NASDAQ REPORTS FIRST QUARTER 2023 RESULTS; DIVERSE PRODUCT PLATFORM DELIVERS BROAD-BASED GROWTH

NEW YORK - Nasdaq, Inc. (Nasdaq: NDAQ) reported financial results for the first quarter of 2023.

First quarter 2023 net revenues1 increased 2% compared to the first quarter of 2022. Solutions businesses2 revenues increased 4% with 5% organic growth3, partially offset by a negative 1% FX impact.

Annualized Recurring Revenue (ARR)4 increased 7% compared to the first quarter of 2022. Annualized SaaS revenues increased 11% and represented 36% of ARR.

Anti-Financial Crime revenue increased 17% compared to the first quarter of 2022. Nasdaq continued its progress in signing financial institutions to its fraud detection and anti-money laundering SaaS solution, including another Tier 2 client signed during the period and the first global Tier 1 bank signed in April 2023.

First quarter 2023 GAAP diluted earnings per share increased 7% compared to the first quarter of 2022. First quarter 2023 non-GAAP3 diluted earnings per share increased 5% compared to the first quarter of 2022.

The company returned $257 million to shareholders in the first quarter of 2023: $159 million in share repurchases and $98 million in dividends.

Adena Friedman, Chair and CEO said, 'Nasdaq delivered a solid financial performance during the first quarter of 2023, driven by momentum across our divisions.

In recent months, we have seen a step change of technological innovation in artificial intelligence. Nasdaq's investments in proprietary data, and migrating our markets and SaaS solutions to the cloud, uniquely positions us to harness the potential of advanced AI to improve the liquidity, transparency, and integrity of the financial system in the coming years.'

Ann Dennison, Executive Vice President and CFO said, 'We remain focused on taking a thoughtful and strategic approach to investing for growth in this year's operating environment.

Our strong capital position and free cash flow generation give us the ability to invest in growth initiatives while we continue our dividend growth story with a 10% increase in the quarterly dividend.'

FINANCIAL REVIEW

First quarter 2023 net revenues were $914 million, an increase of $22 million, or 2%, from $892 million in the prior year period. Net revenues reflected a $36 million, or 4%, positive impact from organic growth, including positive contributions from all segments, partially offset by an $11 million decrease from the impact of changes in FX rates and a $3 million decrease from the net impact of an acquisition and divestiture.

Solutions businesses revenues were $646 million in the first quarter of 2023, an increase of $23 million, or 4%. The increase primarily reflects a $29 million, or 5%, positive impact from organic growth, partially offset by a $7 million decrease from the impact of changes in FX rates. ARR, which reflects the vast majority of the Solutions Businesses revenues and excludes the AUM and transaction licensing components of Index, increased 7% from the prior year period.

Trading Services net revenues were $267 million in the first quarter of 2023, an increase of $3 million, or 1%. The increase reflects a $7 million, or 3%, positive impact from organic growth, partially offset by a $4 million decrease from the impact of changes in FX rates. Trading Services net revenues reflect strong growth from North American trading partially offset by a decline in European trading.

First quarter 2023 GAAP operating expenses increased $15 million, or 3%, versus the prior year period. The increase primarily reflects higher restructuring expenses associated with the launch of our divisional alignment program in the fourth quarter of 2022 and higher occupancy expense due to lease asset impairment charges in the first quarter of 2023 driven by a reduction in our real estate footprint, partially offset by lower merger and strategic initiatives expense and changes in FX rates.

First quarter 2023 non-GAAP operating expenses increased $8 million, or 2% versus the prior year period. The increase primarily reflects increased expenses associated with the continued investment in our people and our businesses to drive long term growth, partially offset by changes in FX rates.

The company repurchased $159 million in shares of its common stock during the first quarter of 2023. As of March 31, 2023, there was $491 million remaining under the board authorized share repurchase program.

2023 EXPENSE AND TAX GUIDANCE UPDATE5

The company is updating its 2023 non-GAAP operating expense guidance to a range of $1,780 million to $1,840 million. Nasdaq expects its 2023 non-GAAP tax rate to be in the range of 24% to 26%.

