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    NDAQ
    Earnings call· Mar 2026(Q1 FY26)

    NASDAQ Q1 FY26 earnings call NDAQ

    Apr 23, 2026 Source

    Executive summary

    Nasdaq Q1 FY26 — Record Financial Technology Revenue and Strong Organic Growth

    Nasdaq delivered one of its strongest Q1 performances, driven by record Financial Technology revenue growth and broad-based client engagement across its platform. The company saw significant organic growth and strong ARR expansion, reflecting successful execution of its "One Nasdaq" strategy and modernization efforts. Despite an uneven IPO market and mix shifts impacting derivative capture, Nasdaq remains confident in its strategic objectives and long-term value creation.

    Highlights

    5

    • Achieved highest Q1 organic growth since 2021 across net revenue, solutions revenue, and operating income.

    • Delivered highest ever quarterly revenue growth in the Financial Technology division at 18% year-over-year.

    • Diluted EPS grew 21% year-over-year.

    • Overall Annualized Recurring Revenue (ARR) grew 12% year-over-year to $3.2 billion.

    • Financial Technology ACV bookings grew over 50% year-over-year, with 80% cloud-based deals.

    Concerns

    3

    • IPO environment remained uneven amid market volatility, contributing to flat Corporate Solutions revenue.

    • Experienced a mix shift in index derivatives from higher-priced muni contracts to lower-priced micro and mini contracts, impacting capture.

    • Noted lower capture in U.S. equities and U.S. options due to a mix shift towards lower revenue capture order flow.

    Guidance & targets

    4
    CategoryTargetConfidence
    Non-GAAP operating expense
    $2.485 billion to $2.545 billion
    high materiality
    High
    Non-GAAP tax rate
    22.5% to 24.5%
    medium materiality
    High
    Quarterly dividend per share
    $0.31 per share
    high materiality
    High
    Expense efficiencies from AI adoption
    $100 million
    high materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Capital Access Platforms
    Strong data revenue driven by upsells and pricing. Listings revenue benefited from improving IPO environment and pricing increases. Index revenue driven by record average ETP AUM, partially offset by mix shift in derivative volumes.
    ARR growth: 7%Data and listings revenue growth: 9%Data and listings ARR growth: 8%Index revenue growth: 14%Index ARR growth: 6%Workflow and Insights revenue growth: 6%Workflow and Insights ARR growth: 6%
    		$565 million10%—62%
    Financial Technology
    Record revenue and ARR growth driven by strong demand across all subdivisions. High ACV bookings growth, with a significant portion from cloud-based deals. Financial Crime Management Technology saw strong SMB client acquisition and enterprise deals. Regulatory Technologies benefited from sales execution and improved professional services. Capital Markets Technology had exceptional performance due to broad-based demand, including one-time termination fees contributing 4 percentage points to revenue growth.
    ARR growth: 16%ACV bookings growth: >50% YoYCloud-based ACV bookings: 80%New clients signed: 64Cross-sells: 1Upsells: 85Financial Crime Management Technology revenue growth: 21%Financial Crime Management Technology ARR growth: 17%Financial Crime Management Technology net revenue retention: 110%SMB clients signed (Verafin): 58SMB ACV bookings growth (Verafin): 24% YoYRegulatory Technologies revenue growth: 12%Regulatory Technologies ARR growth: 13%AxiomSL cloud-based ACV bookings: ~90%Capital Markets Technology revenue growth: 20%Capital Markets Technology ARR growth: 18%
    		$517 million18%—47%
    Market Services
    Growth driven by record volumes in U.S. equities and options, increased European and Canadian equities volumes. Strong revenue growth in index options. Partially offset by lower capture in U.S. equities and options due to mix shift towards lower revenue capture order flow.
    Record market volumes in U.S. equitiesRecord market volumes in U.S. optionsIndex options revenue growth: >100% YoYElevated market share in U.S. equitiesElevated market share in U.S. options
    		$317 million10%—63%

    Operational metrics

    30
    Operating expense
    $608 millionUp 8% YoY
    Q1 FY26

    Driven by investments in people and technology, and higher compensation costs.

    Net revenue growth
    13%YoY
    Q1 FY26

    Organic growth driven by new/existing clients and product innovation. Beta factors driven by higher market services volumes, one-time FinTech items, and higher index derivatives volumes.

    Share repurchases
    $548 millionvs $616 million in all of 2025
    Q1 FY26

    Accelerated repurchases due to market volatility.

