Nasdaq Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Net Revenue: $1.3 billion, up 11% year-over-year.

Solutions Revenue: Exceeded $1 billion for the first time, reflecting 10% growth.

Annualized Recurring Revenue (ARR): Grew 9% to $3 billion.

Operating Income: $732 million, up 16%.

Diluted EPS: $0.88, representing a 19% increase.

Operating Expenses: $583 million, up 5%.

Operating Margin: 56%, EBITDA margin at 58%, both up 2 percentage points from the prior year.

Free Cash Flow: $516 million for the quarter, totaling $2.1 billion over the last 12 months.

2Strategic Updates and Business Highlights

Capital Access Platforms: Revenue grew 8%, with notable IPO activity, including $6 billion raised in Q3. The IPO pipeline remains robust despite some delays due to government shutdowns.

Financial Technology: Revenue increased by 13%, driven by strong demand across subdivisions. Nasdaq Verafin signed Goldman Sachs as a new client, reflecting growth in Financial Crime Management Technology.

Market Services: Achieved 13% growth, driven by elevated trading volumes in U.S. options and equities.

AI Initiatives: Continued investment in AI solutions, with over 800 clients using AI-powered tools. New digital workers in compliance workflows are expected to enhance efficiency.

Tokenization Proposal: Filed with the SEC to allow trading of tokenized equities, aiming to provide investors with more choice while maintaining market integrity.

3Forward Guidance and Outlook

Nasdaq expects continued strong momentum into Q4 2025, with anticipated revenue growth in both Capital Access Platforms and Financial Technology.

The company aims to surpass $100 million in run-rate revenue from cross-sells by the end of 2027.

Operating expenses are projected to grow at a slower pace in Q4 compared to earlier quarters, reflecting ongoing investments in technology and personnel.

4Bad News, Challenges, or Points of Concern

Financial Crime Management Technology: This segment is expected to finish the year below prior growth expectations, with variability in ARR growth due to implementation timelines for new enterprise clients.

Regulatory Environment: The evolving regulatory landscape poses challenges, particularly in the context of the digital asset ecosystem and compliance requirements.

Market Competition: Competitive pressures in U.S. options and equities trading, with Nasdaq actively managing share in these markets.

5Notable Q&A Insights

Digital Assets: Nasdaq sees significant growth potential in digital assets, leveraging its fintech solutions and partnerships to support institutional adoption.

Tokenization: Discussions highlighted the potential for tokenized equities to enhance market efficiency, with a focus on maintaining the integrity of existing markets.

AI Integration: Nasdaq is focused on using AI to improve operational efficiency and enhance client offerings, with expectations that AI solutions will accelerate revenue synergy targets.

Partnerships: The BioCatch partnership is seen as a strategic move to enhance Verafin's capabilities, positioning it as a more integrated platform provider in the financial crime management space. Overall, Nasdaq's Q3 2025 results reflect strong financial performance and strategic initiatives aimed at leveraging technology and innovation to drive future growth, despite facing some challenges in specific segments and competitive pressures.