Item 1. Financial Statements

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Item 1. Financial Statements

Nasdaq, Inc.

Condensed Consolidated Balance Sheets

(in millions, except share and par value amounts)


	September 30, 2023		December 31, 2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	5,340	$	502
Restricted cash and cash equivalents	25		22
Default funds and margin deposits (including restricted cash and cash equivalents of $5,469 and $6,470, respectively)	5,935		7,021
Financial investments	272		181
Receivables, net	595		677
Other current assets	184		201
Total current assets	12,351		8,604
Property and equipment, net	542		532
Goodwill	7,988		8,099
Intangible assets, net	2,446		2,581
Operating lease assets	397		444
Other non-current assets	626		608
Total assets	$	24,350	$	20,868

Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	286	$	185
Section 31 fees payable to SEC	19		243
Accrued personnel costs	211		243
Deferred revenue	451		357
Other current liabilities	146		122
Default funds and margin deposits	5,935		7,021
Short-term debt	—		664
Total current liabilities	7,048		8,835
Long-term debt	9,703		4,735
Deferred tax liabilities, net	509		456
Operating lease liabilities	412		452
Other non-current liabilities	199		226
Total liabilities	17,871		14,704

Commitments and contingencies

Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 900,000,000 shares authorized, shares issued: 514,134,579 at September 30, 2023 and 513,157,630 at December 31, 2022; shares outstanding: 491,316,638 at September 30, 2023 and 491,592,491 at December 31, 2022	5		5
Additional paid-in capital	1,394		1,445
Common stock in treasury, at cost: 22,817,941 shares at September 30, 2023 and 21,565,139 shares at December 31, 2022	(585)		(515)
Accumulated other comprehensive loss	(2,102)		(1,991)
Retained earnings	7,755		7,207
Total Nasdaq stockholders’ equity	6,467		6,151
Noncontrolling interests	12		13
Total equity	6,479		6,164
Total liabilities and equity	$	24,350	$	20,868

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Condensed Consolidated Statements of Income

(unaudited)

(in millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Revenues:
Market Platforms	$	892	$	1,046	$	2,813	$	3,121
Capital Access Platforms	456		422		1,309		1,262
Anti-Financial Crime	93		77		265		224
Other revenues	10		12		30		37
Total revenues	1,451		1,557		4,417		4,644
Transaction-based expenses:
Transaction rebates	(447)		(494)		(1,377)		(1,605)
Brokerage, clearance and exchange fees	(64)		(173)		(262)		(364)
Revenues less transaction-based expenses	940		890		2,778		2,675
Operating expenses:
Compensation and benefits	260		249		777		750
Professional and contract services	31		34		92		97
Computer operations and data communications	58		50		168		150
Occupancy	28		25		99		78
General, administrative and other	26		38		62		94
Marketing and advertising	12		10		30		31
Depreciation and amortization	64		63		198		195
Regulatory	9		9		27		24
Merger and strategic initiatives	4		14		51		41
Restructuring charges	17		—		49		—
Total operating expenses	509		492		1,553		1,460
Operating income	431		398		1,225		1,215
Interest income	72		2		86		3
Interest expense	(101)		(32)		(174)		(96)



Other income (loss)	1		6		(6)		8
Net income (loss) from unconsolidated investees	(12)		8		(8)		23
Income before income taxes	391		382		1,123		1,153
Income tax provision	97		88		262		270
Net income	294		294		861		883
Net loss attributable to noncontrolling interests	—		—		1		1
Net income attributable to Nasdaq	$	294	$	294	$	862	$	884
Per share information:
Basic earnings per share	$	0.60	$	0.60	$	1.76	$	1.79
Diluted earnings per share	$	0.60	$	0.59	$	1.74	$	1.77
Cash dividends declared per common share	$	0.22	$	0.20	$	0.64	$	0.58

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	294	$	294	$	861	$	883
Other comprehensive income (loss):
Foreign currency translation gains (losses)	41		(155)		(96)		(428)
Income tax expense(1)	(24)		(32)		(15)		(77)
Foreign currency translation, net	17		(187)		(111)		(505)






Comprehensive income	311		107		750		378
Comprehensive loss attributable to noncontrolling interests	—		—		1		1
Comprehensive income attributable to Nasdaq	$	311	$	107	$	751	$	379

____________

(1) Primarily relates to the tax effect of unrealized gains and losses on Euro denominated notes.

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(unaudited)

(in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	Shares	$		Shares	$		Shares	$		Shares	$
Common stock	491	5		491	5		492	5		500	5

Additional paid-in capital
Beginning balance		1,363			1,382			1,445			1,949
Share repurchase program	—	—		—	—		(3)	(159)		(11)	(308)
ASR agreement	—	—		—	—		—	—		—	(325)
Share-based compensation	—	31		—	26		3	90		3	76

Other issuances of common stock, net	—	—		—	—		—	18		—	16
Ending balance		1,394			1,408			1,394			1,408

Common stock in treasury, at cost
Beginning balance		(583)			(509)			(515)			(437)
Other employee stock activity	—	(2)		—	(1)		(1)	(70)		(1)	(73)
Ending balance		(585)			(510)			(585)			(510)

Accumulated other comprehensive loss
Beginning balance		(2,119)			(1,905)			(1,991)			(1,587)
Other comprehensive income (loss)		17			(187)			(111)			(505)

Ending balance		(2,102)			(2,092)			(2,102)			(2,092)

Retained earnings
Beginning balance		7,569			6,869			7,207			6,465

Net income attributable to Nasdaq		294			294			862			884
Cash dividends declared and paid		(108)			(99)			(314)			(285)
Ending balance		7,755			7,064			7,755			7,064

Total Nasdaq stockholders’ equity		6,467			5,875			6,467			5,875

Noncontrolling interests
Beginning balance		12			9			13			10
Net activity related to noncontrolling interests		—			—			(1)			(1)
Ending balance		12			9			12			9

Total Equity	491	$	6,479	491	$	5,884	491	$	6,479	491	$	5,884

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in millions)


	Nine Months Ended September 30,
	2023		2022

Cash flows from operating activities:
Net income	$	861	$	883
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	198		195
Share-based compensation	90		76
Deferred income taxes	44		17

Extinguishment of debt and bridge fees	25		16


Non-cash restructuring charges	12		—

Net income (loss) from unconsolidated investees	8		(23)
Operating lease asset impairments	13		—
Other reconciling items included in net income	22		7
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	75		(69)
Other assets	25		41
Accounts payable and accrued expenses	110		27
Section 31 fees payable to SEC	(224)		—
Accrued personnel costs	(28)		(33)
Deferred revenue	90		86
Other liabilities	(42)		(11)

Net cash provided by operating activities	1,279		1,212
Cash flows from investing activities:
Purchases of securities	(530)		(263)
Proceeds from sales and redemptions of securities	427		305




Acquisition of businesses, net of cash and cash equivalents acquired	—		(41)
Purchases of property and equipment	(116)		(118)
Investments related to default funds and margin deposits, net(1)	64		44
Other investing activities	(3)		48
Net cash used in investing activities	(158)		(25)
Cash flows from financing activities:
Repayments of commercial paper, net	(662)		(221)
Repayments of debt and credit commitment	—		(499)
Payment of debt extinguishment cost and bridge fees	(25)		(16)

Proceeds from issuances of debt, net of issuance costs	5,011		541
Repurchases of common stock	(159)		(308)
ASR agreement	—		(325)
Dividends paid	(314)		(285)
Proceeds received from employee stock activity and other issuances	18		16
Payments related to employee shares withheld for taxes	(70)		(73)
Default funds and margin deposits	(779)		5,446
Other financing activities	(1)		(1)
Net cash provided by financing activities	3,019		4,275
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(300)		(1,724)
Net increase in cash and cash equivalents and restricted cash and cash equivalents	3,840		3,738
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period	6,994		5,496
Cash and cash equivalents, restricted cash and cash equivalents at end of period	$	10,834	$	9,234
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents	$	5,340	$	301
Restricted cash and cash equivalents	25		51
Restricted cash and cash equivalents (default funds and margin deposits)	5,469		8,882
Total	$	10,834	$	9,234
Supplemental Disclosure Cash Flow Information

Interest paid	$	89	$	83
Income taxes paid, net of refund	$	198	$	204

__________________________

(1) Includes purchases and proceeds from sales and redemptions related to the default funds and margin deposits of our clearing operations. For further information, see "Default Fund Contributions and Margin Deposits," within Note 14, "Clearing Operations."

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION AND NATURE OF OPERATIONS

Nasdaq is a global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.

In September 2022, we announced a new organizational structure which aligns our businesses more closely with the foundational shifts that are driving the evolution of the global financial system. In order to amplify our strategy, we aligned the Company more closely with evolving client needs. As a result, our four previous business segments, Market Technology, Investment Intelligence, Corporate Platforms and Market Services, have been changed to align with our new corporate structure that now includes three business segments: Capital Access Platforms, Market Platforms, and Anti-Financial Crime.

Market Platforms

Our Market Platforms segment includes our Trading Services and Marketplace Technology businesses. Our Trading Services business primarily includes revenues from equity derivatives trading, cash equity trading, Nordic fixed income trading & clearing, Nordic commodities and U.S. Tape plans data. We operate multiple exchanges and other marketplace facilities across several asset classes, including derivatives, commodities, cash equity, debt, structured products and ETPs. In addition, in certain countries where we operate exchanges, we also provide clearing, settlement and central depository services. In June 2023, we entered into an agreement to sell our European energy trading and clearing business, subject to regulatory approval. Beginning in the third quarter of 2023, revenues from this business are reflected in Other Revenues in the Condensed Consolidated Statements of Income for all periods, and in our Corporate segment for our segment disclosures.

