Company Overview
Nasdaq, Inc. (NDAQ) is a global financial technology and services company best known for operating the Nasdaq Stock Market, the second-largest equities exchange by market capitalization globally. In addition to its core trading operations, Nasdaq provides technology solutions, market data, and analytics services to financial institutions, corporations, and governments. It has transformed significantly over the past decade from a primarily trading-focused business to a broader tech-centric financial platform. Nasdaq’s growth has been fueled by acquisitions and a pivot to high-margin recurring revenue streams. Headquartered in New York City, Nasdaq operates in over 50 countries.
Most Recent Earnings – Q2 2025
Nasdaq reported its Q2 2025 earnings on July 24, 2025. The company posted earnings per share (EPS) of $0.74, beating consensus estimates of $0.72. Revenue for the quarter was $1.01 billion, up 5% year-over-year, and slightly above analysts’ expectations of $995 million. The revenue increase was driven by its Anti-Financial Crime (AFC) and Index businesses. Nasdaq guided Q3 2025 revenue to a range of $1.01–$1.03 billion and reaffirmed its full-year 2025 revenue growth outlook in the mid-single digits.
Founding, Founders, Products, and Headquarters
Nasdaq was founded in 1971 by the National Association of Securities Dealers (NASD) as the world’s first electronic stock market. Though it began as a quotation system, it evolved into a full-fledged securities exchange and became independent from NASD in 2006. The company went public itself in 2002. Today, Nasdaq’s core business areas include Market Technology (trading systems and surveillance), Investment Intelligence (data and index solutions), Anti-Financial Crime technology, and Corporate Platforms (IR, ESG services). Major acquisitions include Adenza (pending), Verafin, eVestment, and Dorsey Wright. Nasdaq is headquartered in New York City, with a major tech presence in Stockholm, Sweden.
Business Model Evolution and Competitors
While historically defined by its equities exchange, Nasdaq has strategically pivoted to become a diversified fintech and data company. It now earns more than 70% of its revenues from recurring, subscription-based services including anti-financial crime software, index licensing, and analytics. This pivot positions it competitively against firms like Intercontinental Exchange (ICE), London Stock Exchange Group (LSEG), and MSCI. While ICE is strong in energy and fixed income markets, Nasdaq’s strength lies in technology, AI-driven compliance, and data solutions.
Market Landscape and Growth Outlook
Nasdaq operates within several key financial infrastructure markets: exchange operations, capital markets software, investment analytics, and anti-financial crime tech. According to industry forecasts, the global RegTech market alone is projected to grow from approximately $15 billion in 2023 to over $60 billion by 2030, at a CAGR of 22–25%. Similarly, the global market data and analytics industry, where Nasdaq competes with Bloomberg and FactSet, is expected to grow at a CAGR of around 10% through 2030. Nasdaq’s expansion into cloud-based SaaS compliance and data services aligns well with these secular growth trends.
Competitive Dynamics
Nasdaq competes on multiple fronts. In capital markets infrastructure, its main rival is Intercontinental Exchange (ICE), which owns the NYSE and has a stronghold in energy and fixed-income trading. For data and index services, it goes head-to-head with MSCI, S&P Global, and LSEG (which owns Refinitiv). In anti-financial crime software and surveillance, Verafin (owned by Nasdaq) competes with NICE Actimize and ComplyAdvantage. Nasdaq’s competitive edge stems from its integrated tech platforms and early investments in AI/ML-powered surveillance and AML systems.
Nasdaq’s Unique Differentiation
What makes Nasdaq stand out is its transformation into a diversified technology platform. Unlike rivals heavily dependent on trading revenue, Nasdaq’s recurring revenue model—now more than 70% of total revenue—offers stability and growth. Its ownership of iconic indexes like the Nasdaq-100 and robust Anti-Financial Crime platforms give it sticky relationships with banks, fintechs, and asset managers. The company also distinguishes itself with its high R&D spend, strong partnerships (like AWS), and technology that powers over 130 market operators globally.
Key Management
Adena Friedman, CEO since 2017, is a transformative leader who championed Nasdaq’s pivot from a trading venue to a fintech powerhouse. She joined Nasdaq in 1993, left for a stint at Carlyle Group, then returned in 2014 and became the first female CEO of a major U.S. exchange.
Ann Dennison, EVP and CFO, has overseen Nasdaq’s capital allocation strategy and M&A activity. She played a pivotal role in the Verafin acquisition and the pending Adenza deal.
Tal Cohen, President, has led Nasdaq’s Market Platforms segment, which includes equities, options, and crypto. He has deep experience in both U.S. and global markets, helping Nasdaq compete effectively across regions.
Financial Performance – Last 5 Years
Over the last five years, Nasdaq has steadily grown its top line from $4.3 billion in 2020 to over $5.9 billion in 2024, representing a revenue CAGR of ~8%. This growth has been driven largely by acquisitions and the expansion of its recurring revenue lines, especially in surveillance and data. Revenue composition has notably shifted, with non-trading revenue now comprising over 70% of total revenue, compared to under 50% five years ago.
Net income growth has also been strong, with 5-year EPS CAGR around 11%, aided by operating leverage, cost discipline, and tech-driven efficiencies. Nasdaq’s profitability has remained stable with operating margins in the 35–40% range. EPS grew from $4.45 in 2020 to $6.53 in 2024.
Nasdaq has maintained a strong balance sheet, with over $6 billion in total assets and moderate leverage post-Verafin acquisition. The pending $10.5 billion Adenza deal (expected to close late 2025) is structured with a mix of cash and stock, and management expects it to be accretive by 2026. Free cash flow remains robust, and the company has consistently returned capital via dividends and buybacks.
Bull Case for Nasdaq Stock
- Recurring Revenue Strength: Over 70% of revenue is recurring, supporting margin expansion and valuation rerating.
- Fintech Flywheel: Verafin + Adenza + IR tech create a platform that banks and public companies rely on.
- Index & Data Monetization: Ownership of Nasdaq-100 and thematic ETFs drives durable licensing income.
Bear Case for Nasdaq Stock
- Regulatory Risk: As a regulated exchange, changes in U.S. and global compliance laws could affect core operations.
- Integration Risk: Large acquisitions like Adenza carry execution and synergy risks.
- Valuation Stretch: Premium fintech valuation could compress if growth slows or macro headwinds increase.
Analyst Reactions to Q2 2025 Earnings
Analysts were generally positive but cautious following Q2 2025.
- JPMorgan reiterated “Overweight” but lowered the price target from $72 to $70 citing limited near-term upside until Adenza closes.
- Morgan Stanley maintained “Equal Weight” and said recurring revenue momentum is intact but margin pressures need watching.
- Barclays upgraded the stock to “Overweight” with a $75 target, citing the firm’s anti-financial crime tech as underappreciated.
Performance
The stock is in a stage 2 markup (bullish) on the monthly, weekly and daily charts. The strong Power Earnings Gap up shows a strong move higher to the $100+ range after a consolidation to the $90 range. We would be buyers.
