NASDAQ, INC. (NDAQ) FY 2023 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Nasdaq refers to the year-over-year comparison for the fiscal years ended December 31, 2023 and December 31, 2022 and should be read in conjunction with our consolidated financial statements and related notes included in this Form 10-K, as well as the discussion under “Item 1A. Risk Factors.” For further discussion of our growth strategy, products and services, and competitive strengths, see “Item 1. Business.”

Discussion of fiscal year 2022 items and the year-over year comparison of changes in our financial condition and results of operations as of and for the fiscal years ended December 31, 2022 and December 31, 2021 can be found in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was previously filed with the SEC on February 23, 2023. For the Financial Technology segment, which was impacted by the new divisional structure subsequent to the Adenza acquisition, the comparisons presented in this discussion and analysis also include the year-over-year comparison of results of operations for the fiscal years ended December 31, 2022 and December 31, 2021.

Business Segments

Our organizational structure aligns our businesses with the foundational shifts that are driving the evolution of the global financial system. Following the acquisition of Adenza, we further refined the divisional structure into Capital Access Platforms, Financial Technology and Market Services reportable segments. All prior periods have been restated to conform to the current period presentation. See Note 1, “Organization and Nature of Operations,” and Note 19, “Business Segments,” to the consolidated financial statements for further discussion of our reportable segments and geographic data, as well as how management allocates resources, assesses performance and manages these businesses as three separate segments. See “Part I, Item 1. Business” for additional discussion on recent developments and highlights.

Nasdaq’s Operating Results

The following tables summarize our financial performance for the year ended December 31, 2023 compared to the same period in 2022 and for the year ended December 31, 2022 when compared to the same period in 2021. The comparability of our results of operations between reported periods is impacted by the acquisition of Adenza in November 2023. See “2023 Acquisition,” of Note 4, “Acquisitions,” to the consolidated financial statements for further discussion. For a detailed discussion of our results of operations, see “Segment Operating Results” below.

In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Impacts on our revenues less transaction-based expenses and operating income associated with fluctuations in foreign currency are discussed in more detail under “Item 7A. Quantitative and Qualitative Disclosures about Market Risk.”

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The following chart summarizes our ARR (in millions):

ARR for a given period is the current annualized value 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. For Adenza recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for Adenza recurring revenue contracts that include annual values that increase over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation. 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.

The ARR chart includes:

The following chart summarizes our quarterly annualized SaaS revenues for Solutions, which comprises our Capital Access Platforms and Financial Technology segments, for December 31, 2023, 2022 and 2021 (in millions):

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Segment Operating Results

The following table presents our revenues by segment:

The following chart presents our Capital Access Platforms, Financial Technology and Market Services segments as a percentage of our total revenues, less transaction-based expenses.

CAPITAL ACCESS PLATFORMS

The following table presents revenues from our Capital Access Platforms segment:

Data & Listing Services Revenues

The following table presents key drivers from our Data & Listing Services business:

In the tables above:

•Number of total listed companies on The Nasdaq Stock Market for the years ended December 31, 2023, 2022 and 2021 included 600, 528 and 441 ETPs, respectively.

•IPOs, new listings (which includes IPOs) and total listed companies for exchanges that comprise Nasdaq Nordic and Nasdaq Baltic represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.

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Data & Listing Services revenues increased in 2023 compared with 2022 primarily due to an increase in proprietary data revenues driven largely by higher international demand and annual listing fee growth, partially offset by lower initial listings fees.

Index Revenues

The following table presents key drivers from our Index business:

In the table above, TTM represents trailing twelve months.

Index revenues increased in 2023 compared with 2022 primarily due to higher AUM in exchange traded products linked to Nasdaq indices.

Workflow & Insights Revenues

The following table presents key drivers from our Workflow & Insights business:

Workflow & Insights revenues increased in 2023 compared with 2022 due to an increase in both analytics and corporate solutions revenues. The increase in analytics revenues was primarily due to the growth in our eVestment and Solovis product offerings. The increase in our corporate solutions revenues was primarily due to continued demand for our ESG solutions.