Our transaction-based platforms provide market participants with the ability to access, process, display and integrate orders and quotes. The platforms allow the routing and execution of buy and sell orders as well as the reporting of transactions, providing fee-based revenues.

Our Marketplace Technology business includes our trade management services and our market technology businesses. Trade management services provides market participants with a wide variety of alternatives for connecting to and accessing our markets for a fee. Our marketplaces may be accessed via a number of different protocols used for quoting, order entry, trade reporting and connectivity to

various data feeds. We also provide colocation services to market participants, whereby we offer firms cabinet space and power to house their own equipment and servers within our data centers. Additionally, we offer a number of wireless connectivity offerings between select data centers using millimeter wave and microwave technology. In June 2022, we completed the wind-down of our Nordic broker services business.

Our market technology business is a leading global technology solutions provider and partner to exchanges, clearing organizations, central securities depositories, regulators, banks, brokers, buy-side firms and corporate businesses. Our solutions are utilized by leading markets in the U.S., Europe and Asia as well as emerging markets in the Middle East, Latin America, and Africa.

Capital Access Platforms

Our Capital Access Platforms segment includes our Data & Listing Services, Index and Workflow & Insights businesses.

Our Data business sells and distributes historical and real-time market data to the sell-side, the institutional investing community, retail online brokers, proprietary trading firms and other venues, as well as internet portals and data distributors. Our data products can enhance transparency of market activity within our exchanges and provide critical information to professional and non-professional investors globally. As noted above, we entered into an agreement to sell our European energy trading and clearing business in June 2023. Beginning in the third quarter of 2023, certain data revenues from this business that were previously included in our Capital Access Platforms segment are reflected in Other Revenues in the Condensed Consolidated Statements of Income for all periods, and in our Corporate segment for our segment disclosures.

Our Listing Services business operates in the U.S. and Europe on a variety of listing platforms around the world to provide multiple global capital raising solutions for public companies. Our main listing markets are The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Baltic exchanges. Through Nasdaq First North, our Nordic and Baltic operations also offer alternative marketplaces for smaller companies and growth companies.

As of September 30, 2023, there were 4,086 total listings on The Nasdaq Stock Market, including 570 ETPs. The combined market capitalization was approximately $23.8 trillion. In Europe, the Nasdaq Nordic and Nasdaq Baltic exchanges, together with Nasdaq First North, were home to 1,236 listed companies with a combined market capitalization of approximately $1.8 trillion.

Our Index business develops and licenses Nasdaq-branded indexes and financial products. We also license cash-settled options, futures and options on futures on our indexes. As of September 30, 2023, 393 ETPs listed on 26 exchanges in over 20 countries tracked a Nasdaq index and accounted for $411 billion in AUM.

Workflow & Insights includes our analytics and corporate solutions businesses. Our analytics business provides asset managers, investment consultants and institutional asset owners with information and analytics to make data-driven investment decisions, deploy their resources more productively, and provide liquidity solutions for private funds. Through our eVestment and Solovis solutions, we provide a suite of cloud-based solutions that help institutional investors and consultants conduct pre-investment due diligence, and monitor their portfolios post-investment. The eVestment platform also enables asset managers to efficiently distribute information about their firms and funds to asset owners and consultants worldwide.

Through our Solovis platform, endowments, foundations, pensions and family offices transform how they collect and aggregate investment data, analyze portfolio performance, model and predict future outcomes, and share meaningful portfolio insights with key stakeholders. The Nasdaq Fund Network and Nasdaq Data Link are additional platforms in our suite of investment data analytics offerings and data management tools.

Our corporate solutions business includes our Investor Relations Intelligence, ESG Solutions and Governance Solutions products, which serve both public and private companies and organizations. Our public company clients can be companies listed on our exchanges or other U.S. and global exchanges. Our private company clients include a diverse group of organizations ranging from family-owned companies, government organizations, law firms, privately held entities, and various non-profit organizations to hospitals and healthcare systems. We help organizations enhance their ability to understand and expand their global shareholder base, improve corporate governance, and navigate the evolving ESG landscape through our suite of advanced technology, analytics, reporting and consulting services. In June 2022, we acquired Metrio, a provider of ESG data collection, analytics and reporting services based in Montreal, Canada.

Anti-Financial Crime

Our Anti-Financial Crime segment provides cloud-based anti-financial crime management solutions to help financial institutions detect, investigate, and report money laundering and financial fraud. This segment also includes Nasdaq Trade Surveillance, a SaaS solution designed for brokers and other market participants to assist them in complying with market rules, regulations and internal market surveillance policies, as well as Nasdaq Market Surveillance, a market surveillance solution for markets and regulators.

2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity, but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of our equity method investments.

The accompanying condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

As permitted under U.S. GAAP, certain footnotes or other financial information can be condensed or omitted in the interim condensed consolidated financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Nasdaq’s Form 10-K. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Accounting Estimates

In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities in our Condensed Consolidated Balance Sheets. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.

Subsequent Events

We have evaluated subsequent events through the issuance date of this Quarterly Report on Form 10-Q. See Note 4, “Acquisitions,” for further discussion.

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following tables summarize the disaggregation of revenue by major product and service and by segment for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,
	2023		2022
	(in millions)
Market Platforms
Trading Services, net	$	236	$	239
Marketplace Technology	145		140
Capital Access Platforms
Data & Listing Services	188		179
Index	144		125
Workflow & Insights	124		118
Anti-Financial Crime	93		77
Other revenues	10		12
Revenues less transaction-based expenses	$	940	$	890

	Nine Months Ended September 30,
	2023		2022
	(in millions)
Market Platforms
Trading Services, net	$	739	$	743
Marketplace Technology	435		409
Capital Access Platforms
Data & Listing Services	559		545
Index	383		370
Workflow & Insights	367		347
Anti-Financial Crime	265		224
Other revenues	30		37
Revenues less transaction-based expenses	$	2,778	$	2,675

Substantially all revenues from the Capital Access Platforms and Anti-Financial Crime segments as well as our Marketplace Technology business were recognized over time for the three months ended September 30, 2023 and 2022. For the three months ended September 30, 2023 and 2022 approximately 92.5% and 92.0%, respectively, of Trading Services revenues were recognized at a point in time and 7.5% and 8.0%, respectively, were recognized over time. For the nine months ended September 30, 2023 and 2022 approximately 92.9% and 93.3%, respectively, of Trading Services revenues were recognized at a point in time and 7.1% and 6.7%, respectively, were recognized over time.

Contract Balances

Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our Condensed Consolidated Balance Sheets as receivables, which are net of allowance for doubtful accounts of $13 million as of September 30, 2023 and $15 million as of December 31, 2022. There were no material upward or downward adjustments to the allowance during the nine months ended September 30, 2023. We do not have obligations for warranties, returns or refunds to customers.

For the majority of our contracts with customers, except for our market technology and listing services contracts, our performance obligations range from three months to three years and there is no significant variable consideration.

Deferred revenue is the only significant contract asset or liability as of September 30, 2023. Deferred revenue represents consideration received that is yet to be recognized as revenue for unsatisfied performance obligations. Deferred revenue primarily represents our contract liabilities related to our fees for Annual and Initial Listings, Workflow & Insights, Market Technology and Anti-Financial Crime contracts. See Note 7, “Deferred Revenue,” for our discussion on deferred revenue balances, activity, and expected timing of recognition.

We do not have a material amount of revenue recognized from performance obligations that were satisfied in prior periods. We do not provide disclosures about transaction price allocated to unsatisfied performance obligations if contract durations are less than one year. For our initial listings, the transaction price allocated to remaining performance obligations is included in deferred revenue. For our Market Technology, Anti-Financial Crime, and Workflow & Insights contracts, the portion of transaction price allocated to unsatisfied performance obligations is presented in the table below. To the extent consideration has been received, unsatisfied performance obligations would be included in the table below as well as deferred revenue.

The following table summarizes the amount of the transaction price allocated to performance obligations that are unsatisfied, for contract durations greater than one year, as of September 30, 2023:


	Market Technology		Anti-Financial Crime		Workflow & Insights		Total
	(in millions)
Remainder of 2023	$	46	$	105	$	43	$	194
2024	167		379		134		680
2025	139		180		76		395
2026	101		68		32		201
2027	70		17		22		109
2028+	110		8		11		129
Total	$	633	$	757	$	318	$	1,708

4. ACQUISITIONS

2023 Acquisition

In June 2023, we entered into a definitive agreement to acquire Adenza Holdings, Inc., or Adenza, a provider of mission-critical risk management and regulatory software to the financial services industry, for $5.75 billion in cash and a fixed amount of 85.6 million shares of Nasdaq common stock, based on the volume-weighted average price per share over 15 consecutive trading days prior to signing. Nasdaq issued $5.0 billion of debt and entered into a $600 million term loan and will use the proceeds for the cash portion of the consideration. See “Senior Unsecured Notes” and “Acquisition Term Loan Agreement” in “Financing of the Adenza Transaction” of Note 8, “Debt Obligations,” for further discussion.

On November 1, 2023, we completed the acquisition of Adenza. Immediately following the closing of the transaction, 85.6 million shares of Nasdaq common stock, at a closing price of $48.71 per share, were issued to Thoma Bravo, the sole shareholder of Adenza, and represented approximately 15% of the outstanding shares of Nasdaq. For further discussion on the rights of common stockholders refer to “Common Stock” of Note 11, “Nasdaq Stockholders' Equity.”