    Dividend per share
    $0.27
    Q1 FY26

    Paid in the quarter.

    Total capital returned to shareholders
    Over $700 million
    Q1 FY26

    Combination of share repurchases and dividends.

    IR Insight users leveraging AI
    74%
    Q1 FY26

    AI adoption in Corporate Solutions.

    Boardvantage users leveraging AI
    51%
    Q1 FY26

    AI adoption in Corporate Solutions.

    Agentic-AI workforce deployed by clients
    More than 500 clientsUp 40% since Investor Day
    Q1 FY26

    Verafin's AI-driven innovation.

    Net ETP inflows
    $6 billion
    Q1 FY26

    Part of $79 billion over last 12 months.

    Net ETP inflows
    $15 billion
    Early Q2 FY26

    Encouraging momentum seen early in the second quarter.

    ETP AUM
    $836 billion
    End of Q1 FY26

    Exiting the quarter.

    Average ETP AUM
    $877 millionUp 32% YoY
    Q1 FY26

    Record level.

    Capital Markets Technology revenue growth from one-time termination fees
    4 percentage points
    Q1 FY26

    Related to M&A in Market Tech operators.

    Gross leverage ratio
    2.8x
    End of Q1 FY26

    Within mid-to-high target established at Investor Day.

    Net income
    $549 million
    Q1 FY26

    Reported.

    Diluted EPS
    $0.96Up 21% YoY
    Q1 FY26

    Reported.

    Operating margin
    57%Up 2 percentage points YoY
    Q1 FY26

    Reported.

    EBITDA margin
    60%Up 2 percentage points YoY
    Q1 FY26

    Reported.

    Solutions revenue
    $1.1 billionUp 14% YoY
    Q1 FY26

    Reported.

    Annualized Recurring Revenue (ARR)
    $3.2 billionGrew 12% YoY
    Q1 FY26

    Overall ARR.

    ETP net inflows from product launches (last 5 years)
    46%
    Q1 FY26

    Of total inflows.

    ETP net inflows from product launches (last 3 years)
    25%
    Q1 FY26

    Of total inflows.

    Verafin client base
    More than 2,800 clients
    Q1 FY26

    Growing client base.

    Insurance-related revenues (Index franchise)
    30%Increase
    Q1 FY26

    Driven by institutional adoption of index products among annuity providers.

    ETP AUM from non-U.S. clients
    19%
    Q1 FY26

    Driven by strong demand from EMEA and APAC.

    Q1 bookings for AI-ready data (eVestment)
    29%Increase YoY
    Q1 FY26

    Driven by adoption by global asset managers, GPs, and institutional investors.

    Assets under management represented by eVestment AI-ready data adopters
    Over $9 trillion
    Q1 FY26

    Global asset managers, GPs, and institutional investors.

    Net ETP inflows (last 12 months)
    $79 billion
    LTM Q1 FY26

    Total over the last 12 months.

    IPO proceeds raised on Nasdaq
    $5 billion
    Q1 FY26

    Includes 7 of the top 10 IPOs.

    New index products launched
    31
    Q1 FY26

    Includes international and institutional annuity products.

    Product announcements

    8
    ProductTypeDetails
    Nasdaq Private Capital indexeslaunch
    Invesco QQQ Equal Weight ETFslaunch
    New drug trafficking analytic (Verafin)launch
    Calibration Copilot (Surveillance)launch
    Gen AI platform extension (Surveillance)launch
    23/5 Market Operationslaunch
    Nasdaq equity token designroadmap
    Outcome-related options / Event optionslaunch

    Deals & partnerships

    3
    BlackRock and State StreetIndex licensing partnership

    Expanded access to the Nasdaq-100 index for new U.S.-listed ETFs, complementing existing partnership with Invesco.

    FISStrategic partnership

    Nasdaq Verafin is evolving its platform through this partnership to deliver AML and fraud solutions.

    DTCCCollaboration for tokenized equities

    Working collaboratively with DTCC and the industry to advance systems and conduct test trades for tokenized equities.

    Risks & headwinds

    4
    Uneven IPO environmentQ1 FY26

    Softer labor conditions and inflation pressures offset by resilient spending from higher income households and continued capital deployment in AI.

    Mitigation: Issuer engagement remains strong; companies in pipeline preparing for market entry. Encouraging environment for improving IPO activity entering Q2.

