Nasdaq index revenue rises 39% on $49 billion of third-quarter net inflows

Nasdaq, Inc. reported third-quarter net revenue of $1.5 billion, up 13% from a year earlier, led by growth in its index business, according to its results release dated October 22.

What happened

Index revenue was $286 million, up 39%, with $141 billion of net inflows over the trailing twelve months, including $49 billion in the third quarter. Chair and Chief Executive Officer Adena Friedman said the quarter included "record Index net inflows, record FinTech ARR growth, and the establishment of Nasdaq Digital Liquidity Networks within Market Services."

Solutions revenue rose 17% to $1,172 million, or 18% on an organic basis. Financial Technology revenue was $529 million, up 16%. Market Services net revenue was $309 million, up 2%. Annualized recurring revenue, a measure of subscription-type revenue, was $3,365 million, up 12% from a year earlier and up 14% excluding divestitures, and annualized software-as-a-service revenue made up 38% of it.

Earnings and capital return

GAAP operating income rose 25% to $732 million, and non-GAAP operating income rose 15% to $843 million. GAAP diluted earnings per share were $0.96, up 31%, and non-GAAP diluted earnings per share were $1.04, up 18%. In the quarter, Nasdaq returned $173 million to shareholders through dividends and $323 million through repurchases. Chief Financial Officer Sarah Youngwood said the company had returned "more than $1.7 billion to shareholders year to date."