Nasdaq’s First Quarter Earnings Miss Expectations, but CEO Adena Friedman Highlights Organic Growth and Increased Investments

In the first quarter of this year, Nasdaq Inc. reported a decline in profit for the first time in a year, with earnings dropping to 63 cents a share from 69 cents a year ago, below the expected 65 cents. Revenue from Nasdaq’s data and listing segment was flat compared to the previous year and fell short of projections. The number of companies that went public on the exchange in the first quarter of this year was down by half compared to the same period last year.

Despite a turbulent capital markets backdrop, CEO Adena Friedman highlighted Nasdaq’s sustained organic growth, with annualized recurring revenue growing by 5% excluding recent acquisitions. This was driven by a 12% increase in Nasdaq’s financial crime and regulatory products. The company also raised its full-year operating expense guidance to account for increased technology investments.

The current economic environment has made companies cautious about going public due to uncertainties surrounding geopolitical conflicts and potential interest rate cuts by the Federal Reserve. The US economy slowed in the first quarter, with concerns about inflation and cooling consumer and government spending. Despite successful IPOs like Reddit’s, overall trading volume on Nasdaq’s exchanges remained flat year-on-year for a second quarter in a row. Nasdaq’s shares fell about 1% in early trading but had risen nearly 6% for the year up to the previous day.