Nasdaq Q2 Earnings Call Highlights

Key Points

• Nasdaq posted strong Q2 2026 results, with net revenue up 15% to $1.5 billion and diluted EPS rising 25% to $1.07, the first time quarterly EPS topped $1. Operating and EBITDA margins also expanded, reflecting broad-based growth across the business.
• Capital Access Platforms and Indexes were major drivers, led by record U.S. listings activity, $111 billion in operating company proceeds raised, and the first-ever quarter with exchange-traded product AUM above $1 trillion. Index revenue jumped 35% as inflows and derivatives volumes hit new highs.
• Financial Technology and Market Services continued to scale, with double-digit growth in Verafin, regulatory technology and capital markets tech, plus record trading volumes in Market Services. Nasdaq also raised full-year expense guidance and continued returning cash through dividends and share buybacks.

Nasdaq NASDAQ: NDAQ reported strong second-quarter 2026 results, with executives highlighting broad-based revenue growth across its divisions, record activity in its index and listings businesses, and continued demand for financial technology products tied to market modernization, artificial intelligence and financial crime prevention.

Chair and CEO Adena Friedman said Nasdaq delivered “outstanding growth across each of our divisions,” supported by demand for market infrastructure and mission-critical technology. The company reported $1.5 billion in net revenue, up 15%, and $1.2 billion in solutions revenue, up 17%. Annualized recurring revenue rose 12% year over year to $3.3 billion.

Chief Financial Officer Sarah Youngwood said Nasdaq posted net income of $605 million and diluted earnings per share of $1.07, up 25% from the prior-year period. She said it was the first time in the company’s history that quarterly EPS exceeded $1. Operating margin was 57%, while EBITDA margin was 60%, both up two percentage points from the prior-year period.

Listings, Indexes and Data Drive Capital Access Growth

Nasdaq’s Capital Access Platforms division generated $621 million in revenue, up 18%, while annualized recurring revenue rose 8%. Friedman said the company’s U.S. listings franchise delivered “the strongest first half in U.S. exchange history,” with $111 billion in operating company proceeds raised.

The company pointed to the June 12 IPO of SpaceX, which Friedman described as the largest IPO in history, raising $86 billion. She said Nasdaq also dual-listed SpaceX on Nasdaq Texas. Other second-quarter listings cited on the call included Cerebras, Quantinuum and Parabolis Medicines. In total, Nasdaq welcomed 26 new operating companies during the quarter, raising $106 billion in proceeds, including seven of the top 10 IPOs.

Friedman said the IPO environment remains robust and that Nasdaq is “in a strong position to capitalize” as companies look to enter the public markets in the second half of the year. During the question-and-answer session, she said the pipeline is broadening beyond individual large deals, with activity tied to AI infrastructure, power, compute capabilities, healthcare, biotech, defense-related companies and consumer businesses.

Nasdaq’s index business also reached milestones. Friedman said exchange-traded product assets under management exceeded $1 trillion for the first time, while the business recorded $51 billion in net inflows for the quarter and $109 billion over the last 12 months. Youngwood said index revenue rose 35%, driven by record average ETP AUM and higher derivatives contract volumes.

In data, Friedman said growth was driven by new bookings and increased usage, including a 34% year-over-year increase in enterprise licenses across multiple geographies. She cited demand from AI use cases, digital asset platforms and preparations for extended trading hours as key growth drivers.

Financial Technology Sees Double-Digit Growth Across Subdivisions

Nasdaq’s Financial Technology division reported revenue of $539 million, up 15%, with annualized recurring revenue up 16%. Friedman said the quarter included 58 new clients, seven cross-sells and 107 up-sells.

Financial crime management technology, including Nasdaq Verafin, delivered 22% revenue growth. Friedman said Verafin now serves more than 2,800 clients representing more than $13 trillion in collective assets. During the quarter, the business signed 47 new small and midsize business clients, as well as enterprise expansions, renewals and cross-sells. Friedman said early third-quarter activity brought enterprise signings so far in 2026 to 11, already exceeding the total for all of 2025.

Executives emphasized AI adoption in Verafin and other products. Friedman said Verafin’s “agentic AI workforce” is now used by 750 clients and that the company has moved two new agentic workers into beta, focused on AML structuring alerts and ACH fraud alert triage. She said Nasdaq plans to introduce auto-dispositioning capabilities in the third quarter and flexible deployment options across third-party systems by year-end.

In response to an analyst question about AI monetization, Friedman said Nasdaq is taking a product-by-product approach. In some cases, AI capabilities are being integrated into core products, with pricing evaluated over time. In other cases, including certain Verafin and surveillance tools, Nasdaq is using a freemium model that can convert clients to paid subscriptions.

Regulatory technology revenue rose 13%, while capital markets technology revenue increased 14%. Friedman highlighted demand tied to always-on markets, infrastructure modernization and cloud-enabled regulatory reporting. She also said Nasdaq completed modernization programs for BYMA, the Argentina Stock Exchange, and nuam, a regional market operator integrating the Peru, Chile and Colombia stock exchanges.

Market Services Benefits From Record Volumes

Nasdaq’s Market Services division reported record quarterly net revenue of $340 million, up 11%. The company said growth was supported by record industry volumes in U.S. equities and U.S. options, strong European equities and fixed income activity, and continued strength in index options.

Friedman said Nasdaq set records in notional value traded during the June triple witch expiration and the Russell reconstitution. On June 18, Nasdaq recorded $296 billion in notional value traded during triple witching. The Russell reconstitution on June 26 produced record revenue, 4.6 billion shares in the cross and $334 billion in notional value traded, she said.

Nasdaq also said it remains on track for a projected launch of 23.5-hour trading on Dec. 6, 2026. Friedman said the company received SEC approval to list event options and remains on track for a fourth-quarter launch.

Expenses, Capital Returns and Outlook

Youngwood said second-quarter operating expenses were $641 million, up 10%, reflecting employee compensation, incentive compensation tied to revenue execution, marketing expense related to the IPO environment, technology investments and severance costs.

Nasdaq raised its 2026 non-GAAP expense guidance to a range of $2.530 billion to $2.570 billion, from a previous range of $2.485 billion to $2.545 billion. Youngwood said the increase reflected higher employee compensation and increased marketing expense due to a strengthening IPO environment. The company maintained its 2026 non-GAAP tax rate guidance of 22.5% to 24.5%.

Nasdaq generated $477 million in free cash flow during the quarter and $2.2 billion over the last 12 months, with a 97% conversion ratio. The company paid a dividend of $0.31 per share, totaling $174 million, and repurchased 4.1 million shares for $356 million during the quarter. In total, Nasdaq returned more than $530 million to shareholders in the second quarter.

Youngwood said Nasdaq finished the quarter with a gross leverage ratio of 2.6 times after EBITDA growth and a net repayment of about $162 million of gross debt. She also said Nasdaq launched a $200 million to $250 million variable accelerated share repurchase plan in July, expected to be completed in the third quarter.

Friedman closed the call by saying Nasdaq’s second-quarter results “reflect the disciplined execution of our strategy” and reinforce the company’s role as a transformation partner to the global financial system.

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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