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

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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.

Certain percentages and per share amounts herein may not sum or recalculate due to rounding.

EXECUTIVE 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.

We manage, operate and provide our products and services in three business segments: Capital Access Platforms, Financial Technology and Market Services.

First Quarter 2025 Highlights

  • In the first quarter of 2025, Nasdaq achieved an 82.0% win rate among Nasdaq-eligible operating company IPOs in the U.S., representing 45 offerings and $5 billion in total proceeds raised.

  • Market Services delivered record revenues for the segment and record volumes across cash equities, equity options and index options volumes.

  • Our Financial Technology segment delivered 11% ARR growth, reflecting an increase in new clients, cross-sells and upsells.

  • Index achieved a sixth consecutive record quarter, reaching an average ETP AUM of $662 billion and $27 billion of net inflows in the first quarter.

Macroeconomic environment

Our business performance can be positively or negatively impacted by a number of factors, including general economic conditions, the geopolitical environment, current or expected inflation, interest rate fluctuations, the threat or imposition of broad-based tariffs, market volatility, changes in investment patterns and priorities, regulatory changes, pandemics and other factors that are generally beyond our control. For example, higher overall U.S. trading volumes in the first quarter of 2025, as compared to the same period in 2024, has led to an increase in our U.S. Equity Derivative Trading and U.S. Cash Equity Trading revenues. Market factors also contributed to higher valuations in Nasdaq Indices and higher overall volumes in Index derivatives. To the extent that global or national economic conditions weaken and result in slower growth or recessions, our business may be negatively impacted.

Nasdaq’s Operating Results

The following table summarizes our financial performance for the three months ended March 31, 2025 compared to the same period in 2024. For a detailed discussion of our results of operations, see “Segment Operating Results” below.

Three Months Ended March 31,Percentage Change
20252024
(in millions, except per share amounts)
Revenues less transaction-based expenses$1,237$1,11710.7%
Operating expenses690707(2.5)%
Operating income$547$41033.5%
Net income attributable to Nasdaq$395$23468.9%
Diluted earnings per share$0.68$0.4068.6%
Cash dividends declared per common share$0.24$0.229.1%

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):

59

ARR for a given period is the current annualized value derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature, or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. For AxiomSL and Calypso recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for AxiomSL and Calypso recurring revenue contracts that include annual values that increase over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

The ARR chart includes:

▪Capital Access Platforms
◦Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business
◦Index data subscriptions and guaranteed minimum on futures contracts within our Index business
◦Subscription contracts under our Workflow & Insights business
▪Financial Technology
◦Financial Crime Management Technology SaaS subscription contracts excluding one-time service requests
◦Regulatory Technology SaaS and subscription and support contracts excluding one-time service requests
◦Capital Markets Technology SaaS and subscription and support contracts excluding one-time service requests

The following chart summarizes our quarterly annualized SaaS revenues for Solutions, which comprises our Capital Access Platforms and Financial Technology segments, for March 31, 2025 and 2024 (in millions):

1661

SEGMENT OPERATING RESULTS

The following table presents our revenues by segment:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Capital Access Platforms$515$4797.4%
Financial Technology43239210.3%
Market Services1,13479442.8%
Other revenues99(5.8)%
Total revenues$2,090$1,67424.8%
Transaction rebates(579)(481)20.3%
Brokerage, clearance and exchange fees(274)(76)260.0%
Total revenues less transaction-based expenses$1,237$1,11710.7%

The following chart presents our Capital Access Platforms, Financial Technology and Market Services segments as a percentage of our total revenues, less transaction-based expenses.

268

Capital Access Platforms

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

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Data & Listing Services$192$1863.5%
Index19316814.3%
Workflow & Insights1301253.8%
Total Capital Access Platforms$515$4797.4%
As of March 31,
20252024
ARR (in millions)$1,281$1,220

Data & Listing Services Revenues

The following tables present key drivers from our Data & Listing Services business:

Three Months Ended March 31,
20252024
IPOs
The Nasdaq Stock Market6327
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic41
Total new listings
The Nasdaq Stock Market17079
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic92
As of March 31,
20252024
Number of listed companies
The Nasdaq Stock Market4,1394,020
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic1,1601,203
ARR (in millions)701665

In the table above:

  • For the three months ended March 31, 2025 and 2024, IPOs included 18 and 5 SPACs, respectively. The number of total listed companies on The Nasdaq Stock Market for the three months ended March 31, 2025 and 2024 included 833 and 619 ETPs, respectively.

