Nasdaq beat Wall Street estimates for second-quarter profit on Thursday, boosted by several high-profile listings on its exchange and strong demand for its data services in a volatile market environment. The quarter was marked by a string of marquee listings on its exchange, including SpaceX’s record-breaking IPO, which saw trading volume surpass 500 million shares on the first day. While IPOs generate negligible fees from the listing itself, trading in equities, options and related market services drive robust revenue for exchanges. The period was also highly lucrative for trading businesses, which typically benefit during periods of high volatility, as a wave of headlines about the U.S.-Iran war and shifting sentiment on the AI trade led to market swings and drove up demand for hedging. Nasdaq has diversified its business to mitigate the impact of fluctuating trading volumes by expanding its financial technology and software offerings, unlocking recurring revenue. The firm posted net revenue of US$1.5 billion for the quarter, a 15 per cent increase, largely driven by the strong performance of its capital access platforms segment. The unit, which accounts for revenue from listing services and market data on products like equities and options, raked in US$621 million, a 19 per cent jump. ‘PERPS’ WEIGH Despite the surge in volumes, investors have soured on most exchange operators this year, driven by the Commodity Futures Trading Commission’s decision to allow Kalshi and Coinbase to offer perpetual futures for cryptocurrencies, seen as eating into their market share. Perpetual futures, or “perps,” are contracts without an expiry date that are tied to the price of an underlying asset and generally allow traders to use high levels of leverage. Nasdaq shares are down more than 6 per cent this year, but have fared better than CME CME.O and Intercontinental Exchange ICE.N, which have posted steeper declines. Analysts have said Nasdaq’s offerings in the software and data segments, as well as services such as fraud prevention, cushion its business. Revenue from its financial technology segment rose 16 per cent to US$539 million in the quarter. Market services net revenue jumped 11 per cent to US$340 million, lifted by strong cash equities and equity options volumes. It posted an adjusted profit of US$1.07 per share, surpassing the 98 cents per share expected by analysts on average, according to data compiled by LSEG. CME, the first of the exchanges to post earnings this season, beat Wall Street expectations for second-quarter profit on Wednesday. ICE and Cboe are set to report their results next week. (Reporting by Utkarsh Shetti in Bengaluru; Editing by Maju Samuel)
