Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Nasdaq should be read in conjunction with our condensed consolidated financial statements and related notes included in this Form 10-Q.

OVERVIEW

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 202 2, 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. The new corporate structure includes three business segments: Market Platforms, Capital Access Platforms and Anti-Financial Crime. See Note 18, “Business Segments,” to the condensed consolidated financial statements for further discussion of our reportable segments as well as how management allocates resources, assesses performance and manages these businesses as three separate segments. All prior periods have been restated to conform to the current period presentation.

Third Quarter 2023 and Recent Developments

On November 1, 2023, we completed the acquisition of Adenza. Following this acquisition, we will modify our corporate structure to operate under three divisions: Market Services, Capital Access Platforms and Financial Technology. Adenza, which is comprised of the Calypso and AxiomSL solutions, will be included in the Financial Technology division.
In October 2023, the board of directors approved a regular quarterly cash dividend of $0.22 per share on our outstanding common stock.
The Nasdaq Stock Market led U.S. exchanges for operating company IPOs during the third quarter of 2023 with a 93% total win rate, and there were seven companies that switched to Nasdaq.
We achieved a new record for third quarter U.S. cash equities closing cross volumes. U.S. cash equities revenue and revenue capture benefited from third quarter closing cross volumes, including a special rebalance of Nasdaq-100 that had approximately 500 million shares and $70 billion notional traded.
For the three months ended September 30, 2023, we returned $108 million to shareholders through dividend payments.
In September 2023, our board of directors authorized an increase to our share repurchase program, bringing the aggregate remaining authorized amount to $2 billion as of September 30, 2023.

Nasdaq's Operating Results

The following tables summarize our financial performance for the three and nine months ended September 30, 2023 compared to the same periods in 2022. For a detailed discussion of our results of operations, see “Segment Operating Results” below.


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions, except per share amounts)
Revenues less transaction-based expenses	$	940	$	890		5.6	%
Operating expenses	509		492			3.5	%
Operating income	431		398			8.3	%
Net income attributable to Nasdaq	$	294	$	294		—	%
Diluted earnings per share	$	0.60	$	0.59		1.7	%
Cash dividends declared per common share	$	0.22	$	0.20		10.0	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions, except per share amounts)
Revenues less transaction-based expenses	$	2,778	$	2,675		3.9	%
Operating expenses	1,553		1,460			6.4	%
Operating income	1,225		1,215			0.8	%
Net income attributable to Nasdaq	$	862	$	884		(2.5)	%
Diluted earnings per share	$	1.74	$	1.77		(1.7)	%
Cash dividends declared per common share	$	0.64	$	0.58		10.3	%

In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues less transaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under “Item 3. Quantitative and Qualitative Disclosures about Market Risk.”

The following chart summarizes our ARR (in millions):

ARR for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature, or where the contract value fluctuates based on defined metrics. Also excluded are contracts that are signed but not yet commenced. ARR is one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

The ARR chart includes:


▪						Market technology support and SaaS subscription contracts as well as trade management services contracts, excluding one-time service requests.
▪						Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business, index data subscriptions and guaranteed minimum on futures contracts within our Index business and subscription contracts under our Workflow & Insights business.
▪						Anti-Financial Crime support and SaaS subscription contracts.

The following chart summarizes our quarterly annualized SaaS revenues for our Solutions Businesses, which are comprised of the Capital Access Platforms and Anti-Financial Crime segments and the Marketplace Technology business within the Market Platforms segment, for September 30, 2023 and 2022 (in millions):

1267

Segment Operating Results

The following table presents our revenues by segment, transaction-based expenses for our Market Platforms segment and total revenues less transaction-based expenses:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Market Platforms	$	892	$	1,046		(14.7)	%
Capital Access Platforms	456		422			8.1	%
Anti-Financial Crime	93		77			20.8	%
Other revenues	10		12			(16.7)	%
Total revenues	$	1,451	$	1,557		(6.8)	%
Transaction rebates	(447)		(494)			(9.5)	%
Brokerage, clearance and exchange fees	(64)		(173)			(63.0)	%
Total revenues less transaction-based expenses	$	940	$	890		5.6	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Market Platforms	$	2,813	$	3,121		(9.9)	%
Capital Access Platforms	1,309		1,262			3.7	%
Anti-Financial Crime	265		224			18.3	%
Other revenues	30		37			(18.9)	%
Total revenues	4,417		4,644			(4.9)	%
Transaction rebates	(1,377)		(1,605)			(14.2)	%
Brokerage, clearance and exchange fees	(262)		(364)			(28.0)	%
Total revenues less transaction-based expenses	$	2,778	$	2,675		3.9	%

The following charts present our Market Platforms, Capital Access Platforms and Anti-Financial Crime segments as a percentage of our total revenues, less transaction-based expenses.

