Item 2. Management’s Discussion and Analysis of

53K characters. Original on sec.gov · Markdown

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 leading technology platform that powers the

world’s economies. We architect the infrastructure of the

world’s most modern markets, power the innovation

economy, and build trust in the financial system. We

empower economic opportunity by designing and deploying

the technology, data, and advanced analytics that enable our

clients to capture opportunities, navigate risk, and strengthen

resilience.

We manage, operate and provide our products and services in

three business segments: Capital Access Platforms, Financial

Technology and Market Services.

First Quarter 2026 Highlights and Recent Developments

Nasdaq extended its listing leadership with 7 of the top 10

largest operating company IPOs and a 71% win rate across

eligible U.S. operating companies, direct listings and

SPAC business combinations.

Our Index business generated net inflows of $79 billion

over the last twelve months including $6 billion in the first

quarter. ETP AUM as of March 31, 2026 was $836 billion

and average ETP AUM in the first quarter reached a new

record at $877 billion. During the quarter, Nasdaq

launched 31 new products, including 11 in the institutional

annuity space and 12 international products.

Financial Technology delivered 20% revenue growth and

18% ARR growth.

Market Services generated record net revenues, driven by

record volumes and strong market share across U.S. cash

equities and equity derivatives.

Macroeconomic environment

Our business performance can be positively or negatively

impacted by a number of factors, including general economic

conditions, the accelerated pace of technological change, 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 2026 compared with the same period in 2025 led to

an increase in our U.S. equities options and U.S. cash

equities revenues. Market factors also contributed to higher

valuations in Nasdaq Indices 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, 2026 compared to the

same period in 2025. For a detailed discussion of our results

of operations, see “Segment Operating Results” below.


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions, except per share amounts)
Revenues less transaction-based expenses	$1,407	$1,237	13.8%
Operating expenses	750	690	8.8%
Operating income	$657	$547	20.1%
Net income	$519	$395	31.4%
Diluted earnings per share	$0.91	$0.68	33.3%
Cash dividends declared per common share	$0.27	$0.24	12.5%

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):

In the chart above, Other 1Q25 includes $29 million.

ARR for a given period is the current annualized value

derived from subscription contracts with a defined contract

value. This excludes contracts that are not recurring, are one-

time in nature, or where the contract value fluctuates based

on defined metrics. ARR is currently one of our key

performance metrics to assess the health and trajectory of our

recurring business. ARR does not have any standardized

definition and is therefore unlikely to be comparable to

similarly titled measures presented by other companies. ARR

should be viewed independently of revenue and deferred

revenue and is not intended to be combined with or to replace

either of those items. For AxiomSL and Calypso recurring

revenue contracts, the amount included in ARR is consistent

with the amount that we invoice the customer during the

current period. Additionally, for AxiomSL and Calypso

recurring revenue contracts that include annual values that

increase over time, we include in ARR only the annualized

value of components of the contract that are considered

active as of the date of the ARR calculation. We do not

include the future committed increases in the contract value

as of the date of the ARR calculation. ARR is not a forecast

and the active contracts at the end of a reporting period used

in calculating ARR may or may not be extended or renewed

by our customers.

The ARR chart includes:


▪	Capital Access Platforms
	◦	Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business
	◦	Index data subscriptions and guaranteed minimum on futures contracts within our Index business
	◦	Subscription contracts under our Workflow & Insights business
▪	Financial Technology
	◦	Subscription contracts excluding non-recurring professional services.
▪	Other includes ARR related to our Solovis business divested in October 2025.

The following chart summarizes our quarterly annualized

SaaS revenues for March 31, 2026 and 2025 (in millions):

1652

In the chart above, Other 1Q25 includes $29 million.

SEGMENT OPERATING RESULTS

The following table presents our revenues by segment:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Capital Access Platforms	$565	$508	11.4%
Financial Technology	517	432	19.7%
Market Services	1,047	1,140	(8.1)%
Other revenues	8	16	(50.6)%
Total revenues	$2,137	$2,096	2.0%
Transaction rebates	(724)	(585)	23.9%
Brokerage, clearance and exchange fees	(6)	(274)	(97.9)%
Total revenues less transaction-based expenses	$1,407	$1,237	13.8%

The following charts present our Capital Access Platforms,

Financial Technology and Market Services segments as a

percentage of our total revenues, less transaction-based

expenses.

