Nasdaq Reports Third Quarter 2016 Earnings; Delivers Record Subscription and Recurring Revenues(1)
(Thomson Reuters ONE) -
* Net revenues(2) were a record $585 million in the third quarter of 2016, up
11% year-over-year.
* Third quarter 2016 diluted EPS was $0.77. Non-GAAP(3) diluted EPS for the
third quarter 2016 was $0.91.
* Subscription and recurring revenues in the third quarter of 2016 were a
record and represented 75% of total net revenues. Information Services,
Technology Solutions, and Listing Services segments each achieved quarterly
record net revenues.
* At September 30, 2016, the company had achieved $23 million in annualized
run-rate cost synergies for the acquisitions completed in 2016 out of a
targeted $60 million expected upon completion of integration.
* During the third quarter of 2016, Nasdaq repurchased $55 million of its
common stock. Total repurchases from the beginning of the year through
September 30, 2016 were $100 million.
NEW YORK, Oct. 26, 2016 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq:NDAQ) today
reported strong financial results for the third quarter of 2016. Third quarter
net revenues were $585 million, up $56 million or 11% from $529 million in the
prior year period, driven primarily by a $58 million positive impact from
acquisitions. Organic revenue growth in the non-trading segments(4) in the
third quarter of 2016 was offset by a contraction in trading revenues when
compared to an especially volatile trading environment in the prior-year period.
"The third quarter's strong financial results showcase how the complementary
nature of Nasdaq's business mix can deliver against a variety of macro
backdrops. While our marketplaces were subject to lower volatility and industry
volumes compared to the prior year period, the company's non-trading segments
expanded to new record levels," said Bob Greifeld, CEO, Nasdaq.
Mr. Greifeld continued, "The Information Services, Technology Solutions, and
Listing Services segments were especially strong in the third quarter, but more
importantly they each represent areas where we have found attractive
opportunities to invest and where our technology leadership can be leveraged
effectively to benefit our clients and create new opportunities for growth."
Operating expenses were $352 million in the third quarter of 2016, up $54
million from $298 million in the third quarter of 2015. The increase primarily
reflects incremental expenses from the acquisitions of Nasdaq CXC, formerly Chi-
X Canada (February 2016), Marketwired (February 2016), Boardvantage (May 2016),
and ISE (June 2016).
Non-GAAP operating expenses were $317 million in the third quarter of 2016, up
$41 million from $276 million in the third quarter of 2015. This increase
primarily reflects $29 million in incremental operating expenses from the
acquisitions closed in 2016 as well as $13 million due to organic growth.
"During the third quarter, the company made significant progress integrating our
recent acquisitions, moving the synergy achievement up to $23 million on a run
rate basis, which contributed to meaningful accretion to our non-GAAP results,"
said Michael Ptasznik, Chief Financial Officer and Executive Vice President,
Nasdaq.
Mr. Ptasznik continued, "We also saw an attractive opportunity to return $55
million to shareholders through the share buyback program in the third quarter.
I'm pleased to say that in addition to executing on several acquisition
opportunities this year, the company has returned 54% of our non-GAAP net income
year-to-date to shareholders through dividends and buybacks."
Net income attributable to Nasdaq for the third quarter of 2016 was $131
million, or $0.77 per diluted share, compared with $138 million, or $0.80 per
diluted share, in the prior year quarter. On a non-GAAP basis, net income
attributable to Nasdaq for the third quarter of 2016 was $154 million, or $0.91
per diluted share, compared with $151 million, or $0.88 per diluted share, in
the third quarter of 2015.
The company repurchased 800,938 shares for $55 million in the third quarter of
2016 at an average price of $68.19. As of September 30, 2016, there was $429
million remaining under the board authorized share repurchase program.
At September 30, 2016, the company had cash and cash equivalents of $257 million
and total debt of $3,709 million, resulting in net debt of $3,452 million. This
compares to net debt of $2,063 million at December 31, 2015.
(1) Represents revenues from our Information Services, Technology Solutions, and
Listing Services segments, as well as our Trade Management Services business,
formerly referred to as Access and Broker Services.
(2) Represents revenues less transaction-based expenses.
(3) Refer to our reconciliations of U.S. GAAP to non-GAAP net income, diluted
earnings per share, operating income and operating expenses included in the
attached schedules.
(4 )Represents revenues from our Information Services, Technology Solutions, and
Listing Services segments.
BUSINESS HIGHLIGHTS
Market Services (36% of total net revenues) - Net revenues were $213 million in
the third quarter of 2016, up $13 million when compared to the third quarter of
2015. The increase primarily reflects an increase in revenues from the ISE and
Nasdaq CXC acquisitions, partially offset by declines in trading volumes as
compared to multi-year high industry trading volumes experienced in the third
quarter of 2015.