  • IPOs, new listings (which includes IPOs) and total listed companies for exchanges that comprise Nasdaq Nordic and Nasdaq Baltic represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies listed on the alternative markets of Nasdaq First North.

Data & Listing Services revenues increased in the first quarter of 2025 compared with the same period in 2024 due to higher sales, increased usage and pricing in our data business.

Index Revenues

The following table presents key drivers from our Index business:

As of or Three Months Ended March 31,
20252024
Number of licensed ETPs418362
TTM change in period end ETP AUM tracking Nasdaq indices (in billions)
Beginning balance$519$366
Net appreciation (depreciation)17124
Net impact of ETP sponsor switches—(17)
Net inflows8646
Ending balance$622$519
Quarterly average ETP AUM tracking Nasdaq indices (in billions)$662$492
ARR (in millions)$79$74

In the table above, TTM represents trailing twelve months.

Index revenues increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher average AUM in exchange traded products linked to Nasdaq indices and growth in trading volume on futures contracts linked to the Nasdaq-100 Index, partially offset by a $16 million one-time item recognized in the first quarter of 2024 related to a legal settlement to recoup revenue.

Workflow & Insights Revenues

The following table presents key drivers from our Workflow & Insights business:

As of or Three Months Ended March 31,
20252024
(in millions)
ARR$501$481
Quarterly annualized SaaS revenues430411

Workflow & Insights revenues increased in the first quarter of 2025 compared with the same period in 2024 reflecting an increase in analytics revenues, largely driven by eVestment.

Financial Technology

The following table presents revenues from our Financial Technology segment:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Financial Crime Management Technology$77$6420.5%
Regulatory Technology1019011.9%
Capital Markets Technology2542387.0%
Total Financial Technology$432$39210.3%

Financial Crime Management Technology Revenues

The following table presents key drivers for our Financial Crime Management Technology business:

As of or Three Months Ended March 31,
20252024
(in millions)
ARR and Quarterly annualized SaaS revenues$295$243

Financial Crime Management Technology revenues increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher subscription revenues from new sales and price increases to existing clients, and revenue from new clients.

Regulatory Technology Revenues

The following table presents key drivers for our Regulatory Technology business:

As of or Three Months Ended March 31,
20252024
(in millions)
ARR$362$328
Quarterly annualized SaaS revenues197168

Regulatory Technology revenues increased in the first quarter of 2025 compared with the same period in 2024 primarily due to increased subscriptions from our AxiomSL and Surveillance product offerings.

Capital Markets Technology Revenues

The following table presents key drivers for our Capital Markets Technology business:

As of or Three Months Ended March 31,
20252024
(in millions)
ARR$893$821
Quarterly annualized SaaS revenues139110

Capital Markets Technology revenues increased in the first quarter of 2025 compared with the same period in 2024. The increase was primarily due to higher subscription revenues in our trade management services and market technology businesses as well as higher market technology and Calypso professional services revenues.

Market Services

The following table presents revenues from our Market Services segment:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Market Services$1,134$79442.8%
Transaction-based expenses:
Transaction rebates(579)(481)20.3%
Brokerage, clearance and exchange fees(274)(76)260.0%
Total Market Services, net$281$23718.7%

The following table presents net revenues by product from our Market Services segment:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
U.S. Equity Derivative Trading$108$9118.2%
Cash Equity Trading12110021.0%
U.S. Tape plans332817.8%
Other191814.6%
Total Market Services, net$281$23718.7%

In the preceding table, 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 March 31,Percentage Change
20252024
(in millions)
U.S. Equity Derivative Trading Revenues$403$32324.4%
Section 31 fees3211190.6%
Transaction-based expenses:
Transaction rebates(293)(231)26.7%
Section 31 fees(32)(11)190.6%
Brokerage and clearance fees(2)(1)81.7%
U.S. Equity Derivative Trading Revenues, net$108$9118.2%

