NASDAQ, INC. - Quarter Report: 2024 September (Form 10-Q)

Foreign currency translation adjustments()Balance at September 30, 2024$ Financial TechnologyBalance at December 31, 2023$

Measurement period adjustment

Foreign currency translation adjustments()Balance at September 30, 2024$ Market ServicesBalance at December 31, 2023$ Foreign currency translation adjustments()Balance at September 30, 2024$ TotalBalance at December 31, 2023$ Measurement period adjustments Foreign currency translation adjustments()Balance at September 30, 2024$

Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired company. We test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying amount may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. There was impairment of goodwill for the three and nine months ended September 30, 2024 and 2023; however, events such as prolonged economic weakness or unexpected significant declines in operating results of any of our reporting units or businesses may result in goodwill impairment charges in the future. See Note 4, “Acquisition,” for a description of the measurement period adjustment recorded during the third quarter of 2024.

$ Customer relationships Trade names and other Foreign currency translation adjustment()()Total gross amount$ $ Accumulated AmortizationTechnology$()$()Customer relationships()()Trade names and other()()Foreign currency translation adjustment Total accumulated amortization$()$()Net AmountTechnology$ $ Customer relationships Trade names and other Foreign currency translation adjustment()()Total finite-lived intangible assets$ $ Indefinite-Lived Intangible AssetsExchange and clearing registrations$ $ Trade names Licenses Foreign currency translation adjustment()()Total indefinite-lived intangible assets$ $ Total intangible assets, net$ $

There was impairment of intangible assets for the three and nine months ended September 30, 2024 and 2023.

$ Nine Months Ended September 30,20242023(in millions)Amortization expense$ $

million as of September 30, 2024) of acquired finite-lived intangible assets as of September 30, 2024:


			(in millions)
Remainder of 2024			$
2025
2026
2027
2028
2029+
Total			$

$ Equity method investments Equity securities

Financial Investments

Financial investments are comprised of trading securities, primarily highly rated European government debt securities, of which $ million as of September 30, 2024 and $ million as of December 31, 2023 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing.

Equity Method Investments

We record our estimated pro-rata share of earnings or losses each reporting period and record any dividends as a reduction in the investment balance. As of September 30, 2024 and 2023, our equity method investments primarily included our % equity interest in OCC.

The carrying amounts of our equity method investments are included in other non-current assets in the Condensed Consolidated Balance Sheets. impairments were recorded for the three and nine months ended September 30, 2024 and 2023.

Net income (loss) recognized from our equity interest in the earnings and losses of these equity method investments, was $ million and $() million for the three months ended September 30, 2024 and 2023, respectively, and $ million and $() million for the nine months ended September 30, 2024 and 2023, respectively.

$ $()$ $ Annual Listings () Workflow & Insights () Financial Technology:Financial Crime Management Technology ()() Regulatory Technology () Capital Markets Technology () Other () Total$ $ $()$ $

In the above table:

•Additions reflect deferred revenue billed in the current period, net of recognition.

•Revenue recognized includes revenue recognized during the current period that was included in the beginning balance.

•Adjustments reflect foreign currency translation adjustments and the impact of the measurement period adjustment recorded during the third quarter of 2024. See Note 4, “Acquisition,” for a description of the measurement period adjustment.

$ $ $ $ $ $ Annual Listings Workflow & Insights Financial Technology:Financial Crime Management Technology Regulatory Technology Capital Markets Technology Other Total$ $ $ $ $ $ $

In the above table, 2024 represents the remaining three months of 2024.

2025 Notes, $ million, % notes due June 28, 2025

Total short-term debt$ $ Long-term debt - senior unsecured notes:

2026 Notes, $ million, % notes due June 30, 2026

2028 Notes, $ billion, % notes due June 28, 2028

2029 Notes, € million, % notes due March 28, 2029

2030 Notes, € million, % notes due February 13, 2030

2031 Notes, $ million, % notes due January 15, 2031

2032 Notes, € million, % notes due February 15, 2032

2033 Notes, € million, % notes due July 30, 2033

2034 Notes $ billion, % notes due February 15, 2034

2040 Notes, $ million, % notes due December 21, 2040

2050 Notes, $ million, % notes due April 28, 2050

2052 Notes, $ million, % notes due March 7, 2052

2053 Notes, $ million, % notes due August 15, 2053

2063 Notes, $ million, % notes due June 28, 2063

2023 Term Loan

2022 Revolving Credit Facility()()Total long-term debt$ $ Total debt obligations$ $

In the table above, the 2025 Notes were reclassified to short-term debt as of September 30, 2024, including the balance as of December 31, 2023, for presentation purposes.

Commercial Paper Program

Our U.S. dollar commercial paper program is supported by our 2022 Revolving Credit Facility, which provides liquidity support for the repayment of commercial paper issued through this program. See “2022 Revolving Credit Facility” below for further discussion. The effective interest rate of commercial paper issuances fluctuates as short-term interest rates and demand fluctuate. The fluctuation of these rates may impact our interest expense.

million for the nine months ended September 30, 2024. Our Euro denominated notes are adjusted for the impact of foreign currency translation. Our senior unsecured notes are general unsecured obligations which rank equally with all of our existing and future unsubordinated obligations and are not guaranteed by any of our subsidiaries. The senior unsecured notes were issued under indentures that, among other things, limit our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions. The senior unsecured notes may be redeemed by Nasdaq at any time, subject to a make-whole amount.

Upon a change of control triggering event (as defined in the various supplemental indentures governing the applicable notes), the terms require us to repurchase all or part of each holder’s notes for cash equal to % of the aggregate principal amount purchased plus accrued and unpaid interest, if any.

The 2029 Notes, 2030 Notes, 2032 Notes and 2033 Notes pay interest annually. All other notes pay interest semi-annually. The U.S. dollar senior unsecured notes coupon rates may vary with Nasdaq’s debt rating, to the extent Nasdaq is downgraded below investment grade, up to an upward rate adjustment not to exceed %.

Net Investment Hedge

Our Euro denominated notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. Accordingly, the remeasurement of these notes is recorded in accumulated other comprehensive loss within Nasdaq’s stockholders’ equity in the Condensed Consolidated Balance Sheets. For the nine months ended September 30, 2024, the impact of translation increased the U.S. dollar value of our Euro denominated notes by $ million.

Financing of the Adenza Acquisition

Senior Unsecured Notes

In June 2023, Nasdaq issued series of notes for total proceeds of $ million, net of debt issuance costs of $ million, with various maturity dates ranging from 2025 to 2063. The net proceeds from these notes were used to finance the majority of the cash consideration due in connection with the Adenza acquisition. For further discussion of the Adenza acquisition, see Note 4, “Acquisition.”

2023 Term Loan

In June 2023, in connection with the financing of the Adenza acquisition, we entered into a term loan credit agreement, or the 2023 Term Loan. The 2023 Term Loan provided us with the ability to borrow up to $ million to finance a portion of the cash consideration for the Adenza acquisition, for repayment of certain debt of Adenza and its subsidiaries, and to pay fees, costs and expenses related to the transaction. On November 1, 2023, we borrowed $ million, net of fees, under this term loan towards payment of the cash consideration due in connection with the Adenza acquisition. As of September 30, 2024 the term loan is fully repaid.

Credit Facilities

2022 Revolving Credit Facility

In December 2022, Nasdaq amended and restated its previously issued $ billion revolving credit facility, with a new maturity date of December 16, 2027. Nasdaq intends to use funds available under the 2022 Revolving Credit Facility for general corporate purposes and to provide liquidity support for the repayment of commercial paper issued through the commercial paper program. Nasdaq is permitted to repay borrowings under our 2022 Revolving Credit Facility at any time in whole or in part, without penalty.

As of September 30, 2024, amounts were outstanding on the 2022 Revolving Credit Facility. The $() million balance represents unamortized debt issuance costs which are being accreted through interest expense over the life of the credit facility.

Borrowings under the revolving credit facility and swingline borrowings bear interest on the principal amount outstanding at a variable interest rate based on either the SOFR (or a successor rate to SOFR), the base rate (as defined in the 2022 Revolving Credit Facility agreement), or other applicable rate with respect to non-dollar borrowings, plus an applicable margin that varies with Nasdaq’s debt rating. We are charged commitment fees of % to %, depending on our credit rating, whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2024 and 2023.

The 2022 Revolving Credit Facility contains financial and operating covenants. Financial covenants include a maximum leverage ratio. Operating covenants include, among other things, limitations on Nasdaq’s ability to incur additional indebtedness, grant liens on assets, dispose of assets and make certain restricted payments. The facility also contains customary affirmative covenants, including access to financial statements, notice of defaults and certain other material events, maintenance of properties and insurance, and customary events of default, including cross-defaults to our material indebtedness.

million, subject to the consent of the lenders funding the increase and certain other conditions.

Other Credit Facilities

Certain of our European subsidiaries have several other credit facilities, which are available in multiple currencies, primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line. These credit facilities, in aggregate, totaled $ million as of September 30, 2024 and $ million as of December 31, 2023 in available liquidity, of which was utilized. Generally, these facilities each have a term. The amounts borrowed under these various credit facilities bear interest on the principal amount outstanding at a variable interest rate based on a base rate (as defined in the applicable credit agreement), plus an applicable margin. We are charged commitment fees (as defined in the applicable credit agreement), whether or not amounts have been borrowed. These commitment fees are included in interest expense and were not material for the three and nine months ended September 30, 2024 and 2023.

These facilities include customary affirmative and negative operating covenants and events of default.

Debt Covenants

As of September 30, 2024, we were in compliance with the covenants of all of our debt obligations.

% of the first % of eligible employee contributions.

$ $ $

million was recorded to compensation and benefits expense in 2023. We finalized the transfer of any remaining benefits during the first quarter of 2024 and recorded an additional settlement pre-tax charge of $ million to compensation and benefits expense in the Condensed Consolidated Statements of Income. This was offset by a $ million adjustment to Other Comprehensive Income and a $ million cash settlement.

$ $ $

Nonqualified Deferred Compensation Plan

10.

