Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the fourth quarter of 2021 and full year 2021.

• 2021 net revenues1 were $3,420 million, an increase of 18% over 2020. Solutions segments2 revenues increased 21% while Market Services increased 13%.
• Net revenues increased 12% compared to the fourth quarter of 2020. Solutions segments revenues increased 19%, including 12% organic growth and 7% contribution from the acquisition of Verafin.
• Annualized Recurring Revenue (ARR)3 increased 19% compared to the fourth quarter of 2020, and excluding Verafin, increased 9%. Annualized SaaS revenues increased 43% and represented 34% of ARR.
• GAAP diluted earnings per share increased 26% in 2021 and 14% in the fourth quarter 2021.
• Non-GAAP4 diluted earnings per share increased 22% in 2021 and 21% in the fourth quarter 2021.
• The company returned $1,293 million of cash to shareholders in 2021, including $943 million in share repurchases and $350 million in dividends.

Adena Friedman, President and CEO said, “Our record performance in 2021 is another important milestone in Nasdaq’s journey as a technology business serving the financial system. We grew across all segments of our business last year with a focus on competitive positioning, innovation in our trading and listing businesses, and the continued expansion of our software, analytics, data and cloud services. We have entered 2022 in a position of strength across all of our businesses, primed to capture secular growth opportunities as we continue to play our part in increasing investor participation, optimizing capital formation, and driving efficiency and resiliency in the global financial system.”

Ann Dennison, Executive Vice President and CFO said, “Nasdaq’s strong quarterly and full year results underscore our focus on executing and competing in vibrant markets and a clear eyed focus on driving a more diversified revenue profile. During the year, we delivered record profitability underpinned by a 19% increase in ARR and 43% increase in annualized SaaS revenues. Combined, this provides us with sustainable runway to continue to deliver attractive returns to shareholders while investing in long-term growth opportunities across our enterprise.”

FINANCIAL REVIEW

• 2021 net revenues were $3,420 million, an increase of $517 million, or 18% over 2020. Net revenues reflected a $395 million, or 14%, positive impact from organic growth, a $93 million increase from the net impact of acquisitions and divestitures, and a $29 million increase from the impact of changes in FX rates.
• Fourth quarter 2021 net revenues were $885 million, an increase of $97 million, or 12%, from $788 million in the prior year period. Net revenues reflected a $78 million, or 10%, positive impact from organic growth and a $26 million increase from the net impact of acquisitions and divestitures, partially offset by a $7 million decrease from the impact of changes in FX rates.
• Solutions segments revenues were $581 million in the fourth quarter of 2021, an increase of $91 million, or 19%. The increase reflects a $61 million, or 12%, positive impact from organic growth and a $35 million, or 7%, increase from the inclusion of revenues from the acquisition of Verafin, partially offset by a $5 million decrease from the impact of changes in FX rates.
• Market Services net revenues were $303 million in the fourth quarter of 2021, an increase of $15 million, or 5%. The increase reflects a $17 million, or 6%, positive impact from organic growth, partially offset by a $2 million decrease from the impact of changes in FX rates.
• Fourth quarter 2021 GAAP operating expenses increased 15% versus the prior year period. The increase primarily reflects higher compensation and benefits expense, regulatory expense, depreciation and amortization expense, partially offset by lower general, administrative and other expense and restructuring charges.
• Fourth quarter 2021 non-GAAP operating expenses increased 7% versus the prior year period. The increase reflects a $6 million, or 1%, organic increase over the prior year period, a $24 million, or 6%, increase from the net impact of acquisitions and divestitures, partially offset by a $2 million decrease from changes in FX rates. The organic increase primarily reflects higher compensation and benefit expense, marketing and advertising expense and computer operations and data communication expense, partially offset by lower general, administrative and other expense.
• The company repurchased $58 million in shares of its common stock fourth quarter of 2021 and repurchased an aggregate of $943 million in 2021, including the impact of the $475 million accelerated share repurchase (ASR) agreement executed in the second half of 2021. The company repurchased $142 million in shares in January 2022, and plans to enter into an ASR agreement to repurchase an additional $325 million of shares, which is expected to be completed in the first quarter of 2022. As of January 25, 2022, there was $784 million remaining under the board authorized share repurchase program.

