filings.toolsItem 7. Management’s Discussion and Analysis of
97K characters. Original on sec.gov · Markdown
Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis of the financial
condition and results of operations of Nasdaq refers to the
year over year comparison for the fiscal years ended
December 31, 2025 and 2024 and should be read in
conjunction with our consolidated financial statements and
related notes included in this Form 10-K, as well as the
discussion under “Part I, Item 1A. Risk Factors.” For further
discussion of our growth strategy, products and services, and
competitive strengths, see “Part I, Item 1. Business.” For a
similar discussion comparing the fiscal years ended
December 31, 2024 and 2023, refer to “Part II, Item 7.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations” of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2024,
which was previously filed with the SEC on February 21,
Certain percentages and per share amounts herein may not
sum or recalculate due to rounding.
EXECUTIVE OVERVIEW
Nasdaq is a leading technology platform that powers the
world’s economies. We architect the infrastructure of the
world’s most modern markets, power the innovation
economy, and build trust in the financial system. We
empower economic opportunity by designing and deploying
the technology, data, and advanced analytics that enable our
clients to capture opportunities, navigate risk, and strengthen
resilience.
We manage, operate and provide our products and services in
three business segments: Capital Access Platforms, Financial
Technology and Market Services.
2025 Highlights
- Nasdaq extended its listing leadership in 2025 and
achieved its seventh consecutive year as the top U.S.
exchange by proceeds raised.
- In 2025, U.S. operating company IPOs on Nasdaq raised
over $24 billion in proceeds. In 2025, Nasdaq set a record
for listing transfers, with $1.2 trillion in annual switches
for the first time including the largest exchange transfer on
record.
- Index achieved record net inflows of $99 billion in 2025,
and exited the year with ETP AUM of $882 billion, an all-
time high. Nasdaq launched 122 new Index products in
2025, with nearly half of the launches being international
products and 32 new products in the institutional insurance
annuity space.
- The Financial Technology segment delivered 14% growth
in ARR and revenue, reflecting an increase in new clients,
cross-sells and upsells.
- Market Services delivered record revenue, reflecting
strength across U.S. cash equities and U.S. equities options
volumes in 2025.
Macroeconomic environment
Our business performance can be positively or negatively
impacted by a number of factors, including general economic
conditions, the geopolitical environment, current or expected
inflation, interest rate fluctuations, the threat or imposition of
broad-based tariffs, market volatility, changes in investment
patterns and priorities, regulatory changes, pandemics and
other factors that are generally beyond our control. For
example, higher overall U.S. trading volumes in 2025 as
compared to 2024 led to an increase in our U.S. equities
options and U.S. cash equities revenues. Market factors also
contributed to higher valuations in Nasdaq Indices, higher
overall volumes in Index derivatives and an improving IPO
landscape. To the extent that global or national economic
conditions weaken and result in slower growth or recessions,
our business may be negatively impacted.
Nasdaq’s Operating Results
The following table summarizes our financial performance
for the year ended December 31, 2025 compared to the same
period in 2024 and for the year ended December 31, 2024
compared to the same period in 2023. The comparability of
our results of operations between reported periods is
primarily impacted by our acquisition of Adenza in
November 2023. See Note 4, “Acquisition and Divestitures,”
to the consolidated financial statements for further
discussion. For a detailed discussion of our results of
operations, see “Segment Operating Results” below.
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions, except per share amounts) | ||||||||
| Revenues less transaction- based expenses | $5,249 | $4,649 | $3,895 | 12.9% | 19.4% | |||
| Operating expenses | 2,918 | 2,851 | 2,317 | 2.3% | 23.0% | |||
| Operating income | $2,331 | $1,798 | $1,578 | 29.7% | 13.9% | |||
| Net income attributable to Nasdaq | $1,788 | $1,117 | $1,059 | 60.1% | 5.5% | |||
| Diluted earnings per share | $3.09 | $1.93 | $2.08 | 60.3% | (7.4)% | |||
| Cash dividends declared per common share | $1.05 | $0.94 | $0.86 | 11.7% | 9.3% |
In countries with currencies other than the U.S. dollar,
revenues and expenses are translated using monthly average
exchange rates. Impacts on our revenues less transaction-
based expenses and operating income associated with
fluctuations in foreign currency are discussed in more detail
under “Item 7A. Quantitative and Qualitative Disclosures
About Market Risk.”
As discussed above, in October 2025, we sold our Solovis
business, previously included in our Capital Access
Platforms segment. Revenues, ARR and quarterly annualized
SaaS revenues related to our Solovis business has been
reclassified to “Other” for all periods presented to facilitate
comparability.
The following chart summarizes our ARR (in millions):
- In the chart above, Other for 4Q23 and 4Q24 includes $25
million and $28 million, respectively.
ARR for a given period is the current annualized value
derived from subscription contracts with a defined contract
value. This excludes contracts that are not recurring, are one-
time in nature, or where the contract value fluctuates based
on defined metrics. ARR is currently one of our key
performance metrics to assess the health and trajectory of our
recurring business. ARR does not have any standardized
definition and is therefore unlikely to be comparable to
similarly titled measures presented by other companies. ARR
should be viewed independently of revenue and deferred
revenue and is not intended to be combined with or to replace
either of those items. For AxiomSL and Calypso recurring
revenue contracts, the amount included in ARR is consistent
with the amount that we invoice the customer during the
current period. Additionally, for AxiomSL and Calypso
recurring revenue contracts that include annual values that
increase over time, we include in ARR only the annualized
value of components of the contract that are considered
active as of the date of the ARR calculation. We do not
include the future committed increases in the contract value
as of the date of the ARR calculation. ARR is not a forecast
and the active contracts at the end of a reporting period used
in calculating ARR may or may not be extended or renewed
by our customers.
The ARR chart includes:
| ▪ | Capital Access Platforms | |
| ◦ | Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business | |
| ◦ | Index data subscriptions and guaranteed minimum on futures contracts within our Index business | |
| ◦ | Subscription contracts under our Workflow & Insights business | |
| ▪ | Financial Technology | |
| ◦ | Subscription contracts excluding non-recurring professional services. | |
| ▪ | Other includes ARR related to our Solovis business divested in October 2025. |
The following chart summarizes our quarterly annualized
SaaS revenues for December 31, 2025, 2024 and 2023 (in
millions):
- In the chart above, Other for 4Q23 and 4Q24 includes $25
million and $28 million, respectively.
SEGMENT OPERATING RESULTS
The following table presents our revenues by segment:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Capital Access Platforms | $2,137 | $1,945 | $1,744 | 9.9% | 11.5% | |||
| Financial Technology | 1,850 | 1,621 | 1,099 | 14.1% | 47.5% | |||
| Market Services | 4,214 | 3,771 | 3,156 | 11.7% | 20.9% | |||
| Other revenues | 61 | 63 | 65 | (4.1)% | (3.1)% | |||
| Total revenues | $8,262 | $7,400 | $6,064 | 11.6% | 22.0% | |||
| Transaction rebates | (2,572) | (2,026) | (1,838) | 26.9% | 10.2% | |||
| Brokerage, clearance and exchange fees | (441) | (725) | (331) | (39.1)% | 119.1% | |||
| Total revenues less transaction- based expenses | $5,249 | $4,649 | $3,895 | 12.9% | 19.4% |
The following charts present our Capital Access Platforms,
Financial Technology and Market Services segments as a
percentage of our total revenues, less transaction-based
expenses.
Capital Access Platforms
The following tables present revenues and ARR from our
Capital Access Platforms segment:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Data & Listing Services | $804 | $754 | $749 | 6.7% | 0.7% | |||
| Index | 827 | 706 | 528 | 17.1% | 33.7% | |||
| Workflow & Insights | 506 | 485 | 467 | 4.4% | 3.9% | |||
| Total Capital Access Platforms | $2,137 | $1,945 | $1,744 | 9.9% | 11.5% |
| As of December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| ARR (in millions) | $1,340 | $1,240 | $1,210 |
Data & Listing Services Revenues
The following tables present key drivers from our Data &
Listing Services business:
| Year Ended December 31, | |||||
| IPOs | 2025 | 2024 | 2023 | ||
| The Nasdaq Stock Market | 281 | 180 | 130 | ||
| Operating company | 155 | 130 | 103 | ||
| SPACs | 126 | 50 | 27 | ||
| Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 19 | 14 | 7 | ||
| Total new listings | |||||
| The Nasdaq Stock Market | 784 | 463 | 330 | ||
| Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 27 | 31 | 23 | ||
| As of December 31 | |||||
| Number of listed companies | 2025 | 2024 | 2023 | ||
| The Nasdaq Stock Market | 4,480 | 4,075 | 4,044 | ||
| Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic | 1,119 | 1,174 | 1,218 | ||
| ARR (in millions) | $764 | $691 | $682 |
In the tables above:
- The number of total listed companies on The Nasdaq Stock
Market for the years ended December 31, 2025, 2024 and
2023 included 1,112, 768 and 600 ETPs, respectively.
- IPOs, new listings (which includes IPOs) and total listed
companies for exchanges that comprise Nasdaq Nordic and
Nasdaq Baltic represent companies listed on the Nasdaq
Nordic and Nasdaq Baltic exchanges and companies listed
on the alternative markets of Nasdaq First North.
Data & Listing Services revenues increased for the year
ended December 31, 2025 compared with the same period in
2024 due to new data sales, usage and pricing, increased
annual listings revenues due to new listings and the favorable
impact from changes in foreign currency rates, partially
offset by delistings.
