NDAQ
Earnings call · Dec 2025 (Q4 FY25)

NASDAQ Q4 FY25 earnings call NDAQ

Jan 29, 2026 Source

Executive summary

Nasdaq Q4 FY25 — Record Revenues, Strong Organic Growth, and Strategic AI Integration

Nasdaq delivered a strong Q4 and full-year FY25, marked by record revenues and robust organic growth across its diversified platform. The company exceeded its leverage target and continued to integrate AI into its product offerings, notably within Financial Crime Management Technology. Management expressed confidence in sustained growth, driven by strategic initiatives, client engagement, and a healthy pipeline, with a focus on innovation and capital efficiency in evolving market structures, including tokenized securities.

Highlights

7

  • FY25 net revenues reached a record $5.2 billion, an increase of 12% year-over-year.

  • FY25 solutions revenue grew 11% to $4 billion, hitting the top end of the medium-term outlook.

  • FY25 diluted EPS grew 24% year-over-year.

  • ARR ended FY25 at $3.1 billion, an increase of 10% year-over-year.

  • Gross leverage reduced to 2.9x by year-end, outperforming the expectation of 3.0x.

  • Index franchise achieved record $99 billion in net inflows over the last 12 months, including a record $35 billion in Q4 FY25.

  • Record $1.2 trillion in listing transfers for FY25, including Walmart's historic transfer.

Concerns

3

  • Financial Crime Management Technology professional services fees are not expected to maintain Q4 FY25 levels over H1 FY26 due to implementation timing for deals signed in H2 FY25.

  • Lower capture in U.S. options in Q4 FY25 due to options regulatory fee (ORF) recoupment and a mix shift towards lower revenue products.

  • Data and Listings segment expects an approximately $9 million year-over-year headwind in each quarter of 2026 from prior year delistings, new listing standards, and amortization roll-off.

Guidance & targets

CategoryTargetConfidence
Non-GAAP Operating Expense
$2.455 billion to $2.535 billion
high materiality
High
Non-GAAP Tax Rate
22.5% to 24.5%
medium materiality
High
Cross-sell Run Rate Revenue
surpass $100 million
medium materiality
High
23/5 Trading Launch
launch in the second half of '26
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Capital Access Platforms
Q4 revenue growth driven by 9% Alpha. Data revenue growth from upsells, usage, and new sales. Listings benefited from improving IPO environment, partially offset by delistings and lower amortization of prior listing fees. Index revenue driven by ETP AUM appreciation and derivatives contract volumes.
Annual Revenue: $2.1 billionAnnual Revenue Growth: 10%ARR Growth: 7%Data and Listings Revenue Growth (Q4): 7%Data and Listings ARR Growth: 8%Index Revenue Growth (Q4): 23%Annual Operating Margin: 60%
$572 million12%—59%
Financial Technology
Strong performance across all three subdivisions. Q4 results reflect strong sales execution and sequentially improved professional services revenue. Financial Crime Management Technology saw significant growth in enterprise deals and ACV. Regulatory Technology broadened product portfolio and deepened partnerships. Capital Markets Technology saw durable demand for modernization solutions and increased adoption of managed services.
Annual Revenue: $1.85 billionAnnual Revenue Growth: 11%ARR Growth: 12%Financial Crime Management Technology Revenue Growth (Q4): 24%Financial Crime Management Technology Annual Revenue Growth: 22%Financial Crime Management Technology ARR Growth: 18%Regulatory Technology Revenue Growth (Q4): 12%Regulatory Technology Annual Revenue Growth: 10%Regulatory Technology ARR Growth: 12%Capital Markets Technology Revenue Growth (Q4): 9%Capital Markets Technology Annual Revenue Growth: 9%Capital Markets Technology ARR Growth: 11%Annual Operating Margin: 47%
$498 million12%—48%
Market Services
Q4 revenue was a quarterly record, driven by record industry volumes in U.S. equities and options, improved volumes and capture in index options, elevated market share in European equities, and higher U.S. tape plan revenue. Growth was partially offset by lower capture in U.S. options due to ORF recoupment and a mix shift.
Annual Net Revenue: $1.2 billionAnnual Net Revenue Growth: 17%Annual Operating Margin: 64%
$311 million14%—64%

Operational metrics

Net Revenue
$5.2 billion up 12%
FY25

First time surpassing $5 billion in annual net revenue.

