(Reuters) – Exchange operator Nasdaq beat estimates for second-quarter profit on Wednesday on the back of consistent demand for its investment-related products and capital markets solutions such as anti-financial crime software.
In recent years, the company has rejigged its business model away from market-sensitive businesses such as listing fees from initial public offerings on its exchanges and trading towards financial technology services.
The diversification helped the transatlantic exchange operator blunt the effects of a drought in the U.S. market for IPOs that had soured last year due to rising interest rates and heavy volatility.
Even as executives at major banks and traders have now begun to see ‘greenshoots’ in the IPO market, spurring hopes of a potential recovery, multi-billion listings at Nasdaq’s stock exchange are yet to return so far this year.
The company’s solutions businesses revenue climbed 6% to $674 million in the quarter compared to a year earlier, while its trading services unit reported a 1% decline to $250 million.
Nasdaq said it earned 71 cents per share in on an adjusted basis the three months ended June 30, beating analysts’ estimates of 66 cents per share, according to Refinitiv IBES data.
Net revenue in the quarter rose 4% to $925 million.
A total of 23 companies listed on its Nasdaq Stock Market through IPOs in the quarter. That compares with 38 a year earlier.
In line with CEO Adena Friedman’s diversification strategy, Nasdaq inked its biggest-ever deal of $10.5 billion for Thoma Bravo-owned software firm Adenza in the quarter.
The deal hit the stock, which has fallen 11% since its announcement in June. Analysts cautioned at the time the firm may have overpaid for a relatively unknown asset.
(Reporting by Manya Saini in Bengaluru; Editing by Maju Samuel)
