Nasdaq’s profit fell for the first time in a year as firms continue to wait for the economy to stabilise before going public.
Earnings fell to 63 US cents a share from 69 US cents a year ago, the company said in a statement, below an expected 65 US cents. Revenue from Nasdaq’s data and listing segment, which houses its trading exchanges, was largely flat from a year ago and also fell short of projections.
Just 27 companies went public on the exchange in the first three months of this year, down from 40 in the same time last year. Thursday’s earnings statement notably lacked any commentary on IPOs for the first time since the third quarter of 2022.
Nasdaq usually touts its “listings leadership” in the US, whereas Thursday’s results focused on the exchange operator’s pivot to steadier and more predictable revenue streams.
“The sustained organic growth against a turbulent capital markets backdrop is a testament to the effective competitive position of the company today,” chief executive officer Adena Friedman said in the statement.
Annualised recurring revenue – a measure of subscription sales – grew by 5 per cent excluding recent acquisitions, driven by 12 per cent growth in Nasdaq’s financial crime and regulatory products. The company also raised its full year operating expense guidance to reflect more technology investments.
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Companies remain wary of going public as wars in Ukraine and Israel add to uncertainty around when the Federal Reserve will cut interest rates. The US economy slowed significantly in the first quarter as consumer and government spending cooled amid a pickup in inflation. Those concerns appear to be outweighing recent successful debuts like Reddit, which is up about 25 per cent since its IPO in March.
Overall trading volume on Nasdaq’s exchanges was flat year-on-year for a second consecutive quarter. BLOOMBERG
