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    NDAQ
    Earnings call· Sep 2025(Q3 FY25)

    NASDAQ, INC. NDAQ

    Oct 21, 2025 Source

    Executive summary

    Nasdaq Q3 FY25 — Solutions Revenue Exceeds $1 Billion for First Time, Strong EPS Growth

    Nasdaq delivered strong Q3 FY25 results, with solutions revenue surpassing $1 billion for the first time, driven by robust demand for its diversified technology platform. The company continues to invest in AI-enabled solutions and strategic partnerships, while also exceeding its expense efficiency targets and making significant progress on deleveraging. Management remains confident in achieving strategic objectives and long-term shareholder value.

    Highlights

    5

    • Net revenue grew 11% year-over-year to $1.3 billion.

    • Solutions quarterly revenues exceeded $1 billion for the first time, up 10% YoY.

    • Diluted EPS grew 19% year-over-year to $0.88.

    • Annualized Recurring Revenue (ARR) grew 9% to $3 billion.

    • Surpassed expanded net expense efficiency target with over $150 million actioned, and gross leverage ratio improved to 3.1x.

    Concerns

    4

    • Financial Crime Management Technology revenue growth is expected to end the year "just below the range" of the medium-term outlook.

    • The sale of Solovis will impact quarterly revenue by approximately $7 million to $8 million and direct costs by $6 million.

    • Lower share in U.S. options and lower capture in U.S. equities partially offset Market Services growth.

    • The corporate buying environment in Corporate Solutions remains muted.

    Guidance & targets

    7
    CategoryTargetConfidence
    Organic Expense Expectations
    $2.305 billion to $2.335 billion
    medium materiality
    High
    Full Year Tax Rate
    22.5% to 23.5%
    medium materiality
    High
    Gross Leverage Ratio
    3.0x
    high materiality
    High
    Financial Technology Revenue Growth
    just below the range
    medium materiality
    Medium
    Capital Access Platforms Revenue Growth
    at or slightly above the high end of the range
    medium materiality
    High
    Run Rate Revenue from Cross-sells
    surpass $100 million
    high materiality
    High
    Digital Enhanced Due Diligence Analyst Release
    on track for release
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Capital Access Platforms
    Data and Listings revenue growth driven by new sales, upsells, usage, and improved listings revenue from IPO activity. Index revenue growth driven by a 35% increase in average ETP AUM. Workflow and Insights revenue increase primarily by analytics (eVestment and Datalink). Corporate Solutions saw improving new sales, gross, and net retention trends. Operating margin up 2 percentage points versus prior year.
    ARR growth: 6%Data and Listings revenue growth: 6%Data and Listings ARR growth: 7%Index revenue growth: 13%Index revenue growth from alpha factors: 9 percentage pointsAverage ETP AUM increase: 35%Workflow and Insights revenue growth: 5%Workflow and Insights ARR growth: 4%Corporate Solutions revenue: essentially flat
    		$546 million8%—60%
    Financial Technology
    Strong demand across all subdivisions. Financial Crime Management Technology saw strong client engagement and increasing adoption of GenAI entity Research Copilot. Regulatory Technology growth reflects solid performance, with a decline in professional services revenue. Capital Markets Technology benefited from strong performance in trade management services and Calypso upfront revenue. Operating margin up 1.5 percentage points versus prior year.
    ARR growth: 12%New clients signed: 65Upsells: 97Cross-sells: 4Financial Crime Management Technology revenue growth: 22%Financial Crime Management Technology ARR growth: 18%Financial Crime Management Technology SME clients signed: 55Financial Crime Management Technology Net Revenue Retention: 111%Regulatory Technology revenue growth: 9%Regulatory Technology ARR growth: 11%Capital Markets Technology revenue growth: 12%Capital Markets Technology ARR growth: 10%
    		$457 million13%—45%
    Market Services
    Growth primarily driven by elevated market-wide equities volumes, record U.S. option industry volumes, increased volumes and capture in index options, and elevated capture in European derivatives. Partially offset by lower share in U.S. options, lower capture in U.S. equities, and lower U.S. cash equity revenue (vs. $3 million benefit in prior year). Operating margin up 5 percentage points versus prior year.
    Index options revenue: more than doubling versus prior year
    		$303 million13%—65%

    Operational metrics

    43
    Net Revenue Growth
    11%YoY
    Q3 FY25

    Overall net revenue growth for the quarter.