Section 31 fees are recorded as U.S. equity derivative and U.S. cash equity trading revenues with a corresponding

amount recorded in transaction-based expenses. We are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Pass-through fees can increase or decrease due to rate changes by the SEC, our percentage of the overall industry volumes processed on our systems, and differences in actual dollar value traded. Section 31 fees increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher 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 March 31,
20252024
Total industry average daily volume (in millions)53.643.3
Nasdaq PHLX matched market share9.1%10.3%
The Nasdaq Options Market matched market share5.1%5.4%
Nasdaq BX Options matched market share1.7%2.2%
Nasdaq ISE Options matched market share6.8%6.3%
Nasdaq GEMX Options matched market share3.6%2.5%
Nasdaq MRX Options matched market share2.8%2.5%
Total matched market share executed on Nasdaq’s exchanges29.1%29.2%

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues, net increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher industry trading volumes, partially offset by lower overall matched market share executed on Nasdaq’s exchanges. The increase in U.S. equity derivative trading revenues in the first quarter of 2025 also reflects a higher gross capture rate. The increase in U.S. equity derivative trading revenues, net was partially offset by a lower capture rate driven by higher rebate capture rate.

Transaction rebates, in which we credit a portion of the execution charge to the market participant, increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher industry trading volumes and higher rebate capture rate, partially offset by lower overall U.S. matched market share executed on Nasdaq’s exchanges.

Cash Equity Trading Revenues

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

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Cash Equity Trading Revenues$407$35016.2%
Section 31 fees23459294.4%
Transaction-based expenses:
Transaction rebates(280)(245)14.2%
Section 31 fees(234)(59)294.4%
Brokerage and clearance fees(6)(5)37.2%
Cash equity trading revenues, net$121$10021.0%

See the discussion above for an explanation of Section 31 fees for the first quarter of 2025 as compared with the same period in 2024.

Three Months Ended March 31,
20252024
Total U.S.-listed securities
Total industry average daily share volume (in billions)15.711.8
Matched share volume (in billions)137.6116.7
The Nasdaq Stock Market matched market share14.2%15.7%
Nasdaq BX matched market share0.3%0.4%
Nasdaq PSX matched market share0.1%0.2%
Total matched market share executed on Nasdaq’s exchanges14.6%16.3%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility48.1%41.4%
Total market share62.7%57.7%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges789,103666,408
Total average daily value of shares traded (in billions)$5.4$4.7
Total market share executed on Nasdaq’s exchanges69.9%71.7%

Cash equity trading revenues and cash equity trading revenues, net increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges.

Transaction rebates increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher U.S. industry volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq’s exchanges and lower rebate capture rates. For The Nasdaq Stock Market and Nasdaq PSX, we credit a portion of the per share execution charge to the market participant that provides the liquidity, and for Nasdaq BX, we credit a portion of the per share execution charge to the market participant that takes the liquidity.

U.S. Tape Plans

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

Three Months Ended March 31,Percentage Change
20252024
(in millions)
U.S. Tape plans$33$2817.8%

U.S. Tape plans revenues increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher one-time industry-wide adjustments and usage volume.

Other

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

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Other$19$1814.6%

In the preceding table, Other is presented net of Canadian cash equity transaction rebates of $6 million and $5 million for the three months ended March 31, 2025 and 2024, respectively.

Other revenues increased slightly in the first quarter of 2025 as compared with the same period in 2024 due to an increase in Nordic fixed income trading and clearing and Nordic derivatives revenues.

Other Revenues

For the three months ended March 31, 2025 and 2024, Other revenues include revenues related to our Nordic power trading and clearing business. In January 2025, we entered into an agreement to transfer existing open positions in our Nordic power derivatives trading and clearing business to a European exchange. The completion of this transaction is subject to customary regulatory approvals.

EXPENSES

Operating Expenses

The following table presents our operating expenses:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Compensation and benefits$329$340(3.5)%
Professional and contract services36348.3%
Technology and communication infrastructure776715.9%
Occupancy2828(0.1)%
General, administrative and other628(81.3)%
Marketing and advertising141125.8%
Depreciation and amortization1561550.7%
Regulatory15955.1%
Merger and strategic initiatives249160.1%
Restructuring charges526(79.6)%
Total operating expenses$690$707(2.5)%

The decrease in compensation and benefits expense in the first quarter of 2025 compared with the same period in 2024 was primarily driven by a pre-tax charge of $23 million in the first quarter of 2024 resulting from the finalization of the termination of our pension plan, partially offset by higher incentive compensation.