Equity Derivatives (11% of total net revenues) - Net equity derivative
trading and clearing revenues were $67 million in the third quarter of
2016, up $16 million compared to the third quarter of 2015. The increase is
primarily due to the inclusion of revenues from our acquisition of ISE in
June 2016 and higher market share at The NASDAQ Options Market and Nasdaq
PHLX, partially offset by lower industry trading volumes.
Cash Equities (10% of total net revenues) - Net cash equity trading revenues
were $59 million in the third quarter of 2016, down $8 million compared to
the third quarter of 2015. This decrease reflects lower matched market
share, lower industry trading volumes and lower U.S. average net capture,
partially offset by the inclusion of net revenues associated with the
acquisition of Nasdaq CXC.
Fixed Income and Commodities Trading and Clearing(1) (3% of total net
revenues) - Net fixed income and commodities trading and clearing (FICC)
revenues were $18 million in the third quarter of 2016, down $5 million from
the third quarter of 2015, due to declines in commodities and U.S. fixed
income revenues and the impact of trading incentives on Nasdaq Futures (NFX)
revenues.
Trade Management Services (12% of total net revenues) - Trade management
services revenues were $69 million in the third quarter of 2016, up $10
million compared to the third quarter of 2015, due to the inclusion of
revenue from the acquisition of ISE and an increase in customer demand for
network connectivity.
(1) Our FICC business was formerly referred to as fixed income, currency and
commodities trading and clearing.
Information Services (23% of total net revenues) - Revenues were $137 million in
the third quarter of 2016, up $5 million from the third quarter of 2015.
Data Products (18% of total net revenues) - Data products revenues were $109
million in the third quarter of 2016, up $6 million compared to the third
quarter of 2015 primarily due to growth in proprietary data products
revenues, the inclusion of revenues from the acquisitions of ISE and Nasdaq
CXC, as well as higher audit collections.
Index Licensing and Services (5% of total net revenues) - Index licensing
and services revenues were $28 million in the third quarter of 2016, down $1
million from the third quarter of 2015. The revenue decline was primarily
due to a decrease in the value of underlying assets associated with non-ETP
Nasdaq-licensed products and lower fees associated with derivative products
licensing Nasdaq indices, due to lower volumes.
Technology Solutions (29% of total net revenues) - Revenues were $167 million in
the third quarter of 2016, up $36 million from the third quarter of 2015. The
increase primarily reflects the inclusion of revenues from the acquisitions of
Marketwired and Boardvantage, as well as $13 million in organic revenue growth
in our Market Technology business.
Corporate Solutions (16% of total net revenues) - Corporate solutions
revenues were $94 million in the third quarter of 2016, up $22 million from
the third quarter of 2015. The increase was due to the inclusion of
revenues from the Marketwired and Boardvantage acquisitions.
Market Technology (13% of total net revenues) - Market technology revenues
were $73 million in the third quarter of 2016, up $14 million from the third
quarter of 2015. The increase was driven primarily by growth in revenues
from software licensing and support as well as surveillance products.
Listing Services (12% of total net revenues) - Revenues were $68 million in the
third quarter of 2016, up $2 million compared to the third quarter of 2015
primarily due to higher revenues in the Nordics due to new company listings.
CORPORATE HIGHLIGHTS
* NFX growth continues Nasdaq's commodities expansion. NFX, a U.S.-based
derivatives market for key energy benchmarks, has seen increasing traction
since launch in July 2015. During the month of September 2016, open
interest in NFX products reached a record 1.2 million contracts, and during
the third quarter of 2016, trading volume of 8.9 million contracts increased
16% from 7.7 million contracts in the second quarter of 2016. Since its
July 2015 inception, 118 firms have traded on NFX.
* The Nasdaq Stock Market leads U.S. exchanges for IPOs and switches. In the
U.S. market, The Nasdaq Stock Market welcomed 79 new listings in the third
quarter of 2016, including 31 IPOs such as Trade Desk, Apptio and Nutanix.
During the third quarter of 2016, 74% of all U.S. IPOs were listed on
Nasdaq. In addition, The Nasdaq Stock Market welcomed 16 switches thus far
in 2016 with an aggregate market capitalization of $42 billion, including
IHS Markit. Nasdaq announced 24 new exchange-traded products (ETP) listings
and one switch in the third quarter, bringing Nasdaq's total ETP listings to
295, up 48% from the third quarter of 2015.