FINANCIAL TECHNOLOGY

The following table presents revenues from our Financial Technology segment:

Financial Crime Management Technology Revenues

The following table presents key drivers for Financial Crime Management Technology business:

Financial Crime Management Technology revenues increased in 2023 compared with 2022 and 2022 compared with 2021 due to an increase in demand related to new sales to existing clients and new customer acquisitions. The 2022 increase was also driven by a $28 million purchase price adjustment from the Verafin acquisition on deferred revenue in 2021 and the inclusion of a full year of Verafin revenues in 2022.

Regulatory Technology Revenues

The following table presents key drivers for Regulatory Technology business:

Regulatory Technology revenues increased in 2023 compared with 2022 primarily due to the inclusion of revenues from our acquisition of Adenza and strong performance from our surveillance offerings in new sales to existing clients and new customer acquisitions. The strong performance of our surveillance offerings was also the key driver of the increase in 2022 compared with 2021.

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Capital Markets Technology Revenues

The following table presents key drivers for Capital Markets Technology business:

Capital Markets Technology revenues increased in 2023 compared with 2022 and 2022 compared with 2021. The increase in 2023 was primarily due to the inclusion of revenues from our acquisition of Adenza, higher trade management services revenues mainly driven by demand for colocation and connectivity services and higher market technology revenues due to higher support revenues and higher professional services fees. The increase in 2022 was primarily due to higher trade management services revenues associated with increased demand for connectivity services, partially offset by lower market technology revenues. The decrease in market technology revenues in 2022 was due to the successful completion of long-term contracts in 2021 and the unfavorable impact of changes in foreign exchange rates of $10 million, partially offset by growth in SaaS-based revenues.

MARKET SERVICES

The following table presents revenues from our Market Services segment:

Our Market Services segment includes equity derivatives trading, cash equity trading, Nordic fixed income trading & clearing, U.S. Tape plans and other revenues. The following tables present net revenues by product from our Market Services segment:

In the table above, Other includes Nordic fixed income trading & clearing, Nordic derivatives and Canadian cash equities trading.

U.S. Equity Derivative Trading

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers from our U.S. Equity Derivative Trading business:

Section 31 fees are recorded as U.S. equity derivative and cash equity trading revenues with a corresponding amount recorded in transaction-based expenses. We are assessed these fees from the SEC and pass them through to our customers in the form of incremental fees. Pass-through fees can increase or decrease due to rate changes by the SEC, our percentage of the overall industry volumes processed on our systems, and differences in actual dollar value traded. Section 31 fees decreased in 2023 compared with 2022 primarily due to lower average SEC fee rates. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.

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U.S. equity derivative trading revenues, transaction rebates, in which we credit a portion of the execution charge to the market participant, and U.S. equity derivative trading revenues less transaction-based expenses remained relatively flat in 2023 compared with 2022 primarily due to higher industry trading volumes, partially offset by lower overall matched market share executed on Nasdaq’s exchanges and lower gross capture rate.

Cash Equity Trading Revenues

The following tables present total revenues, transaction-based expenses, and total revenues less transaction-based expenses as well as key drivers and other metrics from our Cash Equity Trading business:

See the discussion in "U.S. Equity Derivative Trading" for an explanation of Section 31 fees for 2023 as compared to 2022. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.

In the tables above, total market share includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the FINRA/Nasdaq Trade Reporting Facility.

Cash equity trading revenues decreased in 2023 compared with 2022 primarily due to lower industry trading volumes, lower overall U.S. matched market share executed on Nasdaq’s exchanges, as well as lower gross capture rates.

Cash equity trading revenues less transaction-based expenses remained flat in 2023 compared with 2022 primarily due to lower industry trading volumes and lower overall U.S. matched market share executed on Nasdaq’s exchanges, partially offset by higher U.S. capture rate.

