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

____________

(1)

See accompanying notes to condensed consolidated financial statements.

Nasdaq, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

(in millions)

Common stock

Additional paid-in capital

Beginning balance

Share repurchase program

—

()

Share-based compensation

Ending balance

Common stock in treasury, at cost

Beginning balance

()

Other employee stock activity

—

()

Ending balance

()

Accumulated other comprehensive loss

Beginning balance

()

Other comprehensive loss

()

Ending balance

()

Retained earnings

Beginning balance

Net income attributable to Nasdaq

Cash dividends declared and paid

()

Ending balance

Total Nasdaq stockholders’ equity

Noncontrolling interests

Beginning balance

Net activity related to noncontrolling interests

()

Ending balance

Total Equity

% of Regulatory Technology revenues, related to AxiomSL, were recognized at a point in time and % of Capital Markets Technology revenues, related to Calypso, were recognized at a point in time. The remaining Financial Technology revenues were recognized over time. For the three months ended March 31, 2024 and 2023 approximately %, and %, respectively, of Market Services revenues were recognized at a point in time and %, and %, respectively, were recognized over time.

Contract Balances

Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our Condensed Consolidated Balance Sheets as receivables, which are net of allowance for doubtful accounts of $ million as of March 31, 2024 and December 31, 2023. There were no material upward or downward adjustments to the allowance during the three months ended March 31, 2024. We do not have obligations for warranties, returns or refunds to customers.

For the majority of our contracts with customers, except for our market technology and listing services contracts, our performance obligations range from to and there is no significant variable consideration.

Deferred revenue is the only significant contract asset or liability as of March 31, 2024. Deferred revenue represents consideration received that is yet to be recognized as revenue for unsatisfied performance obligations. Deferred revenue primarily represents our contract liabilities related to our fees for Annual and Initial Listings, Workflow & Insights, Financial Crime Management Technology, Regulatory Technology and Capital Markets Technology contracts. See Note 7, “Deferred Revenue,” for our discussion on deferred revenue balances, activity, and expected timing of recognition.

We do not provide disclosures about transaction price allocated to unsatisfied performance obligations if contract durations are less than one year. For our initial listings, the transaction price allocated to remaining performance obligations is included in deferred revenue, and therefore not included below. For our Financial Crime Management Technology, Regulatory Technology, Capital Markets Technology and Workflow & Insights contracts, the portion of transaction price allocated to unsatisfied performance obligations is presented in the table below. To the extent consideration has been received, unsatisfied performance obligations would be included in the table below as well as deferred revenue.

$ $ $ $ 2025 2026 2027 2028 2029+ Total$ $ $ $ $

billion in cash (subject to customary post-closing adjustments) and a fixed amount of million shares of Nasdaq common stock, based on the volume-weighted average price per share over consecutive trading days prior to signing. Nasdaq issued approximately $ billion of debt, and entered into a $ million term loan, and used the proceeds for the cash portion of the consideration. See “Senior Unsecured Notes” and “2023 Term Loan” in “Financing of the Adenza Acquisition” of Note 8, “Debt Obligations,” for further discussion.

million, which comprises the following:


			(in millions, except price per share)
Shares of Nasdaq common stock issued
Closing price per share of Nasdaq common stock on November 1, 2023			$
Fair value of equity portion of the purchase consideration			$
Cash consideration			$
Total purchase consideration			$

At the closing of the transaction, the million shares of Nasdaq common stock were issued to Thoma Bravo, the sole shareholder of Adenza, and represented approximately % of the outstanding shares of Nasdaq. For further discussion on the rights of common stockholders refer to “Common Stock” of Note 11, “Nasdaq Stockholders’ Equity.” Adenza is part of our Financial Technology segment.

Acquired intangible assets

Receivables, net

Other net assets acquired

Cash and cash equivalents

Accrued personnel costs

()

Deferred revenue

()

Deferred tax liability on acquired intangible assets

()

Total purchase consideration

Intangible Assets

$ $ $ Discount rate used % % %Estimated average useful life years years years

Customer Relationships

Customer relationships represent the contractual relationships with customers.

Methodology

Customer relationships were valued using the income approach, specifically an excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.

years.

Technology

As part of our acquisition of Adenza, we acquired developed technology relating to AxiomSL and Calypso.