Index Revenues
The following table presents key drivers from our Index
business:
| As of or Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| Number of licensed ETPs | 451 | 401 | 364 | |||
| TTM change in period end ETP AUM tracking Nasdaq indices (in billions) | ||||||
| Beginning balance | $647 | $473 | $315 | |||
| Net appreciation | 136 | 110 | 128 | |||
| Net impact of ETP sponsor switches | — | (16) | (1) | |||
| Net inflows | 99 | 80 | 31 | |||
| Ending balance | $882 | $647 | $473 | |||
| Annual average ETP AUM tracking Nasdaq indices (in billions) | $740 | $558 | $396 | |||
| ARR (in millions) | $81 | $76 | $72 |
In the table above, TTM represents trailing twelve months.
Index revenues increased for the year ended December 31,
2025 compared with the same period in 2024 primarily due
to higher average AUM in exchange traded products linked
to Nasdaq indices and growth in trading volumes. The
increase in 2025 is partially offset by a $16 million one-time
item recognized in the first quarter of 2024 related to a legal
settlement to recoup revenue.
Workflow & Insights Revenues
The following table presents key drivers from our Workflow
& Insights business:
| As of or Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| (in millions) | |||||
| ARR | $495 | $473 | $456 | ||
| Quarterly annualized SaaS revenues | 425 | 403 | 386 |
Workflow & Insights revenues increased for the year ended
December 31, 2025 compared with the same period in 2024
primarily due to an increase in analytics revenues, largely
driven by eVestment and Nasdaq Data Link sales growth.
Financial Technology
The following table presents revenues from our Financial
Technology segment:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Financial Crime Management Technology | $331 | $273 | $223 | 21.5% | 22.2% | |||
| Regulatory Technology | 428 | 352 | 212 | 21.5% | 66.3% | |||
| Capital Markets Technology | 1,091 | 996 | 664 | 9.5% | 50.0% | |||
| Total Financial Technology | $1,850 | $1,621 | $1,099 | 14.1% | 47.5% |
Financial Crime Management Technology Revenues
The following table presents key drivers for our Financial
Crime Management Technology business:
| As of or Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| (in millions) | ||||||
| ARR and Quarterly annualized SaaS revenues | $329 | $278 | $226 |
Financial Crime Management Technology revenues
increased for the year ended December 31, 2025 compared
with the same period in 2024 primarily due to higher
subscription revenues from new and existing clients and
higher professional services fees.
Regulatory Technology Revenues
The following table presents key drivers for our Regulatory
Technology business:
| As of or Year Ended December 31, | ||||||
| 2025 | 2024 | 2023 | ||||
| (in millions) | ||||||
| ARR | $407 | $354 | $325 | |||
| Quarterly annualized SaaS revenues | 239 | 191 | 165 |
Regulatory Technology revenues increased for the year
ended December 31, 2025 compared with the same period in
2024 primarily due to increased subscription revenues from
our AxiomSL and Surveillance solutions driven by new sales
and price increases to existing clients and revenue from new
clients. The increase was also driven by a one-time revenue
reduction recognized in the third quarter of 2024 related to a
purchase accounting adjustment. See Note 3, “Revenue from
Contracts with Customers,” to the consolidated financial
statements for discussion on the measurement period
adjustment.
Capital Markets Technology Revenues
The following table presents key drivers for our Capital
Markets Technology business:
| As of or Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| (in millions) | |||||
| ARR | $975 | $868 | $799 | ||
| Quarterly annualized SaaS revenues | 156 | 134 | 108 |
Capital Markets Technology revenues increased for the year
ended December 31, 2025 compared with the same period in
- The increase was primarily due to higher revenues
related to data center growth and higher subscription
revenues from new sales and price increases to existing
clients.
Market Services
The following table presents revenues from our Market
Services segment:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Market Services | $4,214 | $3,771 | $3,156 | 11.7% | 20.9% | |||
| Transaction-based expenses: | ||||||||
| Transaction rebates | (2,572) | (2,026) | (1,838) | 26.9% | 10.2% | |||
| Brokerage, clearance and exchange fees | (441) | (725) | (331) | (39.1)% | 119.1% | |||
| Total Market Services, net | $1,201 | $1,020 | $987 | 17.7% | 3.4% |
The following table presents net revenues by product from
our Market Services segment:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| U.S. Equity Derivative Trading | $463 | $395 | $374 | 17.2% | 5.7% | |||
| Cash Equity Trading | 515 | 430 | 397 | 19.9% | 8.3% | |||
| U.S. Tape plans | 139 | 125 | 141 | 11.1% | (11.5)% | |||
| Other | 84 | 70 | 75 | 18.9% | (6.2)% | |||
| Total Market Services, net | $1,201 | $1,020 | $987 | 17.7% | 3.4% |
In the preceding tables, Other includes Nordic fixed income
trading & clearing, Nordic derivatives and Canadian cash
equities trading.
U.S. Equity Derivative Trading
The following tables present total revenues, transaction-based
expenses, and total revenues less transaction-based expenses
as well as key drivers from our U.S. Equity Derivative
Trading business:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| U.S. Equity Derivative Trading Revenues | $1,702 | $1,428 | $1,257 | 19.2% | 13.6% | |||
| Section 31 fees | 47 | 87 | 55 | (46.1)% | 56.9% | |||
| Transaction-based expenses: | ||||||||
| Transaction rebates | (1,236) | (1,030) | (879) | 20.0% | 17.1% | |||
| Section 31 fees | (47) | (87) | (55) | (46.1)% | 56.9% | |||
| Brokerage and clearance fees | (3) | (3) | (4) | (8.6)% | (16.5)% | |||
| U.S. Equity Derivative Trading Revenues, net | $463 | $395 | $374 | 17.2% | 5.7% |
Section 31 fees are recorded as U.S. equity derivative and
U.S. cash equity trading revenues with a corresponding
amount recorded in transaction-based expenses. We are
assessed these fees from the SEC and pass them through to
our customers in the form of incremental fees. Pass-through
fees can increase or decrease due to rate changes by the SEC,
our percentage of the overall industry volumes processed on
our systems, and differences in actual dollar value traded.
Section 31 fees decreased in 2025 compared with the same
period in 2024 primarily due to a decrease in the rate to zero
in the second quarter of 2025. Since the amount recorded in
revenues is equal to the amount recorded as Section 31 fees,
there is no impact on our net revenues.
| Year Ended December 31, | |||||
| U.S. equity options | 2025 | 2024 | 2023 | ||
| Total industry average daily volume (in millions) | 55.8 | 44.4 | 40.4 | ||
| Nasdaq PHLX matched market share | 10.3% | 10.0% | 11.3% | ||
| The Nasdaq Options Market matched market share | 3.5% | 5.5% | 6.1% | ||
| Nasdaq BX Options matched market share | 1.6% | 2.1% | 3.3% | ||
| Nasdaq ISE Options matched market share | 6.7% | 6.9% | 5.9% | ||
| Nasdaq GEMX Options matched market share | 3.6% | 2.6% | 2.4% | ||
| Nasdaq MRX Options matched market share | 3.4% | 2.7% | 2.0% | ||
| Total matched market share executed on Nasdaq’s exchanges | 29.1% | 29.8% | 31.0% |
U.S. equity derivative trading revenues and U.S. equity
derivative trading revenues, net increased for the year ended
December 31, 2025 compared with the same period in 2024
primarily due to higher industry trading volumes, partially
offset by lower capture and lower overall U.S. matched
market share executed on Nasdaq’s exchanges.
Transaction rebates, in which we credit a portion of the
execution charge to the market participant, increased for the
year ended December 31, 2025 compared with the same
period in 2024 primarily due to higher industry trading
volumes, partially offset by lower rebate capture rate and
lower overall U.S. matched market share executed on
Nasdaq’s exchanges.
Cash Equity Trading Revenues
The following tables present total revenues, transaction-based
expenses, and total revenues less transaction-based expenses
as well as key drivers and other metrics from our Cash Equity
Trading business:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Cash Equity Trading Revenues | $1,847 | $1,428 | $1,355 | 29.4% | 5.4% | |||
| Section 31 fees | 366 | 611 | 253 | (40.0%) | 141.7% | |||
| Transaction-based expenses: | ||||||||
| Transaction rebates | (1,307) | (974) | (939) | 34.1% | 3.8% | |||
| Section 31 fees | (366) | (611) | (253) | (40.0%) | 141.7% | |||
| Brokerage and clearance fees | (25) | (24) | (19) | 2.8% | 29.5% | |||
| Cash equity trading revenues, net | $515 | $430 | $397 | 19.9% | 8.3% |
See the discussion above for an explanation of Section 31
fees for the year ended December 31, 2025 as compared with
the same period in 2024.
| Year Ended December 31, | |||||
| Total U.S.-listed securities | 2025 | 2024 | 2023 | ||
| Total industry average daily share volume (in billions) | 17.6 | 12.2 | 11.0 | ||
| Matched share volume (in billions) | 625.7 | 479.4 | 455.6 | ||
| The Nasdaq Stock Market matched market share | 13.9% | 15.1% | 15.8% | ||
| Nasdaq BX matched market share | 0.2% | 0.3% | 0.4% | ||
| Nasdaq PSX matched market share | 0.1% | 0.2% | 0.3% | ||
| Total matched market share executed on Nasdaq’s exchanges | 14.2% | 15.6% | 16.5% | ||
| Market share reported to the FINRA/Nasdaq Trade Reporting Facility | 47.8% | 44.3% | 36.7% | ||
| Total market share | 62.0% | 59.9% | 53.2% | ||
| Nasdaq Nordic and Nasdaq Baltic securities | |||||
| Average daily number of equity trades executed on Nasdaq’s exchanges | 710,314 | 651,455 | 666,411 | ||
| Total average daily value of shares traded (in billions) | $5.1 | $4.5 | $4.5 | ||
| Total market share executed on Nasdaq’s exchanges | 72.2% | 72.6% | 71.0% |
Cash equity trading revenues and cash equity trading
revenues, net increased for the year ended December 31,
2025 compared with the same period in 2024 primarily due
to higher U.S. and European industry trading volumes,
partially offset by lower overall U.S. matched market share
executed on Nasdaq's exchanges. Cash equity trading
revenues, net was also partially offset by lower capture.
