UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 001-38855
___________________________________
Nasdaq, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
52-1165937
(I.R.S. Employer Identification No.)
151 W. 42nd Street,
New York,
New York
(Address of Principal Executive Offices)
10036
(Zip Code)
Registrant’s telephone number, including area code: +1 212 401 8700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.01 par value per share
4.500% Senior Notes due 2032
0.900% Senior Notes due 2033
0.875% Senior Notes due 2030
1.75% Senior Notes due 2029
Trading Symbol(s)
Name of each exchange on which registered
NDAQ
NDAQ32
NDAQ33
NDAQ30
NDAQ29
The Nasdaq Stock Market
The Nasdaq Stock Market
The Nasdaq Stock Market
The Nasdaq Stock Market
The Nasdaq Stock Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company
☒
☐
☐
Accelerated filer
Smaller reporting company
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2023, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $17.0 billion (this amount represents approximately
340.1 million shares of Nasdaq, Inc.’s common stock based on the last reported sales price of $49.85 of the common stock on The Nasdaq Stock Market on such date).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
Common Stock, $0.01 par value per share
Outstanding at February 13, 2024
575,206,570 shares
Documents Incorporated by Reference: Certain portions of the Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.
Part I.
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Part II.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Item 9C.
Part III.
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Director
Independence
Item 14. Principal Accountant Fees and Services
Part IV.
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
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i
About this Form 10-K
Throughout this Form 10-K, unless otherwise specified:
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“Nasdaq,” “we,” “us” and “our” refer to Nasdaq, Inc.
“Nasdaq Baltic” refers to collectively, Nasdaq Tallinn AS, Nasdaq Riga,
AS, and AB Nasdaq Vilnius.
“Nasdaq BX” refers to the cash equity exchange operated by Nasdaq BX,
Inc.
“Nasdaq BX Options” refers to the options exchange operated by Nasdaq
BX, Inc.
“Nasdaq Clearing” refers to the clearing operations conducted by Nasdaq
Clearing AB.
“Nasdaq CXC” and “Nasdaq CX2” refer to the Canadian cash equity
trading books operated by Nasdaq CXC Limited.
“Nasdaq First North” refers to our alternative marketplaces for smaller
companies and growth companies in the Nordic and Baltic regions.
“Nasdaq GEMX” refers to the options exchange operated by Nasdaq
GEMX, LLC.
“Nasdaq ISE” refers to the options exchange operated by Nasdaq ISE,
LLC.
“Nasdaq MRX” refers to the options exchange operated by Nasdaq MRX,
LLC.
“Nasdaq Nordic” refers to collectively, Nasdaq Clearing AB, Nasdaq
Stockholm AB, Nasdaq Copenhagen A/S, Nasdaq Helsinki Ltd, and
Nasdaq Iceland hf.
“Nasdaq PHLX” refers to the options exchange operated by Nasdaq
PHLX LLC.
“Nasdaq PSX” refers to the cash equity exchange operated by Nasdaq
PHLX LLC.
“The Nasdaq Options Market” refers to the options exchange operated by
The Nasdaq Stock Market LLC.
“The Nasdaq Stock Market” refers to the cash equity exchange and listing
venue operated by The Nasdaq Stock Market LLC.
Nasdaq also provides as a tool for the reader the following list of
abbreviations and acronyms that are used throughout this Annual Report on
Form 10-K.