Methodology

The developed technology was valued using the income approach, specifically the relief-from-royalty method, which is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The royalty rate is applied to the projected revenue over the expected remaining life of the intangible asset to estimate royalty savings. The net after-tax royalty savings are calculated for each year in the remaining economic life of the technology and discounted to present value.

Discount Rate

The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the developed technology relative to the overall business as discussed above in “Customer Relationships.”

Trade Name

As part of our acquisition of Adenza, we acquired the AxiomSL and Calypso trade names. The trade names are recognized in the industry and carry a reputation for quality. As such, the reputation and positive recognition embodied in the trade names is a valuable asset to Nasdaq.

Methodology

The AxiomSL and Calypso trade names were valued using the income approach, specifically the relief-from-royalty method as discussed above in “Technology.”

Discount Rate

The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the trade name relative to the overall business as discussed above in “Customer Relationships.”

Foreign currency translation adjustments()Balance at March 31, 2024$

Financial Technology

Balance at December 31, 2023$ Foreign currency translation adjustments()Balance at March 31, 2024$

Market Services

Balance at December 31, 2023$ Foreign currency translation adjustments()Balance at March 31, 2024$ TotalBalance at December 31, 2023$ Foreign currency translation adjustments()Balance at March 31, 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 months ended March 31, 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.

$ 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 months ended March 31, 2024 and 2023.

million as of March 31, 2024) of acquired finite-lived intangible assets as of March 31, 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 March 31, 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 March 31, 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 months ended March 31, 2024 and 2023.

Net income recognized from our equity interest in the earnings and losses of these equity method investments, primarily OCC, was $ million and $ million for the three months ended March 31, 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.

$ $ $ $ $ $ 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 nine months of 2024.

$ Long-term debt - senior unsecured notes:

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

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$ $

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. As of March 31, 2024, we had $ million outstanding under the commercial paper program.

million for the three months ended March 31, 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 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 three months ended March 31, 2024, the impact of translation decreased the U.S. dollar value of our Euro denominated notes by $ million.

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 “2023 Acquisition,” of 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. Under the 2023 Term Loan, borrowings bear interest on the principal amount outstanding at a variable interest rate based on the SOFR plus an applicable margin that varies with Nasdaq’s credit rating. 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. We made a partial repayment during the fourth quarter of 2023 and paid the remaining balance in the first quarter of 2024.

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 March 31, 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 months ended March 31, 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.

The 2022 Revolving Credit Facility includes an option for Nasdaq to increase the available aggregate amount by up to $ 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 for one subsidiary. These credit facilities, in aggregate, totaled $ million as of March 31, 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 months ended March 31, 2024 and 2023.

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

Debt Covenants

As of March 31, 2024, we were in compliance with the covenants of all of our debt obligations.

% of the first % of eligible employee contributions.

Pension and Supplemental Executive Retirement Plans

Prior to 2024, we maintained non-contributory, defined-benefit pension plans, non-qualified SERPs for certain senior executives and other post-retirement benefit plans for eligible employees in the U.S. Most employees outside the U.S. are covered by local retirement plans or by applicable social laws. Benefits under social laws are generally expensed in the periods in which the costs are incurred.

In June 2023, we terminated our U.S. pension plan and took steps to wind down the plan and transfer the resulting liability to an insurance company which started in 2023 and was completed in 2024. These steps included settling all future obligations under our U.S. pension plan through a combination of lump sum payments to eligible, electing participants (completed in 2023) and the transfer of any remaining benefits to a third-party insurance company through a group annuity contract. In connection with the plan termination and partial settlement, a pre-tax loss of $ 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 loss 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.

10.

% discount for the ESPP for the three months ended March 31, 2024 and 2023, which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:

2023

Common Shares Available Under Our Equity Plan

As of March 31, 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.

In the table above, the granted amount primarily includes additional awards granted based on overachievement of performance parameters.

As of March 31, 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 three months ended March 31, 2024. There were stock options exercised for the three months ended March 31, 2024 and 2023.

$ $

Exercisable at March 31, 2024

$ $

As of March 31, 2024, the aggregate pre-tax intrinsic value of the outstanding and exercisable stock options in the above table was $ million and represents the difference between our closing stock price on March 31, 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 March 31, 2024 and 2023, million outstanding stock options were exercisable and the exercise price was $.

million shares of our common stock were available for future issuance as of March 31, 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 March 31, 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 March 31, 2024, the remaining aggregate authorized amount under the existing share repurchase program was $ billion. There were share repurchased under our share repurchase program in the first quarter of 2024.

