NASDAQ, INC. (NDAQ) FY 2024 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, 2024 and 2023 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 “Part I, Item 1A. Risk Factors.” For further discussion of our growth strategy, products and services, and competitive strengths, see “Part I, Item 1. Business.” For a similar discussion comparing the fiscal years ended December 31, 2023 and 2022, refer to “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, 2023, which was previously filed with the SEC on February 21, 2024.

The period over period percentages below are calculated based on exact dollars, and therefore may not recalculate exactly using rounded numbers as presented in millions in the tables below.

EXECUTIVE OVERVIEW

Nasdaq is a global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.

We manage, operate and provide our products and services in three business segments: Capital Access Platforms, Financial Technology and Market Services.

2024 Highlights

•Throughout 2024, Nasdaq substantially completed the integration of AxiomSL and Calypso.

•In 2024, our Financial Technology segment delivered more than 10% ARR growth, reflecting an increase in new clients, cross-sells and upsells.

•Nasdaq extended listing leadership in 2024 with its sixth consecutive year as the top U.S. exchange by number of IPOs and proceeds raised.

•In 2024, Nasdaq achieved an 82% win rate among Nasdaq-eligible IPOs in the U.S., representing 180 deals and $23 billion in total proceeds raised.

•In 2024, our Index business had $80 billion of net inflows, including $28 billion in the fourth quarter, and reported its fifth consecutive record quarter in ETP AUM, reaching $647 billion as of December 31, 2024. In addition, the Index business launched a record 116 new products with its clients.

•In 2024, our Market Services segment achieved record net revenue. The Closing Cross set full year records in both share volume and notional value traded.

Macroeconomic environment

Our business performance can be positively or negatively impacted by a number of factors, including general economic conditions, current or expected inflation, interest rate fluctuations, market volatility, changes in investment patterns and priorities, regulatory changes, pandemics and other factors that are generally beyond our control. For example, higher overall U.S. trading volumes in 2024 as compared to 2023 has led to an increase in our U.S. Equity Derivative Trading and U.S. Cash Equity Trading revenues. Market factors also contributed to higher valuations in Nasdaq Indices. In our corporate solutions business, we managed through market challenges, as corporate buying cycles remained elongated throughout the year. To the extent that global or national economic conditions weaken and result in slower growth or recessions, our business may be negatively impacted. See “Part I, Item 1A. Risk Factors” for further discussion.

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Nasdaq’s Operating Results

The following table summarizes our financial performance for the year ended December 31, 2024 compared to the same period in 2023 and for the year ended December 31, 2023 compared to the same period in 2022. The comparability of our results of operations between reported periods is impacted by the acquisition of Adenza in November 2023. See Note 4, “Acquisition,” 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.”

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 AxiomSL and Calypso recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for AxiomSL and Calypso 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.

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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, 2024, 2023 and 2022 (in millions):

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.

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Capital Access Platforms

The following tables present revenues and ARR from our Capital Access Platforms segment:

Data & Listing Services Revenues

The following tables present key drivers from our Data & Listing Services business:

In the table above:

•For the years ended December 31, 2024, 2023 and 2022, IPOs included 50, 27 and 74 SPACs, respectively. The number of total listed companies on The Nasdaq Stock Market for the years ended December 31, 2024, 2023 and 2022 included 768, 600 and 528 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 listed on the alternative markets of Nasdaq First North.

Data & Listing Services revenues increased in 2024 compared with the same period in 2023 as higher data usage, price increases on regulated data, higher initial listing fees and new data sales were partially offset by lower annual fees due to the impact of 2023 delistings and downgrades and lower amortization of prior period initial listing fees.

Index Revenues

The following table presents key drivers from our Index business:

In the table above, TTM represents trailing twelve months. The number of listed ETPs as of December 31, 2023 and 2022 has been updated to reflect a revised methodology whereby an ETP listed on multiple exchanges is counted as one product, rather than formerly being counted per exchange. This change has no impact on reported AUM.

