Group Co.
Nasdaq Reports Third Quarter 2018 Results
Traders Magazine Online News, October 26, 2018
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the third quarter of 2018.
Third quarter 2018 net revenues were $600 million, down $3 million from $603 million in the prior year period. The third quarter decrease in net revenues included a positive $28 million, or 5%, impact from organic growth, and a positive $22 million impact from the inclusion of revenues from the acquisition of eVestment, offset by a $46 million negative impact from the divestiture of the Public Relations Solutions and Digital Media Services businesses and a $7 million unfavorable impact from changes in foreign exchange rates.
"Third quarter revenue exhibited solid organic revenue growth across our franchise, in-line with our longer-term outlook. The continued strong growth in market technology, index and analytics, which are areas where we've shifted more of our resources, enhances our confidence in our new strategic direction," said Adena Friedman, President and CEO, Nasdaq. "As we look forward, we remain focused in the near-term on the early implementation of our strategic re-alignment to maximize opportunities as a technology and analytics provider, while ensuring we continue to achieve the highest possible effectiveness in our foundational marketplace businesses."
GAAP operating expenses were $354 million in the third quarter of 2018, an increase of $13 million from $341 million in the third quarter of 2017. The increase primarily reflects higher general, administrative and other expense and depreciation and amortization expense, partially offset by lower professional fees and compensation and benefits expense. Included in general, administrative and other expense during the period is an $8 million loss related to the default of a Nasdaq Clearing member.
Non-GAAP operating expenses were $311 million in the third quarter of 2018, a decrease of $4 million, or 1%, compared to the third quarter of 2017. This reflects a $19 million increase from the acquisition of eVestment and a $15 million organic expense increase, more than offset by a $32 million decrease due to the divestiture of the Public Relations Solutions and Digital Media Services businesses and a $6 million favorable impact from changes in foreign exchange rates.
"We continued to execute our capital plan to support our strategy, re-allocating resources to significant growth opportunities. During the third quarter of 2018, we completed the remaining share repurchases funded by the divestiture of the Public Relations Solutions and Digital Media Services businesses, and in October, announced an agreement to sell our 5% equity stake in LCH Group Holdings Limited," said Michael Ptasznik, Executive Vice President and Chief Financial Officer, Nasdaq. "We also commenced a tender offer to the shareholders and warrant holders of Cinnober, a capital markets technology supplier, in a proposed transaction expected to achieve both our stated investment return goals and advance our strategic direction as a technology and analytics provider."
On a GAAP basis, net income for the third quarter of 2018 was $163 million, or $0.97 per diluted share, compared to $170 million, or $1.00 per diluted share, in the third quarter of 2017.
On a non-GAAP basis, net income for the third quarter of 2018 was $193 million, or $1.15 per diluted share, compared to $172 million, or $1.01 per diluted share, in the third quarter of 2017, representing a 14% increase in non-GAAP diluted earnings per share year over year.
At September 30, 2018, the company had cash and cash equivalents of $324 million and total debt of $3,880 million, resulting in net debt of $3,556 million. This compares to total debt of $4,207 million and net debt of $3,830 million at December 31, 2017.
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