Headcount, including employees of non-wholly owned consolidated subsidiaries, increased to 9,377 employees as of March 31, 2025 from 8,568 employees as of March 31, 2024, primarily due to an increase in our Financial Technology segment as we support revenue growth and innovation.

Professional and contract services expense increased in the first quarter of 2025 compared with the same period in 2024 primarily due to certain legal fee accruals.

Technology and communication infrastructure expense increased in the first quarter of 2025 compared with the same period in 2024 primarily due to increased investment in technology, particularly our cloud initiatives and software licensing.

Occupancy expense remained flat in the first quarter of 2025 compared with the same period in 2024.

General, administrative and other expense decreased in the first quarter of 2025 compared with the same period in 2024 primarily due to a gain on extinguishment of debt. See Note 7, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.

Marketing and advertising expense increased in the first quarter of 2025 compared with the same period in 2024 primarily due to higher client incentive spending resulting from increased IPO activity.

Depreciation and amortization expense remained relatively flat in the first quarter of 2025 compared with the same period in 2024.

Regulatory expense increased in the first quarter of 2025 compared with the same period in 2024 primarily due to a change in classification of costs related to the CAT from general, administrative and other expense to regulatory expense, beginning in the fourth quarter of 2024, as well as a slight increase in the CAT operating fees.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years, which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third-party transaction costs and vary based on the size and frequency of the activities described above. For the first quarter of 2025, these amounts are primarily driven by the timing of recognition associated with the transfer of open positions in our Nordic power derivatives trading and clearing business, Adenza integration costs and other strategic initiative costs. For the first quarter of 2024, these costs were primarily related to the integration of Adenza.

Restructuring charges decreased in the first quarter of 2025 compared with the same period in 2024 primarily due to the completion of our divisional realignment program in September 2024.

We further expanded our Adenza restructuring program in the fourth quarter of 2024 to accelerate our momentum. In connection with this program, we expect to incur approximately $140 million in pre-tax charges. Actions taken as part of this program are expected to be completed by the end of 2025, while certain costs may be recognized in the first half of 2026. We expect to achieve benefits primarily in the form of expense synergies with annual cost savings of $140 million by the end of 2025, inclusive of the $80 million of net expense synergies related to the AxiomSL and Calypso acquisition. We have actioned over $100 million net expense synergies through March 31, 2025.

For further discussion related to both programs described above, see Note 18, “Restructuring Charges,” to the condensed consolidated financial statements.

Non-Operating Income and Expenses

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

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Interest income$11$685.1%
Interest expense(96)(108)(10.8)%
Net interest expense(85)(102)(16.5)%
Other income (loss)(1)1(172.2)%
Net income from unconsolidated investees273618.1%
Total non-operating expense$(59)$(98)(39.7)%

The following table presents our interest expense:

Three Months Ended March 31,Percentage Change
20252024
(in millions)
Interest expense on debt$92$103(10.3)%
Accretion of debt issuance costs and debt discount34(29.0)%
Other fees117.4%
Interest expense$96$108(10.8)%

Interest income increased in the first quarter of 2025 compared with the same period in 2024 primarily due to a higher average cash balance.

Interest expense decreased in the first quarter of 2025 compared with the same period in 2024 primarily due to lower outstanding debt following our partial repurchases of several series of outstanding senior unsecured notes. See Note 7, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.

Net income from unconsolidated investees increased in the first quarter of 2025 compared with the same period in 2024 due to higher income recognized from our equity method investment in OCC driven by higher industry volumes. See “Equity Method Investments,” of Note 5, “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 March 31,Percentage Change
20252024
($ in millions)
Income tax provision$93$7918.7%
Effective tax rate19.1%25.3%

For further discussion of our tax matters, see Note 15, “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 in this Quarterly Report on Form 10-Q. 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.