Transaction rebates decreased in 2023 compared with 2022. For The Nasdaq Stock Market and Nasdaq PSX, we credit a portion of the per share execution charge to the market participant that provides the liquidity, and for Nasdaq BX, we credit a portion of the per share execution charge to the market participant that takes the liquidity. The decrease was primarily due to lower rebate capture rate, lower U.S.

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industry volumes, and lower U.S. matched market share executed on Nasdaq's exchanges.

U.S. Tape Plans

The following table presents revenues from our U.S. Tape plans business:

U.S. Tape plans revenues decreased in 2023 compared with 2022 primarily due to lower market share and usage.

Other

Other includes Nordic fixed income trading and clearing, Nordic derivatives and Canadian cash equities trading. The following tables present revenue and a key driver from our Other business:

In the table above, other includes transaction rebates of $20 million, $30 million, and $32 million in 2023, 2022, and 2021 respectively.

In the tables above, Nasdaq Nordic and Nasdaq Baltic total average daily volume of options and futures contracts include Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement.

Other revenues increased in 2023 compared with 2022 primarily due to increased revenues in our Nordic derivatives trading, higher collateral management services revenues, partially offset by lower revenue from Canadian cash equities trading.

OTHER REVENUES

For the years ended December 31, 2023, 2022 and 2021, other revenues include revenues related to our European power trading and clearing business, following our announcement in June 2023 to sell this business to the European Energy Exchange, subject to regulatory approval. Prior to June 2023, these revenues were included in our Market Services and Capital Access Platforms segments. Also for the years ended December 31, 2023, 2022 and 2021, other revenues include a transitional services agreement associated with a divested business. For the year ended December 31, 2022 and 2021, other revenues also include

revenues related to our Nordic broker services business for which we completed the wind-down in June 2022. Prior to June 2022, these revenues were included in our Market Services segment. Additionally, for the year ended December 31, 2021, other revenues include revenues associated with the NPM business which we contributed in July 2021 to a standalone, independent company, of which we own the largest minority interest, together with a consortium of third-party financial institutions. Prior to July 2021, these revenues were included in our Capital Access Platforms segment.

EXPENSES

Operating Expenses

The following table presents our operating expenses:

The increase in compensation and benefits expense for the year ended December 31, 2023 compared with the same period in 2022 was primarily driven by increased headcount. The increase in the year ended December 31, 2023 was partially offset by a favorable impact from foreign exchange rates of $12 million.

Headcount, including employees of non-wholly owned consolidated subsidiaries, increased to 8,525 employees as of December 31, 2023 from 6,377 as of December 31, 2022, primarily due to our acquisition of Adenza.

Professional and contract services expense decreased in 2023 compared with 2022 primarily due to reduced consulting costs and reduced legal fees.

Computer operations and data communications expense increased in 2023 compared with 2022 primarily due to higher costs related to our cloud initiatives.

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Occupancy expense increased in 2023 compared with 2022 primarily due to a review of our real estate and facility capacity requirements due to our new and evolving work models initiated in the first quarter of 2023. As a result of this ongoing review, for the year ended December 31, 2023, we recorded $18 million in impairment charges and exit related costs following the abandonment of leased office space.

General, administrative and other expense decreased in 2023 compared with the same period in 2022 primarily due to an insurance recovery related to a legal matter in 2023 and a loss on extinguishment of debt recorded in 2022.

Marketing and advertising expense decreased in 2023 compared with 2022 primarily due to lower client incentives resulting from lower IPO activity.

Depreciation and amortization expense increased in 2023 compared with 2022 primarily due to an increase in amortization due to the intangible assets acquired as part of the Adenza acquisition.

Regulatory expense remained relatively flat in 2023 compared with 2022.

We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years, which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third-party transaction costs and vary based on the size and frequency of the activities described above. The increase for the year ended December 31, 2023 compared with 2022 primarily reflects higher expenses related to the Adenza acquisition.