Transaction rebates increased for the year ended December
31, 2025 compared with the same period in 2024 primarily
due to higher U.S. industry volumes and higher capture,
partially offset by lower overall U.S. matched market share
executed on Nasdaq’s exchanges. For The Nasdaq Stock
Market and Nasdaq PSX, we credit a portion of the per share
execution charge to the market participant that provides the
liquidity, and for Nasdaq BX, we credit a portion of the per
share execution charge to the market participant that takes the
liquidity.
U.S. Tape Plans
The following table presents revenues from our U.S. Tape
plans business:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| U.S. Tape plans | $139 | $125 | $141 | 11.1% | (11.5)% |
U.S. Tape plans revenues increased for the year ended
December 31, 2025 compared with the same period in 2024
primarily due to higher market share, higher usage volume
and higher one-time industry-wide adjustments.
Other
Other includes Nordic fixed income trading and clearing,
Nordic derivatives and Canadian cash equities trading. The
following table presents revenues from our Other business:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Other | $84 | $70 | $75 | 18.9% | (6.2)% |
In the preceding tables, Other is presented net of Canadian
cash equity transaction rebates of $29 million, $22 million
and $20 million for the years ended December 31, 2025,
2024 and 2023, respectively.
Other revenues increased for the year ended December 31,
2025 compared with the same period in 2024 due to an
increase in Nordic equity derivatives revenues and Canadian
cash equity revenues.
Other Revenues
For the years ended December 31, 2025 and 2024, Other
revenues include revenues related to our Nordic power
futures business and our Solovis business. See Note 4,
“Acquisition and Divestitures,” to the consolidated financial
statements for further discussion.
EXPENSES
Operating Expenses
The following table presents our operating expenses:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Compensation and benefits | $1,392 | $1,324 | $1,082 | 5.1% | 22.4% | |||
| Professional and contract services | 160 | 152 | 128 | 5.2% | 18.4% | |||
| Technology and communication infrastructure | 316 | 281 | 233 | 12.3% | 20.9% | |||
| Occupancy | 124 | 112 | 129 | 9.6% | (12.9)% | |||
| General, administrative and other | 75 | 109 | 113 | (29.8)% | (3.6)% | |||
| Marketing and advertising | 65 | 54 | 47 | 20.2% | 16.4% | |||
| Depreciation and amortization | 632 | 613 | 323 | 3.1% | 89.3% | |||
| Regulatory | 52 | 55 | 34 | (6.2)% | 60.8% | |||
| Merger and strategic initiatives | 60 | 35 | 148 | 72.8% | (76.5)% | |||
| Restructuring charges | 42 | 116 | 80 | (63.5)% | 44.3% | |||
| Total operating expenses | $2,918 | $2,851 | $2,317 | 2.3% | 23.0% |
The increase in compensation and benefits expense for the
year ended December 31, 2025 compared with the same
period in 2024 was primarily driven by increased headcount
and higher incentive compensation and the unfavorable
impact from changes in foreign currency rates. The increase
in 2025 compared with the same period in 2024 was partially
offset by a pre-tax charge of $23 million in the first quarter of
2024 resulting from the finalization of the termination of our
pension plan.
Headcount, including employees of non-wholly owned
consolidated subsidiaries, increased to 9,525 employees as of
December 31, 2025 from 9,162 employees as of December
31, 2024, as we support revenue growth and innovation.
Professional and contract services expense increased for the
year ended December 31, 2025 compared with the same
period in 2024 primarily due to higher consulting fees,
partially offset by lower legal fee accruals.
Technology and communication infrastructure expense
increased for the year ended December 31, 2025 compared
with the same period in 2024 primarily due to increased
investment in technology, particularly our cloud initiatives
and software licensing.
Occupancy expense increased for the year ended December
31, 2025 compared with the same period in 2024 primarily
due to colocation data center growth.
General, administrative and other expense decreased for the
year ended December 31, 2025 compared with the same
period in 2024 primarily due to a gain on extinguishment of
debt recorded for the year ended December 31, 2025 as well
as the change in classification of costs related to the CAT
from general, administrative and other expense to regulatory
expense, beginning in the fourth quarter of 2024. See Note 9,
“Debt Obligations,” to the consolidated financial statements
for further discussion of the gain on extinguishment of debt.
Marketing and advertising expense increased for the year
ended December 31, 2025 compared with the same period in
2024 primarily due to higher marketing expense resulting
from higher IPO activity.
Depreciation and amortization expense increased for the year
ended December 31, 2025 compared with the same period in
2024 due to increased depreciation of capitalized software
projects.
Regulatory expense decreased for the year ended December
31, 2025 compared with the same period in 2024 primarily
due to the settlement of an SFSA fine in 2024, partially offset
by an increase relating to a change in classification of costs
related to the CAT described above.
We have pursued various strategic initiatives and completed
acquisitions and divestitures in recent years, which have
resulted in expenses which would not have otherwise been
incurred. These expenses generally include integration costs,
as well as legal, due diligence and other third-party
transaction costs and vary based on the size and frequency of
the activities described above. For the years ended December
31, 2025, and 2024, these costs included Adenza integration
costs and other strategic initiative costs. For the year ended
December 31, 2024, these costs were partially offset by
recognition of a termination fee due to Nasdaq in the second
quarter of 2024 related to the termination of the then
proposed divestiture of our Nordic power futures business.
For the year ended December 31, 2025, these costs included
a repayment of this fee due to the sale of the Nordic power
futures business to another buyer, as designated in the
settlement agreement.
Restructuring charges decreased for the year ended
December 31, 2025 compared with the same period in 2024
primarily due to the completion of our divisional realignment
program in September 2024.
We further expanded our Adenza restructuring program in
the fourth quarter of 2024 following the achievement of our
initial targets. In connection with this program, we expect to
incur approximately $140 million in pre-tax charges. We
have incurred costs principally related to employee-related
costs, contract terminations, asset impairments and other
related costs and expect to incur additional costs in these
areas in an effort to accelerate efficiencies through location
strategy and enhanced AI capabilities. Actions taken as part
of this program were completed as of December 31, 2025,
while certain costs may be recognized in the first half of
- We have achieved benefits primarily in the form of
expense synergies with over $160 million net expense
synergies actioned through December 31, 2025.
For further discussion related to both programs described
above, see Note 20, “Restructuring Charges,” to the
consolidated financial statements.
Non-Operating Income and Expenses
The following table presents our non-operating income and
expenses:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Interest income | $39 | $28 | $115 | 37.5% | (75.5)% | |||
| Interest expense | (367) | (414) | (284) | (11.4)% | 45.6% | |||
| Net interest expense | (328) | (386) | (169) | (15.0)% | 128.3% | |||
| Net gain on divestitures | 86 | — | — | 100.0% | —% | |||
| Other income (loss) | (27) | 21 | (1) | (224.3)% | (5,232.5)% | |||
| Net income (loss) from unconsolidated investees | 83 | 16 | (7) | 414.8% | (328.7)% | |||
| Total non- operating expense | $(186) | $(349) | $(177) | (46.5)% | 97.4% |
The following table presents our interest expense:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Interest expense on debt | $354 | $398 | $272 | (11.2)% | 46.3% | |||
| Accretion of debt issuance costs and debt discount | 10 | 13 | 9 | (17.9)% | 33.9% | |||
| Other fees | 3 | 3 | 3 | (16.1)% | 18.7% | |||
| Interest expense | $367 | $414 | $284 | (11.4)% | 45.6% |
Interest income increased for the year ended December 31,
2025 compared with the same period in 2024 primarily due
to a higher average cash balance.
Interest expense decreased for the year ended December 31,
2025 compared with the same period in 2024 primarily due
to lower outstanding debt following the repayment of our
2025 Notes and the partial repurchases of several series of
outstanding senior unsecured notes. See Note 9, “Debt
Obligations,” to the consolidated financial statements for
further discussion.
Net gains on divestitures for the year ended December 31,
2025 relates to the divestitures of our Solovis business, our
Nordic power futures business and our Nasdaq Risk
Modelling for Catastrophes business. See Note 4,
“Acquisition and Divestitures,” to the consolidated financial
statements for further discussion of these transactions.
Other income (loss) primarily represents realized and
unrealized gains and losses from strategic investments related
to our corporate venture program. See “Equity Securities,” of
Note 6, “Investments,” to the consolidated financial
statements for further discussion of these transactions.
Net income (loss) from unconsolidated investees increased
for the year ended December 31, 2025 compared with the
same period in 2024 due to higher income recognized from
our equity method investment in OCC driven by higher
industry volumes. See “Equity Method Investments,” of Note
6, “Investments,” to the consolidated financial statements for
further discussion.
