Nasdaq registers rise in net income in Q4 2020
Nasdaq, Inc. (NASDAQ:NDAQ) today posted its financial report for the final quarter of 2020, with revenues and profits rising from the year-ago period.
On a GAAP basis, net income in the fourth quarter of 2020 was $224 million, or diluted EPS of $1.34, compared to $202 million, or $1.21 per diluted share, in the fourth quarter of 2019.
On a non-GAAP basis, net income in the fourth quarter of 2020 was $268 million, or $1.60 per diluted share, compared to $215 million, or $1.29 per diluted share, in the fourth quarter of 2019.
Nasdaq posted net revenues of $788 million for the fourth quarter of 2020, an increase of $142 million, or 22%, from $646 million in the prior year period. Net revenues reflected a $126 million positive impact from organic growth, a $13 million increase from the impact of favorable changes in FX rates and a $3 million increase from the inclusion of revenues from acquisitions.
2020 net revenues were $2,903 million, an increase of $368 million, or 15%, from $2,535 million in the prior year period. The full year increase in net revenues included a $350 million positive impact from organic growth, a $14 million positive impact from changes in Forex rates and a $4 million positive net impact from acquisitions and divestitures.
Across segments, Market Services registered record net revenues of $291 million in the fourth quarter of 2020, an increase of $66 million, or 29%, compared to the fourth quarter of 2019.
Equity Derivative Trading and Clearing generated net revenues of $92 million in the final quarter of 2020, up $19 million from the fourth quarter of 2019. The increase reflects higher U.S. industry trading volumes, partially offset by a lower U.S. net capture rate.
Trade Management Services saw revenues of $78 million in the fourth quarter of 2020, an increase of $6 million from the fourth quarter of 2019, primarily due to increased demand for connectivity services.
Corporate Platforms marked revenues of $144 million in the fourth quarter of 2020, up $15 million, or 12%, compared to the fourth quarter of 2019.
Listing Services also delivered solid performance, as revenues reached $88 million in the fourth quarter of 2020, an increase of $11 million from the fourth quarter of 2019. The increase was primarily driven by higher U.S. listing revenues due to an increase in the overall number of listed companies, higher Nasdaq Private Market revenues and a $2 million favorable impact from changes in Forex rates.
The Market Data segment posted revenues of $104 million for the fourth quarter of 2020, up $8 million from the fourth quarter of 2019, with growth in U.S. proprietary products from new sales, including continued expansion geographically, and an increase in shared tape plan revenues.
The Analytics segment reported revenues of $46 million for the fourth quarter of 2020, up $5 million from the fourth quarter of 2019, primarily due to the acquisition of Solovis and growth in eVestment.
Market Technology generated revenues of $106 million in the fourth quarter of 2020, up $8 million, compared to the fourth quarter of 2019. The increase is primarily due to higher SaaS revenues as well as a $4 million favorable impact from changes in FX rates.
Adena Friedman, President and CEO, Nasdaq, commented:
“Our record fourth quarter and full year results attest to Nasdaq’s continuing ability to address the needs of our clients in a capital markets environment characterized by elevated trading, strong IPO activity and rising index valuations, made possible by both our resilient, scalable technology and the flexibility our team exhibited in effectively delivering for clients against a pandemic-impacted backdrop.
Despite meeting many near-term challenges in 2020, I am incredibly pleased that Nasdaq was also able to accelerate our progress as an advanced technology and analytics provider to the financial industry with our announced acquisition of Verafin, a SaaS technology provider specializing in combating fraud and money laundering. Together with Verafin, we believe that Nasdaq will become a leading provider of anti-financial crime technology, while also raising our long-term organic growth potential.”