268

Capital Access Platforms

The following tables present revenues and ARR from our

Capital Access Platforms segment:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Data & Listing Services	$214	$192	11.4%
Index	220	193	14.4%
Workflow & Insights	131	123	6.7%
Total Capital Access Platforms	$565	$508	11.4%


	As of March 31,
	2026	2025
ARR (in millions)	$1,366	$1,252

Data & Listing Services Revenues

The following tables present key drivers from our Data &

Listing Services business:


	Three Months Ended March 31,
IPOs	2026	2025
The Nasdaq Stock Market	63	63
Operating company	15	45
SPACs	48	18
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	—	4
Total new listings
The Nasdaq Stock Market	176	170
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	5	9

	As of December 31
Number of listed companies	2026	2025
The Nasdaq Stock Market	4,570	4,139
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1,107	1,160

ARR (in millions)	$777	$701

In the tables above:

The number of total listed companies on The Nasdaq Stock

Market for the three months ended March 31, 2026 and

2025 included 1,180 and 833 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 2026 compared with the same period in 2025 due

to new data sales to new and existing clients, pricing and

usage, increased annual listings revenues due to new listings,

increased initial listing fees and the favorable impact from

changes in foreign currency rates, partially offset by the

impact of prior year delistings.

Index Revenues

The following table presents key drivers from our Index

business:


	As of or Three Months Ended March 31,
	2026	2025
Number of licensed ETPs	470	418
TTM change in period end ETP AUM tracking Nasdaq indices (in billions)
Beginning balance	$622	$519
Net appreciation	135	17
Net inflows	79	86
Ending balance	$836	$622
Quarterly average ETP AUM tracking Nasdaq indices (in billions)	$877	$662

ARR (in millions)	$85	$79

In the table above, TTM represents trailing twelve months.

Index revenues increased in the first quarter of 2026

compared with the same period in 2025 primarily due to

higher average AUM in exchange traded products linked to

Nasdaq indices.

Workflow & Insights Revenues

The following table presents key drivers from our Workflow

& Insights business:


	As of or Three Months Ended March 31,
	2026	2025
	(in millions)
ARR	$504	$472
Quarterly annualized SaaS revenues	432	401

Workflow & Insights revenues increased in the first quarter

of 2026 compared with the same period in 2025 primarily

due to an increase in analytics revenues, largely driven by

eVestment and Nasdaq Data Link sales growth.

Financial Technology

The following table presents revenues from our Financial

Technology segment:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Financial Crime Management Technology	$93	$77	21.0%
Regulatory Technology	118	101	16.4%
Capital Markets Technology	306	254	20.6%
Total Financial Technology	$517	$432	19.7%

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,
	2026	2025
	(in millions)
ARR and Quarterly annualized SaaS revenues	$344	$295

Financial Crime Management Technology revenues

increased in the first quarter of 2026 compared with the same

period in 2025 primarily due to higher subscription revenues

from new and existing clients and higher professional

services fees.

Regulatory Technology Revenues

The following table presents key drivers for our Regulatory

Technology business:


	As of or Three Months Ended March 31,
	2026	2025
	(in millions)
ARR	$419	$362
Quarterly annualized SaaS revenues	252	197

Regulatory Technology revenues increased in the first quarter

of 2026 compared with the same period in 2025 primarily

due to increased subscription revenues from our AxiomSL

and Surveillance solutions driven by new sales and price

increases to existing clients, revenue from new clients and the

favorable impact from changes in foreign currency rates.

Capital Markets Technology Revenues

The following table presents key drivers for our Capital

Markets Technology business:


	As of or Three Months Ended March 31,
	2026	2025
	(in millions)
ARR	$1,059	$893
Quarterly annualized SaaS revenues	174	139

Capital Markets Technology revenues increased in the first

quarter of 2026 compared with the same period in 2025. The

increase was primarily due to higher revenues from data

center growth including a change in pricing structure, higher

Calypso upfront license revenues, increased subscription

revenues across the business and certain one-time fees,

partially offset by lower professional services revenues.