Tax Matters
The following table presents our income tax provision and
effective tax rate:
| Year Ended December 31, | Percentage Change | |||||||
| 2025 | 2024 | 2023 | 2025 vs. 2024 | 2024 vs. 2023 | ||||
| (in millions) | ||||||||
| Income tax provision | $358 | $334 | $344 | 7.0% | (2.8)% | |||
| Effective tax rate | 16.7% | 23.1% | 24.6% |
For further discussion of our tax matters, see Note 17,
“Income Taxes,” to the consolidated financial statements.
NON-GAAP FINANCIAL MEASURES
In addition to disclosing results determined in accordance
with U.S. GAAP, we also provide non-GAAP net income
attributable to Nasdaq and non-GAAP diluted earnings per
share in this Annual Report on Form 10-K. Management uses
this non-GAAP information internally, along with U.S.
GAAP information, in evaluating our performance and in
making financial and operational decisions. We believe our
presentation of these measures provides investors with
greater transparency and supplemental data relating to our
financial condition and results of operations. In addition, we
believe the presentation of these measures is useful to
investors for period-to-period comparisons of our ongoing
operating performance.
These measures are not in accordance with, or an alternative
to, U.S. GAAP, and may be different from non-GAAP
measures used by other companies. In addition, other
companies, including companies in our industry, may
calculate such measures differently, which reduces their
usefulness as comparative measures. Investors should not
rely on any single financial measure when evaluating our
business. This non-GAAP information should be considered
as supplemental in nature and is not meant as a substitute for
our operating results in accordance with U.S. GAAP. We
recommend investors review the U.S. GAAP financial
measures included in this Annual Report on Form 10-K,
including our consolidated financial statements and the notes
thereto. When viewed in conjunction with our U.S. GAAP
results and the accompanying reconciliation, we believe these
non-GAAP measures provide greater transparency and a
more complete understanding of factors affecting our
business than U.S. GAAP measures alone.
We understand that analysts and investors regularly rely on
non-GAAP financial measures, such as non-GAAP net
income attributable to Nasdaq and non-GAAP diluted
earnings per share, to assess operating performance. We use
non-GAAP net income attributable to Nasdaq and non-
GAAP diluted earnings per share because they highlight
trends more clearly in our business that may not otherwise be
apparent when relying solely on U.S. GAAP financial
measures, since these measures eliminate from our results
specific financial items that have less bearing on our ongoing
operating performance.
The following table presents reconciliations between U.S.
GAAP net income attributable to Nasdaq and diluted
earnings per share and non-GAAP net income attributable to
Nasdaq and diluted earnings per share:
| Year Ended December 31, | |||||
| 2025 | 2024 | 2023 | |||
| (in millions, except per share amounts) | |||||
| U.S. GAAP net income attributable to Nasdaq | $1,788 | $1,117 | $1,059 | ||
| Non-GAAP adjustments: | |||||
| Adenza purchase accounting adjustment | — | 34 | — | ||
| Amortization expense of acquired intangible assets | 487 | 488 | 206 | ||
| Merger and strategic initiatives expense | 60 | 35 | 148 | ||
| Restructuring charges | 42 | 116 | 80 | ||
| Lease asset impairments | — | — | 25 | ||
| (Gain) loss on extinguishment of debt | (18) | 4 | — | ||
| Net gain on divestitures | (86) | — | — | ||
| Net (income) loss from unconsolidated investees | (83) | (16) | 7 | ||
| Legal and regulatory matters | 6 | 20 | 12 | ||
| Pension settlement charge | — | 23 | 9 | ||
| Other (gain) loss | 40 | (15) | 21 | ||
| Total non-GAAP adjustments | $448 | $689 | $508 | ||
| Total non-GAAP tax adjustments | (113) | (168) | (134) | ||
| Other tax adjustments | (109) | (7) | — | ||
| Total non-GAAP adjustments, net of tax | $226 | $514 | $374 | ||
| Non-GAAP net income attributable to Nasdaq | $2,014 | $1,631 | $1,433 | ||
| U.S. GAAP effective tax rate | 16.7% | 23.1% | 24.6% | ||
| Total adjustments from non- GAAP tax rate | 5.7% | 0.7% | 0.4% | ||
| Non-GAAP effective tax rate | 22.4% | 23.8% | 25.0% | ||
| Weighted-average common shares outstanding for diluted earnings per share | 578.6 | 579.2 | 508.4 | ||
| U.S. GAAP diluted earnings per share | $3.09 | $1.93 | $2.08 | ||
| Total adjustments from non- GAAP net income | 0.39 | 0.89 | 0.74 | ||
| Non-GAAP diluted earnings per share | $3.48 | $2.82 | $2.82 |
We believe that excluding the above items, described further
below, from the non-GAAP net income attributable to
Nasdaq provides a more meaningful analysis of Nasdaq’s
ongoing operating performance and comparisons in Nasdaq’s
performance between periods:
*•*Adenza purchase accounting adjustment: As discussed in
Note 3, “Revenue from Contracts with Customers,” to the
consolidated financial statements, during the third quarter
of 2024, as part of finalizing the purchase accounting of the
Adenza acquisition, a one-time net revenue reduction of
$32 million was recorded in our Financial Technology
segment, reflecting the net impact of the accounting change
on AxiomSL subscription revenue from the date of the
Adenza acquisition. For purposes of evaluating the
performance of our segments, we have excluded the
reduction of $34 million as this relates to the prior year
impact of this change. We have not excluded the offsetting
$2 million 2024 impact of this change.
*•*Amortization expense of acquired intangible assets: We
amortize intangible assets acquired in connection with
various acquisitions. Intangible asset amortization expense
can vary from period to period due to episodic acquisitions
completed, rather than from our ongoing business
operations. As such, if intangible asset amortization is
included in performance measures, it is more difficult to
assess the day-to-day operating performance of the
businesses and the relative operating performance of the
businesses between periods.
*•*Merger and strategic initiatives expense: We have pursued
various strategic initiatives and completed acquisitions and
divestitures in recent years that have resulted in expenses
which would not have otherwise been incurred. The
frequency and the amount of such expenses vary
significantly based on the size, timing and complexity of
the transactions. These expenses primarily include
integration costs, as well as legal, due diligence and other
third-party transaction costs.
◦For the years ended December 31, 2025, and December
31, 2024, these costs included Adenza integration costs
and other strategic initiative costs. For the year ended
December 31, 2024, these costs were partially offset by
the recognition of a termination fee received by Nasdaq
in 2024, related to the termination of the proposed
divestiture of our Nordic power futures business. For the
year ended December 31, 2025, these costs included a
repayment of this fee due to the sale of the Nordic power
futures business to another buyer, as designated in the
settlement agreement.
- Restructuring charges: In the fourth quarter of 2023,
following the closing of the Adenza acquisition, our
management approved, committed to and initiated a
restructuring program, to optimize our efficiencies as a
combined organization. We further expanded this program
in the fourth quarter of 2024 following the achievement of
our initial targets. Actions taken as part of this program
were completed as of December 31, 2025, while certain
costs may be recognized in the first half of 2026. In
addition, we completed our divisional realignment program
in September 2024. See Note 20, “Restructuring Charges,”
to the consolidated financial statements for further
discussion of these programs.
*•*Lease asset impairments: For the year ended December 31,
2023, this included impairment charges related to our
operating lease assets and leasehold improvements
associated with vacating certain leased office space, which
are recorded in occupancy and depreciation and
amortization expense in the Consolidated Statements of
Income.
*•*Gain/loss on extinguishment of debt: For the year ended
December 31, 2025 we recorded a gain on early
extinguishment of debt and for the year ended December
31, 2024 we recorded a loss on early extinguishment of
debt. These gains and losses were recorded under general,
administrative and other expense in the Consolidated
Statements of Income. See Note 9, “Debt Obligations,” to
the consolidated financial statements for further discussion.
*•*Net gain on divestitures: For the year ended December 31,
2025, this includes net gains on divestitures of our Solovis
business, Nordic power futures business and our Nasdaq
Risk Modelling for Catastrophes business. These gains are
net of costs to sell. See Note 4, “Acquisition and
Divestitures,” to the consolidated financial statements for
further discussion of these transactions.
*•*Net (income) loss from unconsolidated investees: We
exclude our share of the earnings and losses of our equity
method investments. This provides a more meaningful
analysis of Nasdaq’s ongoing operating performance or
comparisons in Nasdaq’s performance between periods.
See “Equity Method Investments,” of Note 6,
“Investments,” to the consolidated financial statements for
further discussion.
- Legal and regulatory matters: For the year ended
December 31, 2025, this includes accruals relating to
certain legal matters, which are recorded in professional
and contract services in the Consolidated Statements of
Income. For the year ended December 31, 2024, this
primarily related to the settlement of an SFSA fine, and
accruals related to certain legal matters, which are recorded
in regulatory expense and professional and contract
services in the Consolidated Statements of Income.
- Pension settlement charge: For the years ended December
31, 2024 and 2023, we recorded a pre-tax charge as a result
of settling our U.S. pension plan. The plan was terminated
and partially settled in 2023, with final settlement
occurring during the first quarter of 2024. The pre-tax
charge is recorded in compensation and benefits expense in
the Consolidated Statements of Income.
- Other (gain) loss: For the years ended December 31, 2025
and 2024, other items primarily include net gains and
losses from strategic investments entered into through our
corporate venture program, which are included in other
income (loss) in our Consolidated Statements of Income.
- Total non-GAAP tax adjustments*:* The non-GAAP
adjustment to the income tax provision for all periods
primarily includes the tax impact of each non-GAAP
adjustment.
