Jan 29 (Reuters) – Nasdaq’s profit rose in the fourth quarter, the exchange operator said on Thursday, as prolonged market volatility lifted equity and options trading.
Traders reshuffled their portfolios more actively as they navigated volatility fueled by AI-driven bubble fears, the Federal Reserve’s rate cuts, and geopolitical risks. This boosted volumes in equity options and cash equities, lifting transaction and clearing fees for exchange operators.
The company’s market services revenue from trading grew 16% to $311 million during the reported quarter, benefited from record industry volumes in U.S. cash equities and equity derivatives.
“For the first time, Nasdaq exceeded $5 billion in annual net revenue and $4 billion in annual Solutions revenue,” Nasdaq CEO and Chair Adena Friedman said in a statement.
The exchange operator reported an adjusted profit of $554 million, or 96 cents per share, for the three months ended December 31, up from $438 million, or 76 cents per share, a year earlier.
IPO COMEBACK
A strong capital markets backdrop, marked by a surge in mergers and acquisitions and a pickup in IPO activity, also encouraged higher trade activity.
Shares of the company rose about 1% in premarket trading.
Nasdaq’s total new listings rose to 215 in the fourth quarter from 162 a year earlier, resulting in about a 10% increase in the company’s data and listing services revenue.
The U.S. IPO market raised the biggest haul last year since 2021, according to data from Dealogic.
Medical supply giant Medline, diagnostic imaging services provider Lumexa Imaging and molecular diagnostics firm BillionToOne were among the notable debuts on the Nasdaq in the quarter.
Revenue from the company’s financial technology unit, which includes anti-financial crime and capital markets infrastructure software, increased 13.7% to $498 million, while its index business revenue jumped 23.4% to $232 million.
Nasdaq has widened its footprint from trading business into financial technology and software, building predictable, recurring revenue streams that are less exposed to the market’s swings.
(Reporting by Prakhar Srivastava and Ateev Bhandari in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)
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