* Corporate Solutions launches Nasdaq Influencers while Nasdaq IR Insight sees
continued strong adoption. Nasdaq has seen strong adoption of the next
generation IR platform with 86% of companies upgraded since January.
Additionally, Nasdaq's Corporate Solutions business launched Nasdaq
Influencers, a new solution for communications and marketing professionals
to discover and connect with the most relevant thought leaders in their
industry and uncover new opportunities to share their news and information,
insights and recommendations as well as drive brand identity and awareness.
* Nasdaq sees strong growth in number of ETPs and assets tracking Nasdaq
indexes. The number of ETPs licensed to Nasdaq indexes increased to 289 at
September 30, 2016 versus 267 at June 30, 2016, including several non-U.S.
product launches in China, Taiwan, and Australia. Two new Nasdaq-100 ETPs
were listed in Hong Kong with BMO and BlackRock and one in Taiwan with Fubon
Asset Management. Additionally, BetaShares launched a series of Global Ex-
Australia hedged ETPs based on Nasdaq indexes. Overall AUM in exchange
traded products (ETPs) benchmarked to all Nasdaq indexes increased 15% to
$118 billion as of September 30, 2016 compared to September 30, 2015.
ABOUT NASDAQ
Nasdaq (Nasdaq:NDAQ) is a leading provider of trading, clearing, exchange
technology, listing, information and public company services across six
continents. Through its diverse portfolio of solutions, Nasdaq enables customers
to plan, optimize and execute their business vision with confidence, using
proven technologies that provide transparency and insight for navigating today's
global capital markets. As the creator of the world's first electronic stock
market, its technology powers more than 70 marketplaces in 50 countries, and 1
in 10 of the world's securities transactions. Nasdaq is home to more than 3,700
listed companies with a market value of $10.0 trillion and approximately 18,000
corporate clients. To learn more, visit: nasdaq.com/ambition or
business.nasdaq.com.
NON-GAAP INFORMATION
In addition to disclosing results determined in accordance with U.S. GAAP,
Nasdaq also discloses certain non-GAAP results of operations, including, but not
limited to, net income attributable to Nasdaq, diluted earnings per share,
operating income, and operating expenses, that include certain adjustments or
exclude certain charges and gains that are described in the reconciliation table
of U.S. GAAP to non-GAAP information provided at the end of this release.
Management uses this non-GAAP information internally, along with U.S. GAAP
information, in evaluating our performance and in making financial and
operational decisions. We believe our presentation of these measures provides
investors with greater transparency and supplemental data relating to our
financial condition and results of operations. In addition, we believe the
presentation of these measures is useful to investors for period-to-period
comparisons of results as the items described below do not reflect ongoing
operating performance.
These measures are not in accordance with, or an alternative to, U.S. GAAP, and
may be different from non-GAAP measures used by other companies. Investors
should not rely on any single financial measure when evaluating our business. We
recommend investors review the U.S. GAAP financial measures included in this
earnings release. When viewed in conjunction with our U.S. GAAP results and the
accompanying reconciliations, we believe these non-GAAP measures provide greater
transparency and a more complete understanding of factors affecting our business
than U.S. GAAP measures alone.
We understand that analysts and investors regularly rely on non-GAAP financial
measures, such as non-GAAP net income attributable to Nasdaq, non-GAAP diluted
earnings per share, non-GAAP operating income and non-GAAP operating expenses to
assess operating performance. We use these measures because they highlight
trends more clearly in our business that may not otherwise be apparent when
relying solely on U.S. GAAP financial measures, since these measures eliminate
from our results specific financial items, such as those described below, that
have less bearing on our ongoing operating performance.
Amortization expense of acquired intangible assets: We amortize intangible
assets acquired in connection with various acquisitions. Intangible asset
amortization expense can vary from period to period due to episodic acquisitions
completed, rather than from our ongoing business operations. As such, if
intangible asset amortization is included in performance measures, it is more
difficult to assess the day-to-day operating performance of the businesses, the
relative operating performance of the businesses between periods and the
earnings power of Nasdaq. Management does not consider intangible asset
amortization expense for the purpose of evaluating the performance of our
business or its managers or when making decisions to allocate resources.
Therefore, we believe performance measures excluding intangible asset
amortization expense provide investors with a more useful representation of our
businesses' ongoing activity in each period.
Restructuring charges: Restructuring charges are associated with our 2015
restructuring plan to improve performance, cut costs and reduce spending and are
primarily related to (i) the rebranding of our company name from The NASDAQ OMX
Group, Inc. to Nasdaq, Inc., (ii) severance and other termination benefits,
(iii) costs to vacate duplicate facilities, and (iv) asset impairment charges.