Index revenues increased in 2024 compared with the same period in 2023 primarily due to higher AUM in exchange traded products linked to Nasdaq indices and growth in trading volume on futures contracts linked to the Nasdaq-100 Index. The increase in 2024 also includes a $16 million one-time item related to a legal settlement to recoup revenue.

Workflow & Insights Revenues

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

Workflow & Insights revenues increased in 2024 compared with the same period in 2023 primarily due to an increase in analytics revenue, particularly our Data Link and eVestment product offerings.

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Financial Technology

The following table presents revenues from our Financial Technology segment:

Financial Crime Management Technology Revenues

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

Financial Crime Management Technology revenues increased in 2024 compared with the same period in 2023 primarily due to revenue recognition from the full year impact of contracts signed in 2023, including higher value contracts, new sales and price increases to existing clients and new customer acquisitions, particularly small and medium-sized businesses.

Regulatory Technology Revenues

The following table presents key drivers for our Regulatory Technology business:

Regulatory Technology revenues increased in 2024 compared with the same period in 2023 primarily due to the inclusion of revenues from AxiomSL associated with our acquisition of Adenza and higher surveillance revenues, partially offset by a one-time revenue reduction recognized in the third quarter of 2024 related to a purchase accounting adjustment. See Note 3, “Revenue from Contracts with Customers,” to the consolidated financial statements for discussion on the measurement period adjustment.

Capital Markets Technology Revenues

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

Capital Markets Technology revenues increased in 2024 compared with the same period in 2023. The increase was primarily due to the inclusion of revenues from Calypso associated with our acquisition of Adenza. The increase was also driven by higher trade management services revenues mainly driven by demand for additional colocation and connectivity services following our recent data center expansion and higher market technology license and support revenues, partially offset by lower market technology professional services revenue due to a large project delivery in the comparable period in 2023.

Market Services

The following table presents revenues from our Market Services segment:

The following table presents net revenues by product from our Market Services segment:

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In the preceding table, 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 increased in 2024 compared with the same period in 2023 primarily due to higher average SEC fee rates as a result of an increase in the SEC fee rate in May 2024. Since the amount recorded in revenues is equal to the amount recorded as Section 31 fees, there is no impact on our net revenues.

U.S. equity derivative trading revenues and U.S. equity derivative trading revenues, net increased in 2024 compared with the same period in 2023 primarily due to higher industry trading volumes, partially offset by lower overall matched market share executed on Nasdaq’s exchanges. U.S. equity derivative trading revenues also increased in 2024 compared with the same period in 2023 due to higher gross capture.

Transaction rebates, in which we credit a portion of the execution charge to the market participant, increased in 2024 compared with the same period in 2023 primarily due to higher rebate capture rate and industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq’s exchanges.

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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 2024 as compared with the same period in 2023.

Cash equity trading revenues and cash equity trading revenues, net increased in 2024 compared with the same period in 2023 primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges.

Transaction rebates increased in 2024 compared with the same period in 2023 primarily due to higher U.S. industry volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq’s exchanges. 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.

U.S. Tape Plans

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

U.S. Tape plans revenues decreased in 2024 compared with the same period in 2023 primarily due to lower industry-wide usage volume and the impact of one-time industry-wide adjustments.

Other

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

In the preceding table, Other includes Canadian cash equity transaction rebates of $22 million, $20 million and $30 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Other revenues decreased in 2024 compared with the same period in 2023 primarily due to a decrease in Nordic derivatives revenues due to a non-recurring payment received in 2023, partially offset by an increase in Nordic fixed income trading and clearing.

