Nasdaq Reports Second Quarter 2017 Results; Achieves Record Quarterly Net Revenues
(Thomson Reuters ONE) -
* Net revenues(1) were a record $602 million in the second quarter of 2017, an
increase of 8% compared to the second quarter of 2016. Subscription and
recurring revenues(2) increased 5% compared to prior year period and
represented 75% of total net revenues in the second quarter of 2017.
* Second quarter 2017 GAAP diluted EPS was $0.87, while non-GAAP diluted EPS
was $1.02.(3)Compared to the second quarter of 2016, GAAP diluted EPS
increased $0.45, or 107%, while non-GAAP diluted EPS increased $0.11, or
12%.
* GAAP operating margin increased to 41% in the second quarter of 2017, up
from 31% in the second quarter of 2016 while non-GAAP operating margin rose
to 48% in the second quarter of 2017, up from 46% in the second quarter of
2016.
* As of June 30, 2017, the company achieved $60 million in annualized run-rate
cost synergies. The company has also identified $10-$20 million in
additional synergies to be realized upon completion of various platform
migrations.
* The company is lowering its 2017 non-GAAP operating expense guidance to
$1,260-$1,290 million.
NEW YORK, July 26, 2017 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq:NDAQ) today
reported financial results for the second quarter of 2017. Second quarter 2017
net revenues were $602 million, up $43 million or 8% from $559 million in the
prior year period. The second quarter increase in net revenues included a $34
million positive impact from acquisitions and $15 million, or 3%, organic
growth, partially offset by a $6 million unfavorable impact due to changes in
foreign exchange rates.
"In addition to achieving a new quarterly net revenue record, we are making
significant progress against our 2017 execution priorities, by commercializing
key technologies with new products available through the Nasdaq Financial
Framework and Analytics Hub, achieving our merger synergies ahead of our
original timeline, and raising our market share in our largest trading
categories significantly above prior year levels," said Adena T. Friedman,
President and CEO, Nasdaq.
Mrs. Friedman continued, "At the same time, we have taken a leadership role
supporting current and potential corporate issuers through our blueprint to
revitalize the U.S. capital markets,(4) which champions reforms and initiatives
that we believe improve the public company experience to the benefit of
stakeholders throughout and even beyond the broader investment community."
(1) Represents revenues less transaction-based expenses.
(2) Represents revenues from our Corporate Services, Information Services and
Market Technology segments, as well as our Trade Management Services business.
(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) For more information, please see http://business.nasdaq.com/revitalize
GAAP operating expenses were $358 million in the second quarter of 2017, down
$27 million from $385 million in the second quarter of 2016. The decrease
primarily reflects lower restructuring and merger and strategic initiatives
expense, partially offset by incremental operating expenses from the
acquisitions closed in the prior year period and additional costs associated
with the early extinguishment of debt.
Non-GAAP operating expenses were $315 million in the second quarter of 2017, up
$15 million from $300 million in the second quarter of 2016. This increase
reflects $11 million of incremental operating expenses net of synergies from the
acquisitions closed in the second quarter of 2016 and a $9 million organic
expense increase, partially offset by a $5 million favorable impact from changes
in foreign exchange rates.
"Reflecting the significant progress achieved on our integrations and
identification of additional opportunities, the company is raising its total
synergy target. Despite the headwinds that today's low volatility environment
presents, our consistent application of the company's expense and efficiency
discipline is delivering margin improvement and contributing to EPS growth
consistent with our aspiration to deliver double-digit total shareholder
returns," said Michael Ptasznik, Executive Vice President and Chief Financial
Officer, Nasdaq.
Mr. Ptasznik continued, "On the capital front, in the second quarter of 2017 we
initiated the company's first commercial paper program and began paying down
borrowings consistent with our stated objectives, following significant buyback
activity and a 19% dividend increase announced in the first quarter of 2017. We
plan to continue deploying and returning capital in a thoughtful and balanced
approach over time."
On a GAAP basis, net income attributable to Nasdaq for the second quarter of
2017 was $147 million, or $0.87 per diluted share, compared with net income of
$70 million, or $0.42 per diluted share, in the second quarter of 2016.
