QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended | ||||||||
OR | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period | from ________ to ________ |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
No Changes | |||||||||||
(Former name, former address and former fiscal year, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at April 26, 2022 | ||||||||||
Common Stock, $0.01 par value per share | shares |
Page | ||||||||
Part I. FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II. OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
Assets | (unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and cash equivalents | |||||||||||
Default funds and margin deposits (including restricted cash and cash equivalents of $ | |||||||||||
Financial investments | |||||||||||
Receivables, net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease assets | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Section 31 fees payable to SEC | |||||||||||
Accrued personnel costs | |||||||||||
Deferred revenue | |||||||||||
Other current liabilities | |||||||||||
Default funds and margin deposits | |||||||||||
Short-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred tax liabilities, net | |||||||||||
Operating lease liabilities | |||||||||||
Other non-current liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity | |||||||||||
Nasdaq stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Common stock in treasury, at cost: | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total Nasdaq stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenues: | |||||||||||
Market Technology | $ | $ | |||||||||
Investment Intelligence | |||||||||||
Corporate Platforms | |||||||||||
Market Services | |||||||||||
Other revenues | |||||||||||
Total revenues | |||||||||||
Transaction-based expenses: | |||||||||||
Transaction rebates | ( | ( | |||||||||
Brokerage, clearance and exchange fees | ( | ( | |||||||||
Revenues less transaction-based expenses | |||||||||||
Operating expenses: | |||||||||||
Compensation and benefits | |||||||||||
Professional and contract services | |||||||||||
Computer operations and data communications | |||||||||||
Occupancy | |||||||||||
General, administrative and other | |||||||||||
Marketing and advertising | |||||||||||
Depreciation and amortization | |||||||||||
Regulatory | |||||||||||
Merger and strategic initiatives | |||||||||||
Restructuring charges | |||||||||||
Total operating expenses | |||||||||||
Operating income | |||||||||||
Interest income | |||||||||||
Interest expense | ( | ( | |||||||||
Other (loss) income | ( | ||||||||||
Net income from unconsolidated investees | |||||||||||
Income before income taxes | |||||||||||
Income tax provision | |||||||||||
Net income | |||||||||||
Net loss attributable to noncontrolling interests | |||||||||||
Net income attributable to Nasdaq | $ | $ | |||||||||
Per share information: | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ | |||||||||
Cash dividends declared per common share | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive loss: | |||||||||||
Foreign currency translation losses | ( | ( | |||||||||
Income tax expense(1) | ( | ( | |||||||||
Foreign currency translation, net | ( | ( | |||||||||
Comprehensive income | |||||||||||
Comprehensive loss attributable to noncontrolling interests | |||||||||||
Comprehensive income attributable to Nasdaq | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Shares | $ | Shares | $ | ||||||||||||||||||||
Common stock | |||||||||||||||||||||||
Additional paid-in capital | |||||||||||||||||||||||
Beginning balance | |||||||||||||||||||||||
Share repurchase program | ( | ( | ( | ( | |||||||||||||||||||
ASR agreement(1) | ( | ( | — | — | |||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||
Stock option exercises, net | — | — | — | ||||||||||||||||||||
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 per common share | ( | ( | |||||||||||||||||||||
Ending balance | |||||||||||||||||||||||
Total Nasdaq stockholders’ equity | |||||||||||||||||||||||
Noncontrolling interests | |||||||||||||||||||||||
Beginning balance | |||||||||||||||||||||||
Net activity related to noncontrolling interests | ( | ( | |||||||||||||||||||||
Ending balance | |||||||||||||||||||||||
Total Equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Net income from unconsolidated investees | ( | ( | |||||||||
Other reconciling items included in net income | |||||||||||
Net change in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
Receivables, net | ( | ||||||||||
Other assets | ( | ||||||||||
Accounts payable and accrued expenses | |||||||||||
Section 31 fees payable to SEC | ( | ( | |||||||||
Accrued personnel costs | ( | ( | |||||||||
Deferred revenue | |||||||||||
Other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of securities | ( | ( | |||||||||
Proceeds from sales and redemptions of securities | |||||||||||