    Solutions Revenue
    over $1 billion10% year-over-year growth
    Q3 FY25

    First time solutions quarterly revenues exceeded $1 billion.

    Annualized Recurring Revenue
    $3 billion9% growth
    Q3 FY25

    ARR surpassed $3 billion for the first time.

    Operating Expense Growth
    5%YoY
    Q3 FY25

    Operating expense growth.

    Operating Income Growth
    16%YoY
    Q3 FY25

    Operating income growth.

    Diluted EPS Growth
    19%YoY
    Q3 FY25

    Diluted EPS growth.

    Operating Margin
    56%up 2 percentage points
    Q3 FY25

    Operating margin for the quarter.

    EBITDA Margin
    58%up 2 percentage points
    Q3 FY25

    EBITDA margin for the quarter.

    Net Revenue Growth (Alpha factors)
    8 percentage points
    Q3 FY25

    Driven by new and existing clients and product innovation.

    Net Revenue Growth (Beta factors)
    3 percentage points
    Q3 FY25

    Driven by elevated volumes in Market Services and higher valuation in NASDAQ indices.

    SaaS Revenue Growth
    12%for a second consecutive quarter
    Q3 FY25

    Total SaaS revenue growth.

    SaaS Revenue Growth
    17%
    Q3 FY25

    SaaS revenue growth within the Financial Technology segment.

    SaaS as percentage of ARR
    38%increased 1 percentage points versus the prior year quarter
    Q3 FY25

    SaaS as a percentage of total ARR.

    ETP AUM
    $829 billion
    Q3 FY25

    Period-end ETP AUM, an all-time high.

    Average ETP AUM
    $777 billion35% increase
    Q3 FY25

    Average ETP AUM for the quarter.

    Private funds covered
    60,000 fundsnearly doubled
    Q3 FY25

    Number of private funds covered within eVestment.

    Financial Institutions served
    more than 2,700
    Q3 FY25

    Total financial institutions served by Nasdaq Verafin, representing more than $11 trillion in collective assets.

    Net Revenue Retention
    111%
    Q3 FY25

    Reflecting strong client engagement and adoption of GenAI tools.

    Enterprise Client Signings
    6more than triple the number of enterprise signings in 2024
    YTD FY25

    Number of new enterprise client signings year-to-date, with more than double the ACV compared to 2024.

    Nasdaq-listed securities share of total industry volume
    53%up from 49% a year ago
    Q3 FY25

    Share of total industry volume represented by Nasdaq-listed securities.

    Net Expense Efficiency Program Actioned
    over $150 millionsurpassed $140 million target
    Q3 FY25

    Cost reduction actions as of the end of the third quarter.

    Gross Leverage Ratio
    3.1ximprovement of 0.1x from the second quarter
    Q3 FY25

    Gross leverage ratio at quarter end.

    S&P Senior Unsecured Debt Rating
    BBB+from BBB
    Q3 FY25

    S&P recognized deleveraging progress with an upgrade.

    Cross-sells
    30
    Since Adenza acquisition

    Total cross-sell wins since the Adenza acquisition closed.

    Cross-sells as % of sales pipeline
    over 15%
    Q3 FY25

    Cross-sells accounted for over 15% of the Financial Technology sales pipeline.

    Free Cash Flow Conversion Ratio
    110%
    Q3 FY25

    Strong conversion ratio.

    Dividend per share
    $0.27
    Q3 FY25

    Dividend paid per share.

    Total Dividend Paid
    $155 million
    Q3 FY25

    Total dividend paid in the quarter.

    Annualized Payout Ratio
    33%
    Q3 FY25

    Annualized payout ratio.

    Debt Repurchased
    $69 million
    Q3 FY25

    Debt repurchased in the third quarter as part of deleveraging.