On a non-GAAP basis, net income attributable to Nasdaq for the second quarter of
2017 was $172 million, or $1.02 per diluted share, compared with $153 million,
or $0.91 per diluted share, in the second quarter of 2016.
At June 30, 2017, the company had cash and cash equivalents of $356 million and
total debt of $3,552 million, resulting in net debt of $3,196 million. This
compares to net debt of $3,200 million at December 31, 2016. Included in total
debt of $3,552 million is $494 million outstanding from the recently established
commercial paper program. As of June 30, 2017, there was $273 million remaining
under the board authorized share repurchase program. There were no share
repurchases during the second quarter of 2017.
2017 EXPENSE GUIDANCE(1) - The company is lowering its 2017 non-GAAP operating
expense guidance to $1,260 to $1,290 million, versus prior 2017 expense guidance
of $1,260 to $1,300 million.
(1) U.S. GAAP operating expense guidance is not provided due to the inherent
difficulty in quantifying certain amounts due to a variety of factors including
the unpredictability in the movement in foreign currency rates, as well as
future charges or reversals outside of the normal course of business.
BUSINESS HIGHLIGHTS
Market Services (37% of total net revenues) - Net revenues were $222 million in
the second quarter of 2017, up $28 million when compared to the second quarter
of 2016.
Equity Derivatives (11% of total net revenues) - Net equity derivative
trading and clearing revenues were $67 million in the second quarter of
2017, up $21 million compared to the second quarter of 2016. The increase
is primarily due to the inclusion of revenues from the acquisition of ISE in
June 2016.
Cash Equities (11% of total net revenues) - Net cash equity trading revenues
were $64 million in the second quarter of 2017, up $1 million from the
second quarter of 2016. This increase primarily reflects higher European
cash equities revenues, partially offset by an unfavorable impact from
changes in foreign exchange rates.
Fixed Income and Commodities Trading and Clearing (3% of total net revenues)
- Net fixed income and commodities trading and clearing revenues were $19
million in the second quarter of 2017, down $2 million from the second
quarter of 2016. The decrease primarily reflects lower industry volumes in
our European commodities products.
Trade Management Services (12% of total net revenues) - Trade management
services revenues were $72 million in the second quarter of 2017, up $8
million compared to the second quarter of 2016, due to the inclusion of
revenues from the acquisition of ISE and an increase in customer demand for
network connectivity.
Corporate Services (27% of total net revenues) - Revenues were $164 million in
the second quarter of 2017, up $2 million compared to the second quarter of
2016.
Corporate Solutions (16% of total net revenues) - Corporate solutions
revenues were $97 million in the second quarter of 2017, up $3 million from
the second quarter of 2016. The increase is primarily due to the inclusion
of revenues from the acquisition of Boardvantage completed in May 2016.
Listing Services (11% of total net revenues) - Listing services revenues
were $67 million in the second quarter of 2017, down $1 million from the
second quarter of 2016, as an increase in European listing services revenues
were more than offset by lower U.S. revenues from the run-off of listing of
additional shares fees as a result of the implementation of our all-
inclusive annual fee, and an unfavorable impact due to changes in foreign
exchange rates.
Information Services (24% of total net revenues) - Revenues were $144 million in
the second quarter of 2017, up $10 million from the second quarter of 2016.
Data Products (18% of total net revenues) - Data products revenues were $111
million in the second quarter of 2017, up $4 million compared to the second
quarter of 2016 primarily due to growth in proprietary data products
revenues.
Index Licensing and Services (6% of total net revenues) - Index licensing
and services revenues were $33 million in the second quarter of 2017, up $6
million from the second quarter of 2016 primarily due to higher assets under
management in exchange traded products linked to Nasdaq indexes.
Market Technology (12% of total net revenues) - Revenues were $72 million in the
second quarter of 2017, up $3 million from the second quarter of 2016. The
increase primarily reflects organic revenue growth from software, licensing and
support, software as a service, particularly growth in SMARTS surveillance
subscriptions, as well as higher change request revenues. New order intake
totaled $64 million in the second quarter of 2017 while total order value was a
record $799 million at June 30, 2017, up 4% from June 30, 2016.