- Other tax adjustments: For the years ended December 31,
2025 and 2024, other tax adjustments reflect a tax benefit
related to payments made to certain former Adenza
employees. For the year ended December 31, 2025, this
also reflects tax benefits from the revaluation of deferred
tax liabilities to a lower blended state and local tax rate,
revised state positions related to prior years, the release of
a prior year reserve following a favorable audit settlement
and a divestiture in 2025. For the year ended December 31,
2024, other tax adjustments reflect a one-time net tax
expense of $33 million related to the completion of an
intra-group transfer of certain IP assets to our U.S.
headquarters as well as a tax benefit related to return to
provision adjustments and release of tax reserves due to
lapse in statute of limitations.
LIQUIDITY AND CAPITAL RESOURCES
Historically, we have funded our operating activities and met
our commitments through cash generated by operations,
augmented by the periodic issuance of debt. Currently, our
cost and availability of funding remain healthy. We continue
to prudently assess our capital deployment strategy through
balancing internal investments, debt repayments, and
shareholder return activity, including dividends and share
repurchases, and potential acquisitions.
We expect that our current cash and cash equivalents
combined with cash flows provided by operating activities,
supplemented with our borrowing capacity and access to
additional financing, including our revolving credit facility
and our commercial paper program, provides us additional
flexibility to meet our ongoing obligations and the capital
deployment strategic actions described above, while allowing
us to invest in activities and product development that
support the long-term growth of our operations.
Principal factors that could affect the availability of our
internally-generated funds include:
- deterioration of our revenues in any of our business
segments;
- changes in regulatory and working capital requirements;
and
- an increase in our expenses.
Principal factors that could affect our ability to obtain cash
from external sources include:
- operating covenants contained in our credit facilities that
limit our total borrowing capacity;
- credit rating downgrades, which could limit our access to
additional debt;
- a significant decrease in the market price of our common
stock; and
- volatility or disruption in the public debt and equity
markets.
The following table summarizes selected measures of our
liquidity and capital resources:
| December 31, 2025 | December 31, 2024 | |||
| (in millions) | ||||
| Working capital | $42 | $(116) | ||
| Cash and cash equivalents | 604 | 592 | ||
| Financial investments | 28 | 184 |
Working Capital
The increase in working capital from December 31, 2024 to
December 31, 2025, excluding default funds and margin
deposits, which are both equal and offsetting, is primarily due
to a decrease in current liabilities and an increase in current
assets.
Decreased current liabilities were primarily due to:
- a decrease in Section 31 fees payable due to a decrease in
the fee rate, partially offset by
-
higher deferred revenue due to higher average billings,
-
an increase in other current liabilities,
-
an increase in accrued personnel costs, and
-
an increase in short-term debt due to the reclassification of
2026 Notes, partially offset by the repayment of the 2025
Notes.
Increased current assets were primarily due to:
- higher restricted cash primarily due to the movement of
regulatory capital to shorter term investments qualifying as
cash equivalents,
-
an increase in other current assets, and
-
an increase in cash and cash equivalents; partially offset by
-
lower financial investments at fair value offset in restricted
cash above, and
- decreased receivables, net due to timing of billings.
Cash and Cash Equivalents
Cash and cash equivalents includes all non-restricted cash in
banks and highly liquid investments with original maturities
of 90 days or less at the time of purchase. The balance
retained in cash and cash equivalents is a function of
anticipated or possible short-term cash needs, prevailing
interest rates, our investment policy, and alternative
investment choices. As of December 31, 2025, our cash and
cash equivalents of $604 million were primarily invested in
money market funds, European government debt securities,
bank deposits and state-owned enterprises notes.
Repatriation of Cash
Our cash and cash equivalents held outside of the U.S. in
various foreign subsidiaries totaled $280 million as of
December 31, 2025 and $181 million as of December 31,
- The remaining balance held in the U.S. totaled $324
million as of December 31, 2025 and $411 million as of
December 31, 2024.
Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents, which was $210 million
as of December 31, 2025 and $31 million as of December 31,
2024, is restricted from withdrawal due to a contractual or
regulatory requirement or not available for general use and as
such is classified as restricted in the Consolidated Balance
Sheets. The increase in this balance as of December 31, 2025
is primarily due to more regulatory capital being invested in
shorter term investments, which are classified as cash
equivalents, and are included in restricted cash and cash
equivalents in the Consolidated Balance Sheets as of
December 31, 2025. As of December 31, 2024, we had more
regulatory capital being invested in longer term investments,
which were classified as financial investments in the
Consolidated Balance Sheets.
Cash Flow Analysis
The following table summarizes the changes in cash flows:
| Year Ended December 31, | |||
| 2025 | 2024 | ||
| Net cash provided by (used in): | (in millions) | ||
| Operating activities | $2,255 | $1,939 | |
| Investing activities | (1,100) | (953) | |
| Financing activities | (2,953) | (2,561) |
Net Cash Provided by Operating Activities
Net cash provided by operating activities primarily consists
of net income adjusted for certain non-cash items, including,
but not limited to, depreciation and amortization expense,
expense associated with share-based compensation, net
income from unconsolidated investees, net gain on
divestitures and the effects of changes in working capital.
Refer to the above discussion regarding changes in working
capital.
Net cash provided by operating activities increased $316
million for the year ended December 31, 2025 compared with
the same period in 2024. The increase was primarily driven
by an increase in net income, partially offset by changes in
working capital, as discussed above, and a decrease in
adjustments to net income primarily driven by higher net
income from unconsolidated investees and net gain on
divestitures, partially offset by an increase in deferred income
tax expense.
Net Cash Used in Investing Activities
Net cash used in investing activities increased for the year
ended December 31, 2025 as compared to 2024 primarily
driven by increases in net purchases of investments related to
default funds and margin deposits of $373 million, purchases
of property and equipment of $59 million and other investing
activities of $46 million primarily related to our corporate
venture program, partially offset by proceeds from sales and
redemption of securities, net of $191 million, primarily due
to more regulatory capital being invested in shorter term
investments, which are classified as cash equivalents, and
proceeds from divestitures of $140 million. The movement in
our default funds and margin deposits has no impact on
Nasdaq's cash, cash equivalents, restricted cash or restricted
cash equivalents as it is held on behalf of our customers.
Net Cash Used in Financing Activities
Net cash used in financing activities increased for the year
ended December 31, 2025 as compared to 2024 primarily
driven by increases in repurchases of common stock of $471
million, an increase in dividends paid of $60 million and an
increase in the repayment of debt of $14 million, resulting
from our continued commitment toward deleveraging. These
increases were partially offset by a decrease in default funds
and margin deposits of $146 million which does not impact
Nasdaq's cash, cash equivalents, restricted cash or restricted
cash equivalents as it relates to customer funds.
See “Default Fund Contributions and Margin Deposits” of
Note 15, “Clearing Operations,” for further discussion of
these balances.
See Note 9, “Debt Obligations,” to the consolidated financial
statements for further discussion of our debt obligations.
See “Share Repurchase Program,” and “Cash Dividends on
Common Stock,” of Note 12, “Nasdaq Stockholders’
Equity,” to the consolidated financial statements for further
discussion of our share repurchase program and cash
dividends declared and paid on our common stock.
Financial Investments
Our financial investments totaled $28 million as of December
31, 2025 and $184 million as of December 31, 2024. Of these
securities, $18 million as of December 31, 2025 and $171
million as of December 31, 2024 are assets primarily utilized
to meet regulatory capital requirements, mainly for our
clearing operations at Nasdaq Clearing. See Restricted Cash
and Cash Equivalents above and Note 6, “Investments,” to
the consolidated financial statements for further discussion.
Regulatory Capital Requirements
Clearing Operations Regulatory Capital Requirements
We are required to maintain minimum levels of regulatory
capital for the clearing operations of Nasdaq Clearing. The
level of regulatory capital required to be maintained is
dependent upon many factors, including market conditions
and creditworthiness of the counterparty. As of December 31,
2025, our required regulatory capital of $158 million was
primarily comprised of cash and cash equivalents that are
included in restricted cash and cash equivalents in the
Consolidated Balance Sheets.
Broker-Dealer Net Capital Requirements
Our broker-dealer subsidiaries, Nasdaq Execution Services,
NFSTX, LLC, and Nasdaq Capital Markets Advisory, are
subject to regulatory requirements intended to ensure their
general financial soundness and liquidity. These requirements
obligate these subsidiaries to comply with minimum net
capital requirements. As of December 31, 2025, the
combined required minimum net capital totaled $1 million
and the combined excess capital totaled $25 million,
substantially all of which is held in cash and cash equivalents
in the Consolidated Balance Sheets. The required minimum
net capital is included in restricted cash and cash equivalents
in the Consolidated Balance Sheets.
Nordic and Baltic Exchange Regulatory Capital
Requirements
The entities that operate trading venues in the Nordic and
Baltic countries are each subject to local regulations and are
required to maintain regulatory capital intended to ensure
their general financial soundness and liquidity. As of
December 31, 2025, our required regulatory capital of $47
million was primarily invested in cash and cash equivalents,
which is included in restricted cash and cash equivalents in
the Consolidated Balance Sheets and European government
debt securities that are included in financial investments in
the Consolidated Balance Sheets.
Other Capital Requirements
We operate several other businesses which are subject to
local regulation and are required to maintain certain levels of
regulatory capital. As of December 31, 2025, other required
regulatory capital of $13 million, primarily related to Nasdaq
Central Securities Depository, was primarily invested in
European government debt securities that are included in
financial investments in the Consolidated Balance Sheets and
cash and cash equivalents, which is included in restricted
cash and cash equivalents in the Consolidated Balance
Sheets.