Due to the abbreviated timing between the November 1, 2023 acquisition date and the filing of this Form 10-Q, as well as the size and complexity of this transaction, the accounting for the business combination is not yet complete. We are in the process of determining the fair values of intangible and tangible assets acquired and liabilities assumed, including review of third-party valuations. Accordingly, we are not able to provide the preliminary allocation of consideration paid to the assets acquired and liabilities assumed. Further, the supplemental pro forma revenue and earnings of the combined entity are predicated on the completion of the business combination accounting and allocation of consideration paid.

2022 Acquisition

In June 2022, we acquired Metrio, a provider of ESG data collection, analytics and reporting services based in Montreal, Canada. Metrio is part of our Workflow & Insights business in our Capital Access Platforms segment.

Pro Forma Results and Acquisition-Related Costs

The condensed consolidated financial statements for the three and nine months ended September 30, 2023 include the financial results of the 2022 acquisition from the date of the acquisition. Pro forma financial results have not been presented since this acquisition was not material to our financial results.

Acquisition-related costs for the transactions described above were expensed as incurred and are included in merger and strategic initiatives expense in the Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2023 these costs primarily related to our planned acquisition of Adenza. For the three and nine months ended September 30, 2023, these costs mainly included consulting and legal fees. For the nine months ended September 30, 2023, these costs also included fees for the transaction bridge financing, which was subsequently terminated. We expect to incur customary costs related to transaction advisors, including advisors for the Adenza transaction, which will be included in merger and strategic initiatives expense in the Condensed Consolidated Statements of Income in the fourth quarter of 2023.

5. GOODWILL AND ACQUIRED INTANGIBLE ASSETS

Goodwill

The following table presents the changes in goodwill by business segment during the nine months ended September 30, 2023:


	(in millions)
Market Platforms
Balance at December 31, 2022	$	2,912



Foreign currency translation adjustments	(67)
Balance at September 30, 2023	$	2,845
Capital Access Platforms
Balance at December 31, 2022	$	4,178



Foreign currency translation adjustments	(40)
Balance at September 30, 2023	$	4,138
Anti-Financial Crime
Balance at December 31, 2022	$	1,009



Foreign currency translation adjustments	(4)
Balance at September 30, 2023	$	1,005

Total
Balance at December 31, 2022	$	8,099



Foreign currency translation adjustments	(111)
Balance at September 30, 2023	$	7,988

Goodwill represents the excess of purchase price over the 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 test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying amount may be impaired, 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. There was no impairment of goodwill for the three and nine months ended September 30, 2023 and 2022; however, events such as prolonged economic weakness or unexpected significant declines in operating results of any of our reporting units or businesses may result in goodwill impairment charges in the future.

Acquired Intangible Assets

The following table presents details of our total acquired intangible assets, both finite- and indefinite-lived:


	September 30, 2023		December 31, 2022

Finite-Lived Intangible Assets	(in millions)
Gross Amount
Technology	$	304	$	304
Customer relationships	2,005		2,005
Trade names and other	57		60
Foreign currency translation adjustment	(227)		(209)
Total gross amount	$	2,139	$	2,160
Accumulated Amortization
Technology	$	(131)	$	(97)
Customer relationships	(859)		(778)
Trade names and other	(17)		(17)
Foreign currency translation adjustment	137		120
Total accumulated amortization	$	(870)	$	(772)
Net Amount
Technology	$	173	$	207
Customer relationships	1,146		1,227
Trade names and other	40		43
Foreign currency translation adjustment	(90)		(89)
Total finite-lived intangible assets	$	1,269	$	1,388

Indefinite-Lived Intangible Assets
Exchange and clearing registrations	$	1,257	$	1,257
Trade names	121		121
Licenses	52		52
Foreign currency translation adjustment	(253)		(237)
Total indefinite-lived intangible assets	$	1,177	$	1,193
Total intangible assets, net	$	2,446	$	2,581

There was no impairment of indefinite-lived intangible assets for the three and nine months ended September 30, 2023 and 2022.

The following table presents our amortization expense for acquired finite-lived intangible assets:


	Three Months Ended September 30,
	2023		2022
	(in millions)
Amortization expense	$	37	$	38

	Nine Months Ended September 30,
	2023		2022
	(in millions)
Amortization expense	$	112	$	116

The table below presents the estimated future amortization expense (excluding the impact of foreign currency translation adjustments of $90 million as of September 30, 2023) of acquired finite-lived intangible assets as of September 30, 2023:


	(in millions)
Remainder of 2023	$	41
2024	153
2025	151
2026	148
2027	147
2028+	719
Total	$	1,359

6. INVESTMENTS

The following table presents the details of our investments:


	September 30, 2023		December 31, 2022
	(in millions)
Financial investments	$	272	$	181



Equity method investments	378		390
Equity securities	76		86

Financial Investments

Financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $150 million as of September 30, 2023 and $161 million as of December 31, 2022 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing.

Equity Method Investments

We record our estimated pro-rata share of earnings or losses each reporting period and record any dividends as a reduction in the investment balance. As of September 30, 2023 and 2022, our equity method investments primarily included our 40.0% equity interest in OCC.

The carrying amounts of our equity method investments are included in other non-current assets in the Condensed Consolidated Balance Sheets. No impairments were recorded for the three and nine months ended September 30, 2023 and 2022.

Net income (loss) recognized from our equity interest in the earnings and losses of these equity method investments, primarily OCC and Nasdaq Private Market, LLC or NPM, was $(12) million and $8 million for the three months ended September 30, 2023 and 2022, respectively, and $(8) million and $23 million for the nine months ended September 30, 2023 and 2022, respectively.

Equity Securities

The carrying amounts of our equity securities are included in other non-current assets in the Condensed Consolidated Balance Sheets. We elected the measurement alternative for substantially all of our equity securities as they do not have a readily determinable fair value. No material adjustments were made to the carrying value of our equity securities for the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, our equity securities primarily represent various strategic investments made through our corporate venture program.

7. DEFERRED REVENUE

Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue during the nine months ended September 30, 2023 are reflected in the following table:


	Balance at December 31, 2022		Additions		Revenue Recognized		Adjustments		Balance at September 30, 2023
	(in millions)
Market Platforms:
Market Technology	$	29	$	25	$	(26)	$	(1)	$	27
Capital Access Platforms:
Initial Listings	116		15		(30)		(1)		100
Annual Listings	2		92		(1)		(1)		92

Workflow & Insights	172		162		(152)		—		182
Anti-Financial Crime	108		102		(100)		—		110
Other	21		11		(9)		(1)		22
Total	$	448	$	407	$	(318)	$	(4)	$	533

In the above table:

Additions reflect deferred revenue billed in the current period, net of recognition.
Revenue recognized includes revenue recognized during the current period that was included in the beginning balance.
Adjustments reflect foreign currency translation adjustments.
Other primarily includes deferred revenue from our non-U.S. listing of additional shares fees and our Index business. These fees are included in our Capital Access Platforms segment.

As of September 30, 2023, we estimate that our deferred revenue will be recognized in the following years:


Fiscal year ended:	2023		2024		2025		2026		2027		2028+		Total
	(in millions)
Market Platforms:
Market Technology	$	12	$	11	$	2	$	1	$	1	$	—	$	27
Capital Access Platforms:
Initial Listings	10		34		24		19		10		3		100
Annual Listings	92		—		—		—		—		—		92

Workflow & Insights	84		98		—		—		—		—		182
Anti-Financial Crime	51		59		—		—		—		—		110
Other	6		9		5		2		—		—		22
Total	$	255	$	211	$	31	$	22	$	11	$	3	$	533

In the above table, the amounts shown under the column for 2023 represent the remaining three months of 2023.

The timing of recognition of deferred revenue related to certain market technology contracts represents our best estimates as the recognition is primarily dependent upon the completion of customization and any significant modifications made pursuant to existing market technology contracts.

8. DEBT OBLIGATIONS

The following table presents the carrying amounts of our debt outstanding, net of unamortized debt issuance costs:


	September 30, 2023		December 31, 2022
	(in millions)
Short-term debt:
Commercial paper	$	—	$	664


Long-term debt - senior unsecured notes:
2025 Notes, $500 million, 5.650% notes due June 28, 2025	497		—
2026 Notes, $500 million, 3.850% notes due June 30, 2026	499		498
2028 Notes, $1 billion, 5.350% notes due June 28, 2028	991		—
2029 Notes, €600 million, 1.75% notes due March 28, 2029	630		637
2030 Notes, €600 million, 0.875% notes due February 13, 2030	630		637
2031 Notes, $650 million, 1.650% notes due January 15, 2031	644		644
2032 Notes, €750 million, 4.500% notes due February 15, 2032	784		—
2033 Notes, €615 million, 0.900% notes due July 30, 2033	645		653
2034 Notes $1.25 billion, 5.550% notes due February 15, 2034	1,239		—
2040 Notes, $650 million, 2.500% notes due December 21, 2040	644		644
2050 Notes, $500 million, 3.250% notes due April 28, 2050	487		486
2052 Notes, $550 million, 3.950% notes due March 7, 2052	541		541
2053 Notes, $750 million, 5.950% notes due August 15, 2053	738		—
2063 Notes, $750 million, 6.100% notes due June 28, 2063	738		—
2022 Revolving Credit Agreement	(4)		(5)

Total long-term debt	$	9,703	$	4,735
Total debt obligations	$	9,703	$	5,399

Commercial Paper Program

Our U.S. dollar commercial paper program is supported by our 2022 Revolving Credit Agreement, which provides liquidity support for the repayment of commercial paper issued through this program. See “2022 Revolving Credit Agreement” below for further discussion. The effective interest rate of commercial paper issuances fluctuates as short-term interest rates and demand fluctuate. The fluctuation of these rates may impact our interest expense. As of September 30, 2023, we had no outstanding borrowings under our commercial paper program. As of November 1, 2023, we had $200 million outstanding under the commercial paper program.