CORPORATE HIGHLIGHTS
* Nasdaq releases new report outlining call for dialogue and action in U.S.
financial markets. The report, "The Promise of Market Reform: Reigniting
America's Economic Engine," offers a blueprint to revitalize the U.S.
capital markets to create a vibrant ecosystem that delivers enhanced capital
formation opportunities, a more inviting environment for growth and
innovation, and accelerated job formation and wealth creation. The
initiative is designed to create a dialogue and facilitate action steps to
help drive America's economic engine by modernizing market structure,
reconstructing the regulatory framework and reorienting to a long-term view.
* Market Technology order intake totaled $64 million in the second quarter of
2017 and Nasdaq signed a new agreement to provide a blockchain enabled
solution to SIX, the Swiss financial infrastructure provider. Order intake
of $64 million in the second quarter of 2017 included new client
relationships with AIFC Exchange, a new stock exchange being established in
Kazakhstan, and Deposito Central de Valores, the Chilean central securities
depository. Additionally, Nasdaq announced SMARTS product extensions with
the Investment Industry Regulatory Organization of Canada and the Monetary
Authority of Singapore. In July 2017, Nasdaq also signed an agreement with
SIX Swiss Exchange to implement a distributed ledger technology based
solution for the OTC structured products business from SIX, highlighting
further commercialization of blockchain with the Nasdaq Financial Framework.
* Nasdaq launches the Analytics Hub platform to help augment buy side trading
strategies. The Nasdaq Analytics Hub platform provides the buy side with
investment signals that are derived from structured and unstructured data
sets, from both proprietary sources and collaboration with third-party
partners. The May 2017 debut included four initial data sets. In July,
Nasdaq introduced four additional data sets to broaden and deepen the high
value content, providing insights from corporate filings, fundamental and
technical factors. Nasdaq intends to add new data sets, sources and
analytics over time.
* Nasdaq launches Auction on Demand in the Nordics to help customers fulfill
their MiFID II transparency requirements. Nasdaq launched a new periodic
auction feature in the Nordics called Auction on Demand that is designed to
fulfill both MiFID I and MiFID II transparency rules and help market
participants execute both large and small orders. Developed with
professional investors in mind, Auction on Demand addresses a broad range of
execution challenges for orders and runs in parallel to Nasdaq Nordic's lit
order books.
* Nasdaq's Nordic exchanges achieved a record first half of the year for new
listings, and The Nasdaq Stock Market led U.S. exchanges for IPOs in the
first half of 2017. Nasdaq's Nordic exchanges welcomed a record 61 new
listings and 6 First North to Main market upgrades in the first and second
quarter of 2017, marking the strongest first half of the year in the history
of the company in terms of listings activity. In the U.S. market, The
Nasdaq Stock Market welcomed 64 new listings during the second quarter of
2017, 36 of which were IPOs including Okta, Appian, NCS Multistage and
Carlyle Group's BDC. During the second quarter, The Nasdaq Stock Market won
52% of IPO listings, and 62% over the twelve months ended June 30, 2017.
* Nasdaq saw strong growth and record ETP assets under management tracking
Nasdaq indexes. Overall assets under management (AUM) in ETPs benchmarked to
Nasdaq's proprietary index families increased to a record $147 billion as of
June 30, 2017, up 36% compared to June 30, 2016. The June 30, 2017 total
AUM included $61 billion, or 41%, tracking smart beta indexes. Also as of
June 30, 2017, the number of ETPs tracking Nasdaq-licensed indexes rose to
316, an increase of 18%, compared to June 30, 2016.
ABOUT NASDAQ
Nasdaq (Nasdaq:NDAQ) is a leading global provider of trading, clearing, exchange
technology, listing, information and public company services. 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 second electronic stock market, its technology
powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's
securities transactions. Nasdaq is home to approximately 3,900 total listings
with a market value of approximately $12 trillion. 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 as
of June 30, 2016 are primarily related to (i) severance and other termination
benefits, (ii) asset impairment charges, and (iii) other 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 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 generally 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 in 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, 2017, other significant items include loss
on extinguishment of debt, wind down costs associated with an equity method
investment which was previously written off, and the recognition of previously
unrecognized tax benefits associated with positions taken in prior years. For
the three months ended June 30, 2016, other significant items primarily 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. We
believe the exclusion of such amounts allows management and investors to better
understand the financial results of Nasdaq.