2022 EXPENSE AND TAX GUIDANCE5

The company is initiating its 2022 non-GAAP operating expense guidance to a range of $1,680 to $1,760 million. Nasdaq expects its 2022 non-GAAP tax rate to be in the range of 24.0% to 26.0%.

STRATEGIC AND BUSINESS UPDATES

• Nasdaq and AWS partner to transform capital markets through benefits of a cloud-enabled infrastructure. Nasdaq and Amazon Web Services, Inc. (AWS) announced a multi-year partnership to build the next generation of cloud-enabled infrastructure for the world’s capital markets. Nasdaq will use a new edge computing solution that is co-designed by Nasdaq and AWS specifically for market structure. Beginning in 2022, Nasdaq plans to migrate its North American markets to AWS in a phased approach, starting with Nasdaq MRX, a U.S. options market.
• Nasdaq’s annualized SaaS revenues in the fourth quarter of 2021 increased 43% year over year. Annualized SaaS revenues totaled $640 million in the fourth quarter of 2021, representing 34% of total company ARR, up from 28% in the fourth quarter of 2020. The 43% year over year increase in annualized SaaS revenues primarily reflects the inclusion of Verafin and strong growth in our surveillance and analytics businesses.
• The Analytics offerings of eVestment and Solovis delivered a 41% increase in new sales in 2021 versus the prior year while the gross retention improved one percentage point. Our combined Analytics offerings including eVestment and Solovis saw continued strong user adoption across both asset owners and asset managers with combined new sales of $26 million in 2021, an increase of 41% versus 2020. There were 61 ETPs tracking Nasdaq indexes launched in 2021 with nearly $3 billion of AUM accumulated during the year, including the PHLX Semiconductor Index, and Hashdex products linked to the Nasdaq Crypto Index. In the fourth quarter of 2021, Nasdaq launched Data Fabric, a managed data solution built off Nasdaq Data Link to help investment management firms scale their data infrastructure with enhanced quality, governance and integrity.
• The Nasdaq Stock Market led U.S. exchanges for IPOs during 2021 and featured nine of the ten largest U.S.-based IPOs by capital raised. The Nasdaq Stock Market led U.S. exchanges in 2021 with a 73% total win rate, reflecting a 76% win rate among operating companies6 and a 71% win rate among SPACs. The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs representing $181 billion in capital raised, while Nasdaq’s European exchanges welcomed 207 new listings. New listings in 2021 included the IPOs of Rivian, the largest by capital raised, and GlobalFoundries as well as 33 listing switches including Honeywell, Palo Alto Networks and Baker Hughes.
• For the second consecutive year, Nasdaq led all exchanges in total traded U.S. options, inclusive of multiply-list equity options and index options products, while equity value traded on the Nasdaq Nordic markets reached their highest level since 2008. Nasdaq’s U.S. options market average daily number of contracts set a new annual record and totaled 12.8 million in 2021, an increase of 25% year over year. The average daily trading value of Nasdaq’s Nordic and Baltic main markets reached $4.7 billion, an increase of 10% year over year, and the highest since 2008.

 Represents revenues less transaction-based expenses. 2 Constitutes revenues from Market Technology, Investment Intelligence and Corporate Platforms segments.3 Annualized Recurring Revenue (ARR) for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.4 Refer to our reconciliations of U.S. GAAP to non-GAAP net income, diluted earnings per share, operating income and operating expenses, included in the attached schedules.5 U.S. GAAP operating expense and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.6 Operating companies exclude special purpose acquisition companies and when a special purpose acquisition company completes an acquisition.

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 its 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 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.

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, trading volumes, products and services, ability to transition to new business models, 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, 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, government and industry regulation, interest rate risk, U.S. and global competition, the impact of the COVID-19 pandemic on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners, 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 http://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.

Media Relations Contact

Will Briganti

+1.646.964.8169

william.briganti@nasdaq.com

Investor Relations Contact

Ed Ditmire, CFA

+1.212.401.8737

 ed.ditmire@nasdaq.com