Restructuring charges increased in 2023 compared with 2022 as a result of charges from our 2022 divisional alignment program as well as the launch of our 2023 Adenza restructuring program. See Note 20, “Restructuring Charges,” to the consolidated financial statements for further discussion. By 2025, we expect to achieve benefits of the 2022 divisional alignment program through combined annual run-rate operating efficiencies and revenue synergies of approximately $30 million annually. We expect to achieve $80 million of net expense synergies two years following the closing of the Adenza acquisition.

Non-operating Income and Expenses

The following table presents our non-operating income and expenses:

The following table presents our interest expense:

Interest income increased in 2023 compared with 2022 primarily due to a higher average cash balance during the period between the issuance of the senior unsecured notes in June 2023 and the closing of the Adenza acquisition, and an increase in interest rates.

Interest expense increased in 2023 compared with 2022 primarily due to debt issued in June 2023 to finance the Adenza acquisition as well as an increase in interest rates. See “Financing of the Adenza Acquisition,” of Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion.

The net gain on divestiture of business in 2021 relates to the sale of our U.S. Fixed Income business, which was part of our FICC business within our Market Services segment. We recognized a pre-tax gain on the sale of $84 million, net of disposal costs.

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Other income (loss) primarily represents realized and unrealized gains and losses from strategic investments related to our corporate venture program.

Net income (loss) from unconsolidated investees decreased in 2023 compared with 2022 primarily due to lower income recognized from our equity method investments in OCC and NPM. See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements for further discussion.

Tax Matters

The following table presents our income tax provision and effective tax rate:

For further discussion of our tax matters, see Note 17, “Income Taxes,” to the consolidated financial statements.

NON-GAAP FINANCIAL MEASURES

In addition to disclosing results determined in accordance with U.S. GAAP, we also provide non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share in this Annual Report on Form 10-K. 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 our 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 their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP 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 Annual Report on Form 10-K, including our consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, 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 non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted earnings per share 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. We believe that excluding the following items from the non-GAAP net income attributable to Nasdaq provides a more meaningful analysis of Nasdaq’s ongoing operating performance and comparisons in Nasdaq’s performance between periods:

•Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses and the relative operating performance of the businesses between periods.

•Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. These expenses primarily include integration costs, as well as legal, due diligence and other third-party transaction costs. The increase for the year ended December 31, 2023 compared to 2022 primarily reflects costs related to the Adenza acquisition.

•Restructuring charges: In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program, “Adenza Restructuring” to optimize our efficiencies as a combined organization. In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In 2019, we initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. The 2019 restructuring plan was completed in June 2021. See Note 20, “Restructuring Charges,” to the consolidated financial statements for further discussion of our 2023 Adenza restructuring program, our 2022 divisional alignment program and our 2019 restructuring plan.

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•Net loss (income) from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments, primarily our equity interest in OCC and NPM. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods. See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements for further discussion.

•Other items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq. Other significant items include:

◦Lease asset impairments: For 2023, this includes impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy and depreciation and amortization expense in our Consolidated Statements of Income.

◦Extinguishment of debt: For 2022 and 2021 this includes a loss on extinguishment of debt, which is recorded under general, administrative and other expense in our Consolidated Statements of Income.

◦Legal and regulatory matters: For 2023 and 2022, this includes accruals related to certain legal matters. For 2023, these charges were partially offset by insurance recoveries related to certain legal matters. The charges and related insurance recoveries are recorded in professional and contract services and general, administrative and other expense in the Consolidated Statements of Income. For 2022 and 2021, this also includes a charge related to an administrative fine imposed by the SFSA. related to the clearing default that occurred in 2018. This charge was included in regulatory expense in the Consolidated Statements of Income.

◦Net gain on divestiture of business: For 2021, this represents our pre-tax net gain of $84 million on the sale of our U.S. Fixed Income business.

◦Pension settlement charge: For 2023, we terminated our U.S. pension plan and recorded a partial settlement charge under compensation and benefits in the Consolidated Statements of Income. See Note 10, “Retirement Plans,” to the consolidated financial statements for further discussion.