We exclude these restructuring costs because these costs do not reflect future
operating expenses and do not contribute to a meaningful evaluation of Nasdaq's
ongoing operating performance or a comparison of Nasdaq's performance between
periods.
Merger and strategic initiatives expense: We have pursued various strategic
initiatives and completed a number of acquisitions in recent years which have
resulted in expenses which would not have otherwise been incurred. These
expenses include integration costs, as well as legal, due diligence and other
third party transaction costs. The frequency and the amount of such expenses
vary significantly based on the size, timing and complexity of the transaction.
Accordingly, we exclude these costs for purposes of calculating non-GAAP
measures which provide a more meaningful analysis of Nasdaq's ongoing operating
performance or comparisons of Nasdaq's performance between periods.
Other significant items: We have excluded certain other charges or gains that
are the result of other non-comparable events to measure operating performance.
For the three months ended June 30, 2016, other significant items include tax
expense due to an unfavorable tax ruling received during the three months ended
June 30, 2016, the impact of which related to prior periods, and the release of
a sublease loss reserve due to the early exit of a facility. For the three
months ended September 30, 2015, other significant items include an insurance
recovery for litigation arising from the Facebook IPO in May 2012. We believe
the exclusion of such amounts, which arise outside of the normal course of
business, allow management and investors to better understand the financial
results of Nasdaq.
Foreign exchange impact on revenue: In countries with currencies other than the
U.S. dollar, revenues and expenses are translated using monthly average exchange
rates. Certain discussions in this release isolate the impact of year-over-year
foreign currency fluctuations to better measure the comparability of operating
results between periods. Operating results excluding the impact of foreign
currency fluctuations are calculated by translating the current period's results
by the prior period's exchange rates.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information set forth in this communication contains forward-looking statements
that involve a number of risks and uncertainties. Nasdaq cautions readers that
any forward-looking information is not a guarantee of future performance and
that actual results could differ materially from those contained in the forward-
looking information. Such forward-looking statements include, but are not
limited to (i) projections relating to our future financial results, growth,
trading volumes, products and services, order backlog, taxes and achievement of
synergy targets, (ii) statements about the closing or implementation dates and
benefits of certain acquisitions and other strategic, restructuring, technology,
de-leveraging and capital return initiatives, (iii) statements about our
integrations of our recent acquisitions, (iv) statements relating to any
litigation or regulatory or government investigation or action to which we are
or could become a party, and (v) other statements that are not historical
facts. Forward-looking statements involve a number of risks, uncertainties or
other factors beyond Nasdaq's control. These factors include, but are not
limited to, Nasdaq's ability to implement its strategic initiatives, economic,
political and market conditions and fluctuations, government and industry
regulation, interest rate risk, U.S. and global competition, and other factors
detailed in Nasdaq's filings with the U.S. Securities and Exchange Commission,
including its annual reports on Form 10-K and quarterly reports on Form 10-Q
which are available on Nasdaq's investor relations website
at http://ir.nasdaq.com and the SEC's website at www.sec.gov. Nasdaq undertakes
no obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
WEBSITE DISCLOSURE
Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing
material non-public information and for complying with SEC Regulation FD and
other disclosure obligations. These disclosures will be included on Nasdaq's
website under "Investor Relations."
NDAQF
Nasdaq, Inc.
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)
Three Months Ended
----------------------------------------
September September
30, June 30, 30,
2016 2016 2015
------------- ------------- ------------
Revenues:
Market Services $ 557 $ 532 $ 542
Transaction-based expenses:
Transaction rebates (265 ) (256 ) (256 )
Brokerage, clearance and exchange
fees (79 ) (82 ) (86 )
------------- ------------- ------------
Total Market Services revenues less
transaction-based expenses 213 194 200
Listing Services 68 68 66
Information Services 137 134 132
Technology Solutions 167 163 131
------------- ------------- ------------
Revenues less transaction-based
expenses 585 559 529
------------- ------------- ------------
Operating Expenses:
Compensation and benefits 168 164 150
Marketing and advertising 8 8 6
Depreciation and amortization 46 41 34
Professional and contract services 40 35 33
Computer operations and data
communications 28 27 23
Occupancy 23 19 22
Regulatory 8 6 7
Merger and strategic initiatives 12 35 4
General, administrative and other 19 17 11
Restructuring charges - 33 8
------------- ------------- ------------
Total operating expenses 352 385 298
------------- ------------- ------------
Operating income 233 174 231
Interest income 1 1 1
Interest expense (37 ) (32 ) (28 )
Other investment income - 2 -
Net income from unconsolidated
investees 2 1 2
------------- ------------- ------------
Income before income taxes 199 146 206
Income tax provision 68 76 68
------------- ------------- ------------
Net income attributable to Nasdaq $ 131 $ 70 $ 138
------------- ------------- ------------
Per share information:
Basic earnings per share $ 0.79 $ 0.42 $ 0.83
------------- ------------- ------------
Diluted earnings per share $ 0.77 $ 0.42 $ 0.80
------------- ------------- ------------
Cash dividends declared per common
share $ 0.32 $ - $ 0.25
------------- ------------- ------------
Weighted-average common shares
outstanding for earnings per share:
Basic 165.6 165.0 166.9
Diluted 169.5 168.2 171.5
Nasdaq, Inc.