Senior Unsecured Notes

Our 2040 Notes were issued at par. All of our other outstanding senior unsecured notes were issued at a discount. As a result of the discount, the proceeds received from each issuance were less than the aggregate principal amount. As of September 30, 2023, the amounts in the table above reflect the aggregate principal amount, less the unamortized debt discount and the unamortized debt issuance costs, which are being accreted through interest expense over the life of the applicable notes. The accretion of these costs was $6 million for the nine months ended September 30, 2023. Our Euro denominated notes are adjusted for the impact of foreign currency translation. Our senior unsecured notes are general unsecured obligations which rank equally with all of our existing and future unsubordinated obligations and are not guaranteed by any of our subsidiaries. The senior unsecured notes were issued under indentures that, among other things, limit our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions. The senior unsecured notes may be redeemed by Nasdaq at any time, subject to a make-whole amount.

Upon a change of control triggering event (as defined in the various supplemental indentures governing the applicable notes), the terms require us to repurchase all or part of each holder’s notes for cash equal to 101% of the aggregate principal amount purchased plus accrued and unpaid interest, if any.

The 2029 Notes, 2030 Notes, 2032 Notes and 2033 Notes pay interest annually. All other notes pay interest semi-annually. The U.S senior unsecured notes coupon rates may vary with Nasdaq’s debt rating, to the extent Nasdaq is downgraded below investment grade, up to an upward rate adjustment not to exceed 2%.

Net Investment Hedge

Our Euro denominated 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 within Nasdaq's stockholders’ equity in the Condensed Consolidated Balance Sheets. For the nine months ended September 30, 2023, the impact of translation decreased the U.S. dollar value of our Euro denominated notes by $50 million.

Financing of the Adenza Transaction

Senior Unsecured Notes

In June 2023, Nasdaq issued six series of notes for total proceeds of $5,016 million, net of debt issuance costs of $38 million, with various maturity dates ranging from 2025 to 2063. During the third quarter of 2023, we incurred an additional $5 million in debt issuance costs, for total net proceeds from the issuance of the six series of notes of $5,011 million as of September 30, 2023. The net proceeds from these notes were used to finance the majority of the cash consideration due in connection with the Adenza acquisition. For further discussion of the Adenza acquisition, see “2023 Acquisition,” of Note 4, “Acquisitions.”

Acquisition Term Loan Agreement

In June 2023, in connection with the financing of the Adenza acquisition, we entered into a term loan credit agreement, or the Acquisition Term Loan Agreement. The Acquisition Term Loan Agreement provides us with the ability to borrow up to $600 million to finance a portion of the cash consideration for the Adenza acquisition, for repayment of certain debt of Adenza and its subsidiaries, and to pay fees, costs and expenses related to the transaction.

Under the Acquisition Term Loan Agreement, borrowings bear interest on the principal amount outstanding at a variable interest rate based on either the SOFR or the base rate (or other applicable rate with respect to non-dollar borrowings), plus an applicable margin that varies with Nasdaq's credit rating. As of September 30, 2023, no amounts were outstanding. On November 1, 2023, we borrowed $599 million, net of fees, under this term loan towards payment of the cash consideration due in connection with the Adenza acquisition.

Credit Facilities

2022 Revolving Credit Agreement

In December 2020, Nasdaq entered into the 2020 Credit Facility, which replaced a former credit facility and consists of a $1.25 billion five-year revolving credit facility (with sublimits for non-dollar borrowings, swingline borrowings and letters of credit). We amended and restated the 2020 Credit Facility in December 2022 with a new maturity date of December 16, 2027. Nasdaq intends to use funds available under the 2022 Revolving Credit Agreement for general corporate purposes and to provide liquidity support for the repayment of commercial paper issued through the commercial paper program. Nasdaq is permitted to repay borrowings under our 2022 Revolving Credit Agreement at any time in whole or in part, without penalty.

As of September 30, 2023, no amounts were outstanding on the 2022 Revolving Credit Agreement. The $(4) million balance represents unamortized debt issuance costs which are being accreted through interest expense over the life of the credit facility.

Borrowings under the revolving credit facility and swingline borrowings bear interest on the principal amount outstanding at a variable interest rate based on either the SOFR (or a successor rate to SOFR), the base rate (as defined in the 2022 credit agreement), or other applicable rate with respect to non-dollar borrowings, plus an applicable margin that varies with Nasdaq’s debt rating. We are charged commitment fees of 0.100% to 0.250%, depending on our credit rating, whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2023 and 2022.

The 2022 Revolving Credit Agreement contains financial and operating covenants. Financial covenants include a maximum leverage ratio. Operating covenants include, among other things, limitations on Nasdaq’s ability to incur additional indebtedness, grant liens on assets, dispose of assets and make certain restricted payments. The facility also contains customary affirmative covenants, including access to financial statements, notice of defaults and certain other material events, maintenance of properties and insurance, and customary events of default, including cross-defaults to our material indebtedness.

The 2022 Revolving Credit Agreement includes an option for Nasdaq to increase the available aggregate amount by up to $750 million, subject to the consent of the lenders funding the increase and certain other conditions.

Other Credit Facilities

Certain of our European subsidiaries have several other credit facilities, which are available in multiple currencies, primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line for one subsidiary. These credit facilities, in aggregate, totaled $176 million as of September 30, 2023 and $184 million as of December 31, 2022 in available liquidity, none of which was utilized. Generally, these facilities each have a one-year term. The amounts borrowed under these various credit facilities bear interest on the principal amount outstanding at a variable interest rate based on a base rate (as defined in the applicable credit agreement), plus an applicable margin. We are charged commitment fees (as defined in the applicable credit agreement), whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2023 and 2022.

These facilities include customary affirmative and negative operating covenants and events of default.

Debt Covenants

As of September 30, 2023, we were in compliance with the covenants of all of our debt obligations.

9. RETIREMENT PLANS

Defined Contribution Savings Plan

We sponsor a 401(k) plan, which is a voluntary defined contribution savings plan, for U.S. employees. Employees are immediately eligible to make contributions to the plan and are also eligible for an employer contribution match at an amount equal to 100.0% of the first 6.0% of eligible employee contributions. The following table presents the savings plan expense for the three and nine months ended September 30, 2023 and 2022, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions)
Savings Plan expense	$	4	$	4	$	14	$	13

Pension and Supplemental Executive Retirement Plans

We maintain non-contributory, defined-benefit pension plans, non-qualified SERPs for certain senior executives and other post-retirement benefit plans for eligible employees in the U.S. Our pension plans and SERPs are frozen. Future service and salary for all participants do not count toward an accrual of benefits under the pension plans and SERPs. Most employees outside the U.S. are covered by local retirement plans or by applicable social laws. Benefits under social laws are generally expensed in the periods in which the costs are incurred. The following table presents the total expense for these plans for the three and nine months ended September 30, 2023 and 2022, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions)
Retirement Plans expense	$	6	$	6	$	19	$	18

Nonqualified Deferred Compensation Plan

In June 2022, we established the Nasdaq, Inc. Deferred Compensation Plan, a nonqualified plan. This plan provides certain eligible employees with the opportunity to defer a portion of their annual salary and bonus up to certain approval limits. All deferrals and associated earnings are our general unsecured obligations and were immaterial for the three and nine months ended September 30, 2023.

10. SHARE-BASED COMPENSATION

We have a share-based compensation program for employees and non-employee directors. Share-based awards granted under this program include restricted stock (consisting of restricted stock units), PSUs and stock options. For accounting purposes, we consider PSUs to be a form of restricted stock. Generally, annual employee awards are granted on April 1st of each year.

Summary of Share-Based Compensation Expense

The following table presents the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the three and nine months ended September 30, 2023 and 2022, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions)
Share-based compensation expense before income taxes	$	31	$	26	$	90	$	76

Common Shares Available Under Our Equity Plan

As of September 30, 2023, we had approximately 24.7 million shares of common stock authorized for future issuance under our Equity Plan.

Restricted Stock

We grant restricted stock to most employees. The grant date fair value of restricted stock awards is based on the closing stock price at the date of grant less the present value of future cash dividends. Restricted stock awards granted to employees below the manager level generally vest 33% on the first anniversary of the grant date, 33% on the second anniversary of the grant date, and the remainder on the third anniversary of the grant date. Restricted stock awards granted to employees at or above the manager level generally vest 33% on the second anniversary of the grant date, 33% on the third anniversary of the grant date, and the remainder on the fourth anniversary of the grant date.

Summary of Restricted Stock Activity

The following table summarizes our restricted stock activity for the nine months ended September 30, 2023:


	Restricted Stock
	Number of Awards	Weighted-Average Grant Date Fair Value








Unvested at December 31, 2022	4,380,513	$	45.48
Granted	1,687,070	52.54
Vested	(1,621,991)	37.07
Forfeited	(220,665)	50.30
Unvested at September 30, 2023	4,224,927	$	51.28

As of September 30, 2023, $128 million of total unrecognized compensation cost related to restricted stock is expected to be recognized over a weighted-average period of 1.8 years.

PSUs

We grant three-year PSUs to certain eligible employees. PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. Each eligible individual receives PSUs, subject to the satisfaction of applicable market performance conditions, with a three-year cumulative performance period that vest at the end of the performance period and which settle in shares of our common stock. Compensation cost is recognized over the three-year performance period, taking into account an estimated forfeiture rate, regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. Performance will be determined by comparing Nasdaq’s TSR to two peer groups, each weighted 50.0%. The first peer group consists of exchange companies, and the second peer group consists of all companies in the S&P 500. Nasdaq’s relative performance ranking against each of these groups will determine the final number of shares delivered to each individual under the program. The award issuance under this program will be between 0.0% and 200.0% of the number of PSUs granted and will be determined by Nasdaq’s overall performance against both peer groups. However, if Nasdaq’s TSR is negative for the three-year performance period, regardless of TSR ranking, the award issuance will not exceed 100.0% of the number of PSUs granted. We estimate the fair value of PSUs granted under the three-year PSU program using the Monte Carlo simulation model, as these awards contain a market condition.