Equity and dividends
Share Repurchase Program
See “Share Repurchase Program,” of Note 12, “Nasdaq
Stockholders’ Equity,” to the consolidated financial
statements for further discussion of our share repurchase
program, including our ASR agreements.
Cash Dividends on Common Stock
The following table presents our quarterly cash dividends
paid per common share on our outstanding common stock:
| 2025 | 2024 | ||
| First quarter | $0.24 | $0.22 | |
| Second quarter | 0.27 | 0.24 | |
| Third quarter | 0.27 | 0.24 | |
| Fourth quarter | 0.27 | 0.24 | |
| Total | $1.05 | $0.94 |
See “Cash Dividends on Common Stock,” of Note 12,
“Nasdaq Stockholders’ Equity,” to the consolidated financial
statements for further discussion of the dividends.
Debt Obligations
Our outstanding debt obligations, by contractual maturity, at December 31, 2025 are as follows (in U.S. Dollar millions):
n U.S. Notes n Euro Notes
During 2025, we paid $426 million, excluding accrued
interest, to repurchase an aggregate book value of $444
million of our 2026 Notes, 2028 Notes, 2034 Notes and 2052
Notes. We also repaid in full, at maturity, the 2025 Notes for
an aggregate of $400 million.
As of December 31, 2025, the weighted average interest rate
on our debt obligations was approximately 3.7%, and for the
year ended December 31, 2025, the weighted average interest
rate on our debt obligations was approximately 3.81%. This
rate can fluctuate based on changes in foreign currency
exchange rates and changes in the amount and duration of
outstanding debt. See “foreign currency exchange rate risk”
below for further discussion on hedging associated with our
Euro Notes. In addition to the 2022 Revolving Credit
Facility, we also have other credit facilities primarily to
support our Nasdaq Clearing operations in Europe, as well as
to provide a cash pool credit line. These European credit
facilities, which are available in multiple currencies, totaled
$208 million as of December 31, 2025 and $174 million as of
December 31, 2024 in available liquidity, none of which was
utilized.
As of December 31, 2025, we were in compliance with the
covenants of all of our debt obligations.
See Note 9, “Debt Obligations,” to the consolidated financial
statements for further discussion of our debt obligations.
CONTRACTUAL OBLIGATIONS AND CONTINGENT
COMMITMENTS
Nasdaq has contractual obligations to make future payments
under debt obligations by contract maturity, operating lease
payments, and other obligations. The following table
summarizes material cash requirements for known
contractual and other obligations as of December 31, 2025,
and the estimated timing thereof.
| Payments Due by Period | |||||
| (in millions) | Total | <1 year | 1-3 years | 3-5 years | 5+ years |
| Debt obligation by contractual maturity | $14,240 | $760 | $1,415 | $1,952 | $10,113 |
| Operating lease obligations | 638 | 84 | 165 | 146 | 243 |
| Purchase obligations | 1,506 | 150 | 260 | 280 | 816 |
| Total | $16,384 | $994 | $1,840 | $2,378 | $11,172 |
In the table above:
- Debt obligations by contractual maturity include both
principal and interest obligations. For our Euro Notes,
interest is calculated on an actual basis while all other debt
obligations were primarily calculated on a 365-day basis at
the contractual fixed rate multiplied by the aggregate
principal amount as of December 31, 2025. See Note 9,
“Debt Obligations,” to the consolidated financial
statements for further discussion.
- Operating lease obligations represent our undiscounted
operating lease liabilities as of December 31, 2025, as well
as legally binding minimum lease payments for leases
signed but not yet commenced. See Note 16, “Leases,” to
the consolidated financial statements for further discussion
of our leases.
- Purchase obligations primarily represent minimum
outstanding obligations due under software license
agreements. The balance as of December 31, 2025 is
primarily comprised of our multi-year Amazon Web
Services partnership contract, which we expanded and
extended in the first quarter of 2025. This contract will
benefit both our Financial Technology and Market Services
segments, including their modernization. The expansion of
this contract is not expected to increase our cloud expense
compared to our expectation over the short term or the life
of the contract, and preserves flexibility beyond our
forecast.
OFF-BALANCE SHEET ARRANGEMENTS
For discussion of off-balance sheet arrangements see:
- Note 15, “Clearing Operations,” to the consolidated
financial statements for further discussion of our non-cash
default fund contributions and margin deposits received for
clearing operations; and
- Note 18, “Commitments, Contingencies and Guarantees,”
to the consolidated financial statements for further
discussion of:
◦Guarantees issued and credit facilities available;
◦Other guarantees; and
◦Routing brokerage activities.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a result of our operating, investing and financing
activities, we are exposed to market risks such as interest rate
risk and foreign currency exchange rate risk. We are also
exposed to credit risk as a result of our normal business
activities.
We have implemented policies and procedures to measure,
manage, monitor and report risk exposures, which are
reviewed regularly by management and the board of
directors. We identify risk exposures and monitor and
manage such risks on a daily basis.
We perform sensitivity analyses to determine the effects of
market risk exposures. We may use derivative instruments
solely to hedge financial risks related to our financial
positions or risks that are incurred during the normal course
of business. We do not use derivative instruments for
speculative purposes.
Interest Rate Risk
We are subject to the risk of fluctuating interest rates in the
normal course of business. Our exposure to market risk for
changes in interest rates relates primarily to our financial
investments and debt obligations, which are discussed below.
All of our outstanding debt obligations are fixed-rate
obligations. We may enter into transactions that expose us to
interest rate risk, for which we may utilize interest rate
derivatives agreements to manage that risk.
Financial Investments
As of December 31, 2025, our investment portfolio was
primarily comprised of highly rated European government
debt securities, which pay a fixed rate of interest. These
securities are subject to interest rate risk and the fair value of
these securities will decrease if market interest rates increase.
The impact of an immediate increase to market interest rates,
uniformly, by a hypothetical 100 basis points from levels as
of December 31, 2025, would not have a material impact on
our financial statements.
Debt Obligations
As of December 31, 2025, all of our outstanding debt
obligations are fixed-rate obligations. Interest rates on certain
tranches of notes are subject to adjustment to the extent our
debt rating is downgraded below investment grade, as further
discussed in Note 9, “Debt Obligations,” to the consolidated
financial statements. While changes in interest rates will have
no impact on the interest we pay on fixed-rate obligations, we
are exposed to changes in interest rates as a result of the
borrowings under our 2022 Revolving Credit Facility, as this
facility has a variable interest rate. We may also be exposed
to changes in interest rates if there are amounts outstanding
from the sale of commercial paper under our commercial
paper program, which have variable interest rates. As of
December 31, 2025, there were no outstanding borrowings
under our 2022 Revolving Credit Facility or commercial
paper program.
Foreign Currency Exchange Rate Risk
We are subject to foreign currency exchange rate risk. Our
primary transactional exposure to foreign currency
denominated revenues less transaction-based expenses and
operating income for the years ended December 31, 2025 and
2024 is presented in the following tables. The tables below
do not include the offsetting impact of our hedging programs.
| Euro | Swedish Krona | Canadian Dollar | Other Foreign Currencies | U.S. Dollar | |
| (in millions, except currency rate) | |||||
| Year Ended December 31, 2025 | |||||
| Average FX rate to the U.S. dollar | 1.128 | 0.102 | 0.716 | # | N/A |
| Percentage of revenues less transaction- based expenses | 7.7% | 3.3% | 0.6% | 3.5% | 84.9% |
| Percentage of operating income | 8.6% | (2.8)% | (6.4)% | (9.8)% | 110.4% |
| Impact of a 10% adverse currency fluctuation on revenues less transaction- based expenses | $(40) | $(17) | $(3) | $(18) | $— |
| Impact of a 10% adverse currency fluctuation on operating income | $(20) | $(7) | $(15) | $(23) | $— |
| Euro | Swedish Krona | Canadian Dollar | Other Foreign Currencies | U.S. Dollar | |
| (in millions, except currency rate) | |||||
| Year Ended December 31, 2024 | |||||
| Average FX rate to the U.S. dollar | 1.082 | 0.095 | 0.730 | # | N/A |
| Percentage of revenues less transaction- based expenses | 7.9% | 3.4% | 0.7% | 3.7% | 84.3% |
| Percentage of operating income | 11.8% | (5.9)% | (7.8)% | (10.5)% | 112.4% |
| Impact of a 10% adverse currency fluctuation on revenues less transaction- based expenses | $(37) | $(16) | $(3) | $(17) | $— |
| Impact of a 10% adverse currency fluctuation on operating income | $(21) | $(11) | $(14) | $(19) | $— |
__________
#Represents multiple foreign currency rates.
N/ANot applicable.
The adverse impacts shown in the preceding tables should be
viewed individually by currency and not in aggregate, due to
the correlation between changes in exchange rates for certain
currencies.
We may use foreign exchange contracts to hedge a portion of
our forecasted foreign currency denominated revenues and
expenses in the normal course of business. We hedge these
cash flow exposures to reduce the risk that our earnings and
cash flows will be adversely affected by changes in exchange
rates. These foreign exchange contracts are carried at fair
value, with maturities that can range up to 18 months. We
record changes in fair value of these cash flow hedges of
foreign currency denominated revenue and expenses in
accumulated other comprehensive loss in the Consolidated
Balance Sheets, until the forecasted transaction occurs. When
the forecasted transaction affects earnings, or in the event the
underlying forecasted transaction does not occur, or it
becomes probable that it will not occur, we reclassify the
related gain or loss on the cash flow hedge to revenue or
operating expenses, as applicable. As of December 31, 2025,
the fair value of our derivatives designated as cash flow
hedging instruments are not material.