503

505 In the charts above, Other revenues, which make up approximately 1% for both periods presented, are not shown.

MARKET PLATFORMS

The following tables present revenues from our Market Platforms segment:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Trading Services	$	747	$	906		(17.5)	%
Marketplace Technology	145		140			3.6	%
Total Market Platforms	$	892	$	1,046		(14.7)	%
Transaction-based expenses:
Transaction rebates	(447)		(494)			(9.5)	%
Brokerage, clearance and exchange fees	(64)		(173)			(63.0)	%
Total Market Platforms, net	$	381	$	379		0.5	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Trading Services	$	2,378	$	2,712		(12.3)	%
Marketplace Technology	435		409			6.4	%
Total Market Platforms	$	2,813	$	3,121		(9.9)	%
Transaction-based expenses:
Transaction rebates	(1,377)		(1,605)			(14.2)	%
Brokerage, clearance and exchange fees	(262)		(364)			(28.0)	%
Total Market Platforms, net	$	1,174	$	1,152		1.9	%

Trading Services

Our Trading Services business includes equity derivatives trading, cash equity trading, Nordic fixed income trading & clearing, U.S. Tape plans and other revenues. The following tables present net revenues by product from our Trading Services business:


	Three Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
U.S. Equity Derivative Trading	$	92	$	92	—	%
Cash Equity Trading	93		94		(1.1)	%
U.S. Tape plans	35		36		(2.8)	%
Other	16		17		(5.9)	%
Trading Services, net	$	236	$	239	(1.3)	%











	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
U.S. Equity Derivative Trading	$	283	$	275		2.9	%
Cash Equity Trading	299		300			(0.3)	%
U.S. Tape plans	107		113			(5.3)	%
Other	50		55			(9.1)	%
Trading Services, net	$	739	$	743		(0.5)	%

In the tables above, Other includes Nordic fixed income trading & clearing, Nordic derivatives and Canadian cash equities trading.

U.S. Equity Derivative Trading

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers from our U.S. Equity Derivative Trading business:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
U.S. Equity Derivative Trading Revenues	$	316	$	316		—	%
Section 31 fees	9		26			(65.4)	%
Transaction-based expenses:
Transaction rebates	(223)		(222)			0.5	%
Section 31 fees	(9)		(26)			(65.4)	%
Brokerage and clearance fees	(1)		(2)			(50.0)	%
U.S. Equity derivative trading revenues, net	$	92	$	92		—	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
U.S. Equity Derivative Trading Revenues	$	940	$	938		0.2	%
Section 31 fees	43		46			(6.5)	%
Transaction-based expenses:
Transaction rebates	(654)		(660)			(0.9)	%
Section 31 fees	(43)		(46)			(6.5)	%
Brokerage and clearance fees	(3)		(3)			—	%
U.S. Equity derivative trading revenues, net	$	283	$	275		2.9	%

Section 31 fees are recorded as U.S. equity derivative and cash equity trading revenues with a corresponding amount recorded in transaction-based expenses. We are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Pass-through fees can increase or decrease due to rate changes by the SEC, our percentage of the overall industry volumes processed on our systems, and differences in actual dollar value traded. Section 31 fees decreased in the third quarter and the first nine months of 2023 compared with the same periods in 2022 primarily due to lower average SEC fee rates. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.


	Three Months Ended September 30,
	2023		2022
U.S. equity options
Total industry average daily volume (in millions)	39.6		37.0
Nasdaq PHLX matched market share	11.0	%	11.2	%
The Nasdaq Options Market matched market share	5.6	%	8.3	%
Nasdaq BX Options matched market share	4.4	%	3.9	%
Nasdaq ISE Options matched market share	5.7	%	5.5	%
Nasdaq GEMX Options matched market share	3.0	%	2.1	%
Nasdaq MRX Options matched market share	2.0	%	1.6	%
Total matched market share executed on Nasdaq’s exchanges	31.7	%	32.6	%

	Nine Months Ended September 30,
	2023		2022
U.S. equity options
Total industry average daily volume (in millions)	40.4		37.9
Nasdaq PHLX matched market share	11.2	%	11.4	%
The Nasdaq Options Market matched market share	6.4	%	8.3	%
Nasdaq BX Options matched market share	3.6	%	2.7	%
Nasdaq ISE Options matched market share	5.8	%	5.6	%
Nasdaq GEMX Options matched market share	2.3	%	2.3	%
Nasdaq MRX Options matched market share	1.7	%	1.7	%
Total matched market share executed on Nasdaq’s exchanges	31.0	%	32.0	%

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues less transaction-based expenses remained flat in the third quarter compared with the same period in 2022 primarily due to higher industry trading volumes, offset by lower overall matched market share executed on Nasdaq's exchanges and lower capture rates.

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues less transaction-based expenses increased in the first nine months of 2023 compared with the same period in 2022 primarily due to higher industry trading volumes, partially offset by lower overall matched market share executed on Nasdaq's exchanges. U.S. equity derivative trading revenues was also partially offset by lower capture in the first nine months of 2023 compared with the same period in 2022.

Transaction rebates, in which we credit a portion of the execution charge to the market participant, remained relatively flat in the third quarter of 2023 compared with the same period in 2022. Transaction rebates decreased in the first nine months of 2023 compared with the same period in 2022 primarily due to lower rebate capture rate and lower overall U.S. matched market share executed on Nasdaq's exchanges, partially offset by higher industry trading volumes.