    Shares Repurchased
    1.2 million
    Q3 FY25

    Shares of common stock repurchased.

    Value of Shares Repurchased
    $115 million
    Q3 FY25

    Value of shares repurchased in the third quarter.

    IPO Proceeds
    $6 billion
    Q3 FY25

    Proceeds raised by operating companies in U.S. listings.

    IPO Proceeds
    $14 billion
    YTD FY25

    Year-to-date proceeds raised by operating companies in U.S. listings.

    New Index Products Launched
    30
    Q3 FY25

    New index products launched, including international and institutional insurance annuity products.

    Net Inflows (Index)
    $17 billion
    Q3 FY25

    Net inflows into the index franchise.

    Net Inflows (Index)
    $91 billion
    LTM

    Record net inflows over the last 12 months for the index franchise.

    AI-powered Board summarization tools adoption
    over 800
    Q3 FY25

    Clients who have opted into AI-powered Board summarization tools within Boardvantage.

    Digital sanctions analyst
    launched
    Q3 FY25

    The first digital worker, a digital sanctions analyst, launched into production.

    Digital enhanced due diligence analyst
    on track for release
    FY25

    The next digital worker is on track for release by the end of the year.

    U.S. options industry volume days
    6 of the top 10
    Q3 FY25

    The industry experienced 6 of the top 10 volume days in history measured by options contracts traded, with a subsequent record established in October.

    Nasdaq Index options volumes
    record levels
    Q3 FY25

    Nasdaq Index options volumes hit record levels in the third quarter with a subsequent record established in October.

    Nasdaq Closing Cross daily notional value
    record
    September

    Nasdaq's Closing Cross set a daily notional value record.

    Deals & partnerships

    4
    Insight PartnersSale of Nasdaq Solovis, a portfolio management capabilities provider for asset owners.

    Solovis's offerings were not a strategic fit within Nasdaq's portfolio and provided limited integrated value to the eVestment analytics platform.

    Juniper SquareAgreement to distribute eVestment data through Juniper Square's fundraising platform.

    Juniper Square is a fund operations partner to more than 2,000 private market GPs.

    Commodity Futures Trading Commission (CFTC)Partnership to enhance market surveillance and fraud detection capabilities by deploying Nasdaq's industry-leading suite of surveillance technology.

    Strengthens regulatory technology offerings and can catalyze adoption by member firms.

    BioCatchStrategic partnership to integrate BioCatch's alerts into the workflow of Verafin's anti-financial crime solution and launch a joint go-to-market campaign.

    BioCatch is a leader in behavioral and device intelligence, focusing on pre-transaction signals to prevent fraud. Phase 1 involved integrating alerts and a joint go-to-market campaign with Verafin's SMB segment.

    Risks & headwinds

    6
    Global Uncertainty Impacting IPOsshort-term

    some delays

    Mitigation: Balanced by expectation of lower cost of capital, U.S. economy resilience, and deregulatory agenda. IPO pipeline is robust, expecting meaningful pickup.

    Government Shutdown Impactshort-term

    some short-term delays

    Mitigation: Strengthening foundation in place, market showing signs of durable reengagement.

    Corporate Buying Environment MutedQ3 FY25

    muted

    Mitigation: Targeted investments in product capabilities and client engagement are building foundation, resulting in improving gross and net retention.

    Professional Services Revenue Decline (Regulatory Technology)Q3 FY25

    decline

    Mitigation: Expected and communicated; professional services revenue expected to start to improve in Q4 FY25 and early 2026.

    Lower Share/Capture in Market ServicesQ3 FY25

    lower share in U.S. options, lower capture in U.S. equities

    Mitigation: Team is actively and effectively managing in a competitive landscape.

    Revenue from Discontinued Advertising on nasdaq.comQ3 FY25

    decline

    Mitigation: Partially offset by other growth drivers within the Index franchise.