% discount for the ESPP for the three and nine months ended September 30, 2024 and 2023, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
	(in millions)
Share-based compensation expense before income taxes	$	$	$	$

Common Shares Available Under Our Equity Plan

As of September 30, 2024, we had approximately million shares of common stock authorized for future issuance under our Equity Plan.

Restricted Stock

We grant restricted stock to most employees. The grant date fair value of restricted stock awards is based on the closing stock price at the date of grant less the present value of future cash dividends. Restricted stock awards granted to employees below the manager level generally vest % on the first anniversary of the grant date, % on the second anniversary of the grant date, and the remainder on the third anniversary of the grant date. Restricted stock awards granted to employees at or above the manager level generally vest % on the second anniversary of the grant date, % on the third anniversary of the grant date, and the remainder on the fourth anniversary of the grant date.

Summary of Restricted Stock Activity

In the table above, in addition to the annual employee grant described above, the granted amount also includes additional awards granted based on overachievement of performance metrics.

As of September 30, 2024, the total unrecognized compensation cost related to the PSU program is $ million and is expected to be recognized over a weighted-average period of years.

Stock Options

There were stock option awards granted for the nine months ended September 30, 2024. There were stock options exercised for the nine months ended September 30, 2024 and 2023.

$ $ Exercisable at September 30, 2024 $ $

million and represents the difference between our closing stock price on September 30, 2024 of $ and the exercise price, times the number of shares that would have been received by the option holder had the option holder exercised the stock options on that date. This amount can change based on the fair market value of our common stock. As of September 30, 2024 and 2023, million outstanding stock options were exercisable and the exercise price was $.

ESPP

We have an ESPP under which approximately million shares of our common stock were available for future issuance as of September 30, 2024. Under our ESPP, employees may purchase shares having a value not exceeding % of their annual compensation, subject to applicable annual Internal Revenue Service limitations. We record compensation expense related to the % discount that is given to our employees.

11.

shares of our common stock were authorized, shares were issued and shares were outstanding. As of December 31, 2023, shares of our common stock were authorized, shares were issued and shares were outstanding. The holders of common stock are entitled to vote per share, except that our certificate of incorporation limits the ability of any shareholder to vote in excess of % of the then-outstanding shares of Nasdaq common stock.

Common Stock in Treasury, at Cost

We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to Nasdaq stockholders’ equity and included in common stock in treasury, at cost in the Condensed Consolidated Balance Sheets. Shares repurchased under our share repurchase program are currently retired and canceled and are therefore not included in the common stock in treasury balance. If treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. We held shares of common stock in treasury as of September 30, 2024 and shares as of December 31, 2023, most of which are related to shares of our common stock withheld for the settlement of employee tax withholding obligations arising from the vesting of restricted stock and PSUs.

Share Repurchase Program

As of September 30, 2024, the remaining aggregate authorized amount under the existing share repurchase program was $ billion.

Average price paid per share $

Total purchase price (in millions)

In the table above, the number of shares of common stock repurchased excludes an aggregate of shares withheld to satisfy tax obligations of the grantee upon the vesting of restricted stock and PSUs, and these repurchases are excluded from our repurchase program. Shares repurchased pursuant to the stock repurchase agreement with Thoma Bravo executed in July 2024 are included in the table above. See Note 4, “Acquisition,” for further discussion.

As discussed above in “Common Stock in Treasury, at Cost,” shares repurchased under our share repurchase program are currently retired and cancelled.

Preferred Stock

Our certificate of incorporation authorizes the issuance of shares of preferred stock, par value $ per share, issuable from time to time in one or more series. As of September 30, 2024 and December 31, 2023, shares of preferred stock were issued or outstanding.

Cash Dividends on Common Stock

March 14, 2024$ March 28, 2024April 24, 2024 June 14, 2024 June 28, 2024July 24, 2024 September 13, 2024 September 27, 2024$

The total amount paid of $ million was recorded in retained earnings within Nasdaq’s stockholders’ equity in the Condensed Consolidated Balance Sheets at September 30, 2024.

per share on our outstanding common stock. The dividend is payable on December 20, 2024 to shareholders of record at the close of business on December 6, 2024. The estimated aggregate payment of this dividend is $ million. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.

The board of directors maintains a dividend policy with the intention to provide shareholders with regular and increasing dividends as earnings and cash flows increase.

12.

$ Denominator: Weighted-average common shares outstanding for basic earnings per share Weighted-average effect of dilutive securities - Employee equity awards Weighted-average common shares outstanding for diluted earnings per share Basic and diluted earnings per share:Basic earnings per share$ $ Diluted earnings per share$ $ Nine Months Ended September 30,20242023Numerator:(in millions, except share and per share amounts)Net income attributable to common shareholders$ $ Denominator:Weighted-average common shares outstanding for basic earnings per share Weighted-average effect of dilutive securities - Employee equity awards Weighted-average common shares outstanding for diluted earnings per share Basic and diluted earnings per share:Basic earnings per share$ $ Diluted earnings per share$ $

Securities that were included in the computation of diluted earnings per share because their effect was antidilutive were immaterial for the three and nine months ended September 30, 2024 and 2023.

13.

$ $ $

Swedish mortgage bonds

Time deposits Total assets at fair value$ $ $ $ December 31, 2023

Total

Level 1

Level 2

Level 3

(in millions)

European government debt securities

$ $ $ $

State-owned enterprises and municipal securities

Swedish mortgage bonds

Total assets at fair value$ $ $ $

Financial Instruments Not Measured at Fair Value on a Recurring Basis

Some of our financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash and cash equivalents, receivables, net, certain other current assets, accounts payable and accrued expenses, Section 31 fees payable to SEC, accrued personnel costs, commercial paper and certain other current liabilities.

billion as of September 30, 2024 and $ billion as of December 31, 2023. The discounted cash flow analyses are based on borrowing rates currently available to us for debt with similar terms and maturities. Our commercial paper and our fixed rate and floating rate debt are categorized as Level 2 in the fair value hierarchy.

For further discussion of our debt obligations, see Note 8, “Debt Obligations.”

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

Our non-financial assets, which include goodwill, intangible assets, and other long-lived assets, are not required to be carried at fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. Nasdaq uses Level 3 inputs to measure the fair value of the above assets on a non-recurring basis. As of September 30, 2024 and December 31, 2023, there were non-financial assets measured at fair value on a non-recurring basis.

14.

member sponsored default funds: one related to financial markets, one related to commodities markets and one related to the seafood market. Under this structure, Nasdaq Clearing and its clearing members must contribute to the total regulatory capital related to the clearing operations of Nasdaq Clearing. This structure applies an initial separation of default fund contributions for the financial, commodities and seafood markets in order to create a buffer for each market’s counterparty risks. See “Default Fund Contributions” below for further discussion of Nasdaq Clearing’s default fund. A power of assessment and a liability waterfall have also been implemented to further align risk between Nasdaq Clearing and its clearing members. See “Power of Assessment” and “Liability Waterfall” below for further discussion.

$ $ Margin deposits Total$ $ $

Of the total default fund contributions of $ million, Nasdaq Clearing can utilize $ million as capital resources in the event of a counterparty default. The remaining balance of $ million pertains to member posted surplus balances.

Our clearinghouse holds material amounts of clearing member cash deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. While we seek to achieve a reasonable rate of return, we are primarily concerned with preservation of capital and managing the risks associated with these deposits.

Clearing member cash contributions are maintained in demand deposits held at central banks and large, highly rated financial institutions or secured through direct investments, primarily central bank certificates and highly rated European government debt securities with original maturities primarily one year or less, reverse repurchase agreements and multilateral development bank debt securities. Investments in reverse repurchase agreements range in maturity from to days and are secured with highly rated government securities and multilateral development banks. The carrying value of these securities approximates their fair value due to the short-term nature of the instruments and reverse repurchase agreements.

million as of September 30, 2024 and $ million as of December 31, 2023, in accordance with its investment policy as follows:


	September 30, 2024	December 31, 2023
	(in millions)
Demand deposits	$	$
Central bank certificates
Restricted cash and cash equivalents	$	$
European government debt securities
Reverse repurchase agreements

Multilateral development bank debt securities
Investments	$	$
Total	$	$

million for restricted cash and cash equivalents and $ million for investments.

For the nine months ended September 30, 2024 and 2023, investments related to default funds and margin deposits, net includes purchases of investment securities of $ million and $ million respectively, and proceeds from sales and redemptions of investment securities of $ million, and $ million respectively.

In the investment activity related to default fund and margin contributions, we are exposed to counterparty risk related to reverse repurchase agreement transactions, which reflect the risk that the counterparty might become insolvent and, thus, fail to meet its obligations to Nasdaq Clearing. We mitigate this risk by only engaging in transactions with high credit quality reverse repurchase agreement counterparties and by limiting the acceptable collateral under the reverse repurchase agreement to high quality issuers, primarily government securities and other securities explicitly guaranteed by a government. The value of the underlying security is monitored during the lifetime of the contract, and in the event the market value of the underlying security falls below the reverse repurchase amount, our clearinghouse may require additional collateral or a reset of the contract.

Default Fund Contributions

Required contributions to the default funds are proportional to the exposures of each clearing member. When a clearing member is active in more than one market, contributions must be made to all markets’ default funds in which the member is active. Clearing members’ eligible contributions may include cash and non-cash contributions. Cash contributions received are maintained in demand deposits held at central banks and large, highly rated financial institutions or invested by Nasdaq Clearing, in accordance with its investment policy, either in central bank certificates, highly rated government debt securities, reverse repurchase agreements with highly rated government debt securities as collateral, or multilateral development bank debt securities. Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. Clearing members’ cash contributions are included in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Condensed Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions.

In addition to clearing members’ required contributions to the liability waterfall, Nasdaq Clearing is also required to contribute capital to the liability waterfall and overall regulatory capital as specified under its clearinghouse rules. As of September 30, 2024, Nasdaq Clearing committed capital totaling $ million to the liability waterfall and overall regulatory capital, in the form of government debt securities, which are recorded as financial investments in the Condensed Consolidated Balance Sheets. The combined regulatory capital of the clearing members and Nasdaq Clearing is intended to secure the obligations of a clearing member exceeding such member’s own margin and default fund deposits and may be used to cover losses sustained by a clearing member in the event of a default.