Solutions Revenue
$4 billion up 11%
FY25

First time surpassing $4 billion in solutions revenue, at the top end of the medium-term outlook.

Annual Recurring Revenue (ARR)
$3.1 billion up 10% year-over-year
FY25 end

Represents a 2 percentage point improvement versus the prior year period.

Operating Income
$2.9 billion up 16%
FY25

Non-GAAP operating income.

Diluted EPS
$3.48 up 24%
FY25

Non-GAAP diluted EPS.

Net Revenue
$1.4 billion up 13% year-over-year
Q4 FY25

Non-GAAP net revenue.

Solutions Revenue
$1.1 billion up 12% year-over-year
Q4 FY25

Non-GAAP solutions revenue.

Operating Income
$783 million up 16%
Q4 FY25

Non-GAAP operating income.

Diluted EPS
$0.96 up 27%
Q4 FY25

Non-GAAP diluted EPS.

Operating Expense
$609 million up 8%
Q4 FY25

Non-GAAP operating expense.

Operating Expense
$2.331 billion up 7%
FY25

Non-GAAP operating expense.

Operating Margin
56% up 2 points
FY25

Non-GAAP operating margin.

EBITDA Margin
58% up 2 points
FY25

Non-GAAP EBITDA margin.

Operating Margin
56% up 2 percentage points
Q4 FY25

Non-GAAP operating margin.

EBITDA Margin
59% up 2 percentage points
Q4 FY25

Non-GAAP EBITDA margin.

Free Cash Flow Conversion Ratio
109%
FY25

Conversion ratio for free cash flow.

Dividends Paid
$601 million
FY25

Total dividends paid.

Dividends Paid
$153 million
Q4 FY25

Q4 dividends paid.

Annualized Payout Ratio
31%
Q4 FY25

Annualized payout ratio based on Q4 dividend.

Debt Paid Down
$826 million
FY25

Total debt paid down.

Debt Paid Down
$100 million
Q4 FY25

Debt paid down in Q4 through a successful tender offer.

Gross Leverage Ratio
2.9x outperforming expectation of 3.0x
FY25 end

Ended the year with gross leverage ratio.

Share Repurchases
$616 million
FY25

Total share repurchases.

Share Repurchases
$286 million
Q4 FY25

Q4 share repurchases.

Expanded Efficiency Program Cost Reductions
over $160 million
FY25

Net expense target achieved through cost reductions actioned as of year-end.

Cross-sell Wins
25
FY25

Total cross-sell wins since Adenza acquisition closed is 42.

Cross-sell Wins
12
Q4 FY25

Cross-sell wins in the quarter.

Cross-sells as % of Sales Pipeline
over 15%
Q4 FY25 end

Percentage of Financial Technology sales pipeline represented by cross-sells.

Financial Crime Management Technology New SMB Clients
255
FY25

Total new SMB clients added.

Financial Crime Management Technology New SMB Clients
119
Q4 FY25

New SMB clients added in Q4.

Financial Crime Management Technology New Enterprise Clients
6
FY25

Total new enterprise clients signed. 5 of the 6 were cross-sells.

Financial Crime Management Technology New Enterprise Clients
3
Q4 FY25

New enterprise clients signed in Q4.

Financial Crime Management Technology Total Client Growth
23%
FY25

Combined total client growth over the prior year.

Financial Crime Management Technology Enterprise Deals
9
FY25

Total enterprise deals, including 3 expansion deals with existing clients.

Financial Crime Management Technology Enterprise Deals vs 2024
4x
FY25

Number of enterprise deals and ACV compared to 2024.

Financial Crime Management Technology Net Revenue Retention
112%
FY25

Reflecting strong client engagement.

Surveillance New Clients
26
FY25

New clients across securities exchanges, crypto trading venues, market participants, and regulators.

Central Bank Clients
24
FY25 end

Total central bank clients, including 3 new clients signed in Q4.

Nasdaq Closing Cross Notional Value
$233 billion record
December

New notional value record during the Triple-Witch event.