Foreign exchange impact: 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, total
shareholder returns, 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
-----------------------------------------
June 30, March 31, June 30,
2017 2017 2016
------------- ------------- -------------
Revenues:
Market Services $ 620 $ 606 $ 532
Transaction-based expenses:
Transaction rebates (304 ) (301 ) (256 )
Brokerage, clearance and exchange
fees (94 ) (87 ) (82 )
------------- ------------- -------------
Total Market Services revenues less
transaction-based expenses 222 218 194
Corporate Services 164 160 162
Information Services 144 138 134
Market Technology 72 67 69
------------- ------------- -------------
Revenues less transaction-based
expenses 602 583 559
------------- ------------- -------------
Operating Expenses:
Compensation and benefits 163 161 164
Professional and contract services 38 36 35
Computer operations and data
communications 30 30 27
Occupancy 23 23 19
General, administrative and other 30 19 17
Marketing and advertising 8 7 8
Depreciation and amortization 47 45 41
Regulatory 8 8 6
Merger and strategic initiatives 11 6 35
Restructuring charges - - 33
------------- ------------- -------------
Total operating expenses 358 335 385
------------- ------------- -------------
Operating income 244 248 174
Interest income 2 2 1
Interest expense (36 ) (37 ) (32 )
Other investment income 1 - 2
Net income from unconsolidated
investees 2 4 1
------------- ------------- -------------
Income before income taxes 213 217 146
Income tax provision 66 48 76
------------- ------------- -------------
Net income attributable to Nasdaq $ 147 $ 169 $ 70
------------- ------------- -------------
Per share information:
Basic earnings per share $ 0.89 $ 1.02 $ 0.42
------------- ------------- -------------
Diluted earnings per share $ 0.87 $ 0.99 $ 0.42
------------- ------------- -------------
Cash dividends declared per common
share $ 0.38 $ 0.32 $ -
------------- ------------- -------------
Weighted-average common shares
outstanding for earnings per share:
Basic 165.4 166.5 165.0
Diluted 168.5 170.2 168.2
Nasdaq, Inc.
Revenue Detail
(in millions)
(unaudited)
Three Months Ended
--------------------------------------
March
June 30, 31, June 30,
2017 2017 2016
------------ ------------ ------------
MARKET SERVICES REVENUES
Equity Derivative Trading and Clearing
Revenues $ 191 $ 191 $ 103
Transaction-based expenses:
Transaction rebates (115 ) (113 ) (53 )
Brokerage, clearance and exchange fees (9 ) (10 ) (4 )
------------ ------------ ------------
Total net equity derivative trading and
clearing revenues 67 68 46
Cash Equity Trading Revenues 333 320 339
Transaction-based expenses:
Transaction rebates (185 ) (183 ) (198 )
Brokerage, clearance and exchange fees (84 ) (76 ) (78 )
------------ ------------ ------------
Total net cash equity trading revenues 64 61 63
Fixed Income and Commodities Trading
and Clearing Revenues 24 25 26
Transaction-based expenses:
Transaction rebates (4 ) (5 ) (5 )
Brokerage, clearance and exchange fees (1 ) (1 ) -
------------ ------------ ------------
Total net fixed income and commodities
trading and clearing revenues 19 19 21
Trade Management Services Revenues 72 70 64
------------ ------------ ------------
Total Net Market Services revenues 222 218 194
------------ ------------ ------------
CORPORATE SERVICES REVENUES
Corporate Solutions revenues 97 95 94
Listings Services revenues 67 65 68
------------ ------------ ------------
Total Corporate Services revenues 164 160 162
------------ ------------ ------------
INFORMATION SERVICES REVENUES
Data Products revenues 111 108 107
Index Licensing and Services revenues 33 30 27
------------ ------------ ------------
Total Information Services revenues 144 138 134
------------ ------------ ------------
MARKET TECHNOLOGY REVENUES 72 67 69
------------ ------------ ------------
Revenues less transaction-based
expenses $ 602 $ 583 $ 559
------------ ------------ ------------
Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions)
June 30, December 31,
2017 2016
--------------- --------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 356 $ 403
Restricted cash 18 15
Financial investments, at fair value 300 245
Receivables, net 392 429
