Nasdaq NASDAQ: NDAQ reported first-quarter 2026 results that Chair and CEO Adena Friedman described as “one of the strongest starts to a year in our company's history,” pointing to broad-based client engagement across the company’s market services and solutions platform.
First-quarter financial performance
Nasdaq delivered $1.4 billion in net revenue, up 13% year-over-year, and annualized recurring revenue (ARR) of $3.2 billion, up 12%, according to Friedman. Non-GAAP expenses were $608 million, up 8%, while operating income rose 17% to $799 million. Friedman said diluted EPS increased 21%.
Chief Financial Officer Sarah Youngwood added that solutions revenue rose 14% to $1.1 billion. Nasdaq posted an operating margin of 57% and an EBITDA margin of 60%, both up 2 percentage points. Youngwood said net income was $549 million and diluted EPS was $0.96.
Youngwood attributed the quarter’s 13% net revenue growth to “10 percentage points of alpha” driven by new and existing clients and product innovation, along with 3 points of “beta factors,” including higher Market Services volumes, one-time items in Financial Technology, and higher index-derivatives volumes.
Capital Access Platforms: listings, data, index and analytics trends
In Capital Access Platforms, Nasdaq generated $565 million of revenue, up 10%, with ARR up 7%, Youngwood said. Data and Listings revenue increased 9% (ARR up 8%), driven primarily by “upsells and pricing” in data, she said.
Friedman said Nasdaq welcomed 15 new operating company listings in the U.S. during the quarter, raising over $5 billion in proceeds, “including seven of the top 10 IPOs.” She added that early in the second quarter Nasdaq listed Arxis and Kailera Therapeutics, which she described as “two of the biggest IPOs of Q2 so far.” While she characterized the IPO environment as “uneven amid market volatility,” she said issuer engagement remained strong and Nasdaq was “encouraged” heading into the second quarter.
On the data side, Friedman highlighted 32% year-over-year growth in enterprise license agreements and “continued momentum in Asia and the Middle East.” In response to a question on international demand, Friedman said Nasdaq has seen “a broad-based increase in demand internationally” for its market data over the past five to six years, driven by global investor interest in U.S. equities and increased retail participation abroad. She added that preparation for 23/5 trading in U.S. equities is also contributing to demand for enterprise licenses.
Nasdaq’s index business delivered 14% revenue growth in the quarter, while ARR increased 6%, Youngwood said, driven by record average ETP AUM of $877 billion. Friedman said ETP AUM ended the quarter at $836 billion and the index franchise generated $79 billion in net inflows over the last 12 months, including $6 billion in the quarter. She noted that March market uncertainty contributed to a “risk-off” environment and sector rotation, but said Nasdaq views the impact as short-term. Both Friedman and Youngwood cited early second-quarter momentum, with $15 billion of net ETP inflows as of April 20.
Asked about index revenue dynamics, Youngwood said futures revenue faced a mix shift as “retail is driving more micro volumes,” which carry lower capture than E-mini contracts. She also referenced a fee-sharing agreement reset at the start of the year, with management noting it moved to a higher tier at the end of the first quarter and would benefit the second quarter.
Nasdaq also discussed index product strategy, including new partnerships to expand access to the Nasdaq-100. Friedman said new U.S.-listed ETFs with BlackRock and State Street will have pricing terms “consistent with the QQQ pricing terms,” and are intended to reach investor segments that complement Nasdaq’s long-standing partnership with Invesco.
Within workflow and insights, revenue rose 6% (ARR up 6%), driven by analytics, Youngwood said, while corporate solutions were “essentially flat.” Friedman said analytics performance was supported by eVestment, including a Databricks integration to broaden access to institutional investor data. She also said eVestment’s “AI-ready data” was adopted by global asset managers, GPs and institutional investors representing over $9 trillion in AUM, contributing to a 29% year-over-year increase in first-quarter bookings. In Corporate Solutions, Friedman said AI adoption included 74% of IR Insight users and 51% of Boardvantage users leveraging AI features, while the overall corporate buying environment remained muted amid lower IPO activity versus historical levels.
Financial Technology: record growth, cloud momentum, and Verafin updates
Financial Technology posted $517 million in revenue, up 18%, and ARR growth of 16%, Youngwood said, calling the quarter “record revenue and ARR growth.” Friedman said the division signed 64 new clients, 85 upsells, and one cross-sell in the quarter, with another cross-sell early in the second quarter. Youngwood said ACV bookings grew more than 50% year-over-year, and 80% of ACV bookings were cloud-based.
Management highlighted a Tier 1 bank client that expanded its relationship across multiple Nasdaq solutions. Friedman said Nasdaq completed “a significant renewal and expansion of AxiomSL” in the quarter and later added a cross-sell for Nasdaq Verafin early in the second quarter.