2022 Revolving Credit Facility: $1.25 billion senior unsecured revolving
credit facility, which matures on December 16, 2027, which has replaced the
$1.25 billion credit facility issued in 2020
2025 Notes: $500 million aggregate principal amount of 5.650% senior
unsecured notes due June 28, 2025
2029 Notes: €600 million aggregate principal amount of 1.75% senior
unsecured notes due March 28, 2029
2030 Notes: €600 million aggregate principal amount of 0.875% senior
unsecured notes due February 13, 2030
2031 Notes: $650 million aggregate principal amount of 1.650% senior
unsecured notes due January 15, 2031
2032 Notes: €750 million aggregate principal amount of 4.500% senior
unsecured notes due February 15, 2032
2033 Notes: €615 million aggregate principal amount of 0.900% senior
unsecured notes due July 30, 2033
2034 Notes: $1.25 billion aggregate principal amount of 5.550% senior
unsecured notes due February 15, 2034
2040 Notes: $650 million aggregate principal amount of 2.500% senior
unsecured notes due December 21, 2040
2050 Notes: $500 million aggregate principal amount of 3.25% senior
unsecured notes due April 28, 2050
2052 Notes: $550 million aggregate principal amount of 3.950% senior
unsecured notes due March 7, 2052
2053 Notes: $750 million aggregate principal amount of 5.950% senior
unsecured notes due August 15, 2053
2063 Notes: $750 million aggregate principal amount of 6.100% senior
unsecured notes due June 28, 2063
AML: Anti-money Laundering
ARR: Annualized Recurring Revenue
ASC: Accounting Standards Codification
ASU: Accounting Standards Update
ASR: Accelerated Share Repurchase
ATS: Alternative Trading System
AUM: Assets Under Management
AWS: Amazon Web Services
CAT: A market-wide consolidated audit trail established under an SEC
approved plan by Nasdaq and other exchanges
CCP: Central Counterparty
CFTC: U.S. Commodity Futures Trading Commission
EBITDA: Earnings before interest, taxes, depreciation and amortization
EMIR: European Market Infrastructure Regulation
2026 Notes: $500 million aggregate principal amount of 3.85% senior
Equity Plan: Nasdaq Equity Incentive Plan
unsecured notes due June 30, 2026
2028 Notes: $1 billion aggregate principal amount of 5.350% senior
unsecured notes due June 28, 2028
ESG: Environmental, Social and Governance
ESPP: Nasdaq Employee Stock Purchase Plan
ETF: Exchange Traded Fund
ETP: Exchange Traded Product
ii
Exchange Act: Securities Exchange Act of 1934, as amended
FASB: Financial Accounting Standards Board
FICC: Fixed Income and Commodities Trading and Clearing
FINRA: Financial Industry Regulatory
GICS: Global Industry Classification Standard
IPO: Initial Public Offering
MiFID II: Update to the Markets in Financial Instruments Directive
MiFIR: Markets in Financial Instruments Regulation
NPM: The NASDAQ Private Market, LLC
NSCC: National Securities Clearing Corporation
OCC: The Options Clearing Corporation
OTC: Over-the-Counter
Proxy Statement: Nasdaq’s Definitive Proxy Statement for the 2024 Annual
Meeting of Shareholders
PSU: Performance Share Unit
Regulation NMS: Regulation National Market System
Regulation SCI: Regulation Systems Compliance and Integrity
This Annual Report on Form 10-K includes market share and industry data
that we obtained from industry publications and surveys, reports of
governmental agencies and internal company surveys. Industry publications
and surveys generally state that the information they contain has been
obtained from sources believed to be reliable, but we cannot assure you that
this information is accurate or complete. We have not independently verified
any of the data from third-party sources nor have we ascertained the
underlying economic assumptions relied upon therein. Statements as to our
market position are based on the most currently available market data. For
market comparison purposes, The Nasdaq Stock Market data in this Annual
Report on Form 10-K for IPOs and new listings of equity securities (including
issuers that switched from other listings venues, closed-end funds and ETPs)
is based on data generated internally by us; therefore, the data may not be
comparable to other publicly-available IPO data. Data in this Annual Report
on Form 10-K for IPOs and new listings of equity securities on the Nasdaq
Nordic and Nasdaq Baltic exchanges and Nasdaq First North also is based on
data generated internally by us. IPOs and new listings data is presented as of
period end. While we are not aware of any misstatements regarding industry
data presented herein, our estimates involve risks and uncertainties and are
subject to change based on various factors, including those discussed in the
“Item 1A. Risk Factors” section in this Annual Report on Form 10-K.
Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing
material non-public information and for complying with SEC Regulation FD
and other disclosure obligations.
SaaS: Software as a Service
SEC: U.S. Securities and Exchange Commission
SERP: Supplemental Executive Retirement Plan
SFSA: Swedish Financial Supervisory Authority
SOFR: Secured Overnight Financing Rate
S&P: Standard & Poor’s
S&P 500: S&P 500 Stock Index
SPAC: Special Purpose Acquisition Company
SRO: Self-regulatory Organization
SSMA: Swedish Securities Markets Act 2007:528
TSR: Total Shareholder Return
U.S. GAAP: U.S. Generally Accepted Accounting Principles
U.S. Tape plans: U.S. cash equity and U.S. options industry data
UTP: Unlisted Trading Privileges
UTP Plan: Joint SRO Plan Governing the Collection, Consolidation, and
Dissemination of Quotation and Transaction Information for Nasdaq-Listed
Securities Traded on Exchanges on a UTP Basis
NASDAQ, the NASDAQ logos, and other brand, service or product names or
marks referred to in this report are trademarks or service marks, registered or
otherwise, of Nasdaq, Inc. and/or its subsidiaries. FINRA and Trade Reporting
Facility are registered trademarks of FINRA.
iii
• economic, political and market conditions and fluctuations, including
inflation, interest rate and foreign currency risk inherent in U.S. and
international operations, and geopolitical instability;
• the performance and reliability of our technology and technology of third
parties on which we rely;
• any significant systems failures or errors in our operational processes;
• our ability to continue to generate cash and manage our indebtedness; and
• adverse changes that may occur in the litigation or regulatory areas, or in
increased regulatory oversight
the securities markets generally, or
domestically or internationally.
