journey began in 1971, evolving from the world's first electronic stock market into a comprehensive provider of trading, clearing, data, and listing services. A significant historical milestone was the launch of its switch program in February 2005, which has since attracted over 500 companies, cumulatively representing approximately $3 trillion in market value by Q3 2024. Nasdaq's strategic expansion included the acquisition of OMX AB in 2008, which brought the Helsinki Stock Exchange into its European footprint. A pivotal transformation occurred with the acquisition of AxiomSL and Calypso in 2023, substantially bolstering its Financial Technology segment. This move was followed by a restructuring program aimed at optimizing efficiencies and generating expense synergies, with over $150 million in net expense synergies actioned through September 30, 2025.

Nasdaq operates across three distinct business segments: Capital Access Platforms, Financial Technology, and Market Services. This diversified structure allows the company to capture growth through various market cycles, a testament to its resilience. The company's competitive positioning is robust, particularly in U.S. equity markets, where it maintains leadership in listings. While facing competition from global exchange operators like Intercontinental Exchange (ICE) and CME Group in derivatives and market data, and Cboe Global Markets (CBOE) in options, Nasdaq differentiates itself through its technology-first approach and specialized solutions. Its strong brand and network effects in U.S. capital markets provide enhanced customer loyalty and pricing power, particularly in its Market Technology segment.

Technological Edge: AI and Digital Assets as Growth Catalysts

Nasdaq's strategic focus on technological differentiation is a cornerstone of its investment thesis. The company is actively embedding advanced AI functionality across its platforms, aiming to deliver tangible benefits in efficiency, risk management, and compliance. A prime example is the enhancement of its market surveillance platform, which, following a successful pilot, now leverages AI to identify 80% of pump and dump schemes in historical data, a significant improvement over traditional methods. These new AI detection capabilities utilize extensive industry and internal data sets to provide comprehensive activity assessments and predictive analytics, leading to improved detection and a reduction in false positives.

Further demonstrating its commitment to AI, Nasdaq Verafin launched its Agentic AI workforce, a suite of digital workers designed to transform the efficiency of anti-money laundering programs. Early beta results from the Digital Sanctions Analyst and Digital Enhanced Due Diligence Analyst show the potential to reduce alert review workload by over 80%. This innovation is crucial for financial institutions grappling with increasingly sophisticated financial crime. In its Calypso platform, Nasdaq introduced a new methodology for investment portfolio risk calculations and predictive analytics using AI-based machine learning, enabling up to 100 times faster processing speeds for complex trading and regulatory risk calculations.

Beyond AI, Nasdaq is a key player in the evolving digital asset ecosystem. It is actively supporting institutional adoption through infrastructure that enhances market liquidity, transparency, and integrity. The company announced a proof of concept for on-chain collateral management with Nasdaq Calypso, aiming for a launch in early to mid-2026. This initiative seeks to integrate on-chain capabilities to enable financial institutions to manage collateral across asset classes and markets more dynamically and efficiently. Nasdaq is also active with listed crypto ETFs in its U.S. and European markets and sees potential growth in digital assets options products and proprietary index options benchmarked to cryptocurrency indexes. These technological advancements not only strengthen Nasdaq's competitive moat but also drive new revenue streams and enhance client retention by delivering superior value.

Financial Performance: Resilience and Strategic Growth

Nasdaq delivered a strong financial performance in the third quarter of 2025, underscoring the resilience of its diversified business model. Net revenue for Q3 2025 reached $1.3 billion, marking a 15% increase over Q3 2024, or an 11% organic growth. Solutions revenue, a key indicator of the company's strategic shift, surpassed $1 billion for the first time, growing 10% year-over-year. Diluted earnings per share (EPS) for Q3 2025 were $0.88, a 19% increase, surpassing market expectations. For the nine months ended September 30, 2025, net income attributable to Nasdaq surged by 66.6%, and diluted EPS also increased by 66.6% compared to the same period in 2024.

The Capital Access Platforms segment reported total revenues of $546 million in Q3 2025, up 9.1% year-over-year, and $1,588 million for the nine months, up 8.8%. This growth was primarily driven by new listings, increased data net sales and usage, and strategic pricing. The Index business, a standout performer, saw revenues increase due to higher average Assets Under Management (AUM) in Exchange Traded Products (ETPs) linked to Nasdaq indices. The Index segment's annualized recurring revenue (ARR) stood at $81 million as of September 30, 2025.

The Financial Technology segment demonstrated robust growth, with total revenues of $457 million in Q3 2025, a significant 23.3% increase from Q3 2024, and $1,352 million for the nine months, up 14.4%. Financial Crime Management Technology revenues grew due to higher subscription revenues from new sales and price increases. Regulatory Technology revenues benefited from increased subscription revenue and new clients for AxiomSL and Surveillance offerings. Capital Markets Technology revenues expanded due to growth in trade management services, higher subscription revenues, and new clients from Calypso. The segment's total ARR reached $1,662 million as of September 30, 2025, with SaaS revenue growth of 12% in Q2 2025.