Default funds and margin deposits 3,671 3,301
Other current assets 184 167
--------------- --------------
Total current assets 4,921 4,560
Property and equipment, net 384 362
Deferred tax assets 633 717
Goodwill 6,237 6,027
Intangible assets, net 2,102 2,094
Other non-current assets 383 390
--------------- --------------
Total assets $ 14,660 $ 14,150
--------------- --------------
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 149 $ 175
Section 31 fees payable to SEC 169 108
Accrued personnel costs 124 207
Deferred revenue 265 162
Other current liabilities 115 129
Default funds and margin deposits 3,671 3,301
Short-term debt 494 -
--------------- --------------
Total current liabilities 4,987 4,082
Long-term debt 3,058 3,603
Deferred tax liabilities 732 720
Non-current deferred revenue 161 171
Other non-current liabilities 146 144
--------------- --------------
Total liabilities 9,084 8,720
--------------- --------------
Commitments and contingencies
Equity
Nasdaq stockholders' equity:
Common stock 2 2
Additional paid-in capital 3,011 3,104
Common stock in treasury, at cost (225 ) (176 )
Accumulated other comprehensive loss (892 ) (979 )
Retained earnings 3,680 3,479
--------------- --------------
Total Nasdaq stockholders' equity 5,576 5,430
--------------- --------------
Total liabilities and equity $ 14,660 $ 14,150
--------------- --------------
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
--------------------------------------------------
June 30, March 31, June 30,
2017 2017 2016
------------- ------------- ----------------------
U.S. GAAP net income
attributable to Nasdaq $ 147 $ 169 $ 70
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) 22 23 19
Merger and strategic
initiatives ((2)) 11 6 35
Extinguishment of
debt ((3)) 10 - -
Restructuring charges ((4)) - - 33
Sublease loss reserve ((5)) - - (2 )
Other ((6)) 2 - -
------------- ------------- ----------------------
Total non-GAAP adjustments 45 29 85
Non-GAAP adjustment to the
income tax provision ((7)) (20 ) (11 ) (2 )
------------- ------------- ----------------------
Total non-GAAP adjustments,
net of tax 25 18 83
Non-GAAP net income
attributable to Nasdaq $ 172 $ 187 $ 153
------------- ------------- ----------------------
U.S. GAAP diluted earnings
per share $ 0.87 $ 0.99 $ 0.42
Total adjustments from non-
GAAP net income above 0.15 0.11 0.49
------------- ------------- ----------------------
Non-GAAP diluted earnings
per share $ 1.02 $ 1.10 $ 0.91
------------- ------------- ----------------------
Weighted-average diluted
common shares
outstanding for earnings
per share: 168.5 170.2 168.2
(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 June 30, 2017 and 2016, merger and strategic
initiatives expense primarily related to our acquisition of International
Securities Exchange, or ISE. For the three months ended March 31, 2017,
merger and strategic initiatives expense primarily related to our
acquisitions of ISE, Boardvantage, Inc. and other strategic initiatives.
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 three months ended June 30, 2017, in connection with the
early extinguishment of our 5.25% senior unsecured notes issued in December
2010 and the $300 million repayment on our $400 million senior unsecured
term loan facility due November 25, 2019, we recorded a charge of $10
million primarily related to a premium paid for early redemption.
(4) Restructuring charges for the three months ended June 30, 2016 are
associated with our 2015 restructuring plan to improve performance, cut
costs, and reduce spending and are primarily related to severance and other
termination benefits, asset impairment charges and other charges. In June
2016, we completed our 2015 restructuring plan. 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.
(5) For the three months ended June 30, 2016, the credit of $2 million
pertains to the release of a previously recorded sublease loss reserve due
to the early exit of a facility.
(6) Other charge relates to wind down costs associated with an equity method
investment that was previously written off, which is included in net income
from unconsolidated investees in the Condensed Consolidated Statements of
Income for the three months ended June 30, 2017.