Acquisition of businesses, net of cash and cash equivalents acquired | ( | ||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Investments related to default funds and margin deposits, net (1) | ( | ( | |||||||||
Other investing activities | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from (repayments of) commercial paper, net | ( | ||||||||||
Repayments of borrowings under our credit commitment | ( | ||||||||||
Proceeds from issuances of debt, net of issuance costs and utilization of credit commitment | |||||||||||
Repurchases of common stock | ( | ( | |||||||||
ASR agreement | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Payments related to employee shares withheld for taxes | ( | ( | |||||||||
Default funds and margin deposits | |||||||||||
Other financing activities | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | ( | ( | |||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents, restricted cash and cash equivalents at end of period | $ | $ | |||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and cash equivalents | |||||||||||
Restricted cash and cash equivalents (default funds and margin deposits) | |||||||||||
Total | $ | $ | |||||||||
Supplemental Disclosure Cash Flow Information | |||||||||||
Cash paid for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes, net of refund | $ | $ |
Three Months Ended March 31, 2021 | |||||||||||
As Reported | Adjustment | Adjusted | |||||||||
(in millions) | |||||||||||
Net cash provided by operating activities | $ | $ | $ | ||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents | ( | ( | ( | ||||||||
Net decrease in cash, cash equivalents, restricted cash and cash equivalents | ( | ( | ( | ||||||||
Cash, cash equivalents, restricted cash and cash equivalents at beginning of period | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents at end of period | $ | $ | $ | ||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents | |||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Restricted cash and cash equivalents | |||||||||||
Restricted cash and cash equivalents (Default funds and margin deposits) | |||||||||||
Total | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(in millions) | |||||||||||
Market Technology | |||||||||||
Anti Financial Crime Technology | $ | $ | |||||||||
Marketplace Infrastructure Technology | |||||||||||
Investment Intelligence | |||||||||||
Market data | |||||||||||
Index | |||||||||||
Analytics | |||||||||||
Corporate Platforms | |||||||||||
Listing services | |||||||||||
IR & ESG Services | |||||||||||
Market Services | |||||||||||
Transaction-based trading and clearing, net | |||||||||||
Trade management services | |||||||||||
Other revenues | |||||||||||
Revenues less transaction-based expenses | $ | $ |
Market Technology | Analytics | IR & ESG Services | Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Remainder of 2022 | $ | $ | $ | $ | |||||||||||||||||||
2023 | |||||||||||||||||||||||
2024 | |||||||||||||||||||||||
2025 | |||||||||||||||||||||||
2026 | |||||||||||||||||||||||
2027+ | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(in millions) | |||||
Goodwill | $ | ||||
Acquired Intangible Assets | |||||
Total Net Liabilities Acquired | ( | ||||
Purchase Consideration | $ |
Customer Relationships | Technology | Trade Name | Total Acquired Intangible Assets | |||||||||||
Intangible asset value (in millions) | $ | $ | $ | $ | ||||||||||
Discount rate used | % | % | % | |||||||||||
Estimated average useful life |
(in millions) | |||||
Market Technology | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at March 31, 2022 | $ | ||||
Investment Intelligence | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at March 31, 2022 | $ | ||||
Corporate Platforms | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at March 31, 2022 | $ | ||||
Market Services | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at March 31, 2022 | $ | ||||
Total | |||||
Balance at December 31, 2021 | $ | ||||
Foreign currency translation adjustments | ( | ||||
Balance at March 31, 2022 | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Finite-Lived Intangible Assets | (in millions) | ||||||||||
Gross Amount | |||||||||||
Technology | $ | $ | |||||||||
Customer relationships | |||||||||||
Trade names and other | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total gross amount | $ | $ | |||||||||
Accumulated Amortization | |||||||||||
Technology | $ | ( | $ | ( | |||||||
Customer relationships | ( | ( | |||||||||
Trade names and other | ( | ( | |||||||||
Foreign currency translation adjustment | |||||||||||
Total accumulated amortization | $ | ( | $ | ( | |||||||
Net Amount | |||||||||||
Technology | $ | $ | |||||||||
Customer relationships | |||||||||||
Trade names and other | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Total finite-lived intangible assets | $ | $ | |||||||||
Indefinite-Lived Intangible Assets | |||||||||||
Exchange and clearing registrations | $ | $ | |||||||||
Trade names |