Revenue Detail
(in millions)
(unaudited)
Three Months Ended
-----------------------------------------
September September
30, June 30, 30,
2016 2016 2015
-------------- ------------ -------------
MARKET SERVICES REVENUES
Equity Derivative Trading and
Clearing Revenues $ 164 $ 103 $ 109
Transaction-based expenses:
Transaction rebates (90 ) (53 ) (53 )
Brokerage, clearance and exchange
fees (7 ) (4 ) (5 )
-------------- ------------ -------------
Total net equity derivative trading
and clearing revenues 67 46 51
Cash Equity Trading Revenues 302 339 349
Transaction-based expenses:
Transaction rebates (171 ) (198 ) (202 )
Brokerage, clearance and exchange
fees (72 ) (78 ) (80 )
-------------- ------------ -------------
Total net cash equity trading
revenues 59 63 67
Fixed Income and Commodities Trading
and Clearing Revenues 22 26 25
Transaction-based expenses:
Transaction rebates (4 ) (5 ) (1 )
Brokerage, clearance and exchange
fees - - (1 )
-------------- ------------ -------------
Total net fixed income and
commodities trading and clearing
revenues 18 21 23
Trade Management Services Revenues 69 64 59
-------------- ------------ -------------
Total Net Market Services revenues 213 194 200
-------------- ------------ -------------
LISTING SERVICES REVENUES 68 68 66
-------------- ------------ -------------
INFORMATION SERVICES REVENUES
Data Products revenues 109 107 103
Index Licensing and Services revenues 28 27 29
-------------- ------------ -------------
Total Information Services revenues 137 134 132
-------------- ------------ -------------
TECHNOLOGY SOLUTIONS REVENUES
Corporate Solutions revenues 94 94 72
Market Technology revenues 73 69 59
-------------- ------------ -------------
Total Technology Solutions revenues 167 163 131
-------------- ------------ -------------
Revenues less transaction-based
expenses $ 585 $ 559 $ 529
-------------- ------------ -------------
Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions)
September 30, December 31,
2016 2015
--------------- -------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 257 $ 301
Restricted cash 19 56
Financial investments, at fair value 238 201
Receivables, net 349 316
Default funds and margin deposits 3,323 2,228
Other current assets 160 158
--------------- -------------
Total current assets 4,346 3,260
Property and equipment, net 342 323
Deferred tax assets 768 643
Goodwill 6,206 5,395
Intangible assets, net 2,740 1,959
Other non-current assets 406 281
--------------- -------------
Total assets $ 14,808 $ 11,861
--------------- -------------
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 159 $ 158
Section 31 fees payable to SEC 27 98
Accrued personnel costs 175 171
Deferred revenue 216 127
Other current liabilities 134 138
Current portion of debt obligations 20 -
Default funds and margin deposits 3,323 2,228
--------------- -------------
Total current liabilities 4,054 2,920
Debt obligations 3,689 2,364
Deferred tax liabilities 980 626
Non-current deferred revenue 191 200
Other non-current liabilities 140 142
--------------- -------------
Total liabilities 9,054 6,252
--------------- -------------
Commitments and contingencies
Equity
Nasdaq stockholders' equity:
Common stock 2 2
Additional paid-in capital 3,046 3,011
Common stock in treasury, at cost (169 ) (111 )
Accumulated other comprehensive loss (882 ) (864 )
Retained earnings 3,757 3,571
--------------- -------------
Total equity 5,754 5,609
--------------- -------------
Total liabilities and equity $ 14,808 $ 11,861
--------------- -------------
Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions, except per share amounts)
(unaudited)
Three Months Ended
--------------------------------------------------
September
30, June 30, September 30,
2016 2016 2015
-------------- ------------ ----------------------
U.S. GAAP net income
attributable to Nasdaq $ 131 $ 70 $ 138
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) 23 19 15
Merger and strategic
initiatives ((2)) 12 35 4
Restructuring
charges ((3)) - 33 8
Sublease loss
reserve ((4)) - (2 ) -
Insurance recovery ((5)) - - (5 )
-------------- ------------ ----------------------
Total non-GAAP adjustments 35 85 22
Non-GAAP adjustment to the
income tax provision ((6)) (12 ) (2 ) (9 )
-------------- ------------ ----------------------
Total non-GAAP
adjustments, net of tax 23 83 13
Non-GAAP net income $ 154 $ 153 $ 151
attributable to Nasdaq
-------------- ------------ ----------------------
U.S. GAAP diluted earnings
per share $ 0.77 $ 0.42 $ 0.80
Total adjustments from
non-GAAP net income above 0.14 0.49 0.08
-------------- ------------ ----------------------
Non-GAAP diluted earnings $ 0.91 $ 0.91 $ 0.88
per share
-------------- ------------ ----------------------
(1) Refer to the non-GAAP information section of the earnings release for
further discussion of why we consider amortization expense of acquired
intangible assets to be a non-GAAP adjustment.