Margin Deposits

Nasdaq Clearing requires all clearing members to provide collateral, which may consist of cash and non-cash contributions, to guarantee performance on the clearing members’ open positions, or initial margin. In addition, clearing members must also provide collateral to cover the daily margin call if needed. See “Default Fund Contributions” above for further discussion of cash and non-cash contributions.

Similar to default fund contributions, Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing and are recorded in revenues. These cash deposits are recorded in default funds and margin deposits in the Condensed Consolidated Balance Sheets as both a current asset and a current liability. Pledged margin collateral is not recorded in our Condensed Consolidated Balance Sheets as all risks and rewards of collateral ownership, including interest, belong to the counterparty.

Nasdaq Clearing marks to market all outstanding contracts and requires payment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able to satisfy their financial obligations in a timely manner allowing Nasdaq Clearing the ability to mitigate the risk of a clearing member defaulting due to exceptionally large losses. In the event of a default, Nasdaq Clearing can access the defaulting member’s margin and default fund deposits to cover the defaulting member’s losses.

Regulatory Capital and Risk Management Calculations

Nasdaq Clearing manages risk through a comprehensive counterparty risk management framework, which comprises policies, procedures, standards and financial resources. The level of regulatory capital is determined in accordance with Nasdaq Clearing’s regulatory capital and default fund policy, as approved by the SFSA. Regulatory capital calculations are continuously updated through a proprietary capital-at-risk calculation model that establishes the appropriate level of capital.

liability was recorded as of September 30, 2024.

Power of Assessment

To further strengthen the contingent financial resources of the clearinghouse, Nasdaq Clearing has power of assessment that provides the ability to collect additional funds from its clearing members to cover a defaulting member’s remaining obligations up to the limits established under the terms of the clearinghouse rules. The power of assessment corresponds to % of the clearing member’s aggregate contribution to the financial, commodities and seafood markets’ default funds.

Liability Waterfall

The liability waterfall is the priority order in which the capital resources would be utilized in the event of a default where the defaulting clearing member’s collateral and default fund contribution would not be sufficient to cover the cost to settle its portfolio. If a default occurs and the defaulting clearing member’s collateral, including cash deposits and pledged assets, is depleted, then capital is utilized in the following amount and order:

•junior capital contributed by Nasdaq Clearing, which totaled $ million as of September 30, 2024;

•a loss-sharing pool related only to the financial market that is contributed to by clearing members and only applies if the defaulting member’s portfolio includes interest rate swap products;

•specific market default fund where the loss occurred (i.e., the financial, commodities, or seafood market), which includes capital contributions of the clearing members on a pro-rata basis; and

•fully segregated senior capital for each specific market contributed by Nasdaq Clearing, calculated in accordance with clearinghouse rules, which totaled $ million as of September 30, 2024.

If additional funds are needed after utilization of the liability waterfall, or if part of the waterfall has been utilized and needs to be replenished, then Nasdaq Clearing will utilize its power of assessment and additional capital contributions will be required by non-defaulting members up to the limits established under the terms of the clearinghouse rules.

In addition to the capital held to withstand counterparty defaults described above, Nasdaq Clearing also has committed capital of $ million to ensure that it can handle an orderly wind-down of its operation, and that it is adequately protected against investment, operational, legal, and business risks.

Market Value of Derivative Contracts Outstanding

Fixed-income options and futures Stock options and futures Index options and futures Total$

In the table above:

•We determined the fair value of our option contracts using standard valuation models that were based on market-based observable inputs including implied volatility, interest rates and the spot price of the underlying instrument.

•We determined the fair value of our futures contracts based upon quoted market prices and average quoted market yields.

•We determined the fair value of our forward contracts using standard valuation models that were based on market-based observable inputs including benchmark rates and the spot price of the underlying instrument.

Derivative Contracts Cleared

Fixed-income options and futures Stock options and futures Index options and futures Total

In the table above, the total volume in cleared power related to commodity contracts was Terawatt hours (TWh) and TWh for the nine months ended September 30, 2024 and 2023, respectively.

billion and $ billion as of September 30, 2024 and 2023, respectively. The total number of resale and repurchase agreements contracts cleared was and for the nine months ended September 30, 2024 and 2023, respectively.

15.

$ Liabilities:Current lease liabilitiesOther current liabilities$ $ Non-current lease liabilitiesOperating lease liabilities Total lease liabilities$ $ $ $ $ Variable lease cost Sublease income()()()()Total lease cost$ $ $ $

In the table above, operating lease costs include short-term lease cost, which was immaterial.

million, of which $ million related to operating lease asset impairment and is included in operating lease cost in the table above, $ million related to exit costs and is included in variable lease cost in the table above and $ million related to impairment of leasehold improvements, which are recorded in depreciation and amortization expense in the Condensed Consolidated Statements of Income. We fully impaired our lease assets for locations that we vacated with no intention to sublease. Substantially all of the property, equipment and leasehold improvements associated with the vacated leased office space were fully impaired as there are no expected future cash flows for these items. 2025 2026 2027 2028 2029+ Total lease payments$ Less: interest()Present value of lease liabilities$

In the table above, interest is calculated using the interest rate for each lease. Present value of lease liabilities includes the current portion of $ million.

Total lease payments in the table above excludes $ million of legally binding minimum lease payments for leases signed but not yet commenced. This primarily relates to a new lease signed in the first quarter of 2024 for our European headquarters. This lease will commence in 2025 with a lease term of years. These payments also include a data center lease for which we have not yet obtained full control of the leased premises.

Weighted-average discount rate %

$ Lease assets obtained in exchange for operating lease liabilities$ $

16.

$ Effective tax rate % %Nine Months Ended September 30,20242023(in millions)Income tax provision$ $ Effective tax rate % %

The lower effective tax rate for the three months ended September 30, 2024 was primarily due to a reduction in U.S. taxes on international income related to the changes in our tax profile from recent acquisitions and the purchase of energy tax credits made available under the Inflation Reduction Act. The higher effective tax rate for the nine months ended September 30, 2024 included the completion of an intra-group transfer of certain intellectual property, or IP, assets to our U.S. headquarters, which resulted in a one-time net tax expense of $ million, partially offset by the items mentioned above. The effective tax rate in 2023 included a higher tax benefit from a favorable audit settlement.

The effective tax rate may vary from period to period depending on, among other factors, the geographic and business mix of earnings and losses. These and other factors, including history of pre-tax earnings and losses, are taken into account in assessing the ability to realize deferred tax assets.

Tax Audits

Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income tax return, applicable state and local income tax returns and non-U.S. income tax returns. We are subject to examination by federal, state and local, and foreign tax authorities. Our federal income tax return is under audit for tax year 2018 and is subject to examination by the Internal Revenue Service for the years 2020 through 2023. Several state tax returns are currently under examination by the

17.

million as of September 30, 2024 and December 31, 2023. As discussed in “Other Credit Facilities,” of Note 8, “Debt Obligations,” we also have credit facilities primarily related to our Nasdaq Clearing operations, which are available in multiple currencies, and totaled $ million as of September 30, 2024 and $ million as of December 31, 2023 in available liquidity, of which was utilized.

Other Guarantees

Through our clearing operations in the financial markets, Nasdaq Clearing is the legal counterparty for, and guarantees the performance of, its clearing members. See Note 14, “Clearing Operations,” for further discussion of Nasdaq Clearing performance guarantees.

We have provided a guarantee related to lease obligations for The Nasdaq Entrepreneurial Center, Inc., which is a not-for-profit organization designed to convene, connect and engage aspiring and current entrepreneurs. This entity is not included in the condensed consolidated financial statements of Nasdaq.

We believe that the potential for us to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Balance Sheets for the above guarantees.

Routing Brokerage Activities

One of our broker-dealer subsidiaries, Nasdaq Execution Services, provides a guarantee to securities clearinghouses and exchanges under its standard membership agreements, which require members to guarantee the performance of other

18.

business segments: Capital Access Platforms, Financial Technology and Market Services. See Note 1, “Organization and Nature of Operations,” for further discussion of our reportable segments.

This Quarterly Report on Form 10-Q presents our results in alignment with the new corporate structure. All periods presented are restated to reflect the new structure.

Our management allocates resources, assesses performance and manages these businesses as separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is operating income. Results of individual businesses are presented based on our management accounting practices and structure. Our chief operating decision maker does not review total assets or statements of income below operating income by segments as key performance metrics; therefore, such information is not presented below.

$ Operating income Financial TechnologyTotal revenues Operating income Market ServicesTotal revenues Transaction-based expenses()()Revenues less transaction-based expenses Operating income Corporate ItemsTotal revenues() Operating loss()()ConsolidatedTotal revenues$ $ Transaction-based expenses()()Revenues less transaction-based expenses$ $ Operating income$ $ Nine Months Ended September 30,20242023(in millions)Capital Access PlatformsTotal revenues$ $ Operating income Financial TechnologyTotal revenues Operating income Market ServicesTotal revenues Transaction-based expenses()()Revenues less transaction-based expenses Operating income Corporate ItemsTotal revenues() Operating loss()()ConsolidatedTotal revenues$ $ Transaction-based expenses()()Revenues less transaction-based expenses$ $ Operating income$ $

Adenza purchase accounting adjustment

() Expenses:Amortization expense of acquired intangible assets Merger and strategic initiatives expense Restructuring charges Expenses - divested businesses Other Total expenses$ $ Operating loss$()$()


	Nine Months Ended September 30,
	2024		2023
	(in millions)
Revenues:
Divested businesses	$		$
Adenza purchase accounting adjustment	()
Expenses:
Amortization expense of acquired intangible assets
Merger and strategic initiatives expense
Restructuring charges
Lease asset impairments
Legal and regulatory matters			()
Pension Settlement
Expenses - divested businesses
Other
Total expenses	$		$
Operating loss	$	()	$	()

For further discussion of our segments’ results, see “Segment Operating Results,” of “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

million was recorded in our Financial Technology segment, reflecting the net impact of the accounting change on AxiomSL subscription revenue from the date of the Adenza acquisition. For purposes of evaluating the performance of our segments, we have excluded the reduction of $ million as this relates to the prior year impact of this change. We have not excluded the $ million offsetting current year impact of this change.