◦Other loss (income): For 2023, this includes certain financing costs related to the Adenza acquisition. For 2023, 2022 and 2021 this also includes net gains and losses from strategic investments entered into through our corporate venture program, which are included in other income (loss) in our Consolidated Statements of Income.

•Significant tax items: The non-GAAP adjustment to the income tax provision for all periods primarily includes the tax impact of each non-GAAP adjustment. In addition, for the year ended December 31, 2021, the non-GAAP adjustment to the income tax provision includes adjustments related to return-to-provision.

The following tables present reconciliations between U.S. GAAP net income attributable to Nasdaq and diluted earnings per share and non-GAAP net income attributable to Nasdaq and diluted earnings per share:

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LIQUIDITY AND CAPITAL RESOURCES

Historically, we have funded our operating activities and met our commitments through cash generated by operations, augmented by the periodic issuance of debt. Currently, our cost and availability of funding remain healthy. We continue to prudently assess our capital deployment strategy through balancing acquisitions, internal investments, debt repayments, and shareholder return activity, including share repurchases and dividends.

We expect that our current cash and cash equivalents combined with cash flows provided by operating activities, supplemented with our borrowing capacity and access to additional financing, including our revolving credit facility and our commercial paper program, provides us additional flexibility to meet our ongoing obligations and the capital deployment strategic actions described above, while allowing us to invest in activities and product development that support the long-term growth of our operations.

Principal factors that could affect the availability of our internally-generated funds include:

•    deterioration of our revenues in any of our business segments;

•    changes in regulatory and working capital requirements; and

•an increase in our expenses.

Principal factors that could affect our ability to obtain cash from external sources include:

•    operating covenants contained in our credit facilities that limit our total borrowing capacity;

•    credit rating downgrades, which could limit our access to additional debt;

•    a significant decrease in the market price of our common stock; and

•    volatility or disruption in the public debt and equity markets.

The following table summarizes selected measures of our liquidity and capital resources:

Cash and Cash Equivalents

Cash and cash equivalents includes all non-restricted cash in banks and highly liquid investments with original maturities of 90 days or less at the time of purchase. The balance retained in cash and cash equivalents is a function of anticipated or possible short-term cash needs, prevailing interest rates, our investment policy, and alternative investment choices. As of December 31, 2023, our cash and cash equivalents of $453 million were primarily invested in money market funds, commercial paper, municipal bonds and bank deposits.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $236 million as of December 31, 2023 and $275 million as of December 31, 2022. The remaining balance held in the U.S. totaled $217 million as of December 31, 2023 and $227 million as of December 31, 2022.

Cash Flow Analysis

The following table summarizes the changes in cash flows:

Net Cash Provided by Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation and amortization expense, expense associated with share-based compensation, deferred income taxes and the effects of changes in working capital. Changes in working capital include changes in accounts receivable and deferred revenue which are impacted by the timing of customer billings and related collections from our customers; accounts payable and accrued expenses due to timing of payments; accrued personnel costs, which are impacted by employee performance targets and the timing of payments related to employee bonus incentives; and Section 31 fees payable to the SEC, which is impacted by the changes in SEC fee rates and the timing of collections from customers and payments to the SEC.

Net cash provided by operating activities decreased $10 million for 2023 compared with 2022, excluding the impact of the Adenza acquisition, which is reflected in net cash provided by (used in) investing activities. The decrease was primarily driven by changes in our working capital and timing of various payments and receipts of $(129) million, partially offset by an increase of $119 million driven by the increase in net income adjusted for certain noncash operating activities. The changes in working capital primarily included a decrease in Section 31 fees payable to the SEC, partially offset by lower receivables largely due to a decrease in Section 31 fees receivable as well as timing of collection and an increase in accounts payable and accrued expenses primarily due to an increase in our accrued interest payable from issuances of senior unsecured notes in connection with the Adenza acquisition. Non-cash charges in 2023 primarily included $323 million of depreciation and amortization and $122 million of share-based compensation.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities for the year ended December 31, 2023 primarily related to $5,766 million paid for the acquisition of Adenza, net of cash and cash equivalents acquired, purchases of property and equipment of

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$158 million, net purchases of investments related to default funds and margin deposits of $74 million and $3 million from other investing activities, partially offset by proceeds from the sales and redemptions of trading securities, net of $7 million.