Market Services

The following table presents revenues from our Market

Services segment:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Market Services	$1,047	$1,140	(8.1)%
Transaction-based expenses:
Transaction rebates	(724)	(585)	23.9%
Brokerage, clearance and exchange fees	(6)	(274)	(97.9)%
Total Market Services, net	$317	$281	12.8%

The following table presents net revenues by product from

our Market Services segment:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
U.S. Equity Derivative Trading	$120	$108	10.7%
Cash Equity Trading	138	121	14.8%
U.S. Tape plans	33	33	1.5%
Other	26	19	30.7%
Total Market Services, net	$317	$281	12.8%

In the table above, Other includes Nordic fixed income

trading & clearing, Nordic derivatives and Canadian cash

equities trading.

U.S. Equity Derivative Trading

The following table presents 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
	2026	2025
	(in millions)
U.S. Equity Derivative Trading Revenues	$432	$409	7.3%
Section 31 fees	—	32	(100.0)%
Transaction-based expenses:
Transaction rebates	(312)	(299)	6.4%
Section 31 fees	—	(32)	(100.0)%
Brokerage and clearance fees	—	(2)	(79.5)%
U.S. Equity Derivative Trading Revenues, net	$120	$108	10.7%

Section 31 fees are recorded as U.S. equity derivative and

U.S. cash equity trading revenues with a corresponding

amount recorded in transaction-based expenses. We are

assessed these fees from the SEC and pass them through to

our customers in the form of incremental fees. Pass-through

fees can increase or decrease due to rate changes by the SEC,

our percentage of the overall industry volumes processed on

our systems, and differences in actual dollar value traded.

Section 31 fees decreased in the first quarter of 2026

compared with the same period in 2025 primarily due to a

decrease in the rate to zero in the second quarter of 2025.

Since the amount recorded in revenues is equal to the amount

recorded as Section 31 fees, there is no impact on our net

revenues.


	Three Months Ended March 31,
	2026	2025

Total industry average daily volume (in millions)	62.6	53.6
Nasdaq PHLX matched market share	12.5%	9.1%
The Nasdaq Options Market matched market share	2.6%	5.1%
Nasdaq Texas Options matched market share	1.3%	1.7%
Nasdaq ISE Options matched market share	6.0%	6.8%
Nasdaq GEMX Options matched market share	3.4%	3.6%
Nasdaq MRX Options matched market share	4.3%	2.8%
Total matched market share executed on Nasdaq’s exchanges	30.1%	29.1%

U.S. equity derivative trading revenues and U.S. equity

derivative trading revenues, net increased in the first quarter

of 2026 compared with the same period in 2025 primarily

due to higher industry trading volumes and higher overall

U.S. matched market share executed on Nasdaq’s exchanges

partially offset by lower capture.

Transaction rebates, in which we credit a portion of the

execution charge to the market participant, increased in the

first quarter of 2026 compared with the same period in 2025

primarily due to higher industry trading volumes and higher

overall U.S. matched market share executed on Nasdaq’s

exchanges, partially offset by lower rebate capture rate.

Cash Equity Trading Revenues

The following table presents 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
	2026	2025
	(in millions)
Cash Equity Trading Revenues	$548	$407	34.5%
Section 31 fees	—	234	(100.0)%
Transaction-based expenses:
Transaction rebates	(404)	(280)	44.4%
Section 31 fees	—	(234)	(100.0)%
Brokerage and clearance fees	(6)	(6)	(20.3)%
Cash equity trading revenues, net	$138	$121	14.8%

See the discussion above for an explanation of Section 31

fees for the first quarter of 2026 compared with the same

period in 2025.


