Nasdaq, the exchange operator, recently released its fourth-quarter earnings report. While revenue saw a positive increase, earnings fell by 25% due to the inclusion of new income and operating costs from the acquisition of software provider Adenza.
Quarterly Performance
In the fourth quarter, Nasdaq posted a profit of $197 million, or 36 cents per share. This is a decrease from $241 million, or 48 cents per share, in the same quarter of the previous year.
However, after adjusting for one-time items, earnings stood at 72 cents per share, surpassing market expectations of 70 cents per share according to FactSet.
Total revenue for the quarter rose significantly to $1.65 billion, compared to $1.58 billion in the year-ago quarter. Excluding transaction-based expenses, quarterly revenue reached $1.12 billion, up from $906 million in the previous year and exceeding analyst projections for $1.07 billion.
Organic Growth and Acquisitions
The top line of Nasdaq’s business showed organic growth of 7%, with additional growth attributed to acquisitions and divestitures, including the recent acquisition of Adenza. Revenue from Nasdaq’s solutions business also witnessed strong growth, rising by nearly a third on an organic basis. On the other hand, the market services division experienced a more modest increase of just 1%, remaining relatively flat organically.
Operating Expenses
Operating expenses increased by 37% during the quarter. This rise can be attributed to the inclusion of $94 million in operating costs from Adenza, as well as an increase in the company’s merger and strategic initiatives expense and restructuring costs.