Nasdaq profit beats estimates on IPO rush, investment products demand

[NEW YORK] Nasdaq on Wednesday (Jan 26) reported a nearly 16 per cent jump in 4th-quarter profit that topped Wall Street estimates, buoyed by the frenetic pace of US initial public offerings and strong demand for its investment-related products.

Technology, healthcare and financial technology companies led the IPO rush during the quarter, that included the stellar debut of Rivian Automotive on the exchange that valued the electric vehicle maker at over US$100 billion.

Tech-heavy Nasdaq in 2021 eclipsed rival New York Stock Exchange to host the new listings of 1,000 companies, representing US$181 billion in capital raised. Of the total listings, 752 were IPOs, including chipmaker GlobalFoundries and fintech Coinbase Global.

Nasdaq reported an adjusted profit of US$1.93 per share for the quarter ended Dec 31. Analysts were expecting US$1.78 per share, according to IBES data from Refinitiv.

Even as the transatlantic exchange operator's bourses remain its core business, Nasdaq has pushed into the software sector to reposition itself as a financial technology company offering analytics, data and cloud services.

The company's revenue from solutions segment surged 19 per cent to US$581 million. Its investment analytics products that help customers research across multiple asset classes to make investment decisions have become key growth drivers.

It also launched a cloud-based data management platform geared towards investment management firms during the quarter.

The company's net revenue came in 12 per cent higher at US$885 million from US$788 million a year ago. Market services revenue rose 5 per cent to US$303 million over the same period.

In line with other financial institutions that have seen expenses rise amid inflationary pressures, Nasdaq also saw a 15 per cent increase in operating expenses primarily due to higher employee compensation and benefits.

REUTERS