Most of these factors are difficult to predict accurately and are generally
beyond our control. You should consider the uncertainty and any risk related
to forward-looking statements that we make. These risk factors are discussed
under the caption "Item 1A. Risk Factors" in this Annual Report on Form 10-
K. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Annual Report on Form 10-
K. You should carefully read this entire Annual Report on Form 10-K,
including “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the consolidated financial
statements and the related notes. Except as required by the federal securities
laws, we undertake no obligation to update any forward-looking statement,
release publicly any revisions to any forward-looking statements or report the
occurrence of unanticipated events. For any forward-looking statements
contained in any document, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.
Forward-Looking Statements
The SEC encourages companies to disclose forward-looking information so
that investors can better understand a company’s future prospects and make
informed investment decisions. This Annual Report on Form 10-K contains
these types of statements. Words such as “may,” “will,” “could,” “should,”
“anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,”
“plans,” “believes” and words or terms of similar substance used in
connection with any discussion of future expectations as to industry and
regulatory developments or business
future
operating results or financial performance, and other future developments are
intended to identify forward-looking statements. These include, among others,
statements relating to:
initiatives and strategies,
• our strategic direction, including changes to our corporate structure;
• the integration of acquired businesses, including accounting decisions
relating thereto;
• the scope, nature or impact of acquisitions, divestitures, investments, joint
ventures or other transactional activities;
• the effective dates for, and expected benefits of, ongoing initiatives,
transactional activities and other strategic, restructuring,
including
technology, ESG, de-leveraging and capital return initiatives;
• our products and services;
• the impact of pricing changes;
• tax matters;
• the cost and availability of liquidity and capital; and
• any litigation, or any regulatory or government investigation or action, to
which we are or could become a party or which may affect us and any
potential settlements of litigation, regulatory or governmental investigations
or actions, including with respect to our CFTC investigation.
Forward-looking statements involve risks and uncertainties. Factors that
could cause actual results to differ materially from those contemplated by the
forward-looking statements include, among others, the following:
• our operating results may be lower than expected;
• our ability to successfully integrate acquired businesses or divest sold
businesses or assets, including the fact that any integration or transition
may be more difficult, time consuming or costly than expected, and we may
be unable to realize synergies from business combinations, acquisitions,
divestitures or other transactional activities;
• loss of significant trading and clearing volumes or values, fees, market
share, listed companies, market data customers or other customers;
• our ability to develop and grow our non-trading businesses;
• our ability to keep up with rapid technological advances, including our
ability to effectively manage the development and use of artificial
intelligence in certain of our products and offerings, and adequately
address cybersecurity risks;
iv
PART I
Item 1. Business
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
liquidity,
aspire
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.
to deliver world-leading platforms
improve
that
the
We manage, operate and provide our products and services in three business
segments: Capital Access Platforms, Financial Technology and Market
Services.
History
Nasdaq was founded in 1971 as a wholly-owned subsidiary of FINRA.
Beginning in 2000, FINRA restructured and broadened ownership in Nasdaq
by selling shares to FINRA members, investment companies and issuers listed
on The Nasdaq Stock Market. In connection with this restructuring, FINRA
fully divested its ownership of Nasdaq in 2006, and The Nasdaq Stock Market
became an independent registered national securities exchange in 2007.
In February 2008, Nasdaq and OMX AB combined their businesses, and we
changed our corporate name to The NASDAQ OMX Group, Inc. This
transformational combination resulted in the expansion of our business from a
U.S.-based exchange operator to a global exchange company offering
technology that powers our own exchanges and markets as well as many other
marketplaces around the world. We operated as the NASDAQ OMX Group
until we rebranded our business as Nasdaq, Inc. in 2015.
In November 2023, Nasdaq completed its acquisition of Adenza. Through its
two solutions, AxiomSL and Calypso, Adenza is a provider of mission-critical
risk management, regulatory reporting, and capital markets software to the
financial services industry. The acquisition enhances our technology solutions
and further expands Nasdaq’s complementary offerings across mission-critical
capital markets infrastructure and compliance.
