Nasdaq (NDAQ) Q2 Results: What to Expect


SStock trader Nasdaq (NDAQ) hares were hit hard during this year’s market correction. This could be a buying opportunity for investors looking for a business model that not only features high growth rates, but also strong free cash flow and a decent dividend yield.

The company, home to some of the biggest names in tech, is expected to report its second-quarter fiscal 2022 results before the opening bell on Wednesday. Driven by its leadership position in trading technology and the stock market, Nasdaq’s revenues have grown impressively over the past decade, including a 10% increase in 2021 despite the adverse effects of the pandemic. His income not only comes from new registrations, re-registrations and trading volume, but he has access to a wealth of data that he can use to create new products and services.

Additionally, the Nasdaq has demonstrated a consistent ability to deal with market volatility in a way that other major exchanges have otherwise struggled with. The company’s investments in business technology, for example, have allowed it to quickly adapt to the rapid shift to digitalization and a global virtual world response during the pandemic. However, rising inflation, tighter monetary policy and fears of a recession have cast doubt on near-term growth expectations for some of the biggest names in tech.

The Nasdaq, however, has a well-diversified business that does not rely heavily on trading activity and market-making services. In the first quarter, about 74% of its revenue came from non-trading activities. The company has strategically grown its non-commercial services (the solutions segment) which has now delivered roughly twice the organic revenue growth since 2018. This approach allows the Nasdaq to hedge well against a market downturn. On Wednesday, investors will want to know if these factors are still in play for the quarter just ended and for the rest of the year.

In the three months ending in June, the New York-based company is expected to generate earnings of $1.93 per share on revenue of $881.83 million. That compares to the year-ago quarter where earnings were $1.90 per share on $846 million in revenue. For the full year, ending in December, earnings are expected to rise 4.7% to $7.84 per share from $7.56 a year ago, while annual revenue of $3.57 billion dollars would increase by 4.5% year over year.

Although the company is widely known for its stock trading business, Nasdaq’s revenue base consists of the Market Services segment (trading arm), Corporate Services, which offers listing services and relationship products investors, the Information Services segment, which provides and distributes exchange data, and market technology. These collective businesses are expected to generate higher profits year over year on the back of higher revenue for the quarter.

Over the past four quarters, the company has beaten consensus EPS estimates four times. In the first quarter, the Nasdaq beat both revenue and net income, posting earnings of $1.97 per share, better than the $1.93 expected. First-quarter net revenue of $892 million was also strong, growing 5% year-over-year to beat consensus of $890 million. Equally impressive, the company’s annualized recurring revenue (ARR) grew 9% year-over-year, while annualized SaaS revenue grew 12%, accounting for 34% of ARR, or one percentage point more than a year ago.

During the quarter, Solutions segment revenue of $576 million increased 15% year-over-year, offsetting a 3% decline in Marketplace Services revenue of $315 million. dollars. On Wednesday, investors will want to see continued growth in these metrics, as well as growth in both volume and listings.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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