Nasdaq profit tops estimates on robust demand for investment products By Reuters

(Reuters) – Nasdaq Inc topped Wall Street estimates for first-quarter profit on Wednesday, driven by robust demand for its investment-related products that offset a lull in initial public offerings.

The stock exchange operator has looked to increasingly diversify its offerings and reposition itself as a leading financial technology company with an expanding footprint in the software sector, offering analytics, data and cloud services.

The U.S. IPO market was battered in the quarter with investor sentiment weighed down by concerns over the Ukraine-Russia conflict, a hawkish stance from the Federal Reserve and weakness in high growth technology stocks.

The transatlantic exchange operator’s Nasdaq stock market hosted 70 IPOs in the quarter, including the biggest market debut this year of private equity firm TPG, compared with the 275 stock market flotations, a year earlier.

Nasdaq’s average daily trading volumes in the United States also dropped, as uncertain macroeconomic conditions persisted.

The company said it returned $556 million to shareholders in the quarter, including $467 million through share repurchases of its common stock.

Nasdaq is also seeking regulatory and shareholder approvals for a 3-for-1 stock split which it expects to complete in the third quarter.

In line with other financial companies who have felt the pinch of inflationary pressures, Nasdaq reported a 9% increase in adjusted operating expenses, reflecting costs tied to higher compensation and benefits for employees.

Revenue at the firm’s solutions segment, which also houses its anti-financial crime technology and environmental, social, and governance advisory products, surged 15% to $576 million.

Excluding one-time items, Nasdaq earned $1.97 per share, above analysts’ average estimate of $1.95 per share, according to IBES data from Refinitiv.

Net revenue in the quarter rose 5% to $892 million.