Cash Equity Trading Revenues

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers and other metrics from our Cash Equity Trading business:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Cash Equity Trading Revenues	$	316	$	365		(13.4)	%
Section 31 fees	50		140			(64.3)	%
Transaction-based expenses:
Transaction rebates	(219)		(266)			(17.7)	%
Section 31 fees	(50)		(140)			(64.3)	%
Brokerage and clearance fees	(4)		(5)			(20.0)	%
Cash equity trading revenues, net	$	93	$	94		(1.1)	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Cash Equity Trading Revenues	$	1,022	$	1,240		(17.6)	%
Section 31 fees	201		296			(32.1)	%
Transaction-based expenses:
Transaction rebates	(708)		(921)			(23.1)	%
Section 31 fees	(201)		(296)			(32.1)	%
Brokerage and clearance fees	(15)		(19)			(21.1)	%
Cash equity trading revenues, net	$	299	$	300		(0.3)	%

See the discussion in "U.S. Equity Derivative Trading" for an explanation of Section 31 fees for the third quarter and the first nine months of 2023 as compared to the same periods in 2022. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.


	Three Months Ended September 30,
	2023			2022
Total U.S.-listed securities
Total industry average daily share volume (in billions)	10.4			10.9
Matched share volume (in billions)	106.7			119.9
The Nasdaq Stock Market matched market share	15.5		%	15.9		%
Nasdaq BX matched market share	0.4		%	0.5		%
Nasdaq PSX matched market share	0.3		%	0.8		%
Total matched market share executed on Nasdaq’s exchanges	16.2		%	17.2		%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility	40.2		%	36.9		%
Total market share	56.4		%	54.1		%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	556,257			784,672
Total average daily value of shares traded (in billions)	$	3.6		$	4.3
Total market share executed on Nasdaq’s exchanges	71.6		%	71.1		%

	Nine Months Ended September 30,
	2023			2022
Total U.S.-listed securities
Total industry average daily share volume (in billions)	11.0			12.1
Matched share volume (in billions)	342.2			401.2
The Nasdaq Stock Market matched market share	15.9		%	16.3		%
Nasdaq BX matched market share	0.4		%	0.5		%
Nasdaq PSX matched market share	0.4		%	0.8		%
Total matched market share executed on Nasdaq’s exchanges	16.7		%	17.6		%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility	35.2		%	34.8		%
Total market share	51.9		%	52.4		%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	676,132			953,090
Total average daily value of shares traded (in billions)	$	4.5		$	5.6
Total market share executed on Nasdaq’s exchanges	70.6		%	72.1		%

In the tables above, total market share includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the FINRA/Nasdaq Trade Reporting Facility.

Cash equity trading revenues decreased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to lower industry trading volumes, lower overall U.S. matched market share executed on Nasdaq's exchanges, as well as lower capture rates.

Cash equity trading revenues less transaction-based expenses remained relatively flat in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to lower industry trading volumes and lower overall U.S. matched market share executed on Nasdaq's exchanges, partially offset by higher U.S. capture rate.

Transaction rebates decreased in the third quarter and first nine months of 2023 compared with the same periods in 2022. For The Nasdaq Stock Market and Nasdaq PSX, we credit a portion of the per share execution charge to the market participant that provides the liquidity, and for Nasdaq BX, we credit a portion of the per share execution charge to the market participant that takes the liquidity. The decrease was primarily due to lower rebate capture rate, lower U.S. industry volumes, and lower U.S. matched market share executed on Nasdaq's exchanges.

U.S. Tape Plans

The following table presents revenues from our U.S. Tape plans business:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
U.S. Tape plans	$	35	$	36		(2.8)	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
U.S. Tape plans	$	107	$	113		(5.3)	%

U.S. Tape plans revenues remained relatively flat in the third quarter of 2023 compared with the same period in 2022. U.S. Tape plans revenues decreased in the first nine months of 2023 compared with the same period in 2022 primarily due to lower market share and lower collections.

Other

Other includes Nordic fixed income trading and clearing, Nordic derivatives and Canadian cash equities trading. The following table presents revenue and a key driver from our Other business:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Other	$	16	$	17		(5.9)	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Other	$	50	$	55		(9.1)	%

In the table above, Other includes transaction rebates of $5 million and $6 million for the three months ended September 30, 2023 and 2022, respectively, and $15 million and $24 million for the nine months ended September 30, 2023 and 2022, respectively.


	Three Months Ended September 30,
	2023	2022
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts	245,986	267,137

	Nine Months Ended September 30,
	2023	2022
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts	298,785	303,095

In the tables above, Nasdaq Nordic and Nasdaq Baltic total average daily volume of options and futures contracts include Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement.

Other revenues decreased in the third quarter and the first nine months of 2023 compared with the same periods in 2022 primarily due to lower trading volumes as well as the unfavorable impact of changes in foreign exchange rates.

Marketplace Technology

Marketplace Technology includes our trade management services and market technology businesses.

The following tables present revenues and key drivers from our Marketplace Technology business:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Marketplace Technology	$	145	$	140		3.6	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Marketplace Technology	$	435	$	409		6.4	%


	As of or Three Months Ended September 30,
	2023		2022
	(in millions)
ARR	$	511	$	499
Quarterly annualized SaaS revenues	39		38
Order intake	33		30

	Nine Months Ended September 30,
	2023		2022
	(in millions)
Order intake	155		157

In the table above, order intake is for our market technology business and represents the total contract value of orders signed during the period.