These repurchases may be made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques, an accelerated share repurchase program or otherwise, as determined by our management. The repurchases are primarily funded from existing cash balances. The share repurchase program may be suspended, modified or discontinued at any time, and has no defined expiration date.

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.

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 March 31, 2024 and December 31, 2023, shares of preferred stock were issued or outstanding.

Cash Dividends on Common Stock

March 14, 2024$ March 28, 2024$

The total amount paid of $ million was recorded in retained earnings within Nasdaq’s stockholders’ equity in the Condensed Consolidated Balance Sheets at March 31, 2024.

In April 2024, the board of directors approved a regular quarterly cash dividend of $ per share on our outstanding common stock, which reflects an increase of % from our most recent quarterly cash dividend of $ per share. The dividend is payable on June 28, 2024 to shareholders of record at the close of business on June 14, 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: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 months ended March 31, 2024 and 2023.

13.

$ $ $

State-owned enterprises and municipal securities

Swedish mortgage bonds

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.

We have certain investments, primarily our investment in OCC, which are accounted for under the equity method of accounting. We have elected the measurement alternative for the majority of our equity securities, which primarily represent various strategic investments made through our corporate venture program. See “Equity Method Investments,” and “Equity Securities,” of Note 6, “Investments,” for further discussion.

billion as of March 31, 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 March 31, 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.

Default Fund Contributions and Margin Deposits

$ $ 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.

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


	March 31, 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	$	$

In the table above, the change from December 31, 2023 to March 31, 2024 includes currency translation adjustments of $ million for restricted cash and cash equivalents and $ million for investments.

For the three months ended March 31, 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 March 31, 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.

liability was recorded as of March 31, 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 March 31, 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 March 31, 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.

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 three months ended March 31, 2024 and 2023, respectively.

Resale and Repurchase Agreements Contracts Outstanding and Cleared

The outstanding contract value of resale and repurchase agreements was $ billion and $ billion as of March 31, 2024 and 2023, respectively. The total number of resale and repurchase agreements contracts cleared was and for the three months ended March 31, 2024 and 2023, respectively.

15.

$ Liabilities:Current lease liabilitiesOther current liabilities$ $ Non-current lease liabilitiesOperating lease liabilities Total lease liabilities$ $ $ )() $

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

In the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result of this ongoing review, for the three months ended March 31, 2023, we recorded impairment charges of $ 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. The increase from 2023 related to a new lease signed for our European headquarters in the first quarter of 2024. 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 %

The following table provides supplemental cash flow information related to Nasdaq’s operating leases:


	Three Months Ended March 31,
	2024	2023
	(in millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	$

Lease assets obtained in exchange for operating lease liabilities	$	$

16.

$ Effective tax rate % %

17.

million as of March 31, 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 March 31, 2024 and $ million as of December 31, 2023 in available liquidity, of which was utilized.

listed companies, breached its obligation under certain provisions of the Market Abuse Regulation and the Swedish Securities Market Act. The SFSA review remains ongoing, and Nasdaq Stockholm AB is cooperating fully, providing applicable responses and engaged in ongoing communications with the SFSA.

Other Matters

Except as disclosed above and in our prior reports filed under the Exchange Act, we are not currently a party to any litigation or proceeding that we believe could have a material adverse effect on our business, consolidated financial condition, or operating results. However, from time to time, we have been threatened with, or named as a defendant in, lawsuits or involved in regulatory proceedings.

In the normal course of business, Nasdaq discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiries. Management believes that censures, fines, penalties or other sanctions that could result from any ongoing examinations or inquiries will not have a material impact on its consolidated financial position or results of operations. However, we are unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential fines, penalties or injunctive or other equitable relief, if any, that may result from these matters.

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 Technology

Total revenues Operating income

Market Services

Total 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$ $

are allocated to Corporate Items in our management reports as we believe they do not contribute to a meaningful evaluation of a particular segment’s ongoing operating performance. Management does not consider these items for the purpose of evaluating the performance of our segments or their managers or when making decisions to allocate resources. Therefore, we believe performance measures excluding the below items provide management with a useful representation of our segments’ ongoing activity in each period. These items, which are presented in the table below, include the following:

•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 segments, and the relative operating performance of the segments between periods.