◦Lease asset impairments: For the nine months ended September 30, 2023, this included impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy and depreciation and amortization expense in our Condensed Consolidated Statements of Income.

◦Legal and regulatory matters: For the nine months ended September 30, 2024, this primarily related to the settlement of a previously disclosed SFSA inquiry, and accruals related to certain legal matters. For the nine months ended September 30, 2023, this primarily included insurance recoveries related to certain legal matters. The fine is recorded in regulatory expense and the accruals and insurance recoveries are recorded in professional and contract services and general, administrative and other expense in the Condensed Consolidated Statements of Income.

19.

million in pre-tax charges principally related to employee-related costs, contract terminations and other related costs. We expect to achieve benefits primarily in the form of expense and revenue synergies.

In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. As of September 30, 2024, we completed our divisional alignment program and recognized total pre-tax charges of $ million over a period, within the anticipated range of $ million to $ million.

Costs related to these programs are recorded as restructuring charges in the Condensed Consolidated Statements of Income.

$ $ $ Divisional realignment Consulting servicesAdenza restructuring Divisional realignment Employee-related costsAdenza restructuring Divisional realignment OtherAdenza restructuring Divisional realignment Total restructuring charges$ $ $ $ Total Program Costs IncurredAdenza restructuring$ Divisional realignment$

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Nasdaq should be read in conjunction with our condensed consolidated financial statements and related notes included in this Form 10-Q. The period over period percentages below are calculated based on exact dollars, and therefore may not recalculate exactly using rounded numbers as presented in millions in the tables below.

OVERVIEW

Nasdaq is a global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.

Our organizational structure aligns our businesses with the foundational shifts that are driving the evolution of the global financial system. In order to amplify our strategy, we aligned the Company more closely with evolving client needs into Capital Access Platforms, Financial Technology and Market Services reportable segments. All prior periods have been restated to conform to the current period presentation. See Note 18, “Business Segments,” to the condensed consolidated financial statements for further discussion of our reportable segments and geographic data, as well as how management allocates resources, assesses performance and manages these businesses as three separate segments.

Third Quarter 2024 and Recent Developments

• Nasdaq’s Index business achieved another record in Index ETP AUM, averaging $575 billion during the third quarter of 2024 and reaching $600 billion at quarter-end.

•Nasdaq strengthened its listings leadership in the U.S. in the third quarter of 2024 with a 85% win rate of eligible operating companies.

•In the third quarter of 2024, Nasdaq achieved a record quarter of U.S. equity derivatives net revenue of $107 million, with multi-listed U.S. options market share once again surpassing 30% in the quarter and 19% growth in U.S. index options volume.

•In the third quarter of 2024, we returned $138 million to shareholders through dividend payments and $88 million in repurchases of our common stock.

•In October 2024, the board of directors approved a regular quarterly cash dividend of $0.24 per share on our outstanding common stock.

Nasdaq’s Operating Results

The following tables summarize our financial performance for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The comparability of our results of operations between reported periods is impacted by the acquisition of Adenza in November 2023. See Note 4, “Acquisition,” to the condensed consolidated financial statements for further discussion. For a detailed discussion of our results of operations, see “Segment Operating Results” below.

(in millions, except per share amounts)

In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues less transaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under “Item 3. Quantitative and Qualitative Disclosures about Market Risk.”

The following chart summarizes our ARR (in millions):

ARR for a given period is the current annualized value derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature, or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. For AxiomSL and Calypso recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for AxiomSL and Calypso recurring revenue contracts that include annual values that increase over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

The ARR chart includes:


▪						Proprietary market data subscriptions and annual listing fees within our Data & Listing Services business, index data subscriptions and guaranteed minimum on futures contracts within our Index business and subscription contracts under our Workflow & Insights business.
▪						SaaS subscription and support contracts related to Verafin, surveillance, market technology, AxiomSL, Calypso and trade management services, excluding one-time service requests.

The following chart summarizes our quarterly annualized SaaS revenues for Solutions, which comprises our Capital Access Platforms and Financial Technology segments, for September 30, 2024 and 2023 (in millions):

Segment Operating Results

The following tables present our revenues by segment:


	2024	2023
	(in millions)
%
%
%
%
%
%
%
%

%
%
%
%
%
%
%
%

The following charts present our Capital Access Platforms, Financial Technology and Market Services segments as a percentage of our total revenues, less transaction-based expenses.

CAPITAL ACCESS PLATFORMS

The following tables present revenues from our Capital Access Platforms segment:


	2024	2023
	(in millions)
%
%
%
%

	2024	2023
%
%
%
%


	As of September 30,
	2024		2023
ARR (in millions)	$	1,254	$	1,222

Data & Listing Services Revenues

The following tables present key drivers from our Data & Listing Services business:


	Three Months Ended September 30,
	2024		2023
IPOs
The Nasdaq Stock Market	48		39
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1		—
Total new listings
The Nasdaq Stock Market	138		87
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	6		3




	Nine Months Ended September 30,
	2024		2023
IPOs
The Nasdaq Stock Market	114		102

Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	7		3
Total new listings
The Nasdaq Stock Market	301		230
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	18		16

	As of September 30,
	2024		2023
ARR (in millions)	$	683	$	679
Number of listed companies
The Nasdaq Stock Market	4,039		4,086
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1,186		1,236

In the table above:

•For the three months ended September 30, 2024 and 2023, IPOs included 15 and 4 SPACs, respectively. For the nine months ended September 30, 2024 and 2023, IPOs included 28 and 19 SPACs, respectively. The number of total listed companies on The Nasdaq Stock Market for the nine months ended September 30, 2024 and 2023 included 712 and 570 ETPs, respectively.

•IPOs, new listings (which includes IPOs) and total listed companies for exchanges that comprise Nasdaq Nordic and Nasdaq Baltic represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies listed on the alternative markets of Nasdaq First North.

Data & Listing Services revenues were essentially unchanged for the three and nine months ended September 30, 2024 compared with the same periods in 2023 as new data sales, price increases on regulated data and higher usage, as well as new listings, were primarily offset by lower annual fees due to the impact of 2023 delistings and downgrades and lower amortization of prior period initial listing fees.

Index Revenues

The following table presents key drivers from our Index business:


	As of or Three Months Ended September 30,
	2024		2023
Number of licensed ETPs	388		366
TTM change in period end ETP AUM tracking Nasdaq indices (in billions)
Beginning balance	$	411	$	311
Net appreciation	143		78
Net impact of ETP sponsor switches	(16)		(2)
Net inflows	62		24
Ending balance	$	600	$	411
Quarterly average ETP AUM tracking Nasdaq indices (in billions)	$	575	$	423

ARR (in millions)	$	74	$	72

In the table above, TTM represents trailing twelve months. The number of listed ETPs as of September 30, 2023 has been updated to reflect a revised methodology whereby an ETP listed on multiple exchanges is counted as one product, rather than formerly being counted per exchange. This change has no impact on reported AUM.

Index revenues increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to higher AUM in exchange traded products linked to Nasdaq indices and growth in trading volume on futures contracts linked to the Nasdaq-100 Index. The increase in the first nine months of 2024 also includes a $16 million one-time item related to a legal settlement to recoup revenue.

Workflow & Insights Revenues

The following table presents key drivers from our Workflow & Insights business:


	As of or Three Months Ended September 30
	2024		2023
	(in millions)
ARR	$	497	$	471
Quarterly annualized SaaS revenues	427		402

Workflow & Insights revenues increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to an increase in analytics revenues. The increase was primarily due to higher Data Link sales and growth in our eVestment product offerings.

FINANCIAL TECHNOLOGY

The following tables present revenues from our Financial Technology segment:








	2024	2023
%
%
%
%

	2024	2023
	(in millions)
%
%
%
%

Financial Crime Management Technology Revenues

The following table presents key drivers for our Financial Crime Management Technology business:


	As of or Three Months Ended September 30
	2024		2023
	(in millions)
ARR and Quarterly annualized SaaS revenues	$	268	$	216

Financial Crime Management Technology revenues increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to price increases, new sales to existing clients and new customer acquisitions, particularly small and medium-sized businesses.

Regulatory Technology Revenues

The following table presents key drivers for our Regulatory Technology business:


	As of or Three Months Ended September 30
	2024		2023
	(in millions)
ARR	$	350	$	132
Quarterly annualized SaaS revenues	188		116

Regulatory Technology revenues increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to the inclusion of revenues from AxiomSL associated with our acquisition of Adenza and higher surveillance revenues, partially offset by a one-time revenue reduction recognized in the third quarter of 2024 related to a purchase accounting adjustment. See Note 3, “Revenue from Contracts with Customers,” to the condensed consolidated financial statements for discussion on the measurement period adjustment.

Capital Markets Technology Revenues

The following table presents key drivers for our Capital Markets Technology business:


	As of or Three Months Ended September 30
	2024		2023
	(in millions)
ARR	$	864	$	511
Quarterly annualized SaaS revenues	128		39

Capital Markets Technology revenues increased in the third quarter and first nine months of 2024 compared with the same periods in 2023. The increase for both periods was primarily due to the inclusion of revenues from Calypso associated with our acquisition of Adenza. The increase was also driven by subscription revenue from trade management services and market technology, partially offset by lower market technology professional services revenue due to a large project delivery in the comparative period.

MARKET SERVICES

The following tables present revenues from our Market Services segment:


	2024	2023
	(in millions)
%
Transaction-based expenses:
%
%
%

	2024	2023
%
Transaction-based expenses:
%
%
%

The following tables present net revenues by product from our Market Services segment:


	2024	2023
	(in millions)
%
%
%
%
%

	2024	2023
	(in millions)
%
%
%
%
%

In the preceding tables, Other includes Nordic fixed income trading & clearing, Nordic derivatives and Canadian cash equities trading.