Marketplace technology revenues increased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to higher market technology revenues due to higher support and licensing and higher professional services fees. Trade management services revenues also increased, primarily driven by demand for connectivity services.

CAPITAL ACCESS PLATFORMS

The following tables present revenues and key drivers from our Capital Access Platforms segment:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Data & Listing Services	$	188	$	179		5.0	%
Index	144		125			15.2	%
Workflow & Insights	124		118			5.1	%
Total Capital Access Platforms	$	456	$	422		8.1	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Data & Listing Services	$	559	$	545		2.6	%
Index	383		370			3.5	%
Workflow & Insights	367		347			5.8	%
Total Capital Access Platforms	$	1,309	$	1,262		3.7	%


	As of or Nine Months Ended September 30,
	2023		2022
	(in millions)
ARR	$	1,222	$	1,170
Quarterly annualized SaaS revenues	402		380

Data & Listing Services Revenues

The following table presents key drivers from our Data & Listing Services business:


	Three Months Ended September 30,
	2023	2022
IPOs
The Nasdaq Stock Market	39	35
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	—	3
Total new listings
The Nasdaq Stock Market	87	98
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	3	9




	Nine Months Ended September 30,
	2023	2022
IPOs
The Nasdaq Stock Market	102	143
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	3	33
Total new listings
The Nasdaq Stock Market	230	292
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	16	53
Number of listed companies
The Nasdaq Stock Market	4,086	4,296
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1,236	1,253

In the tables above:

The Nasdaq Stock Market new listings include IPOs, issuers that switched from other listing venues and separately listed ETPs. For the three months ended September 30, 2023 and 2022, IPOs included 4 and 7 SPACs, respectively. For the nine months ended September 30, 2023 and 2022, IPOs included 19 and 66 SPACs, respectively.
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic new listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
Number of total listed companies on The Nasdaq Stock Market for the nine months ended September 30, 2023 and 2022 included 570 and 501 ETPs, respectively.
Number of total listed companies on the exchanges that comprise Nasdaq Nordic and Nasdaq Baltic represents companies listed on these exchanges and companies on the alternative markets of Nasdaq First North.

Data & Listing Services revenues increased in the third quarter and first nine months of 2023 compared with the same periods in 2022. The increase was primarily due to an increase in proprietary data revenues driven largely by higher international demand and annual listing fee growth, partially offset by lower initial listings fees.

Index Revenues

The following tables present key drivers from our Index business:


	As of or Three Months Ended September 30,
	2023		2022
Number of licensed ETPs	393		374
TTM change in period end ETP AUM tracking Nasdaq indexes (in billions)
Beginning balance	$	311	$	361
Net appreciation (depreciation)	78		(106)
Net impact of ETP sponsor switches	(2)		—
Net inflows	24		56
Ending balance	$	411	$	311
Quarterly average ETP AUM tracking Nasdaq indexes (in billions)	$	423	$	346

In the table above, TTM represents trailing twelve months.

Index revenues increased in the third quarter and the first nine months of 2023 compared with the same periods in 2022. The increase in the third quarter was primarily due to higher AUM in exchange traded products linked to Nasdaq indexes and strong futures capture, partially offset by lower futures trading linked to the Nasdaq-100 Index. The increase in the first nine months of 2023 was primarily due to higher AUM in exchange traded products linked to Nasdaq indexes.

Workflow & Insights Revenues

Workflow & Insights revenues increased in the third quarter and first nine months of 2023 compared with the same periods in 2022. The increase was due to an increase in both corporate solutions and analytics revenues. The increase in our corporate solutions revenues was primarily due to continued demand for our ESG solutions. The increase in analytics revenues was primarily due to the growth in our eVestment and Solovis product offerings.

ANTI-FINANCIAL CRIME

The following tables present revenues and key drivers from our Anti-Financial Crime segment:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Anti-Financial Crime	$	93	$	77		20.8	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Anti-Financial Crime	$	265	$	224		18.3	%


	As of or Three Months Ended September 30,
	2023		2022
	(in millions)
ARR	$	348	$	295
Total signed ARR	381		320
Quarterly annualized SaaS revenues	332		281

In the table above, total signed ARR reflects ARR recognized as revenue in the current period as well as ARR for new contracts signed but not yet commenced.

Anti-Financial Crime revenues increased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to an increase in demand for fraud detection and anti-money laundering solutions and solid performance by our surveillance business.

OTHER REVENUES

For the three and nine months ended September 30, 2023 other revenues include revenues related to our European power trading and clearing business, following our announcement in June 2023 to sell this business to the European Energy Exchange, subject to regulatory approval. For the nine months ended September 30, 2022, other revenues also include revenues related to our Nordic broker services business for which we completed the wind-down in June 2022. For the three and nine months ended September 30, 2023 and 2022, other revenues include a transitional services agreement associated with a divested business.