    What to watch in Q4 FY25

    5

    Financial Crime Management Technology Revenue Growth

    starting in the fourth quarter
    Currentexpected to end the year just below the range
    Targetstronger revenue growth

    Why it matters

    This segment is a key growth driver for the Financial Technology division, and its acceleration is crucial for meeting overall growth targets.

    As the business continues to make strong progress in moving upmarket, we want to reiterate that sales cycle and time to value for Tier 1 and Tier 2 deals can take time to flow into subscription revenue run rate. We continue to expect the recent enterprise signings to translate into stronger revenue growth starting in the fourth quarter, consistent with our comments last quarter.

    Q&A highlights

    6

    How does Nasdaq envision its role and growth potential in the evolving digital asset ecosystem across its various businesses?

    Adena Friedman highlighted Nasdaq's long-standing involvement as a technology provider for digital assets, including trading and surveillance tech, and collateral management capabilities. She noted opportunities in fintech solutions, index products (ETP listings), and as a market operator, while emphasizing the need to understand the regulatory landscape.

    “we definitely see our fintech solutions being highly relevant as the digital asset ecosystem grows, expands and more institutional interest in digital assets becomes more mainstream.”

    asked by Michael Cho · answered by Adena Friedman

    3 min read6 chapters

    Detailed Narrative

    01

    Strategic Transformation and Diversification

    Nasdaq achieved a significant milestone with solutions quarterly revenues exceeding $1 billion for the first time, reflecting its successful transformation into a leading technology platform. The company's diversified platform and ability to partner with clients on evolving priorities, leveraging technology, data, and advanced analytics, are reinforcing its leadership across capital markets. This strategic shift is evident in the 11% net revenue growth and 19% diluted EPS growth, showcasing the value of being a trusted fabric of the financial system.

    02

    Capital Access Platforms Momentum

    The Capital Access Platforms segment reported 8% revenue growth, driven by strong performance in data and listings, and index franchises. IPO activity is showing meaningful momentum, with a robust pipeline and expectations for a pickup in the quarters ahead, despite short-term delays from a government shutdown. The index business achieved a record $91 billion in net inflows over the last 12 months and $17 billion in the quarter, with ETP AUM reaching an all-time high of $829 billion, supported by product innovation and international expansion.

    03

    Financial Technology Growth and AI Integration

    Financial Technology delivered 13% revenue growth, fueled by sustained global demand for mission-critical technologies and successful execution. The segment signed 65 new clients, 4 cross-sells, and 97 upsells. Nasdaq is actively integrating AI into its solutions, such as the AI-powered Board summarization tools in Boardvantage and the Agentic AI workforce in Verafin, which includes a digital sanctions analyst launched this month and a digital enhanced due diligence analyst on track for year-end release. This focus on AI aims to enhance client workflows and drive efficiency.

    04

    Market Services Strength and Volume Records

    The Market Services division achieved 13% net revenue growth, reflecting broad-based strength in U.S. and European markets. This was driven by elevated volumes in U.S. options and equities, and excellent growth in index options trading, which saw record levels. Nasdaq-listed securities now represent 53% of total industry volume, up from 49% a year ago, demonstrating the platform's ability to attract issuers and capital and its trusted position in the market.

    05

    Operational Efficiency and Deleveraging

    Nasdaq surpassed its expanded net expense efficiency target, actioning over $150 million in cost reductions, exceeding the $140 million goal. The company also made significant progress on deleveraging, reducing its gross leverage ratio to 3.1x at quarter-end and receiving an S&P debt rating upgrade from BBB to BBB+. These efforts, combined with strong free cash flow generation ($516 million in Q3), support continued investments and shareholder returns, while achieving the EPS accretion milestone 6 months ahead of plan.

    06

    Tokenization and Digital Assets Strategy

    Nasdaq is actively pursuing opportunities in digital assets, filing with the SEC to enable equity securities and ETFs to be traded in tokenized form on its exchange. This initiative aims to offer investors more choice and leverage blockchain technology for potential future efficiencies in collateral mobility and post-trade processing, while preserving the integrity and benefits of existing liquid markets. The company also supports the digital asset ecosystem with trading and surveillance technology, and collateral management capabilities.

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