Our investments in foreign subsidiaries are exposed to
volatility in currency exchange rates through translation of
the foreign subsidiaries’ net assets or equity to U.S. dollars.
Substantially all of our foreign subsidiaries operate in
functional currencies other than the U.S. dollar. The financial
statements of these subsidiaries are translated into U.S.
dollars for consolidated reporting using a current rate of
exchange, with net gains or losses recorded in accumulated
other comprehensive loss in the Consolidated Balance Sheets.
Our primary exposure to net assets in foreign currencies as of
December 31, 2025 is presented in the following table:
| Net Assets | Impact of a 10% Adverse Currency Fluctuation | |||
| (in millions) | ||||
| Swedish Krona | $3,340 | $(334) | ||
| Norwegian Krone | 141 | (14) | ||
| Canadian Dollar | 137 | (14) | ||
| Australian Dollar | 84 | (8) | ||
| British Pound | 78 | (8) |
In the table above, Swedish Krona includes goodwill of
$2,488 million and intangible assets, net of $511 million.
Our Euro Notes have been designated as a hedge of our net
investment in certain foreign subsidiaries to mitigate the
foreign exchange risk associated with certain investments in
these subsidiaries. Accordingly, the remeasurement of these
notes is recorded in accumulated other comprehensive loss in
the Consolidated Balance Sheets. See Note 9, “Debt
Obligations,” to the consolidated financial statements. We
enter into foreign exchange contracts to hedge a portion of
our net investment in certain foreign subsidiaries. These
foreign exchange contracts are carried at fair value, with
maturities ranging up to eight years, and reported as either an
asset or liability depending on their position as of the balance
sheet date, and accumulated other comprehensive loss in the
Consolidated Balance Sheets. The accumulated gains and
losses associated with these instruments will remain in
accumulated other comprehensive loss until the foreign
subsidiaries are sold or substantially liquidated, at which
point they will be reclassified into earnings.
Credit Risk
Credit risk is the potential loss due to the default or
deterioration in credit quality of customers or counterparties.
We are exposed to credit risk from third parties, including
customers, counterparties and clearing agents. These parties
may default on their obligations to us due to bankruptcy, lack
of liquidity, operational failure or other reasons. We limit our
exposure to credit risk by evaluating the counterparties with
which we make investments and execute agreements. For our
investment portfolio, our objective is to invest in securities to
preserve principal while maximizing yields, without
significantly increasing risk. Credit risk associated with
investments is minimized substantially by ensuring that these
financial assets are placed with governments which have
investment grade ratings, well-capitalized financial
institutions and other creditworthy counterparties.
Our subsidiary, Nasdaq Execution Services, may be exposed
to credit risk due to the default of trading counterparties in
connection with the routing services it provides for our
trading customers. System trades in cash equities routed to
other market centers for members of our cash equity
exchanges are routed by Nasdaq Execution Services for
clearing to the NSCC. In this function, Nasdaq Execution
Services is to be neutral by the end of the trading day, but
may be exposed to intraday risk if a trade extends beyond the
trading day and into the next day, thereby leaving Nasdaq
Execution Services susceptible to counterparty risk in the
period between accepting the trade and routing it to the
clearinghouse. In this interim period, Nasdaq Execution
Services is not novating like a clearing broker but instead is
subject to the short-term risk of counterparty failure before
the clearinghouse enters the transaction. Once the
clearinghouse officially accepts the trade for novation,
Nasdaq Execution Services is legally removed from trade
execution risk. However, Nasdaq has membership
obligations to NSCC independent of Nasdaq Execution
Services’ arrangements.
Pursuant to the rules of the NSCC and Nasdaq Execution
Services’ clearing agreement, Nasdaq Execution Services is
liable for any losses incurred due to a counterparty or a
clearing agent’s failure to satisfy its contractual obligations,
either by making payment or delivering securities. Adverse
movements in the prices of securities that are subject to these
transactions can increase our credit risk. However, we believe
that the risk of material loss is limited, as Nasdaq Execution
Services’ customers are not permitted to trade on margin and
NSCC rules limit counterparty risk on self-cleared
transactions by establishing credit limits and capital deposit
requirements for all brokers that clear with NSCC.
Historically, Nasdaq Execution Services has never incurred a
liability due to a customer’s failure to satisfy its contractual
obligations as counterparty to a system trade. Credit
difficulties or insolvency, or the perceived possibility of
credit difficulties or insolvency, of one or more larger or
visible market participants could also result in market-wide
credit difficulties or other market disruptions.
We have credit risk related to transaction and subscription-
based revenues that are billed to customers on a monthly or
quarterly basis, in arrears. Our potential exposure to credit
losses on these transactions is represented by the receivable
balances in the Consolidated Balance Sheets. We review and
evaluate changes in the status of our counterparties’
creditworthiness. Credit losses such as those described above
could adversely affect our consolidated financial position and
results of operations.
We also are exposed to credit risk through our clearing
operations with Nasdaq Clearing. See Note 15, “Clearing
Operations,” to the consolidated financial statements for
further discussion. Our clearinghouse holds material amounts
of clearing member cash deposits, which are held or invested
primarily to provide security of capital while minimizing
credit, market and liquidity risks. While we seek to achieve a
reasonable rate of return, we are primarily concerned with
preservation of capital and managing the risks associated
with these deposits. As the clearinghouse may remit to the
members interest earned at prevailing market rates, less a
spread, this could include negative or reduced yield due to
market conditions. The following is a summary of the risks
associated with these deposits and how these risks are
mitigated.
*•*Credit Risk: When the clearinghouse has the ability to hold
cash collateral at a central bank, the clearinghouse utilizes
its access to the central bank system to minimize credit risk
exposures. When funds are not held at a central bank, we
seek to substantially mitigate credit risk by ensuring that
investments are primarily placed in large, highly rated
financial institutions, highly rated government debt
instruments and other creditworthy counterparties.
*•*Liquidity Risk: Liquidity risk is the risk a clearinghouse
may not be able to meet its payment obligations in the right
currency, in the right place and the right time. To mitigate
this risk, the clearinghouse monitors liquidity requirements
closely and maintains funds and assets in a manner which
minimizes the risk of loss or delay in the access by the
clearinghouse to such funds and assets. For example,
holding funds with a central bank where possible or
investing in highly liquid government debt instruments
serves to reduce liquidity risks.
*•*Interest Rate Risk: Interest rate risk is the risk that interest
rates rise causing the value of purchased securities to
decline. If we were required to sell securities prior to
maturity, and interest rates had risen, the sale of the
securities might be made at a loss relative to the latest
market price. Our clearinghouse seeks to manage this risk
by making short-term investments of members’ cash
deposits. In addition, the clearinghouse investment
guidelines allow for direct purchases or repurchase
agreements with short dated maturities of high quality
sovereign debt (for example, European government and
U.S. Treasury securities), central bank certificates and
multilateral development bank debt instruments.
*•*Security Issuer Risk: Security issuer risk is the risk that an
issuer of a security defaults on its payment when the
security matures. This risk is mitigated by limiting
allowable investments and collateral under reverse
repurchase agreements to high quality sovereign,
government agency or multilateral development bank debt
instruments.
CRITICAL ACCOUNTING POLICIES AND
ESTIMATES
The preparation of financial statements and related
disclosures in conformity with U.S. GAAP requires
management to make judgments, assumptions, and estimates
that affect the amounts reported in the consolidated financial
statements and accompanying notes. Note 2, “Summary of
Significant Accounting Policies,” to the consolidated
financial statements describes the significant accounting
policies and methods used in the preparation of the
consolidated financial statements. The accounting policies
described below are significantly affected by critical
accounting estimates. Such accounting policies require
significant judgments, assumptions, and estimates used in the
preparation of the consolidated financial statements, and
actual results could differ materially from the amounts
reported based on these policies.
Revenue Recognition
As part of our on-premises offerings for our AxiomSL,
market technology, and Calypso solutions within our
Financial Technology segment, we enter into long-term
contracts with our customers that contain multiple
performance obligations. These contracts often include
combinations of software licenses, professional services,
PCS, and other services. We allocate the total contract value
to each performance obligation based on relative standalone
selling prices, or SSP. When observable prices are not
available such as, when a product or service is not sold
separately, we estimate SSP using an expected cost-plus-
margin approach. In certain cases, we apply a residual
approach, allocating the remaining transaction price to
undetermined obligations after assigning amounts to those
with observable SSPs.
For AxiomSL on-premises contracts, we account for the
software license and PCS as a single performance obligation.
This is due to the frequent and mandatory regulatory updates
that are integral to the utility of the software. As such,
revenue is recognized ratably over the contract term,
reflecting the continuous transfer of value to the customer.
As part of our on-premises market technology offering, the
performance obligations within our contracts to develop
customized technology solutions generally consist of a
software license and installation service (professional
services), which together form a single distinct performance
obligation, as well as PCS. We have determined that the
software license and installation service are not distinct as the
license and the customized installation service are inputs to
produce the combined output, a functional and integrated
software system. Revenue for this combined performance
obligation is generally recognized over time using costs
incurred to date relative to total estimated costs at completion
to measure progress toward satisfying our performance
obligation. We recognize revenue over time as our customer
controls the asset for which we are creating, our performance
does not create an asset with alternative use, and we have a
right to payment for performance completed to date. We must
estimate total contract costs, which are influenced by factors
such as technical complexity, delivery schedules, and
productivity. These estimates are reviewed and updated at
least quarterly. Any changes in assumptions or estimates are
recognized in the period in which they occur and may
materially impact the timing and amount of revenue and
profit recognized. PCS revenue is recognized ratably over the
support period, reflecting the continuous transfer of services.