Net cash provided by investing activities for the year ended December 31, 2022 primarily related to net proceeds from sales and redemptions of default funds and margin deposits of $211 million and proceeds of $33 million from other investing activities, partially offset by purchases of property and equipment of $152 million and $41 million cash used for acquisitions, net of cash and cash equivalents acquired.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023 primarily related to $5,608 million proceeds from issuances of senior unsecured notes and the 2023 Term Loan, in connection with the Adenza acquisition, net of debt issuance costs, partially offset by $441 million of dividend payments to our shareholders, $371 million from repayments of our commercial paper, net, $269 million in repurchases of common stock and $260 million relating to partial repayment of the 2023 Term Loan.

Net cash provided by financing activities for the year ended December 31, 2022 primarily related to an increase in default funds and margin deposits of $2,440 million, proceeds of $541 million from the issuances of long-term-debt and proceeds of $238 million from the issuances of our commercial paper, net, partially offset by $1,097 million related to the repayment of our 2022 and 2024 Notes, $383 million of dividend payments to our shareholders, $325 million of repurchases of common stock pursuant to the ASR agreement and $308 million in other repurchases of common stock.

See Note 4, “Acquisitions,” to the consolidated financial statements for further discussion.

See Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion of our debt obligations.

See “Share Repurchase Program,” and “Cash Dividends on Common Stock,” of Note 12, “Nasdaq Stockholders’ Equity,” to the consolidated financial statements for further discussion of our share repurchase program and cash dividends declared and paid on our common stock.

Financial Investments

Our financial investments totaled $188 million as of December 31, 2023 and $181 million as of December 31, 2022. Of these securities, $168 million as of December 31, 2023 and $161 million as of December 31, 2022 are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing. See Note 6, “Investments,” to the consolidated financial statements for further discussion.

Regulatory Capital Requirements

Clearing Operations Regulatory Capital Requirements

We are required to maintain minimum levels of regulatory capital for the clearing operations of Nasdaq Clearing. The level of regulatory capital required to be maintained is dependent upon many factors, including market conditions and creditworthiness of the counterparty. As of December 31, 2023, our required regulatory capital of $123 million was primarily comprised of highly rated European government debt securities that are included in financial investments in the Consolidated Balance Sheets.

Broker-Dealer Net Capital Requirements

Our broker-dealer subsidiaries, Nasdaq Execution Services, NFSTX, LLC, and Nasdaq Capital Markets Advisory, are subject to regulatory requirements intended to ensure their general financial soundness and liquidity. These requirements obligate these subsidiaries to comply with minimum net capital requirements. As of December 31, 2023, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $27 million, substantially all of which is held in cash and cash equivalents in the Consolidated Balance Sheets. The required minimum net capital is included in restricted cash and cash equivalents in the Consolidated Balance Sheets.

Nordic and Baltic Exchange Regulatory Capital Requirements

The entities that operate trading venues in the Nordic and Baltic countries are each subject to local regulations and are required to maintain regulatory capital intended to ensure their general financial soundness and liquidity. As of December 31, 2023, our required regulatory capital of $37 million was primarily invested in European government bills and mortgage bonds and Icelandic government bonds that are included in financial investments in the Consolidated Balance Sheets and cash, which is included in restricted cash and cash equivalents in the Consolidated Balance Sheets.

Other Capital Requirements

We operate several other businesses which are subject to local regulation and are required to maintain certain levels of regulatory capital. As of December 31, 2023, other required regulatory capital of $16 million, primarily related to Nasdaq Central Securities Depository, was primarily invested in European government debt securities that are included in financial investments in the Consolidated Balance Sheets.

Equity and dividends

Share Repurchase Program

See “Share Repurchase Program,” of Note 12, “Nasdaq Stockholders’ Equity,” to the consolidated financial statements for further discussion of our share repurchase program.

