Nasdaq Inc.
Nasdaq, Inc. (NDAQ)
Overview
Nasdaq, Inc. is a New York City-based financial services and technology company best known for operating the Nasdaq Stock Market, the second-largest stock exchange in the world by market capitalization of listed companies. Part of the Financials sector's "Financial Data & Stock Exchanges" industry, Nasdaq has transformed over the past decade from a pure exchange operator into a diversified market-technology and data company, led by CEO Adena Friedman. The company employs roughly 9,500 people and generated about $5.25 billion in revenue in fiscal year 2025 (up nearly 13% year over year), with a market capitalization above $55 billion.
What They Do & How They Make Money
Nasdaq makes money in three broad ways. First, it operates stock, options, and futures exchanges — including the flagship Nasdaq Stock Market plus smaller U.S. venues (Nasdaq PHLX, Nasdaq BX) and several Nordic and Baltic European exchanges (inherited from its 2008 acquisition of OMX) — earning transaction fees on trades and listing fees from companies that list their shares on Nasdaq. Second, it sells market data and licenses its indexes (most famously the Nasdaq-100, which underlies the enormous Invesco QQQ ETF), earning subscription and licensing fees as data usage and assets benchmarked to its indexes grow. Third, and increasingly the company's growth engine, Nasdaq sells software and technology platforms to other financial institutions: exchange-matching and trading technology (Marketplace Technology), and enterprise risk-management, anti-fraud, and regulatory-technology software, especially since its transformative acquisitions of Verafin (anti-financial-crime software, $2.75 billion, 2020) and Adenza (risk-management and regulatory-reporting software, $10.5 billion, 2023).
This shift means Nasdaq now earns a majority of its revenue from recurring, subscription-based software and data products rather than from volatile, volume-driven trading fees — making its revenue mix look increasingly like a fintech/software company rather than a traditional exchange.
Business Segments
Nasdaq reports results across three primary segments:
- Capital Access Platforms — Encompasses index licensing (Nasdaq-branded indexes like the Nasdaq-100), data and listing services, investor relations and governance software (boardroom/ESG tools for public companies), and workflow/analytics tools for corporate clients. This segment benefits from both subscription fees and asset-based fees tied to AUM in Nasdaq-linked index products.
- Financial Technology — The company's fastest-growing segment, combining Anti-Financial Crime (AML/fraud detection software from Verafin) and Regulatory Technology (risk management, trade surveillance, and regulatory-reporting software, heavily built around the Adenza acquisition) sold to banks, brokers, and other exchanges as subscription software.
- Market Services — The traditional exchange business: equity trading, options and futures trading, and trade management services across Nasdaq's U.S. and European exchanges, plus market-data distribution. Revenue here is more transaction-volume-driven and thus more cyclical than the other two segments.
Financial Technology and Capital Access Platforms together generate the majority of Nasdaq's recurring revenue and carry higher margins, while Market Services remains an important, if more cyclical, contributor tied to trading volumes and volatility.
Competitors
- Exchange operations: NYSE (Intercontinental Exchange/ICE), Cboe Global Markets, London Stock Exchange Group (LSEG), Deutsche Börse, and Euronext.
- Market data & indexes: S&P Global (S&P Dow Jones Indices), MSCI, FTSE Russell (LSEG), and Bloomberg.
- Financial technology / risk & compliance software: SS&C Technologies, FIS, Broadridge Financial Solutions, NICE Actimize, and Refinitiv/LSEG's risk and compliance offerings.
- Anti-financial-crime software: NICE Actimize, Oracle Financial Services, and SAS.
- Investor relations / governance software: Diligent, Q4 Inc., and Donnelley Financial Solutions.
Competitive Position
Nasdaq's competitive advantage stems from network effects and regulatory entrenchment in its exchange business — being a listing venue of choice for technology and growth companies gives it a durable brand (the "Nasdaq" listing is itself a marketing asset for issuers) and a deep pool of liquidity that attracts further trading volume. In its newer Financial Technology segment, Nasdaq's advantage comes from the mission-critical, deeply embedded nature of the risk-management and compliance software acquired via Adenza and Verafin: banks and exchanges that build core operations around this software face high switching costs, and increasing global regulatory scrutiny of financial crime and systemic risk creates a structural tailwind for demand.
Key risks include: high leverage taken on to fund the $10.5 billion Adenza acquisition, which increases financial risk and constrains capital flexibility; execution risk in integrating large technology acquisitions and cross-selling software across historically separate business lines; competitive pressure in exchange trading from lower-cost venues and alternative trading systems; and market-services revenue's continued sensitivity to trading volumes and volatility, which can swing with macroeconomic conditions. Nasdaq also faces competition from large, well-capitalized rivals (ICE, LSEG) that are pursuing similar diversification strategies into data and technology, intensifying competition for enterprise software contracts with banks and financial institutions.