Grants of PSUs that were issued in 2020 with a three-year performance period exceeded the applicable performance parameters. As a result, an additional 764,748 units above the original target were granted in the first quarter of 2023 and were fully vested upon issuance.

The following weighted-average assumptions were used to determine the weighted-average fair values of the outstanding PSU awards granted under the three-year PSU program during the nine months ended September 30, 2023 and 2022:


Grant date	April 3, 2023			April 1, 2022
Weighted-average risk-free interest rate	3.75		%	2.55		%
Expected volatility	23.88		%	30.33		%
Weighted-average grant date share price	$	54.40		$	60.64
Weighted-average fair value at grant date	$	52.56		$	63.50

In the table above, the risk-free interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant; and we use historic volatility for PSU awards issued under the three-year PSU program, as implied volatility data could not be obtained for all the companies in the peer groups used for relative performance measurement within the program.

In addition, the annual dividend assumption utilized in the Monte Carlo simulation model is based on Nasdaq’s dividend yield at the date of grant.

Summary of PSU Activity

The following table summarizes our PSU activity for the nine months ended September 30, 2023:


	PSUs

	Number of Awards	Weighted-Average Grant Date Fair Value








Unvested at December 31, 2022	1,966,542	$	56.44
Granted	1,513,538	44.78
Vested	(1,529,496)	37.17
Forfeited	(25,478)	63.59
Unvested at September 30, 2023	1,925,106	$	62.22

In the table above, the granted amount also includes additional awards granted based on overachievement of performance parameters.

As of September 30, 2023, the total unrecognized compensation cost related to the PSU program is $52 million and is expected to be recognized over a weighted-average period of 1.5 years.

Stock Options

We had no stock option activity for the nine months ended September 30, 2023. A summary of our outstanding and exercisable stock options at September 30, 2023 is as follows:


	Number of Stock Options	Weighted-Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)













Outstanding at September 30, 2023	1,420,323	$	41.79	5.4	$	21
Exercisable at September 30, 2023	806,451	$	22.23	3.3	$	21

As of September 30, 2023, the aggregate pre-tax intrinsic value of the outstanding and exercisable stock options in the above table was $21 million and represents the difference between our closing stock price on September 30, 2023 of $48.59 and the exercise price, times the number of shares that would have been received by the option holder had the option holder exercised the stock options on that date. This amount can change based on the fair market value of our common stock. As of September 30, 2022, 0.8 million outstanding stock options were exercisable and the weighted-average exercise price was $22.23.

ESPP

We have an ESPP under which approximately 11.7 million shares of our common stock were available for future issuance as of September 30, 2023. Under our ESPP, employees may purchase shares having a value not exceeding 10.0% of their annual compensation, subject to applicable annual Internal Revenue Service limitations. We record compensation expense related to the 15.0% discount that is given to our employees.

11. NASDAQ STOCKHOLDERS' EQUITY

Common Stock

As of September 30, 2023, 900,000,000 shares of our common stock were authorized, 514,134,579 shares were issued and 491,316,638 shares were outstanding. As of December 31, 2022, 900,000,000 shares of our common stock were authorized, 513,157,630 shares were issued and 491,592,491 shares were outstanding. The holders of common stock are entitled to one vote per share, except that our certificate of incorporation limits the ability of any shareholder to vote in excess of 5.0% of the then-outstanding shares of Nasdaq common stock.

Common Stock in Treasury, at Cost

We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to Nasdaq stockholders’ equity and included in common stock in treasury, at cost in the Condensed Consolidated Balance Sheets. Shares repurchased under our share repurchase program are currently retired and canceled and are therefore not included in the common stock in treasury balance. If treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. We held 22,817,941 shares of common stock in treasury as of September 30, 2023 and 21,565,139 shares as of December 31, 2022, most of which are related to shares of our common stock withheld for the settlement of employee tax withholding obligations arising from the vesting of restricted stock and PSUs.

Share Repurchase Program

In September 2023, our board of directors authorized an increase to our share repurchase program, bringing the aggregate remaining authorized amount to $2.0 billion as of September 30, 2023.

These repurchases may be made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques, an accelerated share repurchase program or otherwise, as determined by our management. The repurchases are primarily funded from existing cash balances. The share repurchase program may be suspended, modified or discontinued at any time, and has no defined expiration date.

The following is a summary of our share repurchase activity, reported based on settlement date, for the nine months ended September 30, 2023:


	Nine Months Ended September 30, 2023

Number of shares of common stock repurchased	2,610,000
Average price paid per share	$	61.08
Total purchase price (in millions)	$	159

In the table above, the number of shares of common stock repurchased excludes an aggregate of 1,252,802 shares withheld upon the vesting of restricted stock and PSUs for the nine months ended September 30, 2023.

As discussed above in “Common Stock in Treasury, at Cost,” shares repurchased under our share repurchase program are currently retired and cancelled.

Preferred Stock

Our certificate of incorporation authorizes the issuance of 30,000,000 shares of preferred stock, par value $0.01 per share, issuable from time to time in one or more series. As of September 30, 2023 and December 31, 2022, no shares of preferred stock were issued or outstanding.

Cash Dividends on Common Stock

During the first nine months of 2023, our board of directors declared and paid the following cash dividends:


Declaration Date	Dividend Per Common Share		Record Date	Total Amount Paid		Payment Date
				(in millions)
January 24, 2023	$	0.20	March 17, 2023	$	97	March 31, 2023
April 18, 2023	0.22		June 16, 2023	109		June 30, 2023
July 18, 2023	0.22		September 15, 2023	108		September 29, 2023

				$	314

The total amount paid of $314 million was recorded in retained earnings within Nasdaq's stockholders' equity in the Condensed Consolidated Balance Sheets at September 30, 2023.

In October 2023, the board of directors approved a regular quarterly cash dividend of $0.22 per share on our outstanding common stock. The dividend is payable on December 22, 2023 to shareholders of record at the close of business on December 8, 2023. The estimated aggregate payment of this dividend is $108 million. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.

The board of directors maintains a dividend policy with the intention to provide shareholders with regular and increasing dividends as earnings and cash flows increase.

12. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended September 30,
	2023		2022
Numerator:	(in millions, except share and per share amounts)
Net income attributable to common shareholders	$	294	$	294
Denominator:
Weighted-average common shares outstanding for basic earnings per share	491,315,824		491,228,889

Weighted-average effect of dilutive securities - Employee equity awards	2,796,138		5,110,197

Weighted-average common shares outstanding for diluted earnings per share	494,111,962		496,339,086
Basic and diluted earnings per share:
Basic earnings per share	$	0.60	$	0.60
Diluted earnings per share	$	0.60	$	0.59

	Nine Months Ended September 30,
	2023		2022
Numerator:	(in millions, except share and per share amounts)
Net income attributable to common shareholders	$	862	$	884
Denominator:
Weighted-average common shares outstanding for basic earnings per share	490,680,174		492,803,274

Weighted-average effect of dilutive securities - Employee equity awards	3,495,584		5,351,675

Weighted-average common shares outstanding for diluted earnings per share	494,175,758		498,154,949
Basic and diluted earnings per share:
Basic earnings per share	$	1.76	$	1.79
Diluted earnings per share	$	1.74	$	1.77

In the table above, employee equity awards from our PSU program, which are considered contingently issuable, are included in the computation of dilutive earnings per share on a weighted average basis when management determines that the applicable performance criteria would have been met if the performance period ended as of the date of the relevant computation.

Securities that were not included in the computation of diluted earnings per share because their effect was antidilutive were immaterial for the three and nine months ended September 30, 2023 and 2022.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables present our financial assets and financial liabilities that were measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022.


	September 30, 2023
	Total		Level 1		Level 2		Level 3
	(in millions)

European government debt securities	$	150	$	150	$	—	$	—
State-owned enterprises and municipal securities	105		—		105		—
Swedish mortgage bonds	12		—		12		—
Corporate debt securities	5		—		5		—


Total assets at fair value	$	272	$	150	$	122	$	—

	December 31, 2022
	Total		Level 1		Level 2		Level 3
	(in millions)
European government debt securities	$	147	$	147	$	—	$	—
State-owned enterprises and municipal securities	7		—		7		—
Swedish mortgage bonds	20		—		20		—
Corporate debt securities	7		—		7		—

Total assets at fair value	$	181	$	147	$	34	$	—

Financial Instruments Not Measured at Fair Value on a Recurring Basis

Some of our financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash and cash equivalents, receivables, net, certain other current assets, accounts payable and accrued expenses, Section 31 fees payable to SEC, accrued personnel costs, commercial paper and certain other current liabilities.

We have certain investments, primarily our investment in OCC, which are accounted for under the equity method of accounting. We have elected the measurement alternative for the majority of our equity securities, which primarily represent various strategic investments made through our corporate venture program. See “Equity Method Investments,” and “Equity Securities,” of Note 6, “Investments,” for further discussion.