$ 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$()$()

19.

million in pre-tax charges principally related to employee-related costs, contract terminations, real estate impairments and other related costs. We expect to achieve benefits primarily in the form of expense and revenue synergies. Costs related to the 2023 Adenza Restructuring program will be recorded as restructuring charges in the Condensed Consolidated Statements of Income.

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 connection with the program, we expect to incur $ million to $ million in pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a period. Costs related to the divisional alignment program will be recorded as restructuring charges in the Condensed Consolidated Statements of Income.

$ Consulting services

Divisional realignment

Employee-related costs

Adenza restructuring

Divisional realignment

Other

Adenza restructuring

Divisional realignment

Total restructuring charges$ $ Total Program Costs Incurred

Adenza restructuring

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.

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.

First Quarter 2024 and Recent Developments

• ETP AUM linked to Nasdaq indices reached record levels, ending the first quarter at $519 billion.

•Nasdaq maintained its leadership among exchanges in U.S. multi-listed options. In the first quarter of 2024, Nasdaq led all exchanges during the period in total volume traded for U.S. multi-listed equity options. Nasdaq also achieved record revenue in its proprietary index options franchise, driven by record trading volumes.

•In April 2024, the board of directors approved a regular quarterly cash dividend of $0.24 per share on our outstanding common stock, which reflects an increase of 9% from our most recent quarterly cash dividend of $0.22 per share.

•For the three months ended March 31, 2024, we returned $127 million to shareholders through dividend payments.

Nasdaq’s Operating Results

The following table summarizes our financial performance for the three months ended March 31, 2024 compared to the same period in 2023. The comparability of our results of operations between reported periods is impacted by the acquisition of Adenza in November 2023. See “2023 Acquisition,” of 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 March 31, 2024 and 2023 (in millions):

Segment Operating Results

The following table presents our revenues by segment:

																														2023

%
%
%
%
%
%
%
%

The following chart presents our Capital Access Platforms, Financial Technology and Market Services segments as a percentage of our total revenues, less transaction-based expenses. 267

CAPITAL ACCESS PLATFORMS

The following table presents revenues from our Capital Access Platforms segment:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
%
%

Data & Listing Services Revenues

The following table presents key drivers from our Data & Listing Services business:


	Three Months Ended March 31,
	2024		2023
IPOs
The Nasdaq Stock Market	27		40
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1		2
Total new listings
The Nasdaq Stock Market	79		81
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	2		7
Number of listed companies
The Nasdaq Stock Market	4,020		4,163
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	1,203		1,250













	As of March 31,
	2024		2023
ARR (in millions)	$	665	$	673

In the table above:

•Number of total listed companies on The Nasdaq Stock Market for the three months ended March 31, 2024 and 2023 included 619 and 539 ETPs, respectively. For the three months ended March 31, 2024 and 2023, IPOs included 5 and 10 SPACs, 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 increased in the first quarter of 2024 compared with the same period in 2023 due to new listings and an increase in proprietary data revenues due to our international expansion, partially offset by the impact of 2023 delistings.

Index Revenues

The following table presents key drivers from our Index business:


	As of or Three Months Ended March 31,
	2024		2023
Number of licensed ETPs	361		387
TTM change in period end ETP AUM tracking Nasdaq indices (in billions)
Beginning balance	$	366	$	401
Net appreciation (depreciation)	124		(57)
Net impact of ETP sponsor switches	(17)		(1)
Net inflows	46		23
Ending balance	$	519	$	366
Quarterly average ETP AUM tracking Nasdaq indices (in billions)	$	492	$	341

ARR (in millions)	$	74	$	71

In the table above, TTM represents trailing twelve months.