STRATEGIC AND BUSINESS UPDATES

Verafin delivers on its anti-financial crime growth strategy with large financial institutions by signing its first Tier 1 global bank and an additional Tier 2 client. Verafin signed a global Tier 1 bank in April 2023 for its fraud SaaS solution, including comprehensive detection capabilities across wires, ACH, and checks, as well as case management and reporting functionality. Additionally, Verafin signed another tier 2 client to its enterprise AML solution during the first quarter of 2023. These signings further underscore Verafin's progress with large bank clients, as its solutions seek to displace legacy platforms and manual processes with a cloud-based and market proven solution.

Nasdaq's annualized SaaS revenues in the first quarter of 2023 increased 11% year over year. Annualized SaaS revenues totaled $729 million in the first quarter of 2023, representing 36% of total company ARR, up from 34% in the first quarter of 2022. The 11% year over year increase in annualized SaaS revenues primarily reflects strong growth in the fraud detection and anti-money laundering solutions.

Nasdaq maintained listings leadership in the U.S. The Nasdaq Stock Market led U.S. exchanges for operating company IPOs with a 91% total win rate during the first quarter of 2023. During the period, the Nasdaq Stock Market featured seven of the ten largest U.S. operating company IPOs by capital raised, and attracted 80% of proceeds raised by operating companies.

Nasdaq led all exchanges in total multiply-listed options traded. In the first quarter of 2023, Nasdaq led all exchanges during the period in total volume traded for multiply-listed equity options. Nasdaq has maintained a consistent share of available on-exchange U.S. equity trading since the first quarter of 2022 with improving capture contributing to revenue growth. The Nasdaq Stock Market remains the single largest venue of liquidity for traded-listed U.S. cash equities.

Nasdaq is continuing its cloud migration strategy and announces additional cloud migration plans for its marketplaces and remaining SaaS solutions. Following the successful migration of Nasdaq MRX options market core trading system onto Amazon Web Services (AWS) edge cloud, Nasdaq plans to migrate a second options exchange by the end of 2023, and is currently migrating its Surveillance and BoardVantage SaaS solutions to the cloud.

ABOUT NASDAQ

Nasdaq (Nasdaq: NDAQ) is a global technology company serving the capital markets and other industries. Our diverse offering of data, analytics, software and services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.

NON-GAAP INFORMATION

In addition to disclosing results determined in accordance with U.S. GAAP, Nasdaq also discloses certain non-GAAP results of operations, including, but not limited to, non-GAAP net income attributable to Nasdaq, non-GAAP diluted earnings per share, non-GAAP operating income, and non-GAAP operating expenses, that include certain adjustments or exclude certain charges and gains that are described in the reconciliation table of U.S. GAAP to non-GAAP information provided at the end of this release. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of results as the items described below in the reconciliation tables do not reflect ongoing operating performance.

These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as a comparative measure. Investors should not rely on any single financial measure when evaluating our business. This information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this earnings release. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliations, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.

We understand that analysts and investors regularly rely on non-GAAP financial measures, such as those noted above, to assess operating performance. We use these measures because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance.

Organic revenue and expense growth, organic change and organic impact are non-GAAP measures that reflect adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates, and (ii) the revenues, expenses and operating income associated with acquisitions and divestitures for the twelve month period following the date of the acquisition or divestiture. Reconciliations of these measures are described within the body of this release.

Foreign exchange impact: In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Certain discussions in this release isolate the impact of year-over-year foreign currency fluctuations to better measure the comparability of operating results between periods. Operating results excluding the impact of foreign currency fluctuations are calculated by translating the current period's results by the prior period's exchange rates.

Divisional alignment program: In October 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period. We expect to achieve benefits in the form of both increased customer engagement and operating efficiencies. Costs related to the divisional alignment program will be recorded as 'restructuring' in our consolidated statements of income. We will exclude charges associated with this program for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq's performance between periods.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to (i) projections relating to our future financial results, total shareholder returns, growth, dividend program, trading volumes, products and services, ability to transition to new business models or implement our new corporate structure, taxes and achievement of synergy targets, (ii) statements about the closing or implementation dates and benefits of certain acquisitions, divestitures and other strategic, restructuring, technology, environmental, de-leveraging and capital allocation initiatives, (iii) statements about our integrations of our recent acquisitions, (iv) statements relating to any litigation or regulatory or government investigation or action to which we are or could become a party, and (v) other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq's control. These factors include, but are not limited to, Nasdaq's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, geopolitical instability, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in Nasdaq's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on Nasdaq's investor relations website at https://ir.nasdaq.com and the SEC's website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

WEBSITE DISCLOSURE

Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.

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