Nasdaq Inc on Wednesday reported a nearly 16 per cent jump in fourth-quarter profit that topped Wall Street estimates, buoyed by the frenetic pace of U.S. initial public offerings and strong demand for its investment-related products.
Technology, health care and financial technology companies led the IPO rush during the quarter, that included the stellar debut of Rivian Automotive Inc on the exchange that valued the electric vehicle maker at over $100-billion.
Tech-heavy Nasdaq in 2021 eclipsed rival New York Stock Exchange to host the new listings of 1,000 companies, representing $181-billion in capital raised. Of the total listings, 752 were IPOs, including chip maker GlobalFoundries Inc and fintech Coinbase Global.
Nasdaq reported an adjusted profit of $1.93 per share for the quarter ended Dec. 31. Analysts were expecting $1.78 per share, according to IBES data from Refinitiv. Even as the transatlantic exchange operator’s bourses remain its core business, Nasdaq has pushed into the software sector to reposition itself as a financial technology company offering analytics, data and cloud services.
The company’s revenue from solutions segment surged 19 per cent to $581-million. Its investment analytics products that help customers research across multiple asset classes to make investment decisions have become key growth drivers.
It also launched a cloud-based data management platform geared toward investment management firms during the quarter.
The company’s net revenue came in 12 per cent higher at $885-million from $788-million a year ago. Market services revenue rose 5 per cent to $303-million over the same period.
In line with other financial institutions that have seen expenses rise amid inflationary pressures, Nasdaq also saw a 15 per cent increase in operating expenses primarily due to higher employee compensation and benefits.
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