Index revenues increased in the first quarter of 2024 compared with the same period in 2023 primarily due to higher AUM in exchange traded products linked to Nasdaq indices, strong futures capture and trading volume of contracts linked to the Nasdaq-100 Index and 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 March 31
	2024		2023
	(in millions)
ARR	$	481	$	458
Quarterly annualized SaaS revenues	411		386

Workflow & Insights revenues increased in the first quarter of 2024 compared with the same period 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 table presents revenues from our Financial Technology segment:



















	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
%
%

Financial Crime Management Technology Revenues

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


	As of or Three Months Ended March 31
	2024		2023
	(in millions)
ARR and Quarterly annualized SaaS revenues	$	243	$	196

Financial Crime Management Technology revenues increased in the first quarter of 2024 compared to the same period in 2023 primarily due to an increase in demand related to 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 Regulatory Technology business:


	As of or Three Months Ended March 31
	2024		2023
	(in millions)
ARR	$	328	$	125
Quarterly annualized SaaS revenues	168		110

Regulatory Technology revenues increased in the first quarter of 2024 compared to the same period in 2023 primarily due to the inclusion of revenues from AxiomSL due to our acquisition of Adenza.

Capital Markets Technology Revenues

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


	As of or Three Months Ended March 31
	2024		2023
	(in millions)
ARR	$	821	$	506
Quarterly annualized SaaS revenues	110		37

Capital Markets Technology revenues increased in the first quarter of 2024 compared with the same period in 2023. The increase was primarily due to the inclusion of revenues from Calypso due to our acquisition of Adenza and higher trade management services revenues mainly driven by demand for colocation and connectivity services and pricing, partially offset by lower market technology revenues related to lower professional fees.

MARKET SERVICES

The following table presents revenues from our Market Services segment:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
Transaction-based expenses:
%
%
%

Our Market Services segment includes equity derivatives trading, cash equity trading, Nordic fixed income trading & clearing, U.S. Tape plans and other revenues. The following table presents net revenues by product from our Market Services segment:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
%
%
%

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

U.S. Equity Derivative Trading

The following table presents 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:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
Transaction-based expenses:
%
%
%
%

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 decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to lower average SEC fee rates. 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 March 31,
	2024		2023
U.S. equity options
Total industry average daily volume (in millions)	43.3		42.4
Nasdaq PHLX matched market share	10.3	%	11.1	%
The Nasdaq Options Market matched market share	5.4	%	7.1	%
Nasdaq BX Options matched market share	2.2	%	3.3	%
Nasdaq ISE Options matched market share	6.3	%	5.8	%
Nasdaq GEMX Options matched market share	2.5	%	2.0	%
Nasdaq MRX Options matched market share	2.5	%	1.5	%
Total matched market share executed on Nasdaq’s exchanges	29.2	%	30.8	%

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues less transaction-based expenses decreased in the first quarter of 2024 compared with the same period in 2023. The decrease in U.S. equity derivative trading revenues was primarily due to lower overall matched market share executed on Nasdaq’s exchanges, partially offset by a higher gross capture rate and higher industry volumes. The decrease in U.S. equity derivative trading revenues less transaction-based expenses was primarily due to lower capture and lower overall matched market share executed on Nasdaq’s exchanges, partially offset by higher industry volumes.

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

Cash Equity Trading Revenues

The following table presents 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:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
Transaction-based expenses:
%
%
%
%

See the discussion in "U.S. Equity Derivative Trading" for an explanation of Section 31 fees for the first quarter of 2024 as compared with the same period in 2023. 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 March 31,
	2024			2023
Total U.S.-listed securities
Total industry average daily share volume (in billions)	11.8			11.8
Matched share volume (in billions)	116.7			121.8
The Nasdaq Stock Market matched market share	15.7		%	15.8		%
Nasdaq BX matched market share	0.4		%	0.4		%
Nasdaq PSX matched market share	0.2		%	0.5		%
Total matched market share executed on Nasdaq’s exchanges	16.3		%	16.7		%
Market share reported to the FINRA/Nasdaq Trade Reporting Facility	41.4		%	31.6		%
Total market share	57.7		%	48.3		%
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of equity trades executed on Nasdaq’s exchanges	666,408			787,715
Total average daily value of shares traded (in billions)	$	4.7		$	5.3
Total market share executed on Nasdaq’s exchanges	71.7		%	68.9		%

In the table 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 less transaction-based expenses decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to lower overall U.S. matched market share executed on Nasdaq’s exchanges.

Transaction rebates decreased in the first quarter of 2024 compared with the same period in 2023. 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. The decrease was primarily due to lower U.S. matched market share executed on Nasdaq's exchanges.

