Nasdaq Inc. on Wednesday reported third-quarter profits that topped Wall Street views, helped by strength in the transatlantic exchange operator’s indexing business and a surge in trading volumes.
Nasdaq reported an adjusted quarterly profit of US$1.53 a share, versus estimates of US$1.46 a share, according to IBES data from Refinitiv.
Net income rose to US$264-million, or US$1.58 a share, from US$150-million, or 90 US cents a share, a year earlier.
The profit beat came largely from growth in indexing, Daniel Fannon, an analyst at Jefferies, said in a note.
Strong demand for technology stocks during the pandemic has benefited the tech-heavy Nasdaq 100 Index, but the company has many other indexes and licensing deals. Revenue from information services, which includes indexing, rose 20 per cent to US$238-million. Net revenue rose 13 per cent to US$715-million, with market services net revenues up 15 per cent, as a result of elevated trading volumes.
Increased market volatility and a new cohort of retail investors led to the higher volumes, Nasdaq chief executive officer Adena Friedman said on a call with analysts.
“We are seeing a secular shift in getting more younger investors engaged in the market and I think that could create a more sustainably higher trading environment,” she said.
Ms. Friedman also said Nasdaq is in talks with the state legislature and the Governor of New Jersey, where the exchange processes trades, over a proposed state tax on financial transactions.
Nasdaq, along with other exchanges and large brokers, has threatened to leave the state over the proposed tax.
If the tax is imposed, “we have to do the responsible thing and find an environment that doesn’t introduce oppression,” she said.
Separately, Nasdaq said its chief financial officer, Michael Ptasznik, will retire Feb. 28, and senior vice-president Ann Dennison will replace him.
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