(2) For the three months ended September 30, 2016 and June 30, 2016, merger
and strategic initiatives expense primarily related to our acquisition of
ISE. For the three months ended September 30, 2015, merger and strategic
initiatives expense primarily related to certain strategic initiatives and our
acquisition of Dorsey, Wright & Associates, LLC. Refer to the non-GAAP
information section of the earnings release for further discussion on why we
consider merger and strategic initiatives expense to be a non-GAAP
adjustment.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. In June 2016, we completed our
2015 restructuring plan. For the three months ended June 30, 2016,
restructuring charges primarily related to severance costs, asset impairment
charges and other charges. For the three months ended September 30, 2015,
restructuring charges primarily related to facility-related costs associated
with the consolidation of leased facilities, severance costs and other
charges. Restructuring charges are recorded on restructuring plans that have
been committed to by management and are, in part, based upon management's best
estimates of future events. Changes to the estimates may require future
adjustments to the restructuring liabilities. Refer to the non-GAAP
information section of the earnings release for further discussion of why we
consider restructuring charges to be a non-GAAP adjustment.
(4) The credit of $2 million pertains to the release of a previously recorded
sublease loss reserve due to the early exit of a facility.
(5) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. The reserve was intended to cover the
estimated amount of a settlement of class-action litigation initiated on
behalf of investors in Facebook common stock on the date of its IPO. The
reserve also covered the cost of re-opening Nasdaq's voluntary accommodation
program to allow any Nasdaq member that did not file for compensation in 2013
to submit a claim during the second quarter of 2015, subject to the conditions
and limitations that were applicable to claims filed in 2013. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represented amounts
reimbursed by applicable insurance coverage.
(6) Includes the tax impact of each non-GAAP adjustment. In addition, in June
2016 we recorded a $27 million tax expense due to an unfavorable tax ruling
received during the three months ended June 30, 2016, the impact of which
related to prior periods.
Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions)
(unaudited)
Three Months Ended
--------------------------------------------------
September
30, June 30, September 30,
2016 2016 2015
-------------- ------------ ----------------------
U.S. GAAP operating income $ 233 $ 174 $ 231
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) 23 19 15
Merger and strategic
initiatives ((2)) 12 35 4
Restructuring
charges ((3)) - 33 8
Sublease loss
reserve ((4)) - (2 ) -
Insurance recovery ((5)) - - (5 )
-------------- ------------ ----------------------
Total non-GAAP
adjustments 35 85 22
-------------- ------------ ----------------------
Non-GAAP operating income $ 268 $ 259 $ 253
-------------- ------------ ----------------------
Revenues less transaction-
based expenses $ 585 $ 559 $ 529
U.S. GAAP Operating
margin( (6)) 40 % 31 % 44 %
Non-GAAP operating
margin( (7)) 46 % 46 % 48 %
(1) Refer to the non-GAAP information section of the earnings release for
further discussion of why we consider amortization expense of acquired
intangible assets to be a non-GAAP adjustment.
(2) For the three months ended September 30, 2016 and June 30, 2016, merger
and strategic initiatives expense primarily related to our acquisition of
ISE. For the three months ended September 30, 2015, merger and strategic
initiatives expense primarily related to certain strategic initiatives and our
acquisition of Dorsey, Wright & Associates, LLC. Refer to the non-GAAP
information section of the earnings release for further discussion on why we
consider merger and strategic initiatives expense to be a non-GAAP
adjustment.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. In June 2016, we completed our
2015 restructuring plan. For the three months ended June 30, 2016,
restructuring charges primarily related to severance costs, asset impairment
charges and other charges. For the three months ended September 30, 2015,
restructuring charges primarily related to facility-related costs associated
with the consolidation of leased facilities, severance costs and other
charges. Restructuring charges are recorded on restructuring plans that have
been committed to by management and are, in part, based upon management's best
estimates of future events. Changes to the estimates may require future
adjustments to the restructuring liabilities. Refer to the non-GAAP
information section of the earnings release for further discussion of why we
consider restructuring charges to be a non-GAAP adjustment.