EXPENSES

Operating Expenses

The following table presents our operating expenses:


	Three Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Compensation and benefits	$	260	$	249	4.4	%
Professional and contract services	31		34		(8.8)	%
Computer operations and data communications	58		50		16.0	%
Occupancy	28		25		12.0	%
General, administrative and other	26		38		(31.6)	%
Marketing and advertising	12		10		20.0	%
Depreciation and amortization	64		63		1.6	%
Regulatory	9		9		—	%
Merger and strategic initiatives	4		14		(71.4)	%
Restructuring charges	17		—		N/M
Total operating expenses	$	509	$	492	3.5	%


	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Compensation and benefits	$	777	$	750		3.6	%
Professional and contract services	92		97			(5.2)	%
Computer operations and data communications	168		150			12.0	%
Occupancy	99		78			26.9	%
General, administrative and other	62		94			(34.0)	%
Marketing and advertising	30		31			(3.2)	%
Depreciation and amortization	198		195			1.5	%
Regulatory	27		24			12.5	%
Merger and strategic initiatives	51		41			24.4	%
Restructuring charges	49		—			N/M
Total operating expenses	$	1,553	$	1,460		6.4	%

N/M Not meaningful.

The increase in compensation and benefits expense in the third quarter and first nine months of 2023 compared with the same periods in 2022 was primarily driven by increased headcount and the impact of merit increases. The increase in the first nine months of 2023 was partially offset by a favorable impact from foreign exchange rates of $13 million.

Headcount, including employees of non-wholly owned consolidated subsidiaries, increased to 6,590 employees as of September 30, 2023 from 6,300 as of September 30, 2022, reflecting growth across each of our three segments.

Professional and contract services expense decreased in the third quarter and the first nine months of 2023 compared with the same periods in 2022 primarily due to reduced legal fees.

Computer operations and data communications expense increased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to higher costs related to our cloud initiatives.

Occupancy expense increased in the third quarter and first nine months of 2023 compared with the same periods in 2022. 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 $18 million in impairment charges and exit related costs following the abandonment of leased office space.

General, administrative and other expense decreased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to an accrual related to a legal matter in the third quarter of 2022. The decrease in the first nine months of 2023 is also driven by an insurance recovery related to a legal matter in 2023 and a loss on extinguishment of debt recorded in 2022.

Marketing and advertising expense increased in the third quarter of 2023 compared with the same period in 2022 primarily driven by new listing activity in the period. Marketing and advertising expense decreased in the first nine months of 2023 compared with the same period in 2022 primarily due to lower client incentives resulting from lower IPO activity.

Depreciation and amortization expense remained relatively flat in the third quarter of 2023 compared with the same period in 2022. Depreciation and amortization expense increased in the first nine months of 2023 compared with the same period in 2022 primarily due to an impairment charge on leasehold improvements related to vacated leased office space. See Note 15, “Leases,” to the condensed consolidated financial statements for further discussion of our asset impairment charges related to vacated leased office space.

Regulatory expense remained relatively flat in the third quarter of 2023 compared with the same period in 2022. Regulatory expense increased in the first nine months of 2023 compared with the same period in 2022 due to higher trading volumes.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years, which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third-party transaction costs and vary based on the size and frequency of the activities described above. The increase for the nine months ended September 30, 2023 compared with the same period in 2022 primarily reflects higher expenses related to the Adenza acquisition.

Restructuring charges increased in the third quarter and first nine months of 2023 compared with the same periods in 2022 as a result of charges from our 2022 divisional alignment program. See Note 19, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion. By 2025, we expect to achieve benefits of the restructuring through combined annual run-rate operating efficiencies and revenue synergies of approximately $30 million annually.

Non-operating Income and Expenses

The following table presents our non-operating income and expenses:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Interest income	$	72	$	2		3,500.0%
Interest expense	(101)		(32)			215.6	%
Net interest expense	(29)		(30)			(3.3)	%


Other income	1		6			(83.3)	%
Net income (loss) from unconsolidated investees	(12)		8			(250.0)	%
Total non-operating expense	$	(40)	$	(16)		150.0	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Interest income	$	86	$	3		2,766.7	%
Interest expense	(174)		(96)			81.3	%
Net interest expense	(88)		(93)			(5.4)	%


Other income (loss)	(6)		8			(175.0)	%
Net income (loss) from unconsolidated investees	(8)		23			(134.8)	%
Total non-operating expenses	$	(102)	$	(62)		64.5	%

The following table presents our interest expense:


	Three Months Ended September 30,					Percentage Change
	2023		2022
	(in millions)
Interest expense on debt	$	97	$	30		223.3	%
Accretion of debt issuance costs and debt discount	3		1			200.0	%
Other fees	1		1			—	%
Interest expense	$	101	$	32		215.6	%

	Nine Months Ended September 30,				Percentage Change
	2023		2022
	(in millions)
Interest expense on debt	$	166	$	89		86.5	%
Accretion of debt issuance costs and debt discount	6		5			20.0	%
Other fees	2		2			—	%
Interest expense	$	174	$	96		81.3	%

Interest income increased in the third quarter and the first nine months of 2023 compared with the same periods in 2022 primarily due to a higher cash balance and an increase in interest rates.

Interest expense increased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due to the new debt issued in June 2023 to finance the Adenza acquisition as well as an increase in interest rates related to borrowings under our commercial paper program.

Other income (loss) primarily represents realized and unrealized gains and losses from strategic investments related to our corporate venture program.

