Analyzing Nasdaq's Q3 2025 10-Q: Strong Growth Fueled by Tech Segments

Nasdaq, a key player in the global financial infrastructure, recently provided a detailed look into its financial health with its quarterly report for the period ending September 30, 2025. This filing allows us to analyze the performance of the exchange operator and financial technology provider. Let's dive into the numbers from their latest 10-Q filing to see how the company performed.

Overall, Nasdaq reported a very strong third quarter. The company demonstrated impressive growth in both revenue and profitability, showcasing strong operating leverage and the increasing success of its technology-focused segments.

Strong Top and Bottom-Line Growth

For the third quarter of 2025, Nasdaq's financial performance was robust. Here are the key highlights compared to the same period in 2024:

• Revenues less transaction-based expenses grew by 14.8% to $1.315 billion. This figure, often called net revenue, is a key metric for exchange operators as it excludes pass-through costs like transaction rebates.
• Operating income surged by 31.0% to $586 million. This outsized growth relative to revenue indicates excellent cost management and operating efficiency.
• Net income attributable to Nasdaq jumped 38.4% to $423 million.
• Diluted earnings per share (EPS) also rose by 38.4% to $0.73.

The nine-month results tell a similar story, with net revenues up 12.7% and operating income climbing an impressive 32.9% year-over-year.

The following flow diagram provides a visual breakdown of how Nasdaq generated its revenue and managed its costs during the third quarter of 2025.

In the diagram, the "Other revenues" category, which totaled $9 million for the quarter, primarily consists of revenues from the Nordic power futures business, which the company has since divested.

Segment Performance: Technology is the Star

A closer look at Nasdaq's business segments reveals where this growth is coming from. The company operates through three main divisions:

Financial Technology: This segment was the standout performer, with revenues growing by a remarkable 23.3% to $457 million for the quarter. This division provides essential technology for managing financial crime and regulatory compliance, as well as capital markets technology for other exchanges and financial institutions. The strong growth here underscores Nasdaq's successful push into high-growth, subscription-based software-as-a-service (SaaS) offerings.

Capital Access Platforms: This segment, which includes Nasdaq's well-known listings business, data services, and index licensing, also posted solid results. Revenues increased by 9.1% to $546 million. A notable driver was the Index business, which grew 13.5%, benefiting from higher assets under management in exchange-traded products (ETPs) that track Nasdaq indexes.

Market Services: This is Nasdaq's traditional trading and clearing business. While gross revenue declined, a look at the net figures tells a different story. Net revenues for Market Services actually increased by 14.1% to $303 million. The change was largely driven by a significant reduction in pass-through brokerage and clearance fees. This highlights why focusing on net revenue is crucial for understanding the segment's true profitability.

Shareholder Returns

Nasdaq continues to reward its shareholders. The company increased its quarterly cash dividend by 12.5% year-over-year to $0.27 per share. Additionally, Nasdaq has been actively repurchasing its own stock, buying back $330 million worth of shares in the first nine months of 2025.

In conclusion, Nasdaq's third-quarter results paint a picture of a company executing effectively on its strategy. Its strategic shift toward technology and recurring revenue streams is clearly paying off, delivering strong, profitable growth. While its core market services business remains solid, the high-growth Financial Technology and Capital Access Platforms are increasingly becoming the primary drivers of value, positioning Nasdaq well in the evolving landscape of global capital markets.