On Wednesday, Jan 29, Nasdaq announced an increase in fourth-quarter profit, driven by heightened demand for its financial technology products, though slightly below certain analysts' projections. The company has diversified beyond its traditional trading and listing services to include products that assist financial institutions with compliance and anti-financial crime measures.
In the fourth quarter, revenue from Nasdaq's financial technology division rose by nearly 9.8%, reaching $438 million, slightly below the anticipated $441.2 million according to LSEG data. Despite a 33% rise in the company's shares in 2024, they saw a minor decline closing at $80.91.
Analysts noted that the lower-than-expected financial technology revenues were impacting the share price. Fintech was driving the growth, but it was actually below expectation for the quarter, remarked Owen Lau, a senior analyst at Oppenheimer & Co. He emphasized the importance of annualized recurring revenue for the company's prospects.
During an analyst call, Nasdaq's CEO, Adena Friedman, expressed confidence in the company's ability to sustain revenue growth in 2025, leveraging a stable economic environment. She highlighted factors such as U.S. consumer spending, low unemployment rates, predictable inflation, and interest rates, instilling investor confidence in capital deployment.
Friedman further mentioned positive global economic growth prospects, mentioning strength in the U.S. and other regions like South Asia contributing to a favorable business climate for the year ahead. The anticipation of a smooth transition for the U.S. economy, robust equity markets, and expectations of a more favorable regulatory landscape under the Trump administration breathed new life into the U.S. IPO market in the last quarter.
Despite a marginal 0.7% increase in Nasdaq's total listed companies in 2024, up to 4,075 as of Dec. 31, data and listing services revenue grew by 1.6%. Prominent names like a software firm and a Chinese self-driving vehicle company listed on Nasdaq during the October-December period.
Adena Friedman predicted a resurgence in IPO activities with more companies expected to join public markets starting in the second quarter of 2025, setting the stage for a strong latter half of the year.
Adjusted net profit attributable to Nasdaq in the fourth quarter was $438 million, or 76 cents per share, exceeding analysts' projections of 75 cents, per LSEG estimates. The company's net revenue increased to $1.23 billion from $1.12 billion the previous year.