We also consider our debt obligations to be financial instruments. As of September 30, 2023, the majority of our debt obligations were fixed-rate obligations. We are exposed to changes in interest rates as a result of borrowings under our 2022 Revolving Credit Agreement, as the interest rates on this facility have a variable rate depending on the maturity of the borrowing and the implied underlying reference rate. We are also exposed to changes in interest rates on amounts outstanding from the sale of commercial paper under our commercial paper program. As of September 30, 2023, we had no outstanding borrowings under our 2022 Revolving Credit Agreement or commercial paper program. The fair value of our remaining debt obligations utilizing discounted cash flow analyses for our floating rate debt, and prevailing market rates for our fixed rate debt was $8.5 billion as of September 30, 2023 and $4.4 billion as of December 31, 2022. The discounted cash flow analyses are based on borrowing rates currently available to us for debt with similar terms and maturities. Our commercial paper and our fixed rate and floating rate debt are categorized as Level 2 in the fair value hierarchy.

For further discussion of our debt obligations, see Note 8, “Debt Obligations.”

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

Our non-financial assets, which include goodwill, intangible assets, and other long-lived assets, are not required to be carried at fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. Nasdaq uses Level 3 inputs to measure the fair value of the above assets on a non-recurring basis. As of September 30, 2023 and December 31, 2022, there were no non-financial assets measured at fair value on a non-recurring basis.

14. CLEARING OPERATIONS

Nasdaq Clearing

Nasdaq Clearing is authorized and supervised under EMIR as a multi-asset clearinghouse by the SFSA. Such authorization is effective for all member states of the European Union and certain other non-member states that are part of the European Economic Area, including Norway. The clearinghouse acts as the CCP for exchange and OTC trades in equity derivatives, fixed income derivatives, resale and repurchase contracts, power derivatives, emission allowance derivatives, and seafood derivatives. In June 2023, we entered into an agreement to sell our European energy trading and clearing business, subject to regulatory approval.

Through our clearing operations in the financial markets, which include the resale and repurchase market, the commodities markets, and the seafood market, Nasdaq Clearing is the legal counterparty for, and guarantees the fulfillment of, each contract cleared. These contracts are not used by Nasdaq Clearing for the purpose of trading on its own behalf. As the legal counterparty of each transaction, Nasdaq Clearing bears the counterparty risk between the purchaser and seller in the contract. In its guarantor role, Nasdaq Clearing has precisely equal and offsetting claims to and from clearing members on opposite sides of each contract, standing as the CCP on every contract cleared. In accordance with the rules and regulations of Nasdaq Clearing, default fund and margin collateral requirements are calculated for each clearing member’s positions in accounts with the CCP. See “Default Fund Contributions and Margin Deposits” below for further discussion of Nasdaq Clearing’s default fund and margin requirements.

Nasdaq Clearing maintains three member sponsored default funds: one related to financial markets, one related to commodities markets and one related to the seafood market. Under this structure, Nasdaq Clearing and its clearing members must contribute to the total regulatory capital related to the clearing operations of Nasdaq Clearing. This structure applies an initial separation of default fund contributions for the financial, commodities and seafood markets in order to create a buffer for each market’s counterparty risks. See “Default Fund Contributions” below for further discussion of Nasdaq Clearing’s default fund. A power of assessment and a liability waterfall have also been implemented to further align risk between Nasdaq Clearing and its clearing members. See “Power of Assessment” and “Liability Waterfall” below for further discussion.

Default Fund Contributions and Margin Deposits

As of September 30, 2023, clearing member default fund contributions and margin deposits were as follows:


	September 30, 2023
	Cash Contributions		Non-Cash Contributions		Total Contributions
	(in millions)
Default fund contributions	$	957	$	151	$	1,108
Margin deposits	4,978		5,069		10,047
Total	$	5,935	$	5,220	$	11,155

Of the total default fund contributions of $1,108 million, Nasdaq Clearing can utilize $905 million as capital resources in the event of a counterparty default. The remaining balance of $203 million pertains to member posted surplus balances.

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.

Clearing member cash contributions are maintained in demand deposits held at central banks and large, highly rated financial institutions or secured through direct investments, primarily central bank certificates and highly rated European government debt securities with original maturities primarily one year or less, reverse repurchase agreements and multilateral development bank debt securities. Investments in reverse repurchase agreements range in maturity from 2 to 6 days and are secured with highly rated government securities and multilateral development banks. The carrying value of these securities approximates their fair value due to the short-term nature of the instruments and reverse repurchase agreements.

Nasdaq Clearing has invested the total cash contributions of $5,935 million as of September 30, 2023 and $7,021 million as of December 31, 2022, in accordance with its investment policy as follows:


	September 30, 2023		December 31, 2022
	(in millions)
Demand deposits	$	4,477	$	4,775
Central bank certificates	992		1,695
Restricted cash and cash equivalents	$	5,469	$	6,470
European government debt securities	172		222
Reverse repurchase agreements	234		192

Multilateral development bank debt securities	60		137
Investments	$	466	$	551
Total	$	5,935	$	7,021

In the table above, the change from December 31, 2022 to September 30, 2023 includes currency translation adjustments of $286 million for restricted cash and cash equivalents and $21 million for investments.

For the nine months ended September 30, 2023 and 2022, investments related to default funds and margin deposits, net includes purchases of investment securities of $33,506 million and $35,019 million, respectively, and proceeds from sales and redemptions of investment securities of $33,570 million and $35,083 million, respectively.

In the investment activity related to default fund and margin contributions, we are exposed to counterparty risk related to reverse repurchase agreement transactions, which reflect the risk that the counterparty might become insolvent and, thus, fail to meet its obligations to Nasdaq Clearing. We mitigate this risk by only engaging in transactions with high credit quality reverse repurchase agreement counterparties and by limiting the acceptable collateral under the reverse repurchase agreement to high quality issuers, primarily government securities and other securities explicitly guaranteed by a government. The value of the underlying security is monitored during the lifetime of the contract, and in the event the market value of the underlying security falls below the reverse repurchase amount, our clearinghouse may require additional collateral or a reset of the contract.

Default Fund Contributions

Required contributions to the default funds are proportional to the exposures of each clearing member. When a clearing member is active in more than one market, contributions must be made to all markets’ default funds in which the member is active. Clearing members’ eligible contributions may include cash and non-cash contributions. Cash contributions received are maintained in demand deposits held at central banks and large, highly rated financial institutions or invested by Nasdaq Clearing, in accordance with its investment policy, either in central bank certificates, highly rated government debt securities, reverse repurchase agreements with highly rated government debt securities as collateral, or multilateral development bank debt securities. Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. Clearing members’ cash contributions are included in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Condensed Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default.

In addition to clearing members’ required contributions to the liability waterfall, Nasdaq Clearing is also required to contribute capital to the liability waterfall and overall regulatory capital as specified under its clearinghouse rules. As of September 30, 2023, Nasdaq Clearing committed capital totaling $115 million to the liability waterfall and overall regulatory capital, in the form of government debt securities, which are recorded as financial investments in the Condensed Consolidated Balance Sheets. The combined regulatory capital of the clearing members and Nasdaq Clearing is intended to secure the obligations of a clearing member exceeding such member’s own margin and default fund deposits and may be used to cover losses sustained by a clearing member in the event of a default.

Margin Deposits

Nasdaq Clearing requires all clearing members to provide collateral, which may consist of cash and non-cash contributions, to guarantee performance on the clearing members’ open positions, or initial margin. In addition, clearing members must also provide collateral to cover the daily margin call if needed. See “Default Fund Contributions” above for further discussion of cash and non-cash contributions.

Similar to default fund contributions, Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing and are recorded in revenues. These cash deposits are recorded in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Pledged margin collateral is not recorded in our Condensed Consolidated Balance Sheets as all risks and rewards of collateral ownership, including interest, belong to the counterparty. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default.

Nasdaq Clearing marks to market all outstanding contracts and requires payment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able to satisfy their financial obligations in a timely manner allowing Nasdaq Clearing the ability to mitigate the risk of a clearing member defaulting due to exceptionally large losses. In the event of a default, Nasdaq Clearing can access the defaulting member’s margin and default fund deposits to cover the defaulting member’s losses.

Regulatory Capital and Risk Management Calculations

Nasdaq Clearing manages risk through a comprehensive counterparty risk management framework, which is comprised of policies, procedures, standards and financial resources. The level of regulatory capital is determined in accordance with Nasdaq Clearing’s regulatory capital and default fund policy, as approved by the SFSA. Regulatory capital calculations are continuously updated through a proprietary capital-at-risk calculation model that establishes the appropriate level of capital.

As mentioned above, Nasdaq Clearing is the legal counterparty for each contract cleared and thereby guarantees the fulfillment of each contract. Nasdaq Clearing accounts for this guarantee as a performance guarantee. We determine the fair value of the performance guarantee by considering daily settlement of contracts and other margining and default fund requirements, the risk management program, historical evidence of default payments, and the estimated probability of potential default payouts. The calculation is determined using proprietary risk management software that simulates gains and losses based on historical market prices, extreme but plausible market scenarios, volatility and other factors present at that point in time for those particular unsettled contracts. Based on this analysis, excluding any liability related to the Nasdaq commodities clearing default (see discussion above), the estimated liability was nominal and no liability was recorded as of September 30, 2023.

Power of Assessment

To further strengthen the contingent financial resources of the clearinghouse, Nasdaq Clearing has power of assessment that provides the ability to collect additional funds from its clearing members to cover a defaulting member’s remaining obligations up to the limits established under the terms of the clearinghouse rules. The power of assessment corresponds to 230% of the clearing member’s aggregate contribution to the financial, commodities and seafood markets’ default funds.