Net income (loss) from unconsolidated investees decreased in the third quarter and first nine months of 2023 compared with the same periods in 2022 primarily due losses recognized from our equity method investments in OCC and NPM. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

Tax Matters

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


	Three Months Ended September 30,							Percentage Change
	2023			2022
	($ in millions)
Income tax provision	$	97		$	88			10.2	%
Effective tax rate	24.8		%	23.0		%

	Nine Months Ended September 30,						Percentage Change
	2023			2022
	(in millions)
Income tax provision	$	262		$	270			(3.0)	%
Effective tax rate	23.3		%	23.4		%

For further discussion of our tax matters, see Note 16, “Income Taxes,” to the condensed consolidated financial statements.

NON-GAAP FINANCIAL MEASURES

In addition to disclosing results determined in accordance with U.S. GAAP, we also provide non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of our ongoing operating performance.

These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.

We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance. We believe that excluding the following items from the non-GAAP net income attributable to Nasdaq provides a more meaningful analysis of Nasdaq’s ongoing operating performance and comparisons in Nasdaq’s performance between periods:

*•*Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses and the relative operating performance of the businesses between periods.

*•*Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. These expenses primarily include integration costs, as well as legal, due diligence and other third-party transaction costs. The increase for the nine months ended September 30, 2023 compared to the same period in 2022 primarily reflects costs related 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,” to the condensed consolidated financial statements for further discussion of our 2022 divisional alignment program.

Net income from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments, primarily our equity interest in OCC and NPM. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.
Other items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq. Other significant items include:

**◦**for the three and nine months ended September 30, 2023, other items include certain financing costs related to the Adenza acquisition;

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

◦for the nine months ended September 30, 2023, other items also 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 nine months ended September 30, 2023 and 2022, other items also include net gains and losses from strategic investments entered into through our corporate venture program included in other income (loss) in our Condensed Consolidated Statements of Income;

◦for the three and nine months ended September 30, 2022, other items include accruals 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 under general, administrative and other expense in our Condensed Consolidated Statements of Income.

*•*Significant tax items: The non-GAAP adjustment to the income tax provision for the three and nine months ended September 30, 2023 and 2022 primarily includes the tax impact of each non-GAAP adjustment.

The following tables present reconciliations between U.S. GAAP net income attributable to Nasdaq and diluted earnings per share and non-GAAP net income attributable to Nasdaq and diluted earnings per share:


	Three Months Ended September 30,
	2023			2022
	(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq	$	294		$	294
Non-GAAP adjustments:
Amortization expense of acquired intangible assets	37			38
Merger and strategic initiatives expense	4			14
Restructuring charges	17			—


Net loss (income) from unconsolidated investees	12			(8)




Other income	9			17
Total non-GAAP adjustments	79			61
Total non-GAAP tax adjustments	(24)			(20)
Total non-GAAP adjustments, net of tax	55			41
Non-GAAP net income attributable to Nasdaq	$	349		$	335

U.S. GAAP effective tax rate	24.8		%	23.0		%
Total adjustments from non-GAAP tax rate	0.9		%	1.4		%
Non-GAAP effective tax rate	25.7		%	24.4		%

Weighted-average common shares outstanding for diluted earnings per share	494.1			496.3

U.S. GAAP diluted earnings per share	$	0.60		$	0.59
Total adjustments from non-GAAP net income	0.11			0.09
Non-GAAP diluted earnings per share	$	0.71		$	0.68


	Nine Months Ended September 30,
	2023			2022
	(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq	$	862		$	884
Non-GAAP adjustments:
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
Net loss (income) from unconsolidated investees	8			(23)




Other income	7			19
Total non-GAAP adjustments	251			169
Total non-GAAP tax adjustments	(76)			(48)
Total non-GAAP adjustments, net of tax	175			121
Non-GAAP net income attributable to Nasdaq	$	1,037		$	1,005

U.S. GAAP effective tax rate	23.3		%	23.4		%
Total adjustments from non-GAAP tax rate	1.3		%	0.7		%
Non-GAAP effective tax rate	24.6		%	24.1		%

Weighted-average common shares outstanding for diluted earnings per share	494.2			498.2

U.S. GAAP diluted earnings per share	$	1.74		$	1.77
Total adjustments from non-GAAP net income	0.36			0.25
Non-GAAP diluted earnings per share	$	2.10		$	2.02

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded our operating activities and met our commitments through cash generated by operations, augmented by the periodic issuance of debt. Currently, our cost and availability of funding remain healthy. We continue to prudently assess our capital deployment strategy through balancing acquisitions, internal investments, debt repayments, and shareholder return activity, including share repurchases and dividends.

In the near term, we expect that our operations and the availability under our revolving credit facility and commercial paper program will provide sufficient cash to fund our operating expenses, capital expenditures, debt repayments, any share repurchases and any dividends.