U.S. Equity Derivative Trading

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers from our U.S. Equity Derivative Trading business:


	2024	2023
	(in millions)
%
%
Transaction-based expenses:
%
%
%
%

	2024	2023
	(in millions)
%
%
%
%
%
%

Section 31 fees are recorded as U.S. equity derivative and cash equity trading revenues with a corresponding amount recorded in transaction-based expenses. We are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Pass-through fees can increase or decrease due to rate changes by the SEC, our percentage of the overall industry volumes processed on our systems, and differences in actual dollar value traded. Section 31 fees increased in the third quarter and the first nine months of 2024 compared with the same periods in 2023 primarily due to higher average SEC fee rates as a result of an increase in the SEC fee rate in May 2024. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.


	Three Months Ended September 30,
	2024		2023
U.S. equity options
Total industry average daily volume (in millions)	44.5		39.6
Nasdaq PHLX matched market share	9.4	%	11.0	%
The Nasdaq Options Market matched market share	5.8	%	5.6	%
Nasdaq BX Options matched market share	2.3	%	4.4	%
Nasdaq ISE Options matched market share	6.8	%	5.7	%
Nasdaq GEMX Options matched market share	2.7	%	3.0	%
Nasdaq MRX Options matched market share	3.2	%	2.0	%
Total matched market share executed on Nasdaq’s exchanges	30.2	%	31.7	%

	Nine Months Ended September 30,
	2024		2023
U.S. equity options
Total industry average daily volume (in millions)	43.3		40.4
Nasdaq PHLX matched market share	9.9	%	11.2	%
The Nasdaq Options Market matched market share	5.5	%	6.4	%
Nasdaq BX Options matched market share	2.3	%	3.6	%
Nasdaq ISE Options matched market share	6.7	%	5.8	%
Nasdaq GEMX Options matched market share	2.6	%	2.3	%
Nasdaq MRX Options matched market share	2.6	%	1.7	%
Total matched market share executed on Nasdaq’s exchanges	29.6	%	31.0	%

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues, net increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to higher industry trading volumes for both periods and higher capture for the third quarter of 2024, partially offset by lower overall matched market share executed on Nasdaq’s exchanges. For the first nine months of 2024 higher capture contributed to the increase in U.S. equity derivative trading revenues, however, for U.S. equity derivative trading revenues, net lower capture partially offset the increase.

Transaction rebates, in which we credit a portion of the execution charge to the market participant, increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to higher industry trading volumes and rebate capture rate, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges.

Cash Equity Trading Revenues

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers and other metrics from our Cash Equity Trading business:


	2024	2023
	(in millions)
%
%
Transaction-based expenses:
%
%
%
%

	2024	2023
	(in millions)
%
%
%
%
%
%

See the discussion in "U.S. Equity Derivative Trading" for an explanation of Section 31 fees for the third quarter and first nine months of 2024 as compared with the same periods in 2023.


	Three Months Ended September 30,
	2024			2023
Total U.S.-listed securities
Total industry average daily share volume (in billions)	11.5			10.4
Matched share volume (in billions)	117.4			106.7
The Nasdaq Stock Market matched market share	15.6		%	15.5		%
Nasdaq BX matched market share	0.3		%	0.4		%
Nasdaq PSX matched market share	0.2		%	0.3		%
Total matched market share executed on Nasdaq’s exchanges	16.1		%	16.2		%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility	44.7		%	40.2		%
Total market share	60.8		%	56.4		%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	609,167			556,257
Total average daily value of shares traded (in billions)	$	4.1		$	3.6
Total market share executed on Nasdaq’s exchanges	71.6		%	71.6		%

	Nine Months Ended September 30,
	2024			2023
Total U.S.-listed securities
Total industry average daily share volume (in billions)	11.7			11.0
Matched share volume (in billions)	354.3			342.2
The Nasdaq Stock Market matched market share	15.6		%	15.9		%
Nasdaq BX matched market share	0.4		%	0.4		%
Nasdaq PSX matched market share	0.2		%	0.4		%
Total matched market share executed on Nasdaq’s exchanges	16.2		%	16.7		%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility	43.0		%	35.2		%
Total market share	59.2		%	51.9		%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	645,622			676,132
Total average daily value of shares traded (in billions)	$	4.5		$	4.5
Total market share executed on Nasdaq’s exchanges	72.2		%	70.6		%

In the tables above, total market share includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the FINRA/Nasdaq Trade Reporting Facility.

Cash equity trading revenues and cash equity trading revenues, net increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges. Higher capture also contributed to the increase in cash equity trading revenues for the third quarter of 2024 and to cash equity trading revenues, net for the third quarter and first nine months of 2024.

Transaction rebates increased in the third quarter of 2024 compared with the same period in 2023 primarily due to higher U.S. industry volumes. Transaction rebates increased in the first nine months of 2024 compared with the same period in 2023 primarily due to higher U.S. industry volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges and lower rebate capture rate. For The Nasdaq Stock Market and Nasdaq PSX, we credit a portion of the per share execution charge to the market participant that provides the liquidity, and for Nasdaq BX, we credit a portion of the per share execution charge to the market participant that takes the liquidity.

U.S. Tape Plans

The following tables present revenues from our U.S. Tape plans business:


	2024	2023
	(in millions)
%

	2024	2023
	(in millions)
%

U.S. Tape plans revenues were essentially unchanged in the third quarter of 2024 compared with the same period in 2023. U.S. Tape plans revenues decreased in the first nine months of 2024 compared with the same period in 2023 primarily due to lower industry-wide usage volume and the impact of one-time industry-wide adjustments.

Other

Other includes Nordic fixed income trading and clearing, Nordic derivatives and Canadian cash equities trading. The following tables present revenues and a key driver from our Other business:


	2024	2023
	(in millions)
%

	2024	2023
	(in millions)
%

In the preceding table, other includes transaction rebates of $5 million for the three months ended September 30, 2024 and 2023, $16 million for the nine months ended September 30, 2024, and $15 million for the nine months ended September 30, 2023.


	Three Months Ended September 30,
	2024	2023
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts	213,911	245,986


	Nine Months Ended September 30,
	2024	2023
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts	235,137	298,785

In the tables above, Nasdaq Nordic and Nasdaq Baltic total average daily volume of options and futures contracts include Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement. The revenue sharing arrangement ended in the fourth quarter of 2023.

Other revenues increased in the third quarter of 2024 compared with the same period in 2023 due to an increase in Canadian cash equities trading and increased in the first nine months of 2024 compared with the same period in 2023 primarily due to an increase in Nordic fixed income trading and clearing revenues and Canadian cash equities trading, partially offset by a decrease in Nordic derivatives revenues.

OTHER REVENUES

For the three and nine months ended September 30, 2024 and 2023, other revenues include revenues related to our Nordic power trading and clearing business, following our announcement in June 2023 that we entered into an agreement to sell this business, which was subsequently terminated in June 2024. While we continue to operate Nordic power trading and clearing and are focused on providing service to our clients, we are evaluating options for this business. Revenues from this business will continue to be reflected in Other Revenues. Prior to June 2023, these revenues were included in our Market Services and Capital Access Platforms segments.

EXPENSES

Operating Expenses

The following tables present our operating expenses:


	2024	2023
	(in millions)
%
%
%
%
%
%
%
%
%
%
%

	2024	2023

The increase in compensation and benefits expense for the third quarter and first nine months of 2024 compared with the same periods in 2023 was primarily driven by increased headcount related to Adenza and higher incentive compensation. The increase in the first nine months of 2024 also includes a pre-tax charge of $23 million resulting from the finalization of the termination of our pension plan.

Headcount, including employees of non-wholly owned consolidated subsidiaries, increased to 9,120 employees as of September 30, 2024 from 6,590 employees as of September 30, 2023, primarily due to our acquisition of Adenza.

Professional and contract services expense increased in the third quarter of 2024 compared with the same period in 2023 primarily due to increased consulting expenses and our acquisition of Adenza. The increase in the first nine months of 2024 compared with the same period in 2023 was primarily due to our acquisition of Adenza.

Technology and communication infrastructure expense increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to an increase in expenses related to the inclusion of Adenza and an increase in investment in technology expense related to our cloud initiatives and software licensing.

Occupancy expense was unchanged in the third quarter compared with the same period in 2023. Occupancy expense decreased in the first nine months of 2024 compared with the same periods in 2023 primarily due to $18 million in impairment charges and exit related costs recorded in the first nine months of 2023 following the abandonment of leased office space, partially offset by an increase in costs related to the inclusion of Adenza office space.

General, administrative and other expense was unchanged in the third quarter compared with the same period in 2023. General, administrative and other expense increased in the first nine months of 2024 compared with the same period in 2023 primarily due to insurance recoveries related to legal matters recorded in the first nine months of 2023, as well as increased expenses related to the inclusion of Adenza and higher travel costs in the first nine months of 2024.

Marketing and advertising expense was essentially unchanged in the third quarter compared with the same period in 2023. Marketing and advertising expense increased in the first nine months of 2024 compared with the same period in 2023 primarily due to higher client incentive spending resulting from higher IPO activity.

Depreciation and amortization expense increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to an increase in amortization related to the intangible assets acquired as part of the Adenza acquisition.

Regulatory expense was unchanged in the third quarter compared with the same period in 2023. Regulatory expense increased in the first nine months of 2024 compared with the same period in 2023 primarily due to the settlement of a previously disclosed SFSA inquiry.

We have pursued various strategic initiatives and completed acquisitions and divestitures 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 and vary based on the size and frequency of the activities described above. For the three and nine months ended September 30, 2024 and 2023, these costs primarily relate to the Adenza acquisition. For the nine months ended September 30, 2024, these costs were partially offset by the recognition of a termination fee received by Nasdaq in 2024 related to the termination of the proposed divestiture of our Nordic power trading and clearing business.

Restructuring charges increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 as a result of charges from our Adenza restructuring program and our divisional alignment program.

At the completion of the Adenza restructuring program, we expect to achieve $80 million of net expense synergies. As of September 30, 2024 we have actioned approximately 80% of these net synergies.

The divisional alignment program concluded on September 30, 2024, incurring total pre-tax charges of $139 million over a two-year period, within the projected range of $115 million to $145 million. For further discussion, refer to Note 19, “Restructuring Charges,” in the condensed consolidated financial statements. In addition to significantly boosting the scalability of our platforms, and thus revenue opportunities, we expect to achieve benefits from the 2022 divisional alignment program through combined annual run-rate operational efficiencies of approximately $30 million annually by 2025, of which approximately $10 million was actioned in 2024.