	Three Months Ended March 31,
Total U.S.-listed securities	2026	2025
Total industry average daily share volume (in billions)	20.0	15.7
Matched share volume (in billions)	183.7	137.6
The Nasdaq Stock Market matched market share	14.7%	14.2%
Nasdaq Texas matched market share	0.3%	0.3%
Nasdaq PSX matched market share	0.1%	0.1%
Total matched market share executed on Nasdaq’s exchanges	15.1%	14.6%
Market share reported to the FINRA/ Nasdaq Trade Reporting Facility	45.6%	48.1%
Total market share	60.7%	62.7%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	797,886	789,103
Total average daily value of shares traded (in billions)	$6.8	$5.4
Total market share executed on Nasdaq’s exchanges	74.3%	70.5%

Cash equity trading revenues and cash equity trading

revenues, net increased in the first quarter of 2026 compared

with the same period in 2025 primarily due to higher U.S.

and European industry trading volumes, and higher overall

U.S. matched market share executed on Nasdaq's exchanges.

Cash equity trading revenues, net also increased due to these

drivers but was partially offset by lower capture.

Transaction rebates, in which we credit a portion of the

execution charge to the market participant, increased in the

first quarter of 2026 compared with the same period in 2025

primarily due to higher industry trading volumes, higher

overall U.S. matched market share executed on Nasdaq’s

exchanges and higher rebate capture rate. 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 Texas, 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
	2026	2025
	(in millions)
U.S. Tape plans	$33	$33	1.5%

U.S. Tape plans revenues remained relatively flat in the first

quarter of 2026 compared with the same period in 2025.

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
	2026	2025
	(in millions)
Other	$26	$19	30.7%

In the preceding table, Other is presented net of Canadian

cash equity transaction rebates of $8 million and $6 million

for the three months ended March 31, 2026 and 2025,

respectively.

Other revenues increased in the first quarter of 2026

compared with the same period in 2025 due to an increase in

Canadian cash equity revenues, Nordic fixed income

revenues and Nordic equity derivatives revenues.

Other Revenues

For the three months ended March 31, 2026 and 2025, Other

revenues related to our Nordic power futures business. For

the three months ended March 31, 2025, Other revenues also

included our Solovis business. See Note 4, “Divestitures,” to

the condensed consolidated financial statements for further

discussion.

EXPENSES

Operating Expenses

The following table presents our operating expenses:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Compensation and benefits	$356	$329	8.4%
Professional and contract services	39	36	8.5%
Technology and communication infrastructure	84	77	8.0%
Occupancy	33	28	15.8%
General, administrative and other	29	6	458.3%
Marketing and advertising	20	14	42.2%
Depreciation and amortization	165	156	6.0%
Regulatory	9	15	(35.7)%
Merger and strategic initiatives	4	24	(84.7)%
Restructuring charges	11	5	103.4%
Total operating expenses	$750	$690	8.8%

The increase in compensation and benefits expense for the

first quarter of 2026 compared with the same period in 2025

was primarily driven by increased headcount and the

unfavorable impact from changes in foreign currency rates.

Headcount, including employees of non-wholly owned

consolidated subsidiaries, increased to 9,613 employees as of

March 31, 2026 from 9,377 employees as of March 31, 2025,

as we support revenue growth and innovation.

Professional and contract services expense increased in the

first quarter of 2026 compared with the same period in 2025

primarily due to higher legal fee accruals.

Technology and communication infrastructure expense

increased in the first quarter of 2026 compared with the same

period in 2025 primarily due to increased investment in

technology, particularly our cloud initiatives and software

licensing.

Occupancy expense increased in the first quarter of 2026

compared with the same period in 2025 primarily due to

colocation data center expansion.

General, administrative and other expense increased in the

first quarter of 2026 compared with the same period in 2025

primarily due to a gain on extinguishment of debt recorded in

the first quarter of 2025.

Marketing and advertising expense increased in the first

quarter of 2026 compared with the same period in 2025

primarily due to an increase in client marketing spend.

Depreciation and amortization expense increased in the first

quarter of 2026 compared with the same period in 2025 due

to increased depreciation of capitalized software projects.

Regulatory expense decreased in the first quarter of 2026

compared with the same period in 2025 primarily due to

lower CAT operating costs.

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 three months ended

March 31, 2026, these costs included amounts associated

with various strategic initiative costs. For the three months

ended March 31, 2025, these costs included amounts

associated with the transfer of open positions in our Nordic

power derivatives trading and clearing business, Adenza

integration costs and other strategic initiative costs.