(4) The credit of $2 million pertains to the release of a previously recorded
sublease loss reserve due to the early exit of a facility.
(5) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. The reserve was intended to cover the
estimated amount of a settlement of class-action litigation initiated on
behalf of investors in Facebook common stock on the date of its IPO. The
reserve also covered the cost of re-opening Nasdaq's voluntary accommodation
program to allow any Nasdaq member that did not file for compensation in 2013
to submit a claim during the second quarter of 2015, subject to the conditions
and limitations that were applicable to claims filed in 2013. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represented amounts
reimbursed by applicable insurance coverage.
(6) U.S. GAAP operating margin equals U.S. GAAP operating income divided by
total revenues less transaction-based expenses.
(7) Non-GAAP operating margin equals non-GAAP operating income divided by
total revenues less transaction-based expenses.
Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions)
(unaudited)
Three Months Ended
--------------------------------------------------
September
30, June 30, September 30,
2016 2016 2015
-------------- ------------ ----------------------
U.S. GAAP operating
expenses $ 352 $ 385 $ 298
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) (23 ) (19 ) (15 )
Merger and strategic
initiatives ((2)) (12 ) (35 ) (4 )
Restructuring
charges ((3)) - (33 ) (8 )
Sublease loss
reserve ((4)) - 2 -
Insurance recovery ((5)) - - 5
-------------- ------------ ----------------------
Total non-GAAP adjustments (35 ) (85 ) (22 )
-------------- ------------ ----------------------
Non-GAAP operating $ 317 $ 300 $ 276
expenses
-------------- ------------ ----------------------
(1) Refer to the non-GAAP information section of the earnings release for
further discussion of why we consider amortization expense of acquired
intangible assets to be a non-GAAP adjustment.
(2) For the three months ended September 30, 2016 and June 30, 2016, merger
and strategic initiatives expense primarily related to our acquisition of
ISE. For the three months ended September 30, 2015, merger and strategic
initiatives expense primarily related to certain strategic initiatives and our
acquisition of Dorsey, Wright & Associates, LLC. Refer to the non-GAAP
information section of the earnings release for further discussion on why we
consider merger and strategic initiatives expense to be a non-GAAP
adjustment.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. In June 2016, we completed our
2015 restructuring plan. For the three months ended June 30, 2016,
restructuring charges primarily related to severance costs, asset impairment
charges and other charges. For the three months ended September 30, 2015,
restructuring charges primarily related to facility-related costs associated
with the consolidation of leased facilities, severance costs and other
charges. Restructuring charges are recorded on restructuring plans that have
been committed to by management and are, in part, based upon management's best
estimates of future events. Changes to the estimates may require future
adjustments to the restructuring liabilities. Refer to the non-GAAP
information section of the earnings release for further discussion of why we
consider restructuring charges to be a non-GAAP adjustment.
(4) The credit of $2 million pertains to the release of a previously recorded
sublease loss reserve due to the early exit of a facility.
(5) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. The reserve was intended to cover the
estimated amount of a settlement of class-action litigation initiated on
behalf of investors in Facebook common stock on the date of its IPO. The
reserve also covered the cost of re-opening Nasdaq's voluntary accommodation
program to allow any Nasdaq member that did not file for compensation in 2013
to submit a claim during the second quarter of 2015, subject to the conditions
and limitations that were applicable to claims filed in 2013. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represented amounts
reimbursed by applicable insurance coverage.
Nasdaq, Inc.