Non-operating Income and Expenses

The following tables present our non-operating income and expenses:


	2024	2023
	(in millions)
%
%

%
%
%

	2024	2023
	(in millions)
%
%
%


%
%
%

The following tables present our interest expense:


	2024	2023
	(in millions)
%
%
%
%

	2024	2023
%
%
%
%

Interest income decreased in the third quarter and first nine months of 2024 compared with the same periods in 2023 due to lower average cash balance.

Interest expense was essentially unchanged in the third quarter of 2024 compared with the same period in 2023. Interest expense increased in the first nine months of 2024 compared with the same period in 2023 primarily due to debt issued in June 2023 to finance the Adenza acquisition. See “Financing of the Adenza Acquisition,” of Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion.

Other income (loss) primarily represents realized and unrealized gains and losses from strategic investments related to our corporate venture program.

Net income (loss) from unconsolidated investees increased in the third quarter and first nine months of 2024 compared with the same periods in 2023 primarily due to higher income recognized from our equity method investment in OCC and lower losses from our equity method investment in Nasdaq Private Market, LLC. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

Tax Matters

The following tables present our income tax provision and effective tax rate:


	2024		2023
	($ in millions)
%
Effective tax rate	14.3	%	24.8	%

	2024		2023
	(in millions)
%
Effective tax rate	24.8	%	23.3	%

For further discussion of our tax matters, see Note 16, “Income Taxes,” to the condensed consolidated financial statements.

NON-GAAP FINANCIAL MEASURES

In addition to disclosing results determined in accordance with U.S. GAAP, we also provide non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share in this Quarterly Report on Form 10-Q. 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 our 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. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, 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 and non-GAAP diluted earnings per share, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share 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 that have less bearing on our ongoing operating performance.

The following tables present reconciliations between U.S. GAAP net income attributable to Nasdaq and diluted earnings per share and non-GAAP net income attributable to Nasdaq and diluted earnings per share:


	Three Months Ended September 30,
	2024			2023
	(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq	$	306		$	294
Non-GAAP adjustments:
Adenza purchase accounting adjustment	34			—
Amortization expense of acquired intangible assets	122			37
Merger and strategic initiatives expense	10			4
Restructuring charges	22			17


Net (income) loss from unconsolidated investees	(1)			12





Other loss	1			9
Total non-GAAP adjustments	$	188		$	79
Total non-GAAP tax adjustments	(65)			(24)

Total non-GAAP adjustments, net of tax	$	123		$	55
Non-GAAP net income attributable to Nasdaq	$	429		$	349

U.S. GAAP effective tax rate	14.3		%	24.8		%
Total adjustments from non-GAAP tax rate	7.0		%	0.9		%
Non-GAAP effective tax rate	21.3		%	25.7		%

Weighted-average common shares outstanding for diluted earnings per share	579.0			494.1

U.S. GAAP diluted earnings per share	$	0.53		$	0.60
Total adjustments from non-GAAP net income	0.21			0.11
Non-GAAP diluted earnings per share	$	0.74		$	0.71


	Nine Months Ended September 30,
	2024			2023
	(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq	$	762		$	862
Non-GAAP adjustments:
Adenza purchase accounting adjustment	34			—
Amortization expense of acquired intangible assets	366			112
Merger and strategic initiatives expense	23			51
Restructuring charges	103			49
Lease asset impairments	—			24

Net (income) loss from unconsolidated investees	(7)			8
Legal and regulatory matters	16			(10)


Pension settlement charge	23			—
Other (income) loss	(8)			17
Total non-GAAP adjustments	$	550		$	251
Total non-GAAP tax adjustments	(151)			(76)
Tax on intra-group transfer of IP assets	33			—
Total non-GAAP adjustments, net of tax	$	432		$	175
Non-GAAP net income attributable to Nasdaq	$	1,194		$	1,037

U.S. GAAP effective tax rate	24.8		%	23.3		%
Total adjustments from non-GAAP tax rate	(1.2)		%	1.3		%
Non-GAAP effective tax rate	23.6		%	24.6		%

Weighted-average common shares outstanding for diluted earnings per share	579.0			494.2

U.S. GAAP diluted earnings per share	$	1.32		$	1.74
Total adjustments from non-GAAP net income	0.74			0.36
Non-GAAP diluted earnings per share	$	2.06		$	2.10

We believe that excluding the following items from the non-GAAP net income attributable to Nasdaq provides a more meaningful analysis of Nasdaq’s ongoing operating performance and comparisons in Nasdaq’s performance between periods:

•Adenza purchase accounting adjustment: As discussed in Note 3, “Revenue from Contracts with Customers,” to the condensed consolidated financial statements, during the third quarter of 2024, as part of finalizing the purchase accounting of the Adenza acquisition, a one-time revenue reduction of $32 million was recorded, reflecting the net

impact of the accounting change on AxiomSL subscription revenue from the date of the Adenza acquisition. We have excluded the reduction of $34 million as this relates to the prior year impact of this change from our non-GAAP results. We have not excluded the $2 million offsetting impact of this change as it is related to current year results.

•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 and the relative operating performance of the businesses between periods.

•Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. These expenses primarily include integration costs, as well as legal, due diligence and other third-party transaction costs. For the three and nine months ended September 30, 2024, and 2023, these costs primarily relate to the Adenza acquisition. For the nine months ended September 30, 2024, these costs were partially offset by the recognition of a termination fee received by Nasdaq in 2024, related to the termination of the proposed divestiture of our Nordic power trading and clearing business.

•Restructuring charges: In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program, “Adenza Restructuring” to optimize our efficiencies as a combined organization. In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In September 2024, we completed our divisional alignment program. See Note 19, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion of our Adenza restructuring program and our divisional alignment program.

•Net income (loss) from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

•Other items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq. Other significant items include:

◦Lease asset impairments: For the nine months ended September 30, 2023, other items include impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy and depreciation and amortization expense in our Condensed Consolidated Statements of Income.

◦Legal and regulatory matters: For the nine months ended September 30, 2024, other items primarily include the settlement of a previously disclosed SFSA inquiry, and accruals related to certain legal matters. For the nine months ended September 30, 2023, other items include insurance recoveries related to certain legal matters. The fine is recorded in regulatory expense and the accruals related to legal matters and insurance recoveries are recorded in professional and contract services and general, administrative and other expense in the Condensed Consolidated Statements of Income.

◦Pension settlement charge: For the nine months ended September 30, 2024, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The loss is recorded in compensation and benefits in the Condensed Consolidated Statements of Income. See Note 9, “Retirement Plans,” to the condensed consolidated financial statements for further discussion.

◦Other (income) loss: For the nine months ended September 30, 2024 and 2023 other items include net gains from strategic investments entered into through our corporate venture program, which are included in other income (loss) in our Consolidated Statements of Income. For the three and nine months ended September 30, 2023, other items included certain financing costs related to the Adenza acquisition.

•Significant tax items: The non-GAAP adjustment to the income tax provision for all periods primarily includes the tax impact of each non-GAAP adjustment. In addition, for the nine months ended September 30, 2024, tax items also include a one-time net tax expense of $33 million related to the completion of an intra-group transfer of certain IP assets to our U.S. headquarters.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded our operating activities and met our commitments through cash generated by operations, augmented by the periodic issuance of debt. Currently, our cost and availability of funding remain healthy. We continue to prudently assess our capital deployment strategy through balancing acquisitions, internal investments, debt repayments, and shareholder return activity, including share repurchases and dividends.

We expect that our current cash and cash equivalents combined with cash flows provided by operating activities, supplemented with our borrowing capacity and access to additional financing, including our revolving credit facility and our commercial paper program, provides us additional flexibility to meet our ongoing obligations and the capital deployment strategic actions described above, while allowing us to invest in activities and product development that support the long-term growth of our operations.

Principal factors that could affect the availability of our internally-generated funds include:

• deterioration of our revenues in any of our business segments;

• changes in regulatory and working capital requirements; and

•an increase in our expenses.

Principal factors that could affect our ability to obtain cash from external sources include:

• operating covenants contained in our credit facilities that limit our total borrowing capacity;

• credit rating downgrades, which could limit our access to additional debt;

• a significant decrease in the market price of our common stock; and

• volatility or disruption in the public debt and equity markets.

The following table summarizes selected measures of our liquidity and capital resources:


	September 30, 2024		December 31, 2023
	(in millions)
Cash and cash equivalents	$	266	$	453

Financial investments	202		188
Working capital	(375)		71

The decrease in working capital is primarily driven by the reclassification of the 2025 Notes to short-term debt in 2024, partially offset by a decrease in commercial paper, net, as further described below under “Debt Obligations.” The decrease was also driven by a decrease in cash and cash equivalents.

Cash and Cash Equivalents

Cash and cash equivalents includes all non-restricted cash in banks and highly liquid investments with original maturities of 90 days or less at the time of purchase. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our investment policy, and alternative investment choices. As of September 30, 2024, our cash and cash equivalents of $266 million were primarily invested in commercial paper, money market funds and bank deposits.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $189 million as of September 30, 2024 and $236 million as of December 31, 2023. The remaining balance held in the U.S. totaled $77 million as of September 30, 2024 and $217 million as of December 31, 2023.

Cash Flow Analysis

The following table summarizes the changes in cash flows:


	Nine Months Ended September 30,
	2024		2023
Net cash provided by (used in):	(in millions)
Operating activities	$	1,234	$	1,279
Investing activities	55		(158)
Financing activities	(2,537)		3,019

Net Cash Provided by Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation and amortization expense, expense associated with share-based compensation, deferred income taxes and the effects of changes in working capital. Changes in working capital include changes in accounts receivable and deferred revenue which are impacted by the timing of customer billings and related collections from our customers; accounts payable and accrued expenses due to timing of payments; accrued personnel costs, which are impacted by employee performance targets and the timing of payments related to employee bonus incentives; and Section 31 fees payable to the SEC, which is impacted by the changes in SEC fee rates and the timing of collections from customers and payments to the SEC.