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Cash Dividends on Common Stock

The following table presents our quarterly cash dividends paid per common share on our outstanding common stock:

See “Cash Dividends on Common Stock,” of Note 12, “Nasdaq Stockholders’ Equity,” to the consolidated financial statements for further discussion of the dividends.

Debt Obligations

The following table summarizes our debt obligations by contractual maturity:

For the year ended December 31, 2023, the weighted average interest rate on our debt obligations was approximately 3.5%. This rate can fluctuate based on changes in interest rates for our variable rate debts, changes in foreign currency exchange rates and changes in the amount and duration of outstanding debt.

In December 2022, Nasdaq amended and restated its previously issued $1.25 billion five-year revolving credit facility, with a new maturity date of December 16, 2027. In addition to the 2022 Revolving Credit Facility, we also have other credit facilities primarily to support our Nasdaq Clearing operations in Europe, as well as to provide a cash pool credit line for one subsidiary. These European credit facilities, which are available in multiple currencies, totaled $191 million as of December 31, 2023 and $184 million as of December 31, 2022 in available liquidity, none of which was utilized.

Financing of the Adenza Acquisition

In June 2023, Nasdaq issued six series of notes for total proceeds of $5,016 million, net of debt issuance costs of $38 million, with various maturity dates ranging from 2025 to 2063. During the second half of 2023, we incurred an additional $6 million in debt issuance costs, for a total net proceeds from the issuance of the six series of notes of $5,010 million as of December 31, 2023. The net proceeds from these notes were used to finance the majority of the cash consideration due in connection with the Adenza acquisition.

In addition, in connection with the financing of the Adenza acquisition, we entered into the 2023 Term Loan agreement. The 2023 Term Loan provided us with the ability to borrow up to $600 million to finance a portion of the cash consideration for the Adenza acquisition and other amounts incurred in connection with this transaction. Under the 2023 Term Loan, borrowings bear interest on the principal amount outstanding at a variable interest rate based on the SOFR plus an applicable margin that varies with Nasdaq’s debt rating. On November 1, 2023, we borrowed $599 million, net of fees, under this term loan towards payment of the cash consideration due in connection with the Adenza acquisition. We made a partial repayment during the fourth quarter of $260 million. As of December 31, 2023, we had $339 million outstanding under this term loan.

As of December 31, 2023, we were in compliance with the covenants of all of our debt obligations.

See Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion of our debt obligations.

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Contractual Obligations and Contingent Commitments

Nasdaq has contractual obligations to make future payments under debt obligations by contract maturity, minimum rental commitments under non-cancelable operating leases and other obligations. The following table shows these contractual obligations as of December 31, 2023:

In the preceding table:

•Debt obligations by contractual maturity include both principal and interest obligations. As of December 31, 2023, an interest rate of 4.8% was used to compute the amount of the contractual obligations for interest on the 2022 Revolving Credit Facility and 6.7% was used to compute the amount of the contractual obligations for interest on the 2023 Term Loan. For our Euro denominated notes interest is calculated on an actual basis while all other debt is calculated on a 360-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of December 31, 2023. See Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion.

•Operating lease obligations represent our undiscounted operating lease liabilities as of December 31, 2023, as well as legally binding minimum lease payments for leases signed but not yet commenced. See Note 16, “Leases,” to the consolidated financial statements for further discussion of our leases.

•Purchase obligations primarily represent minimum outstanding obligations due under software license agreements, of which the majority relates to our multi-year AWS partnership contract.

Off-Balance Sheet Arrangements

For discussion of off-balance sheet arrangements see:

•    Note 15, “Clearing Operations,” to the consolidated financial statements for further discussion of our non-cash default fund contributions and margin deposits received for clearing operations; and

•    Note 18, “Commitments, Contingencies and Guarantees,” to the consolidated financial statements for further discussion of:

◦Guarantees issued and credit facilities available;

◦Other guarantees; and

◦Routing brokerage activities.