The value of various assets and liabilities, including cash and cash equivalents, receivables, accounts payable and accrued expenses, the current portion of long-term debt, and commercial paper, can fluctuate from month to month. Working capital (calculated as current assets less current liabilities) was $5,303 million as of September 30, 2023, compared with $(231) million as of December 31, 2022, an increase of $5,534 million. The increase was primarily driven by an increase in cash and cash equivalents and a decrease in short-term debt. We expect that our cash and cash equivalents combined with cash provided by operating activities will be sufficient to meet our ongoing obligations. In addition, we believe our currently-available borrowing capacity and access to additional financing, including our commercial paper program, provides us additional flexibility to meet our ongoing obligations.

Principal factors that could affect the availability of our internally-generated funds include:

deterioration of our revenues in any of our business segments;
changes in regulatory and working capital requirements; and
an increase in our expenses.

Principal factors that could affect our ability to obtain cash from external sources include:

operating covenants contained in our credit facilities that limit our total borrowing capacity;
credit rating downgrades, which could limit our access to additional debt;
a significant decrease in the market price of our common stock; and
volatility or disruption in the public debt and equity markets.

The following table summarizes our financial assets:


	September 30, 2023		December 31, 2022
	(in millions)
Cash and cash equivalents	$	5,340	$	502

Financial investments	272		181
Total financial assets	$	5,612	$	683

Cash and Cash Equivalents

Cash and cash equivalents includes all non-restricted cash in banks and highly liquid investments with original maturities of 90 days or less at the time of purchase. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our investment policy, and alternative investment choices. As of September 30, 2023, our cash and cash equivalents of $5,340 million were primarily invested in treasury bills, money market funds, commercial paper, municipal bonds and bank deposits. In the long-term, we may use both internally generated funds and external sources to satisfy our debt obligations and other long-term liabilities. Cash and cash equivalents as of September 30, 2023

increased $4,838 million from December 31, 2022. The increase reflected proceeds from issuances of long-term debt, net of issuance costs, in connection with the financing of the Adenza acquisition, partially offset by the repayment of our commercial paper. For further discussion, see “Financing of the Adenza Transaction,” of Note 8, “Debt Obligations,” to the condensed consolidated financial statements.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $304 million as of September 30, 2023 and $275 million as of December 31, 2022. The remaining balance held in the U.S. totaled $5,036 million as of September 30, 2023 and $227 million as of December 31, 2022.

Unremitted earnings of certain subsidiaries outside of the U.S. are used to finance our international operations and are considered to be indefinitely reinvested.

Cash Flow Analysis

The following table summarizes the changes in cash flows:


	Nine Months Ended September 30,
	2023		2022
Net cash provided by (used in):	(in millions)
Operating activities	$	1,279	$	1,212
Investing activities	(158)		(25)
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

Net Cash Provided by Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items such as: depreciation and amortization expense of property and equipment, amortization expense of acquired finite-lived intangible assets, expense associated with share-based compensation, deferred income taxes, extinguishment of debt and bridge fees, non-cash restructuring charges, operating lease asset impairments and net income from unconsolidated investees.

Net cash provided by operating activities is also impacted by the effects of changes in operating assets and liabilities such as: accounts receivable and deferred revenue which are impacted by the timing of customer billings and related collections from our customers; accounts payable and accrued expenses due to timing of payments; accrued personnel costs, which are impacted by employee performance targets and the timing of payments related to employee bonus incentives; and Section 31 fees payable to the SEC, which is impacted by the changes in SEC fee rates and the timing of collections from customers and payments to the SEC.

Net cash provided by operating activities increased $67 million for the nine months ended September 30, 2023 compared with the same period in 2022. The increase was primarily driven by a decrease in receivables primarily due to a decrease in SEC 31 fees receivable as well as timing of collection and an increase in accounts payable and accrued expenses primarily due to an increase in our accrued interest payable from issuances of senior unsecured notes in connection with the Adenza acquisition. This increase was partially offset by a decrease in Section 31 fees payable to the SEC. The remaining change was primarily due to other fluctuations in our working capital.

Net Cash Used in Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2023 primarily related to purchases of property and equipment of $116 million, net purchases of trading securities of $103 million and $3 million from other investing activities, partially offset by net proceeds from the sale of investments related to default funds and margin deposits of $64 million.

Net cash used in investing activities for the nine months ended September 30, 2022 primarily related to purchases of property and equipment of $118 million and $41 million of cash used for acquisitions, net of cash and cash equivalents acquired, partially offset by proceeds of $48 million from other investing activities, net purchases of investments related to default funds and margin deposits of $44 million and net proceeds from sales and redemptions of securities of $42 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2023 primarily related to $5,011 million proceeds from issuances of senior unsecured notes, in connection with the Adenza acquisition, net of debt issuance costs, partially offset by a decrease of $779 million in default funds and margin deposits, $662 million from repayments of our commercial paper, net, $314 million of dividend payments to our shareholders, $159 million in repurchases of common stock and $70 million of payments related to employee shares withheld for taxes.

Net cash provided by financing activities for the nine months ended September 30, 2022 primarily related to an increase in default funds and margin deposits of $5,446 million, proceeds of $541 million from the issuances of long-term-debt, partially offset by $499 million for extinguishment of our 2024 Notes, $325 million of repurchases of common stock pursuant to an ASR agreement, $308 million in other repurchases of common stock, $285 million of dividend payments to our shareholders and $221 million repayment of our commercial paper, net.

See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.

See “Share Repurchase Program,” and “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program and cash dividends declared and paid on our common stock.