Growth Strategy
To enable success in the evolving global financial system, we have established
our purpose, vision, and value proposition together with a focused growth
strategy:
Our Purpose: We advance economic progress for all.
Our Vision: We will be the trusted fabric of the world’s financial system.
Our Value Proposition: We deliver world-leading platforms that improve the
liquidity, transparency and integrity of the global economy.
1
Our Strategy: In 2017, we set a new strategic direction focused on
maximizing the resources, people and capital allocated to our largest growth
opportunities. These opportunities, which include anti-financial crime and
compliance solutions, marketplace technology, workflow for investment
managers and asset owners as well as insight solutions, constituted large and
growing opportunities where we felt our strengths in technology, proprietary
data, analytics and capital markets expertise, combined with our expansive
client network, positioned us to meet our clients’ evolving needs.
Following the completion of the Adenza acquisition, including its two flagship
solutions, AxiomSL and Calypso, we further aligned our business more
closely with the foundational shifts that are driving the evolution of the global
financial system. The divisional structure is as follows:
By aligning our business segments against these secular trends, we aim to
deliver more for our clients and increase growth across our key pillars of
liquidity, transparency and integrity:
• Liquidity: Within our Financial Technology and Market Services segments,
we continue to modernize markets by utilizing technology to maximize the
liquidity of the global economy. New technologies, including cloud,
blockchain, machine learning and artificial intelligence, present significant
opportunities to further enhance market resiliency and scalability and make
markets even more accessible. We believe that these technologies will
enable more opportunities for market participants and new asset classes to
be integrated across markets globally. The Financial Technology and Market
Services segments together offer complementary capabilities to capture the
potential these technologies can unlock in our industry. By utilizing our
Market Services segment’s position at the center of markets, we believe that
our Financial Technology segment will be at the forefront of the financial
system’s evolution and will play a critical role in advancing the
modernization of markets across geographies and asset classes.
• Transparency: Our Capital Access Platforms segment is uniquely placed to
help clients navigate the increasing complexity of the evolving financial
system through access to capital and transparency which enables economic
growth. With approximately 10,000 corporate clients and 5,000 clients
across the investment management ecosystem, Nasdaq is a trusted partner to
aid the corporate and investment communities in making more informed
decisions. Leveraging the insights and capabilities across our listings,
advisory, data, index, and analytics teams, we believe that Capital Access
investor and corporate
Platforms serves as a bridge between
communities, focused on enhancing the client experience by providing
efficient routes to capital, delivering more holistic, actionable insights and
intelligence, modernizing workflows, and navigating the climate and ESG
landscape.
the
• Integrity: Financial Crime Management Technology and Regulatory
Technology include Nasdaq’s fraud detection, anti-money laundering,
surveillance and risk data management and regulatory reporting solutions
businesses. These businesses remain focused on capturing the growth
associated with protecting the integrity of the financial system by fighting
financial crime and helping our clients with their most significant
compliance challenges. These businesses will continue delivering world-
class solutions, leveraging the power of the cloud and machine learning
across asset classes, to the full spectrum of banks and brokers, including the
emerging ecosystem of financial technology, or FinTech, companies and
digital banks.
Products and Services
Capital Access Platforms
Our Capital Access Platforms segment delivers liquidity, transparency and
integrity to the corporate issuer and investment community by empowering
our clients to effectively navigate the capital markets, achieve their
sustainability goals, and drive governance excellence. We offer a suite of
products to assist companies in managing corporate governance standards.
Our Capital Access Platforms segment includes Data & Listing Services,
Index and Workflow & Insights.
Data & Listing Services
Our North American and European data products enhance transparency of
market activity within our exchanges and provide critical information to
professional and non-professional investors globally. Our Data business
distributes historical and real-time market data to sell-side customers, the
institutional investing community, retail online brokers, proprietary trading
firms, and other venues, as well as internet portals and data distributors.
We collect, process, and create information and earn revenues as a distributor
of our own, as well as select third-party, content. We provide varying levels of
quote and trade information to market participants and to data distributors who
in turn provide subscriptions for this information. Our systems enable
distributors to gain access to our market depth, fund valuation, order
imbalances, market sentiment and other analytical data.
We distribute this proprietary market information to both market participants
and non-participants through a number of proprietary products, including
Nasdaq TotalView, our flagship market depth quote product. We offer
TotalView products for The Nasdaq Stock Market and our Nasdaq BX,
Nasdaq PSX and Nordic markets. We also offer Nordic Equity TotalView,
Nordic Derivatives TotalView and Nordic Fixed Income TotalView for Nordic
markets.