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Other Revenues

For the years ended December 31, 2024, 2023 and 2022, Other revenues include revenues related to our Nordic power trading and clearing business, following our announcement in June 2023 that we entered into an agreement to sell this business, which was subsequently terminated in June 2024. In January 2025, we entered into a new agreement to transfer existing open positions in our Nordic power derivatives trading and clearing business to a European exchange. The completion of this transaction is subject to customary regulatory approvals. Revenues from this business will continue to be reflected in Other revenues. Prior to June 2023, these revenues were included in our Market Services and Capital Access Platforms segments. For the years ended December 31, 2023 and 2022, Other revenues also include revenues related to a transitional services agreement associated with a divested business. For the year ended December 31, 2022, 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 and Capital Access Platforms segments.

EXPENSES

Operating Expenses

The following table presents our operating expenses:

The increase in compensation and benefits expense in 2024 compared with the same period in 2023 was primarily driven by the inclusion of a full year of compensation costs related to Adenza employees as compared to two months in 2023, a pre-tax charge of $23 million resulting from the finalization of the termination of our pension plan and higher incentive compensation.

Headcount, including employees of non-wholly owned consolidated subsidiaries, increased to 9,162 employees as of December 31, 2024 from 8,525 employees as of December 31, 2023, primarily due to an increase in our Financial Technology segment as we support revenue growth and innovation.

Professional and contract services expense increased in 2024 compared with the same period in 2023 primarily due to an increase in expenses related to the inclusion of Adenza.

Technology and communication infrastructure expense increased in 2024 compared with the same period in 2023 primarily due to an increase in expenses related to the inclusion of Adenza and an increase in investment in technology expense related to our cloud initiatives and software licensing.

Occupancy expense decreased in 2024 compared with the same period in 2023 primarily due to $18 million in impairment charges and exit related costs recorded in 2023 following the abandonment of leased office space, partially offset by an increase in costs related to the inclusion of Adenza office space.

General, administrative and other expense decreased in 2024 compared with the same period in 2023 primarily due to a one-time accrual in 2023 related to a legal matter, partially offset by the inclusion of Adenza expense for a full year in 2024 and insurance recoveries related to legal matters recorded in 2023.

Marketing and advertising expense increased in 2024 compared with the same period in 2023 primarily due to higher client incentive spending resulting from higher IPO activity.

Depreciation and amortization expense increased in 2024 compared with the same period in 2023 primarily due to an increase in amortization related to the intangible assets acquired as part of the Adenza acquisition.

Regulatory expense increased in 2024 compared with the same period in 2023 primarily due to the settlement of a previously disclosed SFSA inquiry.

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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. For the years ended December 31, 2024 and 2023, these costs primarily relate to the Adenza acquisition. For the year ended December 31, 2024, these costs were partially offset by the recognition of a termination fee received by Nasdaq in 2024 related to the termination of the proposed divestiture of our Nordic power trading and clearing business.

Restructuring charges increased in 2024 compared with the same period in 2023 as a result of charges from our Adenza restructuring program, which we implemented to optimize our efficiencies as a combined organization, and our divisional alignment program, which was completed in September 2024.

We further expanded our Adenza restructuring program in the fourth quarter of 2024 to accelerate our momentum. In connection with this program, we expect to incur approximately $140 million in pre-tax charges. Actions taken as part of this program are expected to be completed by the end of 2025, while certain costs may be recognized in the first half of 2026. We expect to achieve benefits primarily in the form of expense synergies with annual cost savings of $140 million by the end of 2025, inclusive of the $80 million of net expense synergies related to the AxiomSL and Calypso acquisition.

The divisional alignment program concluded on September 30, 2024, incurring total pre-tax charges of $139 million over a two-year period, within the projected range of $115 million to $145 million. In addition to significantly boosting the scalability of our platforms, and thus revenue opportunities, we expect to achieve benefits from the 2022 divisional alignment program through combined annual run-rate operational efficiencies of approximately $30 million annually by 2025.

For further discussion related to both programs described above, see Note 20, “Restructuring Charges,” to the consolidated financial statements.

Non-Operating Income and Expenses

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

The following table presents our interest expense:

Interest income decreased in 2024 compared with the same period in 2023 primarily due to a higher cash balance in 2023 during the period between the issuance of the senior unsecured notes in June 2023 and the close of the Adenza acquisition in November 2023.