(7) For the three months ended June 30, 2017, the non-GAAP adjustment to the
income tax provision primarily reflects the tax impact of each non-GAAP
adjustment and the recognition of previously unrecognized tax benefits of $4
million associated with positions taken in prior years. For the three months
ended March 31, 2017, the amount primarily reflects the tax impact of the
above adjustments. For the three months ended June 30, 2016, the amount
includes the tax impact of the above adjustments as well as $27 million in
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
-----------------------------------------------
June March
30, 31, June 30,
2017 2017 2016
----------- ----------- -----------------------
U.S. GAAP operating income $ 244 $ 248 $ 174
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) 22 23 19
Merger and strategic
initiatives ((2)) 11 6 35
Extinguishment of debt ((3)) 10 - -
Restructuring charges ((4)) - - 33
Sublease loss reserve ((5)) - - (2 )
----------- ----------- -----------------------
Total non-GAAP adjustments 43 29 85
----------- ----------- -----------------------
Non-GAAP operating income $ 287 $ 277 $ 259
----------- ----------- -----------------------
Revenues less transaction-
based expenses $ 602 $ 583 $ 559
U.S. GAAP operating
margin( (6)) 41 % 43 % 31 %
Non-GAAP operating
margin( (7)) 48 % 48 % 46 %
(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 June 30, 2017 and 2016, merger and strategic
initiatives expense primarily related to our acquisition of ISE. For the
three months ended March 31, 2017, merger and strategic initiatives expense
primarily related to our acquisitions of ISE, Boardvantage, Inc. and other
strategic initiatives. 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 three months ended June 30, 2017, in connection with the
early extinguishment of our 5.25% senior unsecured notes issued in December
2010 and the $300 million repayment on our $400 million senior unsecured
term loan facility due November 25, 2019, we recorded a charge of $10
million primarily related to a premium paid for early redemption.
(4) Restructuring charges for the three months ended June 30, 2016 are
associated with our 2015 restructuring plan to improve performance, cut
costs, and reduce spending and are primarily related to severance and other
termination benefits, asset impairment charges and other charges. In June
2016, we completed our 2015 restructuring plan. 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.
(5) For the three months ended June 30, 2016, the credit of $2 million
pertains to the release of a previously recorded sublease loss reserve due
to the early exit of a facility.
(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
-----------------------------------------------
June March
30, 31, June 30,
2017 2017 2016
----------- ----------- -----------------------
U.S. GAAP operating expenses $ 358 $ 335 $ 385
Non-GAAP adjustments:
Amortization expense of
acquired intangible
assets ((1)) (22 ) (23 ) (19 )
Merger and strategic
initiatives ((2)) (11 ) (6 ) (35 )
Extinguishment of debt ((3)) (10 ) - -
Restructuring charges ((4)) - - (33 )
Sublease loss reserve ((5)) - - 2
----------- ----------- -----------------------
Total non-GAAP adjustments (43 ) (29 ) (85 )
----------- ----------- -----------------------
Non-GAAP operating expenses $ 315 $ 306 $ 300
----------- ----------- -----------------------
(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 June 30, 2017 and 2016, merger and strategic
initiatives expense primarily related to our acquisition of ISE. For the
three months ended March 31, 2017, merger and strategic initiatives expense
primarily related to our acquisitions of ISE, Boardvantage, Inc. and other
strategic initiatives. 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 three months ended June 30, 2017, in connection with the
early extinguishment of our 5.25% senior unsecured notes issued in December
2010 and the $300 million repayment on our $400 million senior unsecured
term loan facility due November 25, 2019, we recorded a charge of $10
million primarily related to a premium paid for early redemption.
(4) Restructuring charges for the three months ended June 30, 2016 are
associated with our 2015 restructuring plan to improve performance, cut
costs, and reduce spending and are primarily related to severance and other
termination benefits, asset impairment charges and other charges. In June
2016, we completed our 2015 restructuring plan. 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.
(5) For the three months ended June 30, 2016, the credit of $2 million
pertains to the release of a previously recorded sublease loss reserve due
to the early exit of a facility.
Nasdaq, Inc.