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

Three Months Ended March 31,
20252024
(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq$395$234
Non-GAAP adjustments:
Amortization expense of acquired intangible assets122123
Merger and strategic initiatives expense249
Restructuring charges526
Gain on extinguishment of debt(19)—
Net income from unconsolidated investees(27)(3)
Legal and regulatory matters22
Pension settlement charge—23
Other1—
Total non-GAAP adjustments$108$180
Total non-GAAP tax adjustments(47)(47)
Total non-GAAP adjustments, net of tax$61$133
Non-GAAP net income attributable to Nasdaq$456$367
U.S. GAAP effective tax rate19.1%25.3%
Total adjustments from non-GAAP tax rate4.4%0.3%
Non-GAAP effective tax rate23.5%25.6%
Weighted-average common shares outstanding for diluted earnings per share580.0578.9
U.S. GAAP diluted earnings per share$0.68$0.40
Total adjustments from non-GAAP net income0.110.23
Non-GAAP diluted earnings per share$0.79$0.63

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. For the three months ended March 31, 2025, these amounts are primarily driven by the timing of recognition associated with the transfer of open positions in our Nordic power derivatives trading and clearing business, Adenza integration costs and other strategic initiative costs. For the three months ended March 31, 2024, these costs were primarily related to the integration of Adenza.

  • Restructuring charges: In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program, to optimize our efficiencies as a combined organization. We further expanded this restructuring program in the fourth quarter of 2024 to accelerate our momentum. In addition, we completed divisional realignment program in September 2024. See Note 18, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion of these programs.

  • Net income from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods. See “Equity Method Investments,” of Note 5, “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:

**◦**Gain on extinguishment of debt: For the three months ended March 31, 2025, this includes a gain on extinguishment of debt, which is recorded under general, administrative and other expense in the Condensed

Consolidated Statements of Income. See Note 7, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.

**◦**Legal and regulatory matters: For the three months ended March 31, 2025 and 2024, this includes accruals relating to certain legal matters, which are recorded in professional and contract services in the Condensed Consolidated Statements of Income.

*◦*Pension settlement charge: For the three months ended March 31, 2024, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The pre-tax charge is recorded in compensation and benefits expense in the Condensed Consolidated Statements of Income.

  • Significant tax items: The non-GAAP adjustment to the income tax provision for all periods primarily includes the tax impact of each non-GAAP adjustment. For the three months ended March 31, 2025, this also includes the release of the prior year's reserves following a favorable audit settlement.

LIQUIDITY AND CAPITAL RESOURCES

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

We expect that our current cash and cash equivalents combined with cash flows provided by operating activities, supplemented with our borrowing capacity and access to additional financing, including our revolving credit facility and our commercial paper program, provides us additional flexibility to meet our ongoing obligations and the capital deployment strategic actions described above, while allowing us to invest in activities and product development that support the long-term growth of our operations.

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

  • deterioration of our revenues in any of our business segments;

  • changes in regulatory and working capital requirements; and

  • an increase in our expenses.

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

  • operating covenants contained in our credit facilities that limit our total borrowing capacity;

  • credit rating downgrades, which could limit our access to additional debt;

  • a significant decrease in the market price of our common stock; and

  • volatility or disruption in the public debt and equity markets.

The following table summarizes selected measures of our liquidity and capital resources:

March 31, 2025December 31, 2024
(in millions)
Working capital$(153)$(116)
Cash and cash equivalents690592
Financial investments201184

Working Capital

The decrease in working capital is due to current liabilities increasing more than current assets between December 31, 2024, and March 31, 2025. Higher deferred revenue from billing annual listing revenue in the first quarter of 2025 and higher accrued tax liability, due to the timing of payments, contributed to the increase in current liabilities, partially offset by a decrease in accrued personnel costs after payment of annual incentive compensation in the first quarter of 2025, and lower Section 31 fees payable to the SEC. Current assets increased mainly due to higher cash and cash equivalents.

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 March 31, 2025, our cash and cash equivalents of $690 million were primarily invested in money market funds, bank deposits, commercial paper, repurchase agreements and bank deposits.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $297 million as of March 31, 2025 and $181 million as of December 31, 2024. The remaining balance held in the U.S. totaled $393 million as of March 31, 2025 and $411 million as of December 31, 2024.

Cash Flow Analysis

The following table summarizes the changes in cash flows:

Three Months Ended March 31,
20252024
Net cash provided by (used in):(in millions)
Operating activities$663$530
Investing activities(258)(232)
Financing activities(1,083)(1,875)

Net Cash Provided by Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items, including, but not limited to, depreciation and amortization expense, expense associated with share-based compensation, deferred income taxes and the effects of changes in working capital. Changes in working capital include changes in 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 $133 million for the three months ended March 31, 2025 compared with the same period in 2024. The increase was primarily driven by an increase in net income, partially offset by a decrease in working capital.