Net cash provided by operating activities decreased $45 million for the nine months ended September 30, 2024 compared with the same period in 2023. The decrease was primarily driven by changes in our operating assets and liabilities and timing of various payments and receipts of $(132) million, partially offset by an increase of $87 million driven by the increase in net income adjusted for certain noncash operating activities.

The changes in our operating assets and liabilities primarily included higher receivables, net primarily due to higher Trading Services receivables driven by higher Section 31 fee rate as well as the growth in our index licensing revenues and higher cash outflows from accounts payable and accrued expenses, primarily due to interest paid relating to the senior unsecured notes and the settlement of a legal matter. This was partially offset by lower cash outflows from Section 31 fees payable to SEC due to changes in Section 31 fee rate between the different periods. Non-cash charges in the first nine months of 2024 primarily included $460 million of depreciation and amortization and $105 million of share-based compensation.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2024 primarily related to net proceeds from sales and redemptions of investments related to default funds and margin deposits of $237 million partially offset by purchases of property and equipment of $147 million, other investing activities primarily related to our corporate venture program of $24 million and purchases of trading securities, net, of $11 million.

Net cash used in investing activities for the nine months ended September 30, 2023 primarily related to purchases of property and equipment of $116 million and net purchases of trading securities of $103 million, partially offset by net proceeds from the sale of investments related to default funds and margin deposits of $64 million.

Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2024 primarily related to a decrease related to our default funds and margin deposits of $1,320 million, dividend payments to our shareholders of $403 million, 2023 Term Loan repayment of $340 million, repayments of our commercial paper, net of $291 million, repurchases of common stock of $145 million and payments related to employee shares withheld for taxes of $56 million.

Net cash provided by financing activities for the nine months ended September 30, 2023 primarily related to $5,011 million proceeds from issuances of senior unsecured notes, in connection with the Adenza transaction, net of debt issuance costs partially offset by a decrease in default funds and margin deposits of $779 million, repayments of our commercial paper, net of $662 million, dividend payments to our shareholders of $314 million, repurchases of common stock of $159 million and payments related to employee shares withheld for taxes of $70 million.

See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.

See “Share Repurchase Program,” and “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program and cash dividends declared and paid on our common stock.

Financial Investments

Our financial investments totaled $202 million as of September 30, 2024 and $188 million as of December 31, 2023. Of these securities, $192 million as of September 30, 2024 and $168 million as of December 31, 2023 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. See Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

Regulatory Capital Requirements

Clearing Operations Regulatory Capital Requirements

We are required to maintain minimum levels of regulatory capital for the clearing operations of Nasdaq Clearing. The level of regulatory capital required to be maintained is dependent upon many factors, including market conditions and creditworthiness of the counterparty. As of September 30, 2024, our required regulatory capital of $140 million was primarily comprised of highly rated European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets.

Broker-Dealer Net Capital Requirements

Our broker-dealer subsidiaries, Nasdaq Execution Services, NFSTX, LLC, and Nasdaq Capital Markets Advisory, are subject to regulatory requirements intended to ensure their general financial soundness and liquidity. These requirements obligate these subsidiaries to comply with minimum net capital requirements. As of September 30, 2024, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $22 million, substantially all of which is held in cash and cash equivalents in the Condensed Consolidated Balance Sheets. The required minimum net capital is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Nordic and Baltic Exchange Regulatory Capital Requirements

The entities that operate trading venues in the Nordic and Baltic countries are each subject to local regulations and are required to maintain regulatory capital intended to ensure their general financial soundness and liquidity. As of September 30, 2024, our required regulatory capital of $38 million was primarily invested in European government bills and mortgage bonds and Icelandic government bonds that are included in financial investments in the Condensed Consolidated Balance Sheets and cash, which is included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Other Capital Requirements

We operate several other businesses which are subject to local regulation and are required to maintain certain levels of regulatory capital. As of September 30, 2024, other required regulatory capital of $25 million, primarily related to Nasdaq Central Securities Depository, was primarily invested in European government debt securities that are included in financial investments in the Condensed Consolidated Balance Sheets.

Equity and dividends

Share Repurchase Program

See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.

Cash Dividends on Common Stock

The following table presents our quarterly cash dividends paid per common share on our outstanding common stock:


	2024		2023
First quarter	$	0.22	$	0.20
Second quarter	0.24		0.22
Third quarter	0.24		0.22

Total	$	0.70	$	0.64

See “Cash Dividends on Common Stock,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of the dividends.

Debt Obligations

The following table summarizes our debt obligations by contractual maturity:


	Maturity Date	September 30, 2024		December 31, 2023
Short-term debt:		(in millions)
Commercial paper		$	—	$	291
2025 Notes	June 2025	499		497
Total short-term debt		$	499	$	788
Long-term debt - senior unsecured notes:
2026 Notes	June 2026	499		499
2028 Notes	June 2028	993		991
2029 Notes	March 2029	665		658
2030 Notes	February 2030	664		658
2031 Notes	January 2031	645		645
2032 Notes	February 2032	827		819
2033 Notes	July 2033	681		674
2034 Notes	February 2034	1,240		1,239
2040 Notes	December 2040	644		644
2050 Notes	April 2050	487		487
2052 Notes	March 2052	541		541
2053 Notes	August 2053	738		738
2063 Notes	June 2063	738		738
2023 Term Loan	November 2026	—		339
2022 Revolving Credit Facility	December 2027	(3)		(4)
Total long-term debt		$	9,359	$	9,666
Total debt obligations		$	9,858	$	10,454

In the table above, the 2025 Notes were reclassified to short-term debt as of September 30, 2024, including the balance as of December 31, 2023, for presentation purposes.

For the three and nine months ended September 30, 2024, the weighted average interest rate on our debt obligations was approximately 3.93% and 3.96%, respectively. This rate can fluctuate based on changes in interest rates for our variable rate debts, changes in foreign currency exchange rates and changes in the amount and duration of outstanding debt. In addition to the 2022 Revolving Credit Facility, we also have other credit facilities primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line. These European credit facilities, which are available in multiple currencies, totaled $189 million as of September 30, 2024 and $191 million as of December 31, 2023 in available liquidity, none of which was utilized.

Financing of the Adenza Acquisition

In June 2023, Nasdaq issued six series of notes for total proceeds of $5,016 million, net of debt issuance costs of $38 million, with various maturity dates ranging from 2025 to 2063. The net proceeds from these notes were used to finance the majority of the cash consideration due in connection with the Adenza acquisition.

In addition, in connection with the financing of the Adenza acquisition, we entered into the 2023 Term Loan agreement. The 2023 Term Loan provided us with the ability to borrow up to $600 million to finance a portion of the cash consideration for the Adenza acquisition and other amounts incurred in connection with this transaction. On November 1, 2023, we borrowed $599 million, net of fees, under this term loan towards payment of the cash consideration due in connection with the Adenza acquisition. As of September 30, 2024, the term loan was fully repaid.

As of September 30, 2024, we were in compliance with the covenants of all of our debt obligations.

See Note 8, “Debt Obligations,” to the condensed consolidated financial statements for further discussion of our debt obligations.

Contractual Obligations and Contingent Commitments

Nasdaq had no significant changes to our contractual obligations and contingent commitments from those disclosed in “Part I. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report Form 10-K that was filed with the SEC

February 21, 2024.

Off-Balance Sheet Arrangements

For discussion of off-balance sheet arrangements see:

• Note 14, “Clearing Operations,” to the condensed consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and

• Note 17, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements for further discussion of:

◦Guarantees issued and credit facilities available;

◦Other guarantees; and

◦Routing brokerage activities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of our operating, investing and financing activities, we are exposed to market risks such as interest rate risk and foreign currency exchange rate risk. We are also exposed to credit risk as a result of our normal business activities.

We have implemented policies and procedures to measure, manage, monitor and report risk exposures, which are reviewed regularly by management and the board of directors. We identify risk exposures and monitor and manage such risks on a daily basis.

We perform sensitivity analyses to determine the effects of market risk exposures. We may use derivative instruments solely to hedge financial risks related to our financial positions or risks that are incurred during the normal course of business. We do not use derivative instruments for speculative purposes.

Interest Rate Risk

We are subject to the risk of fluctuating interest rates in the normal course of business. Our exposure to market risk for changes in interest rates relates primarily to our financial investments and debt obligations, which are discussed below.

Financial Investments

As of September 30, 2024, our investment portfolio was primarily comprised of highly rated European government debt securities, which pay a fixed rate of interest. These securities are subject to interest rate risk and the fair value of these securities will decrease if market interest rates increase. If market interest rates were to increase immediately and uniformly by a hypothetical 100 basis points from levels as of September 30, 2024, the fair value of this portfolio would decline by $2 million.

Debt Obligations

As of September 30, 2024, substantially all of our debt obligations were fixed-rate obligations. Interest rates on certain tranches of notes are subject to adjustment to the extent our debt rating is downgraded below investment grade, as further discussed in Note 8, “Debt Obligations,” to the condensed consolidated financial statements. While changes in interest rates will have no impact on the interest we pay on fixed-rate obligations, we are exposed to changes in interest rates as a result of the borrowings under our 2022 Revolving Credit Facility, as this facility has a variable interest rate. We are also exposed to changes in interest rates as a result of the amounts outstanding from the sale of commercial paper under our commercial paper program, which have variable interest rates. As of September 30, 2024, there were no outstanding borrowings under our 2022 Revolving Credit Facility or commercial paper program.

We may utilize interest rate swap agreements to achieve a desired mix of variable and fixed rate debt.