Restructuring charges increased in the first quarter of 2026

compared with the same period in 2025 primarily due to the

higher consulting and other services in relation to our Adenza

restructuring program. We initiated the program upon the

acquisition of Adenza and further expanded the program in

the fourth quarter of 2024 following the achievement of our

initial targets. In connection with this program, we expect to

incur approximately $140 million in pre-tax charges. We

have incurred costs principally related to employee-related

costs, contract terminations, asset impairments and other

related costs and expect to incur additional costs in these

areas in an effort to accelerate efficiencies through location

strategy and enhanced AI capabilities. Actions taken as part

of this program were completed as of December 31, 2025,

while certain costs are being recognized in the first half of

We have achieved benefits primarily in the form of

expense synergies with over $160 million net expense

synergies actioned through March 31, 2026. See Note 19,

“Restructuring Charges,” to the condensed consolidated

financial statements for further discussion.

Non-Operating Income and Expenses

The following table presents our non-operating income and

expenses:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Interest income	$6	$11	(48.5)%
Interest expense	(87)	(96)	(10.1)%
Net interest expense	(81)	(85)	(5.1)%
Net gain on divestitures	89	—	100.0%
Other losses	(14)	(1)	NM
Net income from unconsolidated investees	26	27	(3.2)%
Total non-operating income (expense)	$20	$(59)	(134.2)%

NM Not meaningful

The following table presents our interest expense:


	Three Months Ended March 31,		Percentage Change
	2026	2025
	(in millions)
Interest expense on debt	$84	$92	(10.0)%
Accretion of debt issuance costs and debt discount	2	3	(13.8)%
Other fees	1	1	(10.0)%
Interest expense	$87	$96	(10.1)%

Interest income decreased for the first quarter of 2026

compared with the same period in 2025 primarily due to a

lower average cash balance.

Interest expense decreased for the first quarter of 2026

compared with the same period in 2025 primarily due to

lower outstanding debt following the repayment of our 2025

Notes and the partial repurchases of several series of

outstanding senior unsecured notes in 2025.

Net gains on divestitures for the three months ended March

31, 2026 primarily relates to the divestiture of our Nordic

power futures business. See Note 4, “Divestitures,” to the

condensed consolidated financial statements for further

discussion of these transactions.

Other losses primarily represents realized and unrealized

gains and losses from strategic investments related to our

corporate venture program. See “Equity Securities,” of Note

6, “Investments,” to the condensed consolidated financial

statements for further discussion of these transactions.

Net income from unconsolidated investees primarily relates

to income recognized from our equity method investment in

OCC. 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 March 31,		Percentage Change
	2026	2025
	($ in millions)
Income tax provision	$158	$93	69.6%
Effective tax rate	23.4%	19.1%

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

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 and non-GAAP diluted earnings per share, to assess

operating performance. We use non-GAAP net income 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 and diluted earnings per share and non-

GAAP net income and diluted earnings per share:


	Three Months Ended March 31,
	2026	2025
	(in millions, except per share amounts)
U.S. GAAP net income	$519	$395
Non-GAAP adjustments:
Amortization expense of acquired intangible assets	121	122
Merger and strategic initiatives expense	4	24
Restructuring charges	11	5
Gain on extinguishment of debt	—	(19)
Net gain on divestitures	(89)	—
Net income from unconsolidated investees	(26)	(27)
Legal and regulatory matters	6	2
Other loss	15	1
Total non-GAAP adjustments	$42	$108
Total non-GAAP tax adjustments	(12)	(28)
Other tax adjustments	—	(19)
Total non-GAAP adjustments, net of tax	$30	$61
Non-GAAP net income	$549	$456

U.S. GAAP effective tax rate	23.4%	19.1%
Total adjustments from non- GAAP tax rate	0.3%	4.4%
Non-GAAP effective tax rate	23.7%	23.5%

Weighted-average common shares outstanding for diluted earnings per share	571.7	580.0

U.S. GAAP diluted earnings per share	$0.91	$0.68
Total adjustments from non- GAAP net income	0.05	0.11
Non-GAAP diluted earnings per share	$0.96	$0.79

We believe that excluding the above items, described further

below, from the non-GAAP net income 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 transactions. 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, 2026, these costs included amounts associated

with various strategic initiative costs. For the three months

ended March 31, 2025, these costs included amounts

associated with the transfer of open positions in our Nordic

power derivatives trading and clearing business, Adenza

integration costs and other strategic initiative costs.