Financial Investments

Our financial investments totaled $272 million as of September 30, 2023 and $181 million as of December 31, 2022. Of these securities, $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. See Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

Regulatory Capital Requirements

Clearing Operations Regulatory Capital Requirements

We are required to maintain minimum levels of regulatory capital for the clearing operations of Nasdaq Clearing. The level of regulatory capital required to be maintained is dependent upon many factors, including market conditions and creditworthiness of the counterparty. As of September 30, 2023, our required regulatory capital of $115 million was primarily comprised of highly rated European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets.

Broker-Dealer Net Capital Requirements

Our broker-dealer subsidiaries, Nasdaq Execution Services, NFSTX, LLC, and Nasdaq Capital Markets Advisory, are subject to regulatory requirements intended to ensure their general financial soundness and liquidity. These requirements obligate these subsidiaries to comply with minimum net capital requirements. As of September 30, 2023, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $28 million, substantially all of which is held in cash and cash equivalents in the Condensed Consolidated Balance Sheets. The required minimum net capital is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Nordic and Baltic Exchange Regulatory Capital Requirements

The entities that operate trading venues in the Nordic and Baltic countries are each subject to local regulations and are required to maintain regulatory capital intended to ensure their general financial soundness and liquidity. As of September 30, 2023, our required regulatory capital of $34 million was primarily invested in European mortgage bonds and Icelandic government bonds that are included in financial investments in the Condensed Consolidated Balance Sheets and cash, which is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Other Capital Requirements

We operate several other businesses which are subject to local regulation and are required to maintain certain levels of regulatory capital. As of September 30, 2023, other required regulatory capital of $11 million, primarily related to Nasdaq Central Securities Depository, was primarily invested in European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets and cash, which is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Equity and dividends

Share Repurchase Program

See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.

Cash Dividends on Common Stock

The following table presents our quarterly cash dividends paid per common share on our outstanding common stock:


	2023		2022
First quarter	$	0.20	$	0.18
Second quarter	0.22		0.20
Third quarter	0.22		0.20

Total	$	0.64	$	0.58

See “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of the dividends.

Debt Obligations

The following table summarizes our debt obligations by contractual maturity:


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


Total short-term debt		$	—	$	664
Long-term debt - senior unsecured notes:
2025 Notes	May 2025	497		—
2026 Notes	June 2026	499		498
2028 Notes	May 2028	991		—
2029 Notes	March 2029	630		637
2030 Notes	February 2030	630		637
2031 Notes	January 2031	644		644
2032 Notes	February 2032	784		—
2033 Notes	July 2033	645		653
2034 Notes	February 2034	1,239		—
2040 Notes	December 2040	644		644
2050 Notes	April 2050	487		486
2052 Notes	March 2052	541		541
2053 Notes	August 2053	738		—
2063 Notes	June 2063	738		—
2022 Revolving Credit Agreement	December 2027	(4)		(5)

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

In December 2022, Nasdaq amended and restated the 2020 Credit Facility with a new maturity date of December 16, 2027. In addition to the 2022 Revolving Credit Agreement, we also have other credit facilities primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line for one subsidiary. These European credit facilities, which are available in multiple currencies, totaled $176 million as of September 30, 2023 and $184 million as of December 31, 2022 in available liquidity, none of which was utilized.

Financing of the Adenza Transaction

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 a 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.

In addition, in connection with the financing of the Adenza acquisition, we entered into 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 and other amounts incurred in connection with this 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 debt 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.

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

See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.

Contractual Obligations and Contingent Commitments

Nasdaq has contractual obligations to make future payments under debt obligations by contract maturity, minimum rental commitments under non-cancelable operating leases, net and other obligations. The following table shows these contractual obligations as of September 30, 2023:


	Payments Due by Period
(in millions)	Total		<1 year		1-3 years		3-5 years		5+ years
Debt obligation by contractual maturity	$	16,001	$	386	$	1,740	$	1,673	$	12,202
Operating lease obligations	636		80		136		114		306
Purchase obligations	421		86		107		89		139
Total	$	17,058	$	552	$	1,983	$	1,876	$	12,647

In the preceding table:

Debt obligations by contractual maturity include both principal and interest obligations. As of September 30, 2023, an interest rate of 5.7% was used to compute the amount of the contractual obligations for interest on the 2022 Revolving Credit Agreement. All other debt obligations were primarily calculated on a 365-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of September 30, 2023. See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.
Operating lease obligations represent our undiscounted operating lease liabilities as of September 30, 2023, as well as legally binding minimum lease payments for leases signed but not yet commenced. See Note 15, “Leases,” to the condensed consolidated financial statements for further discussion of our leases.

Acquisition of Adenza

For further discussion of our acquisition of Adenza, see “2023 Acquisition,” of Note 4, “Acquisitions,” to the condensed consolidated financial statements.

Off-Balance Sheet Arrangements

For discussion of off-balance sheet arrangements see:

Note 14, “Clearing Operations,” to the condensed consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and
Note 17, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements for further discussion of:

◦Guarantees issued and credit facilities available;

◦Other guarantees;

◦Routing brokerage activities;

◦Legal and regulatory matters; and

◦Tax audits.

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