Quarterly Key Drivers Detail
(unaudited)
Three Months Ended
-----------------------------------------------------
September
30, June 30, September 30,
2016 2016 2015
-------------- -------------- -----------------------
Market Services
Equity Derivative Trading
and Clearing
U.S. Equity Options
Total industry average
daily volume (in
millions) 13.8 14.1 16.0
Nasdaq PHLX Options
Market matched market
share 16.0 % 16.2 % 15.8 %
The NASDAQ Options Market
matched market share 8.5 % 7.1 % 6.7 %
Nasdaq BX Options Market
matched market share 0.8 % 1.0 % 0.9 %
Nasdaq ISE Options Market
matched market share((1)) 12.0 % 0.2 % -
Nasdaq GMNI Options
Market matched market
share((1)) 1.8 % 0.0 % -
Nasdaq MCRY Options
Market matched market
share((1)) 0.2 % 0.0 % -
-------------- -------------- -----------------------
Total matched market
share executed on
Nasdaq's exchanges 39.3 % 24.5 % 23.4 %
Nasdaq Nordic and Nasdaq
Baltic options and
futures
Total average daily
volume options and
futures contracts((2)) 291,410 439,520 335,361
Cash Equity Trading
Total U.S.-listed
securities
Total industry average
daily share volume (in
billions) 6.59 7.25 7.32
Matched share volume (in
billions) 71.0 80.6 88.2
Matched market share
executed on NASDAQ 13.4 % 14.0 % 15.7 %
Matched market share
executed on Nasdaq BX 2.6 % 2.3 % 2.1 %
Matched market share
executed on Nasdaq PSX 0.9 % 1.1 % 1.0 %
-------------- -------------- -----------------------
Total matched market
share executed on
Nasdaq's exchanges 16.9 % 17.4 % 18.8 %
Market share reported to
the FINRA/NASDAQ Trade
Reporting Facility 33.5 % 33.0 % 31.0 %
-------------- -------------- -----------------------
Total market share((3)) 50.4 % 50.4 % 49.8 %
Nasdaq Nordic and Nasdaq
Baltic securities
Average daily number of
equity trades 394,181 447,231 405,614
Total average daily value
of shares traded (in
billions) $ 4.4 $ 5.2 $ 4.4
Total market share
executed on Nasdaq's
exchanges 62.4 % 63.7 % 69.7 %
Fixed Income and
Commodities Trading and
Clearing
Total U.S. Fixed Income
U.S. fixed income
notional trading volume
(in billions) $ 4,816 $ 5,255 $ 7,397
Nasdaq Nordic and Nasdaq
Baltic fixed income
Total average daily
volume fixed income
contracts 73,422 91,107 116,563
Nasdaq Commodities
Power contracts cleared
(TWh)((4)) 321 455 385
Listing Services
Initial public offerings
NASDAQ 31 25 35
Exchanges that comprise 5 25 7
Nasdaq Nordic and Nasdaq
Baltic
New listings
NASDAQ((5)) 79 73 80
Exchanges that comprise 10 33 9
Nasdaq Nordic and Nasdaq
Baltic((6))
Number of listed
companies
NASDAQ((7)) 2,872 2,868 2,850
Exchanges that comprise 875 873 835
Nasdaq Nordic and Nasdaq
Baltic((8))
Information Services
Number of licensed
exchange traded products 289 267 210
ETP assets under
management (AUM) tracking
Nasdaq indexes (in
billions)((9)) $ 118 $ 108 $ 103
Technology Solutions
Market Technology
Order intake (in
millions)((10)) $ 49 $ 69 $ 83
Total order value (in
millions)((11)) $ 738 $ 769 $ 738
(1) For the three months ended June 30, 2016, Nasdaq ISE Options Market,
Nasdaq GMNI Options Market, and Nasdaq MCRY Options Market matched market
share represents trading volume which commenced on June 30, 2016.
(2) Includes Finnish option contracts traded on EUREX Group.
(3) Includes transactions executed on NASDAQ's, Nasdaq BX's and Nasdaq PSX's
systems plus trades reported through the Financial Industry Regulatory
Authority/NASDAQ Trade Reporting Facility.
(4) Transactions executed on Nasdaq Commodities or OTC and reported for
clearing to Nasdaq Commodities measured by Terawatt hours (TWh).
(5) New listings include IPOs, including those completed on a best efforts
basis, issuers that switched from other listing venues, closed-end funds and
separately listed exchange traded products, or ETPs.
(6) New listings include IPOs and represent companies listed on the Nasdaq
Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of
Nasdaq First North.
(7) Number of listed companies for NASDAQ at period end, including separately
listed ETPs.
(8) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic
exchanges and companies on the alternative markets of Nasdaq First North at
period end.
(9) Represents AUM in licensed ETPs.
(10) Total contract value of orders signed during the period.
(11) Represents total contract value of orders signed that are yet to be
recognized as revenue.
MEDIA RELATIONS CONTACT:
Allan Schoenberg
+1.212.231.5534
allan.schoenberg(at)nasdaq.com
INVESTOR RELATIONS CONTACT:
Ed Ditmire, CFA
+1.212.401.8737
ed.ditmire(at)nasdaq.com
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Nasdaq via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 26.10.2016 - 13:00 Uhr
Sprache: Deutsch
News-ID 502962
Anzahl Zeichen: 62075
contact information:
Town:
New York
Kategorie:
Business News
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