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 initiated the program upon the

acquisition of Adenza and further expanded the program in

the fourth quarter of 2024 following the achievement of

our initial targets. Actions taken as part of this program

were completed as of December 31, 2025, while certain

costs are being recognized in the first half of 2026. See

Note 19, “Restructuring Charges,” to the condensed

consolidated financial statements for further discussion of

this program.

*•*Gain on extinguishment of debt: For the three months

ended March 31, 2025, this included a gain on

extinguishment of debt, which is recorded under general,

administrative and other expense in the Condensed

Consolidated Statements of Income.

*•*Net gain on divestitures: For the three months ended

March 31, 2026, this primarily includes the recognition of

an incremental gain on the sale of our Nordic power

futures business, net of costs to sell. See Note 4,

“Divestitures,” to the condensed consolidated financial

statements for further discussion of this transaction.

*•*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 6, “Investments,” to the

condensed consolidated financial statements for further

discussion.

Legal and regulatory matters: For the three months ended

March 31, 2026 and 2025, this includes accruals relating to

certain legal matters, which are recorded in professional

and contract services in the Condensed Consolidated

Statements of Income.

Other loss: For the three months ended March 31, 2026

and 2025, other items primarily include net gains and

losses from strategic investments entered into through our

corporate venture program, which are included in other

losses in our Condensed Consolidated Statements of

Income.

Total non-GAAP tax adjustments: The non-GAAP

adjustment to the income tax provision for all periods

primarily includes the tax impact of each non-GAAP

adjustment.

Other tax adjustments: For the three months ended March

31, 2025, other tax adjustments included the release of the

prior years' 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, 2026	December 31, 2025
	(in millions)
Working capital	$(17)	$42
Cash and cash equivalents	515	604
Financial investments	184	28

Working Capital

The decrease in working capital from December 31, 2025 to

March 31, 2026, excluding default funds and margin

deposits, which are both equal and offsetting, is primarily due

to a decrease in current assets and an increase in current

liabilities.

Decreased current assets were primarily due to:

lower restricted cash primarily due to the movement of

regulatory capital to longer term investments classified as

financial investments,

lower cash and cash equivalents; partially offset by
an increase in financial investments at fair value,
an increase in receivables, net due to timing of billings, and
an increase in other current assets.

Increased current liabilities were primarily due to:

Higher deferred revenue due to timing of billings,

primarily relating to our annual listing fees; partially offset

a decrease in accrued personnel costs,
a decrease in other current liabilities, and
a decrease in accounts payable and accrued expenses.

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, 2026 and December 31,

2025, our cash and cash equivalents of $515 million were

primarily invested in money market funds, bank deposits,

European government debt securities, and municipal notes.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in

various foreign subsidiaries totaled $335 million as of March

31, 2026 and $280 million as of December 31, 2025. The

remaining balance held in the U.S. totaled $180 million as of

March 31, 2026 and $324 million as of December 31, 2025.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents, which was $49 million

as of March 31, 2026 and $210 million as of December 31,

2025, is restricted from withdrawal due to a contractual or

regulatory requirement or not available for general use and as

such is classified as restricted in the Condensed Consolidated

Balance Sheets. The decrease in this balance as of March 31,

2026 is primarily due to more regulatory capital being

invested in longer term investments, which are classified as

financial investments in the Condensed Consolidated Balance

Sheets as of March 31, 2026. Capital held for regulatory

purposes is invested based on prevailing market rates and our

investment strategy and may be held in shorter term

investments, which meet the criteria to be classified as cash

equivalents, and would then be included in restricted cash

and cash equivalents or longer term investments which would

be classified as financial investments in the Condensed

Consolidated Balance Sheets.