    Mix shift in index derivativesQ1 FY26

    From higher-priced muni contracts to lower-priced micro and mini contracts due to higher retail volumes.

    Mitigation: Record derivative volumes, up 9% in the quarter, partially offset the impact.

    Lower capture in U.S. equities and optionsQ1 FY26

    Driven by strong volumes coming with a mix shift towards lower revenue capture order flow.

    Mitigation: Company continues to manage the balance between capture and market share, maintaining strong lead in U.S. equities capture and U.S. options market share.

    Cybersecurity risks from new AI modelsOngoing

    Anthropic's new Mythos model expected to post significant cybersecurity risks for financial institutions.

    Mitigation: Nasdaq leverages AWS' Bedrock and Microsoft Azure, conducts extensive IT security reviews, and tests models thoroughly before deployment. Partners with cyber companies, hyperscalers, banks, and government on secure model introduction.

    Q&A highlights

    8

    How is Nasdaq using Agentic AI internally for efficiency, and where is client uptake strongest for AI-enabled solutions?

    Internally, Nasdaq targets $100 million in expense efficiencies by end of 2027, primarily in product development, client success, and corporate functions, with most savings expected in 2027. Client adoption is strongest in anti-financial crime management (Verafin) due to workflow automation, regulatory reporting (AxiomSL) for cloud-based AI capabilities, and Corporate Solutions (Boardvantage, IR Insight) for document summarization and agenda building.

    “we are striving to achieve $100 million of expense efficiencies by the end of 2027 and we also did mention that the majority of that will show up in 2027 because we also are making investments in AI to make sure that we can achieve those efficiencies.”

    asked by William Katz · answered by Adena Friedman

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 Performance and Organic Growth

    Nasdaq reported one of its strongest Q1 performances, achieving the highest Q1 organic growth since 2021 across net revenue, solutions revenue, and operating income. Net revenue reached $1.4 billion, a 13% year-over-year increase, with solutions revenue up 14%. This growth was attributed to broad client engagement and successful execution of the "One Nasdaq" strategy, demonstrating the company's ability to deliver profitable and durable growth.

    02

    Financial Technology Division's Record Growth

    The Financial Technology division delivered its highest ever quarterly revenue growth at 18% year-over-year, with ARR growth of 16%. This was driven by sustained global demand for mission-critical technologies, strong ACV bookings growth exceeding 50% year-over-year, and 80% of new bookings being cloud-based solutions. The division signed 64 new clients, 1 cross-sell, and 85 upsells, highlighting its land-and-expand strategy.

    03

    Expansion of Nasdaq-100 Index Partnerships

    Nasdaq announced expanded access to the Nasdaq-100 index through new partnerships with BlackRock and State Street, in addition to its long-standing partner Invesco. The pricing terms for these new U.S.-listed ETFs will be consistent with QQQ pricing. This strategic move aims to broaden distribution and institutional adoption of the flagship index, leveraging the unique investor universes of the new partners to make the index more accessible globally.

    04

    Advancements in AI and Cloud-Based Solutions

    Nasdaq is actively integrating AI across its platforms, with 74% of IR Insight users and 51% of Boardvantage users leveraging AI solutions. In Financial Technology, cloud-based solutions accounted for 80% of ACV bookings, and AI-enabled regulatory solutions are driving client expansions. The company is also targeting $100 million in expense efficiencies by the end of 2027 through internal AI adoption, with most savings expected in 2027.

    05

    Progress in Always-On Markets and Tokenization

    Nasdaq received SEC approval to extend market operations to 23/5, with a projected launch of December 6, 2026, aiming to expand access and resiliency for global market participants. Concurrently, the FCC's approval for trading tokenized securities is advancing, with Nasdaq collaborating with DTCC and the industry to build the necessary infrastructure. The Nasdaq equity token design, expected in H1 2027, aims to give issuers greater control over tokenized shares.

    06

    Index Business Dynamics and ETP Inflows

    The index franchise generated $79 billion in net inflows over the last 12 months, with $6 billion in Q1, exiting the quarter with ETP AUM of $836 billion. Average AUM increased 32% year-over-year to a record $877 million. While Q1 inflows were modestly positive due to sector rotation, early Q2 saw $15 billion in net ETP inflows by April 20. A mix shift towards lower-priced micro and mini contracts impacted derivative capture despite record volumes.

    AI-generated summary of the company’s earnings call. Not investment advice.