Nasdaq, Inc. (Nasdaq: NDAQ) has reported strong revenue results for the second quarter of 2016. Second quarter net revenues were $559 million, up $41 million or 8% from $518 million in the prior year period, driven by a $24 million positive impact from acquisitions, a $14 million positive impact from operations, and a $3 million positive impact from changes in foreign exchange rates.
Bob Greifeld, CEO, Nasdaq, said:
Nasdaq has experienced broad-based demand for our distinctive technology, services and solutions, resulting in continued organic growth from each of our business segments. Further, we are successfully integrating the recently closed acquisitions, which we expect to provide another lever of return for our shareholders as we drive operational synergies and deliver ever increasing value for our clients.
Material expansion in the SMARTS surveillance product’s customer base, the acquisition of the ISE, giving Nasdaq unique scale in U.S. options, exceptional growth in Nordic listings, and the accelerating migration of corporate customers onto the IR Insights platform stand out as second quarter developments which will pay meaningful dividends in future periods.”
Operating expenses were $385 million in the second quarter of 2016, up $84 million from $301 million in the second quarter of 2015. The increase primarily reflected higher merger and strategic initiatives expense of $32 million, higher restructuring charges of $31 million and $15 million in incremental expenses from the acquisitions of Nasdaq CXC, formerly Chi-X Canada (February 2016), Marketwired (February 2016), and Boardvantage (May 2016). Non-GAAP operating expenses were $300 million in the second quarter of 2016, up $19 million from $281 million in the second quarter of 2015. This increase reflected $15 million in incremental expenses from the acquisitions closed in 2016 as well as $4 million in organic growth.
Ron Hassen, Principal Financial Officer and Senior Vice President, Nasdaq, added:
During the quarter we were able to raise over $1 billion in acquisition financing at favorable rates while also reducing FX exposure. As I transition over the CFO responsibilities, I believe the company’s capital and financial position are in excellent condition.”
Michael Ptasznik, Chief Financial Officer and Executive Vice President, Nasdaq, who used to work for TMX Group Limited, has also shared some words:
I’m excited to join the Nasdaq team at an especially interesting time, and look forward to bringing new perspectives and ideas that can contribute to execution of the company’s strategy. In the near-term, this includes a particular focus on ensuring that the acquisition integrations succeed in delivering maximum benefits to clients and shareholders.”
Net income attributable to Nasdaq for the second quarter of 2016 was $70 million, or $0.42 per diluted share, compared with $133 million, or $0.77 per diluted share, in the prior year quarter. On a non-GAAP basis, net income attributable to Nasdaq for the second quarter of 2016 was $153 million, or $0.91 per diluted share, compared with $143 million or $0.83 per diluted share, in the second quarter of 2015, an increase of $10 million, or $0.08 per diluted share.
The company repurchased 256,808 shares for $16 million in the second quarter of 2016 at an average price of $62.27, and an additional 127,580 shares for $8 million in the third quarter of 2016 through July 26, 2016 at an average price of $62.19. As of July 26, 2016, there was $476 million remaining under the board authorized share repurchase program.
At June 30, 2016, the company had cash and cash equivalents of $344 million and total debt of $3,731 million, resulting in net debt of $3,387 million. This compares to net debt of $2,063 million at December 31, 2015.