Cash Flow Analysis

The following table summarizes the changes in cash flows:


	Three Months Ended March 31,
	2026	2025
Net cash provided by (used in):	(in millions)
Operating activities	$689	$663
Investing activities	747	(258)
Financing activities	(4,184)	(1,083)

Net Cash Provided by Operating Activities

Net cash provided by operating activities primarily consists

of net income adjusted for certain non-cash items, including,

but not limited to, depreciation and amortization expense,

expense associated with share-based compensation, net

income from unconsolidated investees, net gain on

divestitures and the effects of changes in working capital.

Refer to the above discussion regarding changes in working

capital.

Net cash provided by operating activities increased $26

million in the first quarter of 2026 compared with the same

period in 2025. The increase was primarily driven by an

increase in net income, partially offset by changes in working

capital, as discussed above, and a decrease in adjustments to

net income primarily driven by net gain on divestitures.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by (used in) investing activities increased

in the first quarter of 2026 compared with the same period in

This was primarily driven by higher proceeds from net

sales and redemption of investments related to default funds

and margin deposits of $1,180 million, partially offset by

purchases of securities, net of $158 million, primarily due to

more regulatory capital being invested in longer term

investments, purchases of property and equipment of $11

million and other investing activities of $6 million primarily

related to our corporate venture program. The movement in

our default funds and margin deposits has no impact on

Nasdaq's cash, cash equivalents, restricted cash or restricted

cash equivalents as it is held on behalf of our customers.

Net Cash Used in Financing Activities

Net cash used in financing activities increased in the first

quarter of 2026 compared with the same period in 2025

primarily driven by an increase in default funds and margin

deposits of $2,918 million, which does not impact Nasdaq's

cash, cash equivalents, restricted cash or restricted cash

equivalents as it relates to customer funds, increases in

repurchases of common stock of $433 million and an

increase in dividends paid of $15 million. These increases

were partially offset by a decrease in repayment of debt of

$257 million.

See “Default Fund Contributions and Margin Deposits” of

Note 14, “Clearing Operations,” for further discussion of

these balances.

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 $184 million as of March

31, 2026 and $28 million as of December 31, 2025. Of these

securities, $168 million as of March 31, 2026 and $18

million as of December 31, 2025 are assets primarily utilized

to meet regulatory capital requirements, mainly for our

clearing operations at Nasdaq Clearing. See Restricted Cash

and Cash Equivalents above and Note 6, “Investments,” to

the 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,

2026, our required regulatory capital of $154 million was

primarily comprised of 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, 2026, the combined

required minimum net capital totaled $1 million and the

combined excess capital totaled $20 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, 2026, our required regulatory capital of $46 million was

primarily invested in cash and cash equivalents, which is

included in restricted cash and cash equivalents in the

Condensed Consolidated Balance Sheets and European

government debt securities that are included in financial

investments 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, 2026, other required

regulatory capital of $14 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 and cash equivalents, 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, including our ASR agreement.

Cash Dividends on Common Stock

The following table presents our quarterly cash dividends

paid per common share on our outstanding common stock:


	2026		2025
First quarter	$0.27		$0.24

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

Our outstanding debt obligations, by contractual maturity, at March 31, 2026 are as follows (in U.S. Dollar millions):

n U.S. Notes n Euro Notes

10805

As of and for the three months ended March 31, 2026, the

weighted average interest rate on our debt obligations was

approximately 3.7%. This rate can fluctuate based on changes

in foreign currency exchange rates and changes in the amount

and duration of outstanding debt. See “Foreign Currency

Exchange Rate Risk” below for further discussion on

hedging associated with our Euro Notes. In addition to the

2022 Revolving Credit Facility, we also have other credit

facilities primarily to support our Nasdaq Clearing operations

in Europe, as well as to provide a cash pool credit line. These

European credit facilities, which are available in multiple

currencies, totaled $202 million as of March 31, 2026 and

$208 million as of December 31, 2025 in available liquidity,

none of which was utilized.

As of March 31, 2026, 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 had no significant changes to our contractual

obligations and contingent commitments from those

disclosed in “Part I. Item 7. Management’s Discussion and

Analysis of Financial Condition and Results of Operations”

in our Annual Report Form 10-K that was filed with the SEC

February 12, 2026.

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; and

◦Routing brokerage activities.

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