Our Calypso on-premises offering typically includes two
distinct performance obligations: a software license and PCS.
License revenue is recognized upfront at the point in time
when the software is made available to the customer as this is
when the customer obtains control and can derive
substantially all benefits from the license. PCS revenue is
recognized over time on a ratable basis over the contract
period beginning on the date that our service is made
available to the customer since the customer receives and
consumes the benefit as Nasdaq provides the service.
Accounting for these contracts requires significant judgment
across several areas. This includes identifying distinct
performance obligations within complex, multi-element
arrangements and determining the SSP for each obligation,
especially when observable pricing is not available. We also
exercise judgment in allocating the transaction price to each
performance obligation based on relative SSP, and in
selecting the appropriate method to measure progress toward
satisfaction of those obligations, such as the input method for
long-term implementation services. If estimated total contract
costs exceed total revenues, we record a provision for the full
expected loss in the period the loss is identified.
Due to the significance of judgment in the estimation process,
as discussed above, changes in assumptions and estimates
may adversely or positively affect financial performance in
future periods.
For further discussion related to recognition of these
revenues, see “Revenue From Contracts with Customers -
Revenue Recognition,” of Note 2, “Summary of Significant
Accounting Policies,” to the consolidated financial
statements.
Goodwill, Indefinite-Lived Intangible Assets and Related
Impairment Testing
Assets acquired and liabilities assumed in connection with
our acquisitions are recorded at their estimated fair values.
Goodwill represents the excess of purchase price over the
estimated fair value assigned to the net assets, including
identifiable intangible assets, of a business acquired.
Goodwill is allocated to our reporting units based on the
assignment of the fair values of each reporting unit of the
acquired company. We recognize specifically identifiable
intangibles, such as customer relationships, technology,
exchange and clearing registrations, trade names and licenses
when a specific right or contract is acquired. Goodwill and
intangible assets deemed to have indefinite useful lives,
primarily exchange and clearing registrations, are not
amortized but instead are tested for impairment at least
annually as of October 1 and more frequently whenever
events or changes in circumstances indicate that the fair value
of the asset may be less than its carrying amount, such as
changes in the business climate, poor indicators of operating
performance or the sale or disposition of a significant portion
of a reporting unit. We perform our goodwill impairment test
at the reporting unit level for our three reporting units:
Capital Access Platforms, Financial Technology and Market
Services segments.
When testing goodwill and indefinite-lived intangible assets
for impairment, we have the option of first performing a
qualitative assessment to determine whether it is more likely
than not that the fair value of a reporting unit or indefinite-
lived intangible asset is less than their respective carrying
amounts as the basis to determine if it is necessary to perform
a quantitative impairment test. If we choose not to complete a
qualitative assessment, or if the initial assessment indicates
that it is more likely than not that the carrying amount of a
reporting unit or the carrying amount of an indefinite-lived
intangible asset exceeds their respective estimated fair values,
a quantitative test is required. Our decision to perform a
qualitative impairment assessment in a given year is
influenced by a number of factors, including but not limited
to, the size of the reporting unit’s goodwill, the significance
of the excess of the reporting unit’s estimated fair value or
the indefinite-lived intangible asset’s fair value over their
respective carrying amounts at the last quantitative
assessment date, and the amount of time in between
quantitative fair value assessments.
In performing a quantitative impairment test, we compare the
fair value of each reporting unit and indefinite-lived
intangible asset with their respective carrying amounts. The
fair value of each reporting unit is estimated using a
combination of a discounted cash flow valuation, which
incorporates assumptions regarding future growth rates,
terminal values, and discount rates, as well as guideline
public company valuations, which incorporates relevant
trading multiples of comparable companies and other factors.
The estimates and assumptions used consider historical
performance and are consistent with the assumptions used in
determining future profit plans for each reporting unit, which
are approved by our board of directors. The fair value of
indefinite-lived intangible assets is primarily determined on
the basis of estimated discounted value, using the Greenfield
Approach for exchange and clearing registrations and
licenses, and the relief from royalty approach or excess
earnings approach for trade names, both of which incorporate
assumptions regarding future revenue projections and
discount rates. If the carrying amounts of the reporting unit or
the indefinite-lived intangible asset exceed their respective
fair values, an impairment charge is recognized in an amount
equal to the difference, limited to the total amount of
goodwill allocated to that reporting unit or the total carrying
value of the indefinite-lived intangible asset.
The following table presents the carrying value of goodwill
for our reportable segments at the time of our 2025 annual
impairment test:
| October 1, 2025 | |
| (in millions) | |
| Capital Access Platforms | $4,282 |
| Financial Technology | 7,947 |
| Market Services | 2,107 |
| $14,336 |
In 2025, we performed a qualitative impairment test for
goodwill on all reporting units and indefinite-lived intangible
assets, as the excesses of their fair values over their
respective carrying amounts, at the time of the last
quantitative test in 2023, were significant. In conducting the
qualitative assessment, we evaluated the performance of each
of these reporting units and indefinite-lived intangible assets
since the last quantitative test, as well as future financial
projections to determine if there were any changes in the key
inputs used to determine their respective fair values. We also
considered the qualitative factors in FASB ASC Topic 350,
“Intangibles–Goodwill and Other,” as well as other relevant
events and circumstances. Based on the results of the
qualitative assessment for each reporting unit and indefinite-
lived intangible asset, and the predominance of positive
indicators and the weight of such indicators, we concluded
that the fair values of our reporting units and indefinite-lived
intangible assets are more likely than not greater than their
respective carrying amounts and as a result, quantitative
analyses were not needed. No impairment of goodwill or
indefinite-lived intangible assets was recorded in 2025, 2024
and 2023.
Although we believe our estimates of fair value are
reasonable, the determination of certain valuation inputs is
subject to management’s judgment. Changes in these inputs
could materially affect the results of our impairment review.
If our forecasts of cash flows or other key inputs are
negatively revised in the future, the estimated fair value of
each reporting unit and of our indefinite-lived intangible
assets would be adversely impacted, potentially leading to an
impairment in the future that could materially affect our
operating results.
Subsequent to our annual impairment test, no indications of
impairment were identified.
Other Long-Lived Assets and Related Impairment
We review our other long-lived assets, such as finite-lived
intangible assets, property and equipment, and operating
lease assets for potential impairment when there is evidence
that events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The
carrying amount of an asset is not recoverable if it exceeds
the sum of the undiscounted cash flows expected to result
from the use and eventual disposition of the asset. If the
carrying amount of the long-lived asset is not recoverable, we
would measure the impairment loss as the amount by which
the carrying amount of the asset exceeds its fair value and is
recorded as a reduction in the carrying amount of the related
asset and a charge to operating results. The fair value of
finite-lived intangible assets, property and equipment and
operating lease assets is based on various valuation
techniques, such as discounted cash flow analysis.
There were no material finite-lived intangible assets
impairment charges in 2025, 2024 and 2023.
There were no material non-cash property and equipment
asset impairment charges in 2025. We recorded pre-tax, non-
cash property and equipment asset impairment charges,
primarily in relation to our restructuring programs of
$37 million in 2024 and $12 million in 2023. See Note 20,
“Restructuring Charges,” to the consolidated financial
statements for a discussion of these plans.
There were no material operating lease assets impairments in
2025 and 2024. As a result of the review of our real estate
and facility capacity requirements, for the year ended
December 31, 2023, we recorded impairment charges of
$23 million, of which $18 million related to operating lease
asset impairment. See Note 16, “Leases,” for further
discussion.
No material impairments were recorded to reduce the
carrying value of our other long-lived assets during 2025,
2024 or 2023.
Income Taxes
Estimates and judgments are required in the calculation of
certain tax liabilities and in the determination of the
recoverability of certain deferred tax assets, which arise from
net operating loss carryforwards, tax credit carryforwards and
temporary differences between the tax and financial
statement recognition of revenues and expenses. Our deferred
tax assets are reduced by a valuation allowance if it is more
likely than not that some portion or all of the recorded
deferred tax assets will not be realized in future periods.
Management is required to determine whether a tax position
is more likely than not to be sustained upon examination,
including resolution of any related appeals or litigation
processes, based on the technical merits of the position. Once
it is determined that a position meets the recognition
thresholds, the position is measured to determine the amount
of benefit to be recognized in the consolidated financial
statements.
In assessing the need for a valuation allowance, we consider
all available evidence including past operating results, the
existence of cumulative losses in the most recent fiscal years,
estimates of future taxable income and the feasibility of tax
planning strategies. In the event that we change our
determination as to the amount of deferred tax assets that can
be realized, we will adjust our valuation allowance with a
corresponding impact to the provision for income taxes in the
period in which such determination is made.
In addition, the calculation of our tax liabilities involves
uncertainties in the application of tax regulations in the U.S.
and other tax jurisdictions. We recognize potential liabilities
for anticipated tax audit issues in such jurisdictions based on
our estimate of whether, and the extent to which, additional
taxes and interest may be due. While we believe that our tax
liabilities reflect the probable outcome of identified tax
uncertainties, it is reasonably possible that the ultimate
resolution of any tax matter may be greater or less than the
amount accrued. If events occur and the payment of these
amounts ultimately proves unnecessary, the reversal of the
liabilities would result in tax benefits being recognized in the
period when we determine the liabilities are no longer
necessary. If our estimate of tax liabilities proves to be less
than the ultimate assessment, a further charge to expense
would result.
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