Nasdaq, Inc. (NASDAQ:NDAQ) is scheduled to announce its fourth-quarter 2023 earnings on Jan 31, before the opening bell, with the company having surpassed earnings expectations in each of the past three reported quarters in 2023.
Factors to Consider
Nasdaq’s fourth-quarter performance is anticipated to be buoyed by organic revenue growth, robust performance in Market Platforms businesses, increased revenues from data and listing services, and contributions from the Adenza acquisition.
Improved performances in Market Technology, Market Data, and Analytics businesses are expected to contribute to non-trading revenues. Recurring data revenues across its international operations are likely to support overall revenues.
The Marketplace Technology business is expected to benefit from enhanced trade management services and market technology, with revenues predicted to increase by 2.3% to $152.4 million.
Organic growth initiatives are likely to boost Anti Financial Crime’s revenues. Increased subscriptions from both new and existing clients, driven by strong demand for trade surveillance and crypto market surveillance solutions, are expected to contribute to a 19.2% year-over-year increase in Anti Financial Crime revenues, reaching $97.7 million. The Zacks Consensus Estimate for this metric stands at $117 million.
However, increased expenses are anticipated due to the development and diversification of Nasdaq’s business. Costs related to compensation and benefits, merger and strategic initiatives, restructuring charges, and general administrative expenses are expected to weigh on margin expansion. Non-GAAP operating expenses are projected to increase by 4.2% year over year.
The ongoing share buyback program is expected to provide additional support to the bottom line.
The Zacks Consensus Estimate for earnings stands at 69 cents per share, indicating a 7.8% increase from the prior-year reported figure.
Q4 Volumes
Nasdaq reported soft volumes for the fourth quarter of 2023. U.S. equity options volume increased by 1% year over year to 781 million contracts. Meanwhile, European options and futures volume decreased by 4% year over year to 17 million contracts.
Revenues per contract for U.S. equity options remained unchanged year over year at 12 cents, while the same metric for European options and futures declined by 2% to 46 cents.
In the cash equities segment, Nasdaq’s U.S. matched equity volume in the fourth quarter totaled 113.3 billion shares, marking a 6.8% decrease from the prior-year quarter. European equity volume, on the other hand, increased by 1.5% year over year to $200 billion.
The number of listed companies on the Nasdaq decreased to 4,662 in the fourth quarter from 4,953 in the year-ago period, reflecting a 4% drop. Total listings also decreased by 4% year over year to 5,262.
Data and listing services revenues are expected to show a 3.1% increase, reaching $189.4 million in the upcoming quarter.
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