Liability Waterfall

The liability waterfall is the priority order in which the capital resources would be utilized in the event of a default where the defaulting clearing member’s collateral and default fund contribution would not be sufficient to cover the cost to settle its portfolio. If a default occurs and the defaulting clearing member’s collateral, including cash deposits and pledged assets, is depleted, then capital is utilized in the following amount and order:

junior capital contributed by Nasdaq Clearing, which totaled $39 million as of September 30, 2023;
a loss-sharing pool related only to the financial market that is contributed to by clearing members and only applies if the defaulting member’s portfolio includes interest rate swap products;
specific market default fund where the loss occurred (i.e., the financial, commodities, or seafood market), which includes capital contributions of the clearing members on a pro-rata basis; and
fully segregated senior capital for each specific market contributed by Nasdaq Clearing, calculated in accordance with clearinghouse rules, which totaled $16 million as of September 30, 2023.

If additional funds are needed after utilization of the liability waterfall, or if part of the waterfall has been utilized and needs to be replenished, then Nasdaq Clearing will utilize its power of assessment and additional capital contributions will be required by non-defaulting members up to the limits established under the terms of the clearinghouse rules.

In addition to the capital held to withstand counterparty defaults described above, Nasdaq Clearing also has committed capital of $60 million to ensure that it can handle an orderly wind-down of its operation, and that it is adequately protected against investment, operational, legal, and business risks.

Market Value of Derivative Contracts Outstanding

The following table presents the market value of derivative contracts outstanding prior to netting:


	September 30, 2023
	(in millions)
Commodity and seafood options, futures and forwards	$	124
Fixed-income options and futures	2,324
Stock options and futures	141
Index options and futures	26
Total	$	2,615

In the table above:

We determined the fair value of our option contracts using standard valuation models that were based on market-based observable inputs including implied volatility, interest rates and the spot price of the underlying instrument.
We determined the fair value of our futures contracts based upon quoted market prices and average quoted market yields.
We determined the fair value of our forward contracts using standard valuation models that were based on market-based observable inputs including benchmark rates and the spot price of the underlying instrument.

Derivative Contracts Cleared

The following table presents the total number of derivative contracts cleared through Nasdaq Clearing for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
	2023	2022
Commodity and seafood options, futures and forwards	172,222	249,227
Fixed-income options and futures	14,437,712	17,233,036
Stock options and futures	15,584,780	13,737,846
Index options and futures	30,059,441	34,191,390
Total	60,254,155	65,411,499

In the table above, the total volume in cleared power related to commodity contracts was 284 Terawatt hours (TWh) and 337 TWh for the nine months ended September 30, 2023 and 2022, respectively.

Resale and Repurchase Agreements Contracts Outstanding and Cleared

The outstanding contract value of resale and repurchase agreements was $1.9 billion and $2.7 billion as of September 30, 2023 and 2022, respectively. The total number of resale and repurchase agreements contracts cleared was 3,519,163 and 4,835,371 for the nine months ended September 30, 2023 and 2022, respectively.

15. LEASES

We have operating leases which are primarily real estate leases predominantly for our U.S. and European headquarters, data centers and for general office space. The following table provides supplemental balance sheet information related to Nasdaq's operating leases:


Leases	Balance Sheet Classification	September 30, 2023		December 31, 2022
		(in millions)
Assets:
Operating lease assets	Operating lease assets	$	397	$	444

Liabilities:
Current lease liabilities	Other current liabilities	$	57	$	54
Non-current lease liabilities	Operating lease liabilities	412		452
Total lease liabilities		$	469	$	506

The following table summarizes Nasdaq's lease cost:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions)
Operating lease cost	$	19	$	18	$	68	$	56
Variable lease cost	10		8		32		25
Sublease income	(1)		(1)		(1)		(3)
Total lease cost	$	28	$	25	$	99	$	78

In the table above, operating lease costs include short-term lease cost, which was immaterial.

In the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result of this ongoing review, for the nine months ended September 30, 2023, we recorded impairment charges of $23 million, of which $13 million related to operating lease asset impairment and is included in operating lease cost in the table above, $5 million related to exit costs and is included in variable lease cost in the table above and $5 million related to impairment of leasehold improvements, which are recorded in depreciation and amortization expense in the Condensed Consolidated Statements of Income. We fully impaired our lease assets for locations that we vacated with no intention to sublease. Substantially all of the property, equipment and leasehold improvements associated with the vacated leased office space were fully impaired as there are no expected future cash flows for these items.

The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded in our Condensed Consolidated Balance Sheets.


	September 30, 2023
	(in millions)
Remainder of 2023	$	17
2024	71
2025	62
2026	51
2027	48
2028+	316
Total lease payments	565
Less: interest	(96)
Present value of lease liabilities	$	469

In the table above, interest is calculated using the interest rate for each lease. Present value of lease liabilities includes the current portion of $57 million.

Total lease payments in the table above exclude $44 million of legally binding minimum lease payments for leases signed but not yet commenced.

The following table provides information related to Nasdaq's lease term and discount rate:


	September 30, 2023
Weighted-average remaining lease term (in years)	10.1

Weighted-average discount rate	3.7	%

The following table provides supplemental cash flow information related to Nasdaq's operating leases:


	Nine Months Ended September 30,
	2023		2022
	(in millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	57	$	47

Lease assets obtained in exchange for operating lease liabilities	$	8	$	130

16. INCOME TAXES

Income Tax Provision

The following table presents our income tax provision and effective tax rate:


	Three Months Ended September 30,
	2023			2022
	(in millions)
Income tax provision	$	97		$	88
Effective tax rate	24.8		%	23.0		%

	Nine Months Ended September 30,
	2023			2022
	(in millions)
Income tax provision	$	262		$	270
Effective tax rate	23.3		%	23.4		%

The higher effective tax rate for the three months ended September 30, 2023, as compared to the prior year period, was primarily due to the income tax effect on the geographic mix of earnings. The effective tax rate may vary from period to period depending on, among other factors, the geographic and business mix of earnings and losses. These and other factors, including history of pre-tax earnings and losses, are taken into account in assessing the ability to realize deferred tax assets.

Tax Audits

Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income tax return, applicable state and local income tax returns and non-U.S. income tax returns. We are subject to examination by federal, state and local, and foreign tax authorities. Our federal income tax returns for the years 2018 through 2022 are subject to examination by the Internal Revenue Service. Several state tax returns are currently under examination by the respective tax authorities for the years 2012 through 2021. Non-U.S. tax returns are subject to examination by the respective tax authorities for the years 2017 through 2022.

We regularly assess the likelihood of additional assessments by each jurisdiction and have established tax reserves that we believe are adequate in relation to the potential for additional assessments. Examination outcomes and the timing of examination settlements are subject to uncertainty. Although the results of such examinations may have an impact on our unrecognized tax benefits, we do not anticipate that such impact will be material to our condensed consolidated financial position or results of operations, but may be material to our operating results for a particular period and the effective tax rate for that period. We do not expect the settlement of any tax audits to be material in the next twelve months.

17. COMMITMENTS, CONTINGENCIES AND GUARANTEES

Guarantees Issued and Credit Facilities Available

In addition to the default fund contributions and margin collateral pledged by clearing members discussed in Note 14, “Clearing Operations,” we have obtained financial guarantees and credit facilities, which are guaranteed by us through counter indemnities, to provide further liquidity related to our clearing businesses. Financial guarantees issued to us totaled $4 million as of September 30, 2023 and December 31, 2022. As discussed in “Other Credit Facilities,” of Note 8, “Debt Obligations,” we also have credit facilities primarily related to our Nasdaq Clearing operations, which are available in multiple currencies, and totaled $176 million as of September 30, 2023 and $184 million as of December 31, 2022 in available liquidity, none of which was utilized.

Other Guarantees

Through our clearing operations in the financial markets, Nasdaq Clearing is the legal counterparty for, and guarantees the performance of, its clearing members. See Note 14, “Clearing Operations,” for further discussion of Nasdaq Clearing performance guarantees.

We have provided a guarantee related to lease obligations for The Nasdaq Entrepreneurial Center, Inc., which is a not-for-profit organization designed to convene, connect and engage aspiring and current entrepreneurs. This entity is not included in the condensed consolidated financial statements of Nasdaq.

We believe that the potential for us to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Balance Sheets for the above guarantees.

Routing Brokerage Activities

One of our broker-dealer subsidiaries, Nasdaq Execution Services, provides a guarantee to securities clearinghouses and exchanges under its standard membership agreements, which require members to guarantee the performance of other members. If a member becomes unable to satisfy its obligations to a clearinghouse or exchange, other members would be required to meet its shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral, as well as meet certain minimum financial standards. Nasdaq Execution Services’ maximum potential liability under these arrangements cannot be quantified. However, we believe that the potential for Nasdaq Execution Services to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Balance Sheets for these arrangements.

Legal and Regulatory Matters

Armenian Stock Exchange Investigation

As disclosed in our prior filings with the SEC, a former non-U.S. subsidiary of Nasdaq, NASDAQ OMX Armenia OJSC, operated the Armenian Stock Exchange and the Central Depository of Armenia, which are regulated by the Central Bank of Armenia under Armenian law. In accordance with the requirements of Armenian law, Mellat Bank SB CJSC, an Armenian entity that is designated under Executive Order 13382, was a market participant on the Armenian Stock Exchange and, as a result, paid participation and transaction fees to the Armenian Stock Exchange during the period from 2012-2014. In 2014, we voluntarily self-disclosed this matter to the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC, and received authorization from OFAC to continue, if necessary, certain activities pertaining to Mellat Bank SB CJSC in Armenia in a limited manner. In 2015, Nasdaq sold a majority of its ownership of Nasdaq OMX Armenia OJSC, with the remaining minority interest sold in 2018.

OFAC has been conducting an inquiry into the Armenian Stock Exchange matter described above and in our prior filings since 2016, and during the first quarter of 2021, we were advised that OFAC is considering a civil monetary penalty in connection with that matter. We are currently in discussions with OFAC.