ETP AUM
$882 billion all-time high
FY25 end

Exchange Traded Product Assets Under Management at year-end.

Average ETP AUM
$860 billion record
Q4 FY25

Average ETP AUM for the quarter, a 36% increase.

Index New Products Launched
122
FY25

New index products introduced, highest number in history.

Listings Win Rate
72%
FY25

Updated listings win rate methodology, accounting for IPO, direct listing, and SPAC combination pathways.

Operating Company Switches Market Cap
$1.2 trillion record
FY25

Market cap represented by operating company switches, including Walmart, Shopify, Kimberly-Clark, and Thomson Reuters.

New Enterprise License Agreements Growth
24% year-over-year
FY25

Growth in new enterprise license agreements.

Platform Usage
up 10% year-over-year
FY25

Increased usage of research workflows in Analytics.

Total SaaS Revenue Growth
13%
Q4 FY25

Total SaaS revenue growth in the quarter.

Fintech SaaS Growth
19%
Q4 FY25

SaaS growth within the Financial Technology division.

SaaS Share of ARR
38% in line with prior year quarter
Q4 FY25

Consistent share of ARR represented by SaaS.

Alpha Growth (Revenue)
over 8 percentage points
Q4 FY25 and FY25

Revenue growth driven by new and existing clients, low churn, and product innovation.

Alpha Growth Improvement
170 basis points versus 2024
FY25

Improvement in Alpha growth.

Effective Tax Rate
21.2%
Q4 FY25

Reflects the impact of a few discrete items.

Effective Tax Rate
22.4% slightly below 2025 tax rate guidance
FY25

Full year tax rate.

Product announcements

ProductTypeDetails
Agentic AI workforce (Agentic Sanctions Analyst)launch
Agentic AI workforce (Agentic Enhanced Due Diligence Analyst)launch
23/5 Trading for Nasdaq Stock Marketroadmap
Proposed Approach to Trade Tokenized Securitiesroadmap

Deals & partnerships

BioCatch Partnership to bring additional intelligence and effectiveness to solutions.

Formed a new partnership with BioCatch to enhance Financial Crime Management technology solutions.

one of the largest banks in Saudi Arabia Agreement for international expansion of data business.

Signed an agreement with one of the largest banks in Saudi Arabia as part of international expansion efforts for the data business.

Revolut Deepened partnership for regulatory reporting.

Deepened partnership after Revolut consolidated their U.K. and European regulatory reporting onto Nasdaq's cloud managed platform.

CFTC Agreement for surveillance system replacement.

CFTC selected Nasdaq to replace its legacy surveillance system.

Juniper Square Partnership to embed investment data in investment workflows.

Partnership to embed Nasdaq's investment data in investment workflows across public and private markets.

LSEG Partnership to embed investment data in investment workflows.

Partnership to embed Nasdaq's investment data in investment workflows across public and private markets.

Risks & headwinds

Data and Listings Revenue Headwind 2026

$9 million year-over-year in each quarter

Financial Crime Management Technology Professional Services Revenue Variability H1 FY26

Not expected to maintain Q4 FY25 levels over H1 FY26

Mitigation:Related to implementation timing for deals signed in H2 FY25; management expects increased quarterly variability in revenue growth impacts from enterprise client signings as the enterprise business grows.

Lower Capture in U.S. Options Q4 FY25

Lower net options capture rate

Mitigation:Driven by options regulatory fee (ORF) recoupment (regulatory expenses mostly recovered in first 3 quarters) and a mix shift towards lower revenue products due to strong volumes.

Government Shutdown Impact on New Issuances Q4 FY25

Interruption to new issuances

Mitigation:Some issuers who wanted to tap public markets in Q4 FY25 are now focusing on Q1/Q2 2026.

Regulatory Approval for 23/5 Trading H2 FY26

Subject to regulatory approval

Mitigation:Launch of 23/5 trading is contingent on receiving necessary regulatory approvals.

Unsettled Regulatory Environment for Prediction Markets

Regulatory environment is still not really settled

Mitigation:Nasdaq prefers to operate in regulated markets with clear rules; evaluating event options within regulated options business and providing technology/data to prediction markets.