Market Services, while experiencing a slight revenue decrease in Q3 2025 to $946 million (down 7.4%), saw its revenues less transaction-based expenses increase by 14.1% to $303 million. For the nine months, revenues less transaction-based expenses rose 18.3% to $890 million. This was driven by higher U.S. and European industry trading volumes, despite some shifts in market share. The segment's operating margin of 63% in Q2 2025 highlights its strong operating leverage.

Operating expenses increased by 4.4% for Q3 2025 and 0.7% for the nine months, reflecting strategic investments in technology and increased headcount (9,625 employees as of September 30, 2025, up from 9,120 a year prior) to support revenue growth and innovation. The Adenza restructuring program has been instrumental in managing costs, with over $150 million in net expense synergies actioned through September 30, 2025.

Strategic Initiatives and Capital Discipline

Nasdaq's "One Nasdaq" strategy is central to its growth, fostering cross-sell opportunities across its Financial Technology division. Since the Adenza acquisition, the company has secured 26 cross-sell wins, with these opportunities now representing over 15% of the Financial Technology sales pipeline. Nasdaq remains on track to surpass $100 million in run rate revenue from cross-sells by the end of 2027.

The company has also demonstrated strong capital discipline, significantly deleveraging its balance sheet. By the end of Q2 2025, Nasdaq achieved a gross leverage ratio of 3.2x, surpassing its 3.3x milestone 16 months ahead of schedule. This was supported by robust net cash provided by operating activities, which increased by $396 million for the nine months ended September 30, 2025. The company repaid $400 million of its 2025 Notes in Q2 2025 and opportunistically repurchased other debt. Nasdaq's commitment to shareholder returns is evident in its progressive dividend policy, with a quarterly cash dividend of $0.27 per share declared in October 2025.

Strategic partnerships, such as the expanded collaboration with AWS (AMZN) announced in Q1 2025, are crucial for modernizing global financial infrastructure. This partnership aims to leverage Nasdaq's cloud migration expertise to offer public and hybrid cloud infrastructure software and services to market operators, enhancing scalability, resiliency, and data management. Furthermore, the extension of the exclusive contract with CME Group (CME) through 2039 for Nasdaq 100 futures and options reinforces the value of its index franchise.

Outlook and Risk Assessment

Nasdaq's outlook for 2025 remains confident, grounded in its diversified business model and strategic execution. Management expects full-year 2025 revenue growth for its Capital Access Platforms to be within the 5% to 8% medium-term outlook range. The Index segment is projected to exceed its mid-to-high single-digit outlook, driven by strong Alpha generation. Data and Listings are expected to grow in the low-single digits, while Workflow and Insights is anticipated to be below its high-single to low-double-digit range due to continued beta headwinds in corporate solutions.

For the Financial Technology division, full-year 2025 revenue growth is expected to be within the 10% to 14% medium-term outlook. Financial Crime Management Technology and Capital Markets Technology are anticipated to be at the low end of their respective ranges, while Regulatory Technology is expected to be well within its range. Non-GAAP operating expenses for 2025 are guided to be between $2.295 billion and $2.335 billion, reflecting a 6% organic growth rate at the midpoint, inclusive of a 2 percentage point benefit from the expanded efficiency program. The non-GAAP tax rate is expected to be between 22.5% and 24.5%.

The macroeconomic environment, while still fluid, presents a constructive backdrop with anticipated U.S. economic resilience and a potential rebound in the global IPO environment starting in Q2 2025. However, risks persist, including global uncertainty from tariff policies, which have caused some delays in IPOs. Regulatory changes also pose challenges; for instance, the European Commission is investigating a potential competition law concern regarding Nordic financial derivatives, the outcome of which remains uncertain. Furthermore, Nasdaq has expressed concerns regarding the SEC's Tick Rule, specifically the reduction of access fees, which could disincentivize market makers from placing orders in lit markets, potentially widening spreads and negatively impacting investors. The 2025 Nasdaq Global Compliance Survey highlighted that 34% of compliance professionals cite understanding and implementing new technology as their greatest challenge, indicating a gap between innovation and execution that Nasdaq must address.

Conclusion

Nasdaq is solidifying its position as a technology powerhouse, adeptly transforming the financial ecosystem through strategic innovation and disciplined execution. The company's robust Q3 2025 financial performance, marked by double-digit revenue and EPS growth, underscores the strength of its diversified business model and the mission-critical nature of its solutions. With significant progress in integrating Adenza, achieving substantial expense synergies, and aggressively deleveraging its balance sheet, Nasdaq is building a resilient foundation for sustained growth.

The company's leadership in AI-driven surveillance, financial crime management, and digital asset innovation is not merely incremental; it represents a fundamental shift in how financial markets operate, offering quantifiable benefits in efficiency and risk management. While macroeconomic and regulatory uncertainties present ongoing challenges, Nasdaq's proactive engagement with these dynamics, coupled with its strong competitive positioning in listings, index services, and financial technology, positions it favorably. Investors should recognize Nasdaq's strategic evolution from a traditional exchange operator to a technology-first partner, poised to capitalize on the modernization of global capital markets and deliver long-term shareholder value through its blend of organic growth, technological leadership, and financial prudence.