U.S. Tape Plans

The following table presents revenues from our U.S. Tape plans business:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%

U.S. Tape plans revenues decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to lower industry-wide usage volume as well as 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 table presents revenue and a key driver from our Other business:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%

In the table above, other includes transaction rebates of $5 million and $6 million for the three months ended March 31, 2024 and 2023, respectively.


	Three Months Ended March 31,
	2024	2023
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options and futures contracts	241,665	344,141

In the table 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 decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to lower European equity derivatives trading volumes.

OTHER REVENUES

For the three months ended March 31, 2024 and 2023, other revenues include revenues related to our European power trading and clearing business, following our announcement in June 2023 to sell this business to the European Energy Exchange, subject to regulatory approval. Prior to June 2023, these revenues were included in our Market Services and Capital Access Platforms segments.

EXPENSES

Operating Expenses

The following table presents our operating expenses:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
%
%
%
%
%
%
%
%
%

The increase in compensation and benefits expense for the first quarter of 2024 compared with the same period in 2023 was primarily driven by increased headcount as well as a pre-tax loss 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 8,568 employees as of March 31, 2024 from 6,486 as of March 31, 2023, primarily due to our acquisition of Adenza.

Professional and contract services expense remained relatively flat in the first quarter of 2024 compared with the same period in 2023.

Computer operations and data communications expense increased in the first quarter of 2024 compared with the same period in 2023 primarily due to an increase in expenses related to the inclusion of Adenza in the first quarter of 2024 and increased investment in technology, primarily higher costs related to our cloud initiatives and software.

Occupancy expense decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to $12 million in impairment charges and exit related costs recorded in the first quarter of 2023 following the abandonment of leased office space.

General, administrative and other expense increased in the first quarter of 2024 compared with the same period in 2023 primarily due to an insurance recovery related to a legal matter in the first quarter of 2023 and increased expenses related to the inclusion of Adenza in the first quarter of 2024.

Marketing and advertising expense remained relatively flat in the first quarter of 2024 compared with the same period in 2023.

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

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. The increase for the three months ended March 31, 2024 compared with the same period in 2023 primarily reflects higher expenses related to the Adenza acquisition.

Restructuring charges increased in the first quarter of 2024 compared with the same period in 2023 as a result of charges from our Adenza restructuring program. See Note 19, “Restructuring Charges,” to the condensed consolidated financial statements for further discussion. By 2025, we expect to achieve benefits of the 2022 divisional alignment program through combined annual run-rate operating efficiencies and revenue synergies of approximately $30 million annually. We expect to achieve $80 million of net expense synergies two years following the closing of the Adenza acquisition.

Non-operating Income and Expenses

The following table presents our non-operating income and expenses:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%

%
%

________________

N/M - Not meaningful

The following table presents our interest expense:


	Three Months Ended March 31,
	2024	2023
	(in millions)
%
%
%

________________

N/M - Not meaningful

Interest income remained flat in the first quarter of 2024 compared with the same period in 2023.

Interest expense increased in the first quarter 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.

Net income from unconsolidated investees decreased in the first quarter of 2024 compared with the same period in 2023 primarily due to lower income recognized from our equity method investment in OCC. See “Equity Method Investments,” of Note 6, “Investments,” to the condensed consolidated financial statements for further discussion.

Tax Matters

The following table presents our income tax provision and effective tax rate:


	Three Months Ended March 31,
	2024		2023
	($ in millions)
%
Effective tax rate	25.3	%	24.0	%

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. 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:

•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. The increase in the first quarter of 2024 compared with the same period in 2023 primarily reflects costs related to the Adenza acquisition.

•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. 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 from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments, primarily our equity interest in OCC. 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 first quarter of 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 first quarter of 2023, this primarily included insurance recoveries related to certain legal matters. The 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: In the first quarter of 2024, we recorded a pre-tax loss 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.

•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.