Interest expense increased in 2024 compared with the same period in 2023 primarily due to debt issued in June 2023 to finance the Adenza acquisition. See “Financing of the Adenza Acquisition,” of Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion.

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 increased in 2024 compared with the same period in 2023 primarily due to higher income recognized from our equity method investment in OCC and lower losses from our equity method investment in NPM. See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements for further discussion.

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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.

The following table presents 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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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:

•Adenza purchase accounting adjustment: As discussed in Note 3, “Revenue from Contracts with Customers,” to the consolidated financial statements, during the third quarter of 2024, as part of finalizing the purchase accounting of the Adenza acquisition, a one-time revenue reduction of $32 million was recorded, reflecting the net impact of the accounting change on AxiomSL subscription revenue from the date of the Adenza acquisition. We have excluded the reduction of $34 million as this relates to the prior year impact of this change from our non-GAAP results. We have not excluded the $2 million offsetting impact of this change as it is related to current year results.

•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. For the years ended December 31, 2024 and 2023, these costs primarily relate to the Adenza acquisition. For the year ended December 31, 2024, these costs were partially offset by the recognition of a termination fee received by Nasdaq in 2024, related to the termination of the proposed divestiture of our Nordic power trading and clearing business.

•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, to optimize our efficiencies as a combined organization. We further expanded this restructuring program in the fourth quarter of 2024 to accelerate our momentum. 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. We completed this program in September 2024. See Note 20, “Restructuring Charges,” to the consolidated financial statements for further discussion of these programs.

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•Net (income) loss from unconsolidated investees: We exclude our share of the earnings and losses of our equity method investments. 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 the year ended December 31, 2023, other items include 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 the Consolidated Statements of Income. See Note 16, “Leases,” to the consolidated financial statements for further discussion.

◦Extinguishment of debt: For the years ended December 31, 2024 and 2022 this includes a loss on extinguishment of debt, which is recorded under general, administrative and other expense in the Consolidated Statements of Income. See Note 9, “Debt Obligations,” to the consolidated financial statements for further discussion.

◦Legal and regulatory matters: For the year ended December 31, 2024, other items primarily include the settlement of a previously disclosed SFSA inquiry, and accruals related to certain legal matters. For 2023 and 2022, other items also 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, 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.

◦Pension settlement charge: For the years ended December 31, 2024 and 2023, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The pre-tax charge is recorded in compensation and benefits expense in the Consolidated Statements of Income. See Note 10, “Retirement Plans,” to the consolidated financial statements for further discussion.

◦Other (income) loss: For the years ended December 31, 2024 and 2022, other items include net gains from strategic investments entered into through our corporate venture program, which are included in other income (loss) in the Consolidated Statements of Income. For 2023, other items included certain financing costs related to the Adenza acquisition and a net loss from a strategic investments entered into through our corporate venture program.

•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, 2024, tax items also include a one-time net tax expense of $33 million related to the completion of an intra-group transfer of certain intellectual property, or IP, assets to our U.S. headquarters as well as a tax benefit related to return to provision adjustments and release of tax reserves due to lapse in statute of limitations.

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 internal investments, debt repayments, and shareholder return activity, including dividends and share repurchases, and potential acquisitions.

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.

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

The decrease in working capital is primarily driven by the reclassification of the 2025 Notes to short-term debt in 2024 and an increase in current deferred revenue, partially offset by a decrease in commercial paper, net, as further described below under “Debt Obligations.”

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, 2024, our cash and cash equivalents of $592 million were primarily invested in money market funds, commercial paper and bank deposits.

Repatriation of Cash

Our cash and cash equivalents held outside of the U.S. in various foreign subsidiaries totaled $181 million as of December 31, 2024 and $236 million as of December 31, 2023. The remaining balance held in the U.S. totaled $411 million as of December 31, 2024 and $217 million as of December 31, 2023.