Foreign Currency Exchange Rate Risk

We are subject to foreign currency exchange rate risk. Our primary transactional exposure to foreign currency denominated revenues less transaction-based expenses and operating income for the three and nine months ended September 30, 2024 is presented in the following tables:


	Euro	Swedish Krona	Canadian Dollar	Other Foreign Currencies	U.S. Dollar	Total
	(in millions, except currency rate)
Three Months Ended September 30, 2024
Average foreign currency rate to the U.S. dollar	1.099	0.096	0.733	#	N/A	N/A
Percentage of revenues less transaction-based expenses	7.7%	3.3%	0.6%	4.1%	84.3%	100.0%
Percentage of operating income	5.8%	(2.6)%	(7.8)%	(14.6)%	119.2%	100.0%
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses	$(9)	$(4)	$(1)	$(4)	$—	$(18)
Impact of a 10% adverse currency fluctuation on operating income	$(3)	$(1)	$(3)	$(7)	$—	$(14)


	Euro	Swedish Krona	Canadian Dollar	Other Foreign Currencies	U.S. Dollar	Total
	(in millions, except currency rate)
Nine Months Ended September 30, 2024
Average foreign currency rate to the U.S. dollar	1.081	0.095	0.736	#	N/A	N/A
Percentage of revenues less transaction-based expenses	8.1%	3.5%	0.7%	3.7%	84.0%	100.0%
Percentage of operating income	12.3%	(5.4)%	(8.4)%	(13.4)%	114.9%	100.0%
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses	$(28)	$(12)	$(2)	$(13)	$—	$(55)
Impact of a 10% adverse currency fluctuation on operating income	$(16)	$(7)	$(11)	$(17)	$—	$(51)

__________

# Represents multiple foreign currency rates.

N/A Not applicable.

The adverse impacts shown in the preceding tables should be viewed individually by currency and not in aggregate due to the correlation between changes in exchange rates for certain currencies.

Our investments in foreign subsidiaries are exposed to volatility in currency exchange rates through translation of the foreign subsidiaries’ net assets or equity to U.S. dollars. Substantially all of our foreign subsidiaries operate in functional currencies other than the U.S. dollar. The financial statements of these subsidiaries are translated into U.S. dollars for consolidated reporting using a current rate of exchange, with net gains or losses recorded in accumulated other comprehensive loss within stockholders’ equity in the Condensed Consolidated Balance Sheets.

Our primary exposure to net assets in foreign currencies as of September 30, 2024 is presented in the following table:


	Net Assets		Impact of a 10% Adverse Currency Fluctuation
	(in millions)
Swedish Krona	$	2,961	$	(296)
British Pound	153		(15)
Norwegian Krone	143		(14)
Canadian Dollar	119		(12)
Australian Dollar	107		(11)

In the table above, Swedish Krona includes goodwill of $2,210 million and intangible assets, net of $482 million.

Credit Risk

Credit risk is the potential loss due to the default or deterioration in credit quality of customers or counterparties. We are exposed to credit risk from third parties, including customers, counterparties and clearing agents. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. We limit our exposure to credit risk by evaluating the counterparties with which we make investments and execute agreements. For our investment portfolio, our objective is to invest in securities to preserve principal while maximizing yields, without significantly increasing risk. Credit risk associated with investments is minimized substantially by ensuring that these financial assets are placed with governments which have investment grade ratings, well-capitalized financial institutions and other creditworthy counterparties.

Our subsidiary, Nasdaq Execution Services, may be exposed to credit risk due to the default of trading counterparties in connection with the routing services it provides for our trading customers. System trades in cash equities routed to other market centers for members of our cash equity exchanges are routed by Nasdaq Execution Services for clearing to the NSCC. In this function, Nasdaq Execution Services is to be neutral by the end of the trading day, but may be exposed to intraday risk if a trade extends beyond the trading day and into the next day, thereby leaving Nasdaq Execution Services susceptible to counterparty risk in the period between accepting the trade and routing it to the clearinghouse. In this interim period, Nasdaq Execution

Services is not novating like a clearing broker but instead is subject to the short-term risk of counterparty failure before the clearinghouse enters the transaction. Once the clearinghouse officially accepts the trade for novation, Nasdaq Execution Services is legally removed from trade execution risk. However, Nasdaq has membership obligations to NSCC independent of Nasdaq Execution Services’ arrangements.

Pursuant to the rules of the NSCC and Nasdaq Execution Services’ clearing agreement, Nasdaq Execution Services is liable for any losses incurred due to a counterparty or a clearing agent’s failure to satisfy its contractual obligations, either by making payment or delivering securities. Adverse movements in the prices of securities that are subject to these transactions can increase our credit risk. However, we believe that the risk of material loss is limited, as Nasdaq Execution Services’ customers are not permitted to trade on margin and NSCC rules limit counterparty risk on self-cleared transactions by establishing credit limits and capital deposit requirements for all brokers that clear with NSCC. Historically, Nasdaq Execution Services has never incurred a liability due to a customer’s failure to satisfy its contractual obligations as counterparty to a system trade. Credit difficulties or insolvency, or the perceived possibility of credit difficulties or insolvency, of one or more larger or visible market participants could also result in market-wide credit difficulties or other market disruptions.

We have credit risk related to transaction and subscription-based revenues that are billed to customers on a monthly or quarterly basis, in arrears. Our potential exposure to credit losses on these transactions is represented by the receivable balances in our Condensed Consolidated Balance Sheets. We review and evaluate changes in the status of our counterparties’ creditworthiness. Credit losses such as those described above could adversely affect our consolidated financial position and results of operations.

We also are exposed to credit risk through our clearing operations with Nasdaq Clearing. See Note 14, “Clearing Operations,” to the condensed consolidated financial statements for further discussion. Our clearinghouse holds material amounts of clearing member cash deposits, which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. While we seek to achieve a reasonable rate of return, we are primarily concerned with preservation of capital and managing the risks associated with these deposits. As the clearinghouse may pass on interest revenues (minus costs) to the members, this could include negative or reduced yield due to market conditions. The following is a summary of the risks associated with these deposits and how these risks are mitigated.

•Credit Risk. When the clearinghouse has the ability to hold cash collateral at a central bank, the clearinghouse utilizes its access to the central bank system to minimize credit risk exposures. When funds are not held at a central bank, we seek to substantially mitigate credit risk by ensuring that investments are primarily placed in large, highly rated financial institutions, highly rated government debt instruments and other creditworthy counterparties.

•Liquidity Risk. Liquidity risk is the risk a clearinghouse may not be able to meet its payment obligations in the right currency, in the right place and the right time. To mitigate this risk, the clearinghouse monitors liquidity requirements closely and maintains funds and assets in a manner which minimizes the risk of loss or delay in the access by the clearinghouse to such funds and assets. For example, holding funds with a central bank where possible or investing in highly liquid government debt instruments serves to reduce liquidity risks.

•Interest Rate Risk. Interest rate risk is the risk that interest rates rise causing the value of purchased securities to decline. If we were required to sell securities prior to maturity, and interest rates had risen, the sale of the securities might be made at a loss relative to the latest market price. Our clearinghouse seeks to manage this risk by making short term investments of members’ cash deposits. In addition, the clearinghouse investment guidelines allow for direct purchases or repurchase agreements with short dated maturities of high quality sovereign debt (for example, European government and U.S. Treasury securities), central bank certificates and multilateral development bank debt instruments.

•Security Issuer Risk. Security issuer risk is the risk that an issuer of a security defaults on its payment when the security matures. This risk is mitigated by limiting allowable investments and collateral under reverse repurchase agreements to high quality sovereign, government agency or multilateral development bank debt instruments.

Item 4. Controls and Procedures

Disclosure controls and procedures.

Nasdaq’s management, with the participation of Nasdaq’s Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of Nasdaq’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, Nasdaq’s Chief Executive Officer and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, Nasdaq’s disclosure controls and procedures are effective.

Changes in internal control over financial reporting. There have been no changes in Nasdaq’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, Nasdaq’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, if any, see “Legal and Regulatory Matters” of Note 17, “Commitments, Contingencies and Guarantees,” to the condensed consolidated financial statements, which is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under “Risk Factors” in our most recent Form 10-K. These risks could materially and adversely affect our business, financial condition and results of operations. These risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Share Repurchase Program

See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended September 30, 2024:


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
July 2024
Share repurchase program	1,369,507	$	63.97	1,369,507	$	1,745

Employee transactions	33,935	$	59.76	N/A	N/A
August 2024
Share repurchase program	—	$	—	—	$	1,745

Employee transactions	1,143	$	68.10	N/A	N/A
September 2024
Share repurchase program	—	$	—	—	$	1,745

Employee transactions	614	$	71.8	N/A	N/A
Total Quarter Ended September 30, 2024
Share repurchase program	1,369,507	$	63.97	1,369,507	$	1,745

Employee transactions	35,692	$	60.23	N/A	N/A

In the preceding table:

•N/A - Not applicable.

•See “Share Repurchase Program,” of Note 11, “Nasdaq Stockholders’ Equity,” to the condensed consolidated financial statements for further discussion of our share repurchase program.

•Employee transactions represents shares surrendered to us to satisfy tax withholding obligations arising from the vesting of restricted stock and PSUs previously issued to employees.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended September 30, 2024, none of the Company’s directors or officers , or modified a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408 of Regulation S-K) except as follows and each of which is intended to satisfy the affirmative defense of Rule 10b5-1(c): (i) , , , a Rule 10b5-1 trading plan for the sale of up to shares of our common stock, subject to certain conditions and which expires on , (ii) , , , a Rule 10b5-1 trading plan for the sale of up to shares of our common stock, subject to certain conditions and which expires on and (iii) , , , a Rule 10b5-1 trading plan for the sale of (a) up to shares of our common stock and (b) after an aggregate of shares of our common stock vest on April 1, 2025 and April 3, 2025, any shares remaining after the applicable number of shares of common stock are forfeited to satisfy tax obligations, subject to certain conditions and which expires on .

Item 6. Exhibits


Exhibit Number

1 0.1						Amendment No. 3 to Amended and Restated Credit Agreement, dated as of August 2, 2024, among Nasdaq, Inc., a Delaware corporation, the lenders party thereto and Bank of America, N.A., as administrative agent.

31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”).

31.2						Certification of Executive Vice President and Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley.

32.1						Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley.

101						The following materials from the Nasdaq, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023; (ii) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023; (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023; and (vi) notes to condensed consolidated financial statements.

104						Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on October 29, 2024.


Nasdaq, Inc.
(Registrant)

By:			/s/ Adena T. Friedman
Name:			Adena T. Friedman
Title:			Chief Executive Officer
Date:			October 29, 2024


By:			/s/ Sarah Youngwood
Name:			Sarah Youngwood
Title:			Executive Vice President and Chief Financial Officer
Date:			October 29, 2024

NASDAQ, INC. - Quarter Report: 2024 September (Form 10-Q)

Similar companies