Within financial crime management technology, Youngwood said revenue grew 21% (ARR up 17%) and net revenue retention was 110%. Friedman said Verafin’s client base exceeded 2,800 clients representing nearly $12 trillion in collective assets, and noted 58 new SMB clients signed in the quarter. Friedman also pointed to a partnership with FIS to expand delivery of AML and fraud solutions to FIS banking and payments clients.
Friedman said Nasdaq’s “agentic AI workforce” in Verafin was deployed by more than 500 clients, up 40% since Investor Day, and that a “drug trafficking analytic” is expected to launch later in the quarter, embedding generative AI into models and synthesizing open-source intelligence, social media and third-party research.
In regulatory technology, Youngwood said revenue grew 12% and ARR grew 13%, supported by surveillance strength and “solid growth in AxiomSL.” Friedman said about 90% of AxiomSL ACV bookings in the quarter were for cloud-based solutions and highlighted demand for AI offerings including Reg Copilot and Reg Navigator. In surveillance, Friedman said Nasdaq saw growth supported by renewals and upsells, including a renewal with a global tier-one bank, and interest in crypto surveillance. She also cited product development such as Calibration Copilot and a planned second-quarter GenAI platform extension that connects news and market events to trade data.
Capital Markets Technology revenue rose 20% (ARR up 18%), Youngwood said, citing broad-based demand across Calypso, Market Technology and Trade Management Services. She noted that revenue growth included a pricing increase in Trade Management Services, higher upfront revenue recognition on certain on-prem Calypso deals, and “two one-time items” tied to termination fees related to M&A among market technology operators, representing 4 percentage points of capital markets technology revenue growth.
Market Services and structural themes: 23/5 trading, tokenization, and new options products
Market Services delivered record net revenue of $317 million, up 10%, Youngwood said, driven by record U.S. equities and options volumes, increased European equities volumes, and strong Canadian equities volumes linked to commodities volatility. She said index options revenue more than doubled year-over-year, while U.S. equities and options capture was pressured by mix shifts toward lower-capture order flow.
Friedman said Nasdaq received SEC approval to extend market operations to 23/5 and is targeting a December 6, 2026 launch. In Q&A, she said about 2% of volume occurs outside Nasdaq’s current operating hours and described the shift as “an evolution, not a revolution,” noting plans to expand market operations, market watch, and technical and network operations coverage, alongside investor education efforts and consolidated tape availability during extended hours.
On tokenization, Friedman said SEC approval to trade tokenized securities allows Nasdaq to enhance market access and issuer-shareholder connectivity, and that Nasdaq will work with DTCC and the industry on required infrastructure. She said Nasdaq expects to provide “early benefits” of its equity token design in the first half of 2027. In response to a question on timeline, she said DTCC has expressed interest in reaching a first tokenized trade before year-end, but added it would likely remain “an early phase” as end-to-end systems are validated through testing.
Nasdaq also discussed “outcome-oriented or event options.” Friedman said Nasdaq is seeking SEC approval for an initial product focused on predicting the future performance of the Nasdaq-100, describing it as a binary “yes, no” option intended to bring “a prediction market construct into a regulated market,” with work underway alongside OCC on risk and margin models.
Expenses, capital returns, and AI adoption inside Nasdaq
Youngwood said Nasdaq updated its full-year non-GAAP expense guidance to $2.485 billion to $2.545 billion, up from $2.455 billion to $2.535 billion, reflecting strong year-to-date revenue performance. She said the company expects second-quarter expense growth to be higher than in the first quarter due in part to the timing of its annual compensation cycle, and maintained non-GAAP tax rate guidance of 22.5% to 24.5%.
Nasdaq generated $629 million in free cash flow in the quarter and $2.1 billion over the last 12 months, Youngwood said. The company paid a $0.27 per share dividend, and Youngwood reiterated that Nasdaq’s board approved an increase to $0.31 per share starting with the June payment. Nasdaq repurchased $548 million of shares in the quarter, and Youngwood said the company returned over $700 million to shareholders through dividends and buybacks.
Separately, management discussed internal use of AI. In response to a question on “AI on the business,” Friedman said Nasdaq is targeting $100 million of expense efficiencies by the end of 2027, with “the majority of that” expected to appear in 2027, alongside investments required to achieve the savings. She cited focus areas including automation in the product development lifecycle, client success and implementations, and functions such as finance, marketing, legal and HR.
About Nasdaq NASDAQ: NDAQ
Nasdaq, Inc is a global financial technology company that operates one of the world's leading electronic securities exchanges and provides a broad array of products and services to capital markets participants. Its core activities include operating the Nasdaq Stock Market and other trading venues, developing and supplying market technology and matching engines to exchanges and trading firms, licensing market data and indices, and offering clearing, trade execution and post-trade solutions. The company also provides market surveillance, risk management and regulatory technology used by exchanges and regulators.
Founded in 1971 by the National Association of Securities Dealers (NASD) as the first electronic stock market, Nasdaq has evolved into a diversified marketplace and technology provider.
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