Net Cash Used in Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 primarily relates to net purchases of investments related to default funds and margin deposits of $204 million and purchases of property and equipment of $49 million.

Net cash used in investing activities for the three months ended March 31, 2024 primarily related to net purchases of investments related to default funds and margin deposits of $184 million, purchases of property and equipment of $39 million and other investing activities of $13 million, partially offset by proceeds from the sale and redemption of trading securities, net of $4 million.

Net Cash Used in Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 primarily relates to a decrease in default funds and margin deposits of $549 million, partial repayment of our 2028, 2034 and 2052 Notes for $257 million, dividend payments to our shareholders of $138 million, repurchases of common stock of $115 million and payments related to employee shares withheld for taxes $25 million.

Net cash used in financing activities for the three months ended March 31, 2024 related to a decrease in default funds and margin deposits of $1,317 million, repayment of the 2023 Term Loan of $340 million, dividend payments to our shareholders of $127 million, repayments of our commercial paper, net of $67 million and payments related to employee shares withheld for taxes $24 million.

See Note 7, “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 10, “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 $201 million as of March 31, 2025 and $184 million as of December 31, 2024. Of these securities, $186 million as of March 31, 2025 and $171 million as of December 31, 2024 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. See Note 5, “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 March 31, 2025, our required regulatory capital of $140 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 March 31, 2025, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $23 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 March 31, 2025, our required regulatory capital of $37 million was primarily invested in European government bills 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 March 31, 2025, other required regulatory capital of $12 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.

Equity and dividends

Share Repurchase Program

See “Share Repurchase Program,” of Note 10, “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:

20252024
First quarter$0.24$0.22

See “Cash Dividends on Common Stock,” of Note 10, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of the dividends.

Debt Obligations

Our debt obligations, by contractual maturity, at March 31, 2025 are as follows (in U.S. Dollar millions):

n Euro Notes n U.S. Notes

10046

In the first quarter of 2025, we repurchased an aggregate principal amount of $279 million of our 2028, 2034 and 2052 Notes, for a net purchase price of $257 million, excluding accrued interest.

For the three months ended March 31, 2025, the weighted average interest rate on our debt obligations was approximately 3.90%. This rate can fluctuate based on changes in interest rates for our variable rate debts, changes in foreign currency exchange rates and changes in the amount and duration of outstanding debt. In addition to the 2022 Revolving Credit Facility, we also have other credit facilities primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line. These European credit facilities, which are available in multiple currencies, totaled $191 million as of March 31, 2025 and $174 million as of December 31, 2024 in available liquidity, none of which was utilized.

As of March 31, 2025, we were in compliance with the covenants of all of our debt obligations.

See Note 7, “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, operating lease payments, and other obligations. The following table summarizes material cash requirements for known contractual and other obligations as of March 31, 2025, and the estimated timing thereof.

Payments Due by Period
(in millions)Total<1 year1-3 years3-5 years5+ years
Debt obligation by contractual maturity$14,797$750$1,149$2,736$10,162
Operating lease obligations60173140127261
Purchase obligations1,494133205238918
Total$16,892$956$1,494$3,101$11,341

In the table above:

  • Debt obligations by contractual maturity include both principal and interest obligations. For our Euro Notes, interest is calculated on an actual basis while all other debt obligations were primarily calculated on a 365-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of March 31, 2025. See Note 7, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.

  • Operating lease obligations represent our undiscounted operating lease liabilities as of March 31, 2025, as well as legally binding minimum lease payments for leases signed but not yet commenced. See Note 14, “Leases,” to the condensed consolidated financial statements for further discussion of our leases.

  • Purchase obligations primarily represent minimum outstanding obligations due under software license agreements. The balance as of March 31, 2025 is primarily comprised of our multi-year Amazon Web Services partnership contract, which we expanded and extended in the first quarter of 2025. This contract will benefit both our Financial Technology and Market Services segments, including their modernization. The expansion of this contract is not expected to increase our cloud expense compared to our expectation over the short term or the life of the contract, and preserves flexibility beyond our forecast.

OFF-BALANCE SHEET ARRANGEMENTS

For discussion of off-balance sheet arrangements see:

  • Note 13, “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 16, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements for further discussion of:

◦Guarantees issued and credit facilities available;

◦Other guarantees; and

◦Routing brokerage activities.

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