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, but not limited to, 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 increased $243 million for the year ended December 31, 2024 compared with the same period in 2023. The increase was primarily driven by an increase in net income and the impact of certain non-cash items on net income, primarily an increase in amortization expense due to acquired intangibles related to the Adenza acquisitions offset by a decrease in deferred income tax liabilities.

The changes in our operating assets and liabilities primarily included higher Section 31 fees payable to the SEC due to changes in Section 31 fee rate between periods, partially offset by higher cash outflows from accounts payable and accrued expenses, primarily due to interest paid relating to the senior unsecured notes and the settlement of a legal matter, and higher cash outflows from higher receivables, net, primarily due to higher Market Services receivables driven by higher Section 31 fee rate as well as higher billings.

Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2024 related to net purchases of investments related to default funds and margin deposits of $707 million, purchases of property and equipment of $207 million, other investing activities primarily related to our corporate venture program of $32 million and net purchases of trading securities, net, of $7 million.

Net cash used in investing activities for the year ended December 31, 2023 related to $5,766 million paid for the acquisition of Adenza, net of cash and cash equivalents acquired, purchases of property and equipment of $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 sale and redemption of trading securities, net of $7 million.

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Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities for the year ended December 31, 2024 primarily related to a decrease in default funds and margin deposits of $1,030 million, dividend payments to our shareholders of $541 million, 2023 Term Loan repayment of $340 million, net repayments of our commercial paper of $291 million, repayments of debt and credit commitments of $181 million and repurchases of common stock of $145 million.

Net cash provided by financing activities for the year ended December 31, 2023 primarily related to $5,608 million in 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 dividend payments to our shareholders of $441 million, repayments of our commercial paper, net of $371 million, repurchases of common stock of $269 million and partial repayment of the 2023 Term Loan of $260 million.

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 $184 million as of December 31, 2024 and $188 million as of December 31, 2023. Of these securities, $171 million as of December 31, 2024 and $168 million as of December 31, 2023 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, 2024, our required regulatory capital of $129 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, 2024, the combined required minimum net capital totaled $1 million and the combined excess capital totaled $24 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, 2024, our required regulatory capital of $35 million was primarily invested in European government bills and mortgage 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, 2024, other required regulatory capital of $12 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.

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.

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Debt Obligations

The debt obligations, by contractual maturity, at December 31, 2024 are as follows (in U.S. Dollar millions):

n Euro Notes n U.S. Notes

In the fourth quarter of 2024, we repurchased an aggregate amount of $181 million of outstanding notes, primarily related to the 2025 Notes, 2028 Notes and 2034 Notes. In February 2025, Nasdaq commenced a cash tender offer to repurchase up to an aggregate principal amount of $200 million of our 2028, 2034 and 2052 Notes.

For the year ended December 31, 2024, the weighted average interest rate on our debt obligations was approximately 3.95%. 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 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. These European credit facilities, which are available in multiple currencies, totaled $174 million as of December 31, 2024 and $191 million as of December 31, 2023 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. 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. On November 1, 2023, we borrowed $599 million, net of fees, under this term loan, which was used towards payment of the cash consideration due in connection with the Adenza acquisition, a portion of which had been repaid in the fourth quarter of 2023. The term loan was fully repaid in 2024.

As of December 31, 2024, 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.

CONTRACTUAL OBLIGATIONS AND CONTINGENT COMMITMENTS

Nasdaq has contractual obligations to make future payments under debt obligations by contract maturity, operating lease payments, and other obligations. The following table summarizes material cash requirements for known contractual and other obligations as of December 31, 2024, and the estimated timing thereof.

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In the table above:

•Debt obligations by contractual maturity include both principal and interest obligations. For our Euro denominated notes interest is calculated on an actual basis while all other debt obligations were primarily calculated on a 365-day basis at the contractual fixed rate multiplied by the aggregate principal amount as of December 31, 2024. 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, 2024, 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. The balance as of December 31, 2024 is primarily comprised of 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.