Splitting Liquidity with Tokenized Equities

Risk of splitting liquidity between on chain and traditional wealth

Mitigation:Nasdaq's tokenization proposal aims to integrate with existing infrastructure to bring liquidity together, drive transparency, and maintain market integrity.

Competition from Blockchain Native Tokens

Competition between tokenized equities and the issuance of blockchain native token

Mitigation:Nasdaq emphasizes that current technology is not sufficient for blockchain native trading of equities at the required scale, speed, and capital efficiency.

What to watch in Q1 FY26

Financial Crime Management Technology Professional Services Revenue

H1 FY26
Current Strong in Q4 FY25
Target Stabilization after Q4 FY25 levels not maintained in H1 FY26

Why it matters

This will indicate the pace of enterprise client implementations and the impact of revenue variability on the segment's growth trajectory.

We do not expect to maintain these levels over the first half of 2026 based on the implementation timing for deals signed in the second half of 2025.

Q&A highlights

What are Nasdaq's expectations for the recently approved expanded options expirations (0DTE) in Mag 7 names, its impact on the options market, and potential tailwinds for Nasdaq's index option franchise?

Nasdaq is pleased with the launch, seeing early positive uptake. It provides clients with more precise risk management, drives volumes, and expands institutional participation. The company plans to expand the offering over time, mindful of liquidity characteristics. The index option franchise could benefit from increased hedging needs for single stock options, given the higher weighting of Mag 7 names in Nasdaq's indices.

“We are focused on the stocks we've already launched, and we want to continue to be very mindful of the liquidity characteristics of the companies that we're introducing into this framework because I think that's really important in terms of being able to manage risk successfully.”

asked by Patrick Moley · answered by Adena Friedman

2 min read 5 chapters

Detailed narrative

Strategic Pillars and Efficiency Program

Nasdaq's FY25 performance was anchored by its 'integrate, innovate, and accelerate' strategic pillars. The company overachieved its expanded efficiency program, realizing over $160 million in cost reductions. This disciplined execution contributed to a reduction in gross leverage to 2.9x, exceeding the target of 3.0x, and led to credit rating upgrades from Moody's and S&P.

Capital Access Platforms Momentum

The Capital Access Platforms segment delivered 10% annual revenue growth, driven by record index inflows, a strong IPO year (securing 3 of the top 5 IPOs, including Medline), and robust data bookings. The listings business achieved a 72% win rate under a new methodology and recorded $1.2 trillion in market cap transfers, including Walmart, Shopify, Kimberly-Clark, and Thomson Reuters. The index franchise saw $99 billion in net inflows over the last 12 months, ending the year with $882 billion in ETP AUM.

Financial Technology Growth and AI Integration

The Financial Technology division achieved 11% annual revenue growth, with Financial Crime Management Technology growing 22%, Regulatory Technology 10%, and Capital Markets Technology 9%. The division added 291 new clients and 462 upsells in FY25, with cross-sells representing over 15% of the sales pipeline. Nasdaq is embedding AI across its business, launching the Agentic AI workforce (Agentic Sanctions Analyst, Agentic Enhanced Due Diligence Analyst) within Financial Crime Management Technology, which has seen strong early client adoption.

Market Services Performance and Market Structure Evolution

Market Services reported record annual net revenue of $1.2 billion, up 17%, fueled by elevated volumes in U.S. equities and options, and strong European performance. Index options revenue more than doubled year-over-year for the second consecutive quarter. Nasdaq is preparing to launch 23/5 trading in H2 2026, subject to regulatory approval, and is actively driving industry efforts for digital assets, including a proposed approach to trade tokenized securities that prioritizes issuer choice, investor protection, and capital efficiency.

Capital Allocation and Future Outlook

Nasdaq generated $2.2 billion in free cash flow in FY25, with a 109% conversion ratio. The company paid $601 million in dividends and repurchased $616 million in shares. Management is focused on organic growth and innovation, while also evaluating bolt-on acquisitions. The company anticipates an active new issuance year in 2026, supported by recent Fed cuts and a healthy pipeline of late-stage private companies, and expects its non-GAAP operating expense for 2026 to be between $2.455 billion and $2.535 billion.

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