The following table presents 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 March 31,
	2024			2023
	(in millions, except per share amounts)
U.S. GAAP net income attributable to Nasdaq	$	234		$	302
Non-GAAP adjustments:
Amortization expense of acquired intangible assets	123			38
Merger and strategic initiatives expense	9			2
Restructuring charges	26			18
Lease asset impairments	—			17

Net income from unconsolidated investees	(3)			(14)
Legal and regulatory matters	2			(10)


Pension settlement charge	23			—

Other	—			1
Total non-GAAP adjustments	$	180		$	52
Total non-GAAP tax adjustments	(47)			(15)
Total non-GAAP adjustments, net of tax	$	133		$	37
Non-GAAP net income attributable to Nasdaq	$	367		$	339

U.S. GAAP effective tax rate	25.3		%	24.0		%
Total adjustments from non-GAAP tax rate	0.3		%	0.6		%
Non-GAAP effective tax rate	25.6		%	24.6		%

Weighted-average common shares outstanding for diluted earnings per share	578.9			494.8

U.S. GAAP diluted earnings per share	$	0.40		$	0.61
Total adjustments from non-GAAP net income	0.23			0.08
Non-GAAP diluted earnings per share	$	0.63		$	0.69

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:


	March 31, 2024		December 31, 2023
	(in millions)
Cash and cash equivalents	$	388	$	453

Financial investments	173		188
Working capital	(72)		71

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 March 31, 2024, our cash and cash equivalents of $388 million were primarily invested in money market funds, commercial paper, municipal bonds and bank deposits.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $206 million as of March 31, 2024 and $236 million as of December 31, 2023. The remaining balance held in the U.S. totaled $182 million as of March 31, 2024 and $217 million as of December 31, 2023.

Cash Flow Analysis

The following table summarizes the changes in cash flows:


	Three Months Ended March 31,
	2024		2023
Net cash provided by (used in):	(in millions)
Operating activities	$	530	$	565
Investing activities	(232)		(133)
Financing activities	(1,875)		(613)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(311)		29
Net decrease in cash and cash equivalents and restricted cash and cash equivalents	$	(1,888)	$	(152)
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period	7,118		6,994
Cash and cash equivalents, restricted cash and cash equivalents at end of period	$	5,230	$	6,842
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents	$	388	$	373
Restricted cash and cash equivalents	21		57
Restricted cash and cash equivalents (default funds and margin deposits)	4,821		6,412
Total	$	5,230	$	6,842

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 $35 million for the first quarter of 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 $(53) million, partially offset by an increase of $18 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 cash outflows in accounts payable and accrued expenses, primarily due to an increase in our accrued interest and interest paid relating to the senior unsecured notes issued in June 2023 in connection with the Adenza acquisition, as well as various other increased cash outflows impacting our working capital. This was partially offset by lower cash outflows from Section 31 fees payable primarily due to a lower Section 31 fee paid in the first quarter of 2024 as compared with the same period in 2023. Non-cash charges in the first quarter of 2024 primarily included $155 million of depreciation and amortization and $30 million of share-based compensation.

Net Cash Used in Investing Activities

Net cash used in investing activities for the three months ended March 31, 2024 primarily related to net purchases of investments related to default funds and margin deposits of $184 million, purchases of property and equipment of $39 million and $13 million from other investing activities, partially offset by proceeds from the sales and redemptions of trading securities, net, of $4 million.

Net cash used in investing activities for the three months ended March 31, 2023 primarily related to net purchases of investments related to default funds and margin deposits of $89 million, purchases of property and equipment of $40 million and net purchases of trading securities of $14 million, partially offset by proceeds of $10 million from other investing activities.

Net Cash Used in Financing Activities

Net cash used in financing activities for the three months ended March 31, 2024 primarily related to a decrease related to our default funds and margin deposits of $1,317 million, $340 million relating to repayment of the 2023 Term Loan, $127 million of dividend payments to our shareholders, $67 million from repayments of our commercial paper, net and $24 million of payments related to employee shares withheld for taxes.

Net cash used in financing activities for the three months ended March 31, 2023 primarily related to $317 million from repayments of our commercial paper, net, $159 million in repurchases of common stock, $98 million of dividend payments to our shareholders and $40 million of payments related to employee shares withheld for taxes.