Quarterly Key Drivers Detail
(unaudited)
Three Months Ended
-----------------------------------------------------
June 30, March 31, June 30,
2017 2017 2016
--------------- --------------- ---------------------
Market Services
Equity Derivative
Trading and Clearing
U.S. Equity Options
Total industry average
daily volume (in
millions) 14.8 14.6 14.1
Nasdaq PHLX Options
Market matched market
share 16.8 % 17.1 % 16.2 %
The Nasdaq Options
Market matched market
share 9.8 % 9.5 % 7.1 %
Nasdaq BX Options Market
matched market share 0.7 % 0.7 % 1.0 %
Nasdaq ISE Options
Market matched market
share ((1)) 9.0 % 9.5 % 0.2 %
Nasdaq GEMX Options
Market matched market
share( (1)) 4.9 % 5.6 % -
Nasdaq MRX Options
Market matched market
share ((1)) 0.2 % 0.1 % -
--------------- --------------- ---------------------
Total matched market
share executed on
Nasdaq's exchanges 41.4 % 42.5 % 24.5 %
Nasdaq Nordic and Nasdaq
Baltic options and
futures
Total average daily
volume options and
futures contracts ((2)) 376,280 338,463 439,520
Cash Equity Trading
Total U.S.-listed
securities
Total industry average
daily share volume (in
billions) 6.85 6.84 7.25
Matched share volume (in
billions) 79.4 74.7 80.6
The Nasdaq Stock Market
matched market share 14.4 % 14.0 % 14.0 %
Nasdaq BX matched market
share 3.2 % 2.7 % 2.3 %
Nasdaq PSX matched
market share 0.8 % 0.9 % 1.1 %
--------------- --------------- ---------------------
Total matched market
share executed on
Nasdaq's exchanges 18.4 % 17.6 % 17.4 %
Market share reported to
the FINRA/Nasdaq Trade
Reporting Facility 33.9 % 34.9 % 33.0 %
--------------- --------------- ---------------------
Total market share ((3)) 52.3 % 52.5 % 50.4 %
Nasdaq Nordic and Nasdaq
Baltic securities
Average daily number of
equity trades 594,901 507,647 447,231
Total average daily
value of shares traded
(in billions) $ 5.7 $ 4.8 $ 5.2
Total market share
executed on Nasdaq's
exchanges 65.7 % 65.0 % 63.0 %
Fixed Income and
Commodities Trading and
Clearing
Total U.S. Fixed Income
U.S. fixed income
notional trading volume
(in billions) $ 4,755 $ 5,041 $ 5,255
Total average daily
volume of Nasdaq Nordic
and Nasdaq Basic fixed
income contracts 118,234 112,004 91,107
Commodities
Power contracts cleared
(TWh) ((4)) 268 379 455
Corporate Services
Initial public offerings
The Nasdaq Stock Market 36 17 25
Exchanges that comprise
Nasdaq Nordic and Nasdaq
Baltic 39 11 25
New listings
The Nasdaq Stock
Market ((5)) 64 42 73
Exchanges that comprise
Nasdaq Nordic and Nasdaq
Baltic ((6)) 45 16 33
Number of listed
companies
The Nasdaq Stock
Market ((7)) 2,912 2,890 2,868
Exchanges that comprise
Nasdaq Nordic and Nasdaq
Baltic ((8)) 945 910 873
Information Services
Number of licensed ETPs 316 306 267
ETP assets under
management (AUM)
tracking Nasdaq indexes
(in billions) $ 147 $ 138 $ 108
Market Technology
Order intake (in
millions) ((9)) $ 64 $ 47 $ 69
Total order value (in
millions) ((10)) $ 799 $ 777 $ 769
(1) For the three months ended June 30, 2016, Nasdaq ISE, Nasdaq GEMX and
Nasdaq MRX matched market share represents one day of trading volume.
(2) Includes Finnish option contracts traded on EUREX Group.
(3) Includes transactions executed on The Nasdaq Stock Market'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 total listings on Nasdaq at period end, including 345
separately listed ETPs at June 30, 2017, 332 at March 31, 2017 and 277 at
June 30, 2016.
(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) Total contract value of orders signed during the period.
(10) 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: 26.07.2017 - 13:25 Uhr
Sprache: Deutsch
News-ID 553980
Anzahl Zeichen: 61589
contact information:
Town:
New York
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 154 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Nasdaq Reports Second Quarter 2017 Results; Achieves Record Quarterly Net Revenues"
steht unter der journalistisch-redaktionellen Verantwortung von
Nasdaq (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