We believe our decision to voluntarily self-report this issue and our continued cooperation with OFAC, along with the permit we received from OFAC in connection with our transactions involving the Armenian Stock Exchange, will be mitigating factors with respect to the matter, and that any monetary fines or restrictions will not be material to our financial results. Accordingly, we expect to reach a settlement with OFAC during the fourth quarter of 2023 and have accrued for an immaterial loss contingency.

CFTC Matter

In June 2022, NASDAQ Futures, Inc. (“NFX”), a non-operational, wholly-owned subsidiary of Nasdaq, received a telephonic “Wells Notice” from the staff of the CFTC relating to certain alleged potential violations by NFX of provisions of the Commodity Exchange Act and CFTC rules thereunder during the period beginning July 2015 through October 2018. The Wells Notice informed NFX that the CFTC staff has made, subject to consideration of NFX’s response, a preliminary determination to recommend that the CFTC authorize an enforcement action against NFX in connection with its former futures exchange business. Nasdaq sold NFX’s futures exchange business to a third-party in November 2019, including the portfolio of open interest in NFX contracts. During 2020, all remaining open interest in NFX contracts was migrated to other exchanges and NFX ceased operation. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. NFX has submitted a response to the Wells Notice that contests all aspects of the

CFTC staff’s position. The CFTC staff subsequently informed us that it plans to formally recommend that the CFTC authorize a civil enforcement action. We cannot predict if or when such an action will be brought, including the scope of the claims or the remedy sought, but such action could commence at any time, and the scope of claims or remedies sought could be material. We believe that NFX would have defenses to any claims if they are the same as those alleged by the CFTC staff during the Wells Notice process. We are unable to predict the ultimate outcome of this matter or the amount or type of remedies that the CFTC may seek or obtain, but any such remedies could have a material negative effect on our operating results and reputation. Accordingly, we are unable to reasonably estimate any potential loss or range of loss, and therefore, we have not accrued for a loss contingency.

SFSA Inquiry

In September 2023, Nasdaq Stockholm AB, a wholly-owned subsidiary of Nasdaq and the operator of the Nasdaq Stockholm exchange, received a written notification from the SFSA regarding a review initiated with regard to the obligation of Nasdaq Stockholm AB to report suspected market abuse. The review, which is still at a preliminary stage, was initiated in connection with an investigation of alleged insider trading in the shares of four companies listed on the Nasdaq Stockholm exchange. The notification stated that the SFSA is reviewing whether Nasdaq Stockholm AB, by not reporting certain suspicious transactions in the four listed companies, breached its obligation under certain provisions of the Market Abuse Regulation rules. Nasdaq Stockholm AB is cooperating fully and is engaged in ongoing communications with the SFSA.

Other Matters

Except as disclosed above and in our prior reports filed under the Exchange Act, we are not currently a party to any litigation or proceeding that we believe could have a material adverse effect on our business, consolidated financial condition, or operating results. However, from time to time, we have been threatened with, or named as a defendant in, lawsuits or involved in regulatory proceedings.

In the normal course of business, Nasdaq discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiries. Management believes that censures, fines, penalties or other sanctions that could result from any ongoing examinations or inquiries will not have a material impact on its consolidated financial position or results of operations. However, we are unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential fines, penalties or injunctive or other equitable relief, if any, that may result from these matters.

Tax Audits

We are engaged in ongoing discussions and audits with taxing authorities on various tax matters, the resolutions of which are uncertain. Currently, there are matters that may lead to assessments, some of which may not be resolved for several years. Based on currently available information, we believe we have adequately provided for any assessments that could result from those proceedings where it is more likely than not that we will be assessed. We review our positions on these matters as they progress. See “Tax Audits,” of Note 16, “Income Taxes,” for further discussion.

18. BUSINESS SEGMENTS

In 2022, we announced a new organizational structure, which aligns our businesses more closely with the foundational shifts that are driving the evolution of the global financial system. In order to amplify our strategy, we aligned the Company more closely with evolving client needs. During the fourth quarter of 2022, we began to manage, operate and provide our products and services in line with this new divisional structure. As a result, our four previous business segments, Market Technology, Investment Intelligence, Corporate Platforms and Market Services have been changed to align with our new corporate structure that includes three business segments: Market Platforms, Capital Access Platforms and Anti-Financial Crime. See Note 1, “Organization and Nature of Operations,” for further discussion of our reportable segments.

This Quarterly Report on Form 10-Q presents our results in alignment with the new corporate structure. All periods presented are restated to reflect the new structure.

Our management allocates resources, assesses performance and manages these businesses as three separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is operating income. Results of individual businesses are presented based on our management accounting practices and structure. Our chief operating decision maker does not review total assets or statements of income below operating income by segments as key performance metrics; therefore, such information is not presented below.

The following tables present certain information regarding our business segments for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,
	2023		2022
Market Platforms	(in millions)
Total revenues	$	892	$	1,046
Transaction-based expenses	(511)		(667)
Revenues less transaction-based expenses	381		379

Operating income	200		213

Capital Access Platforms
Total revenues	456		422

Operating income	254		233

Anti-Financial Crime
Total revenues	93		77

Operating income	31		21

Corporate Items
Total revenues	10		12

Operating loss	(54)		(69)

Consolidated
Total revenues	$	1,451	$	1,557
Transaction-based expenses	(511)		(667)
Revenues less transaction-based expenses	$	940	$	890

Operating income	$	431	$	398



	Nine Months Ended September 30,
	2023		2022
Market Platforms	(in millions)
Total revenues	$	2,813	$	3,121
Transaction-based expenses	(1,639)		(1,969)
Revenues less transaction-based expenses	1,174		1,152

Operating income	634		640

Capital Access Platforms
Total revenues	1,309		1,262

Operating income	720		703

Anti-Financial Crime
Total revenues	265		224

Operating income	85		56

Corporate Items
Total revenues	30		37

Operating loss	(214)		(184)

Consolidated
Total revenues	$	4,417	$	4,644
Transaction-based expenses	(1,639)		(1,969)
Revenues less transaction-based expenses	$	2,778	$	2,675

Operating income	$	1,225	$	1,215

Certain amounts are allocated to Corporate Items in our management reports as we believe they do not contribute to a meaningful evaluation of a particular segment's ongoing operating performance. Management does not consider these items for the purpose of evaluating the performance of our segments or their managers or when making decisions to allocate resources. Therefore, we believe performance measures excluding the below items provide management with a useful representation of our segments' ongoing activity in each period. These items, which are presented in the table below, include the following:

*•*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 segments, and the relative operating performance of the segments 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. These expenses generally include integration costs, as well as legal, due diligence and other third-party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the nine months ended September 30, 2023, these costs primarily relate to the Adenza acquisition.

Restructuring charges: In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. See Note 19, “Restructuring Charges,” for further discussion of this plan.
Revenues and expenses - divested businesses: For the three and nine months ended September 30, 2023 and 2022, these amounts include revenues and expenses related to our European power trading and clearing business, following our announcement in June 2023 to sell this business, subject to regulatory approval. Historically, these amounts were included in our Market Platforms and Capital Access Platforms results. For the nine months ended September 30, 2022 these amounts also include revenues and expenses related to our Nordic broker services business, for which we completed the wind-down in June 2022. Prior to the closing of the transaction, these amounts were included in our Market Platforms results. For the three and nine months ended September 30, 2023 and 2022, other revenues also include a transitional services agreement associated with a divested business.
Other items: We have included certain other charges or gains in corporate items, to the extent we believe they should be excluded when evaluating the ongoing operating performance of each individual segment. Other items primarily include:

*◦*for the nine months ended September 30, 2023, impairment charges related to our lease assets and leasehold improvements associated with vacating certain leased office space which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income;

◦for the nine months ended September 30, 2023, other items include insurance recoveries related to certain legal matters, which are recorded in professional and contract services and general, administrative and other expense in the Condensed Consolidated Statements of Income;

◦for the three and nine months ended September 30, 2022, other items include an accrual related to legal matters which are recorded in professional and contract services and general, administrative and other expense in the Condensed Consolidated Statements of Income; and

◦for the nine months ended September 30, 2022, other items primarily include a loss on extinguishment of debt, which is recorded in general administrative and other expense in the Condensed Consolidated Statements of Income.

The following table summarizes our Corporate Items:


	Three Months Ended September 30,
	2023		2022
	(in millions)
Revenues - divested businesses	$	10	$	12
Expenses:
Amortization expense of acquired intangible assets	$	37	$	38
Merger and strategic initiatives expense	4		14
Restructuring charges	17		—





Expenses - divested businesses	4		6
Other	2		23
Total expenses	64		81
Operating loss	$	(54)	$	(69)


	Nine Months Ended September 30,
	2023		2022
	(in millions)
Revenues - divested businesses	$	30	$	37
Expenses:
Amortization expense of acquired intangible assets	112		116
Merger and strategic initiatives expense	51		41
Restructuring charges	49		—
Lease asset impairments	24		—


Extinguishment of debt	—		16


Expenses - divested businesses	16		20
Other	(8)		28
Total expenses	244		221
Operating loss	$	(214)	$	(184)

For further discussion of our segments’ results, see “Segment Operating Results,” of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

19. RESTRUCTURING CHARGES

In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur $115 million to $145 million in pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period. Costs related to the divisional alignment program will be recorded as restructuring charges in the Condensed Consolidated Statements of Income.

The following table presents a summary of the divisional alignment program charges for the three and nine months ended September 30, 2023 as well as total program costs incurred since the initiation in October 2022.


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023		Total Program Costs Incurred

	(in millions)
Asset impairment charges	$	—	$	12	$	20
Consulting services	9		20		23

Employee-related costs	4		10		13
Other	4		7		8
Total restructuring charges	$	17	$	49	$	64

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