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 $173 million as of March 31, 2024 and $188 million as of December 31, 2023. Of these securities, $160 million as of March 31, 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 March 31, 2024, our required regulatory capital of $120 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 March 31, 2024, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $24 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 March 31, 2024, our required regulatory capital of $35 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 March 31, 2024, other required regulatory capital of $16 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

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	March 31, 2024		December 31, 2023
Short-term debt:		(in millions)
Commercial paper		$	224	$	291
Total short-term debt		$	224	$	291
Long-term debt - senior unsecured notes:
2025 Notes	June 2025	$	498	$	497
2026 Notes	June 2026	499		499
2028 Notes	June 2028	992		991
2029 Notes	March 2029	644		658
2030 Notes	February 2030	643		658
2031 Notes	January 2031	645		645
2032 Notes	February 2032	801		819
2033 Notes	July 2033	659		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	(4)		(4)
Total long-term debt		$	9,765	$	10,163
Total debt obligations		$	9,989	$	10,454

For the three months ended March 31, 2024, the weighted average interest rate on our debt obligations was approximately 4.0%. 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 December 2022, Nasdaq amended and restated its previously issued $1.25 billion five-year revolving credit facility, with a new maturity date of December 16, 2027. 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 for one subsidiary. These European credit facilities, which are available in multiple currencies, totaled $180 million as of March 31, 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. Under the 2023 Term Loan, borrowings bear interest on the principal amount outstanding at a variable interest rate based on the SOFR plus an applicable margin that varies with Nasdaq’s debt rating. 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. We made a partial repayment during the fourth quarter 2023 and paid the remaining balance in the first quarter of 2024.

As of March 31, 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 March 31, 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 March 31, 2024, the fair value of this portfolio would decline by $3 million.

Debt Obligations

As of March 31, 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 and our commercial paper program as these facilities have a variable interest rate. As of March 31, 2024, we have $224 million of outstanding borrowings under our commercial paper program. A hypothetical 100 basis points increase in interest rates on our outstanding commercial paper would increase our annual interest expense by approximately $2 million based on borrowings as of March 31, 2024.

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 months ended March 31, 2024 is presented in the following table:


	Euro	Swedish Krona	Canadian Dollar	Other Foreign Currencies	U.S. Dollar	Total
	(in millions, except currency rate)
Three Months Ended March 31, 2024
Average foreign currency rate to the U.S. dollar	1.086	0.096	0.742	#	N/A	N/A
Percentage of revenues less transaction-based expenses	7.5%	3.7%	0.7%	3.2%	84.9%	100.0%
Percentage of operating income	14.8%	(3.3)%	(8.5)%	(12.0)%	109.0%	100.0%
Impact of a 10% adverse currency fluctuation on revenues less transaction-based expenses	$(8)	$(4)	$(1)	$(4)	$—	$(17)
Impact of a 10% adverse currency fluctuation on operating income	$(6)	$(1)	$(3)	$(5)	$—	$(15)

__________

# Represents multiple foreign currency rates.

N/A Not applicable.

The adverse impacts shown above 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 March 31, 2024 is presented in the following table:


	Net Assets		Impact of a 10% Adverse Currency Fluctuation
	(in millions)
Swedish Krona	$	2,829	$	283
Norwegian Krone	135		14
British Pound	151		15
Canadian Dollar	105		11
Australian Dollar	98		10
Euro	74		7

In the table above, Swedish Krona includes goodwill of $2,108 million and intangible assets, net of $467 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 March 31, 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 March 31, 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)
January 2024
Share repurchase program	—	$	—	—	$	1,890

Employee transactions	28,751	$	56.29	N/A	N/A
February 2024
Share repurchase program	—	$	—	—	$	1,890

Employee transactions	409,768	$	55.70	N/A	N/A
March 2024
Share repurchase program	—	$	—	—	$	1,890

Employee transactions	—	$	—	N/A	N/A
Total Quarter Ended March 31, 2024
Share repurchase program	—	$	—	—	$	1,890

Employee transactions	438,519	$	55.74	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 March 31, 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).

Item 6. Exhibits


Exhibit Number

4.1						Second Amendment to Nasdaq Stockholders’ Agreement, dated as of March 19, 2024, by and between Nasdaq, Inc. and Borse Dubai Limited (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 20, 2024).

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 March 31, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023; (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023; (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023; (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 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 May 2, 2024.


Nasdaq, Inc.
(Registrant)

By:			/s/ Adena T. Friedman
Name:			Adena T. Friedman
Title:			Chief Executive Officer
Date:			May 2, 2024


By:			/s/ Sarah Youngwood
Name:			Sarah Youngwood
Title:			Executive Vice President and Chief Financial Officer
Date:			May 2, 2024

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

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