We operate several other proprietary services and data products to provide
market information, including Nasdaq Basic, a low cost alternative to the
industry Level 1 feed and Nasdaq Canada Basic, a low cost alternative to other
high priced data feeds. We also provide various other data, including data
relating to our U.S. equities and options exchanges and Nordic equities,
derivatives, fixed income and futures.
Additionally, our Nasdaq Cloud Data Service provides a flexible and efficient
method of delivery for real-time exchange data and other financial
information. Data
through a suite of application
programming interfaces, or APIs, allowing for the integration of data from
disparate sources and a reduction in time to market for customer-designed
applications. These APIs are highly scalable and can support the delivery of
real-time exchange data.
is made available
We operate a variety of listing platforms around the world to provide multiple
global capital raising solutions for public companies. Companies listed on our
markets represent a diverse array of industries including, among others,
healthcare, consumer products, telecommunication services, information
technology, financial services, industrials and energy. Our main listing markets
are The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Baltic
exchanges.
Companies seeking to list securities on The Nasdaq Stock Market may do so
on one of the three market tiers: The Nasdaq Global Select Market, The
Nasdaq Global Market, or The Nasdaq Capital Market. To qualify, companies
must meet minimum listing requirements, including specified financial and
corporate governance criteria. Once listed, companies must maintain rigorous
listing and corporate governance standards.
2
As of December 31, 2023, a total of 5,262 companies listed securities on our
U.S., Nasdaq Nordic, Nasdaq Baltic and Nasdaq First North exchanges. As of
December 31, 2023, a total of 4,044 companies listed securities on The
Nasdaq Stock Market, with 1,443 listings on The Nasdaq Global Select
Market, 1,269 on The Nasdaq Global Market and 1,332 on The Nasdaq
Capital Market.
We seek new listings from companies conducting IPOs, including SPACs, and
direct listings as well as companies looking to switch from alternative
exchanges. The 2023 new listings were comprised of the following:
listed on The Nasdaq Stock Market. More than 100 ETPs worldwide track
indices in the NDX ecosystem, and had nearly $360 billion in assets tracking
the index as of December 31, 2023.
We provide index data products based on Nasdaq indices. Index data products
include our Global Index Data Service, which delivers real-time index values
throughout the trading day, and Global Index Watch/Global Index File
Delivery Service, which delivers daily and historical weightings and
components data, corporate actions and a breadth of additional data for the
indices that we operate.
Operating company IPOs
SPAC IPOs
Switches from the New York Stock Exchange LLC, or NYSE,
and the NYSE American LLC, or NYSE American
Upgrades from OTC
ETPs and Other Listings
Total
The Nasdaq Stock Market IPO win rates:
2023 total
Operating companies
103
27
18
18
164
330
82 %
81 %
During 2023, we had 18 new listings resulting from companies switching their
listings from NYSE or NYSE American to join The Nasdaq Stock Market.
Together with companies that transferred additional securities to The Nasdaq
Stock Market during 2023, an aggregate of $377 billion in global equity
market capitalization switched to The Nasdaq Stock Market.
We also offer listings on the exchanges that comprise Nasdaq Nordic and
Nasdaq Baltic. For smaller companies and growth companies, we offer access
to the financial markets through the Nasdaq First North alternative
marketplaces. As of December 31, 2023, a total of 1,218 companies listed
securities on our Nordic and Baltic exchanges.
Our European listing customers include companies, funds and governments.
Customers issue securities in the form of cash equities, depository receipts,
warrants, ETPs, convertibles, rights, options, bonds or fixed-income related
products. In 2023, a total of 23 new companies listed on our Nordic and Baltic
exchanges.
Index
Our Index business develops and licenses Nasdaq-branded indices and
financial products. License fees for our trademark licenses vary by product
based on a percentage of underlying assets, dollar value of a product issuance,
number of products or number of contracts traded. We also license cash-
settled options, futures and options on futures on our indices.
As of December 31, 2023, 388 ETPs listed on 27 exchanges in over 20
countries tracked a Nasdaq index and accounted for $473 billion in AUM. Our
flagship index, the Nasdaq-100 Index, or NDX, includes the top 100 non-
financial companies
3
Workflow & Insights
Workflow & Insights includes our analytics and corporate solutions products.
Our analytics products provide asset managers, investment consultants and
institutional asset owners with information and analytics to make data-driven
investment decisions, deploy their resources more productively, and provide
liquidity solutions for private funds. Through our eVestment and Solovis
solutions, we provide a suite of cloud-based solutions that help institutional
investors and consultants conduct pre-investment due diligence, and monitor
their portfolios post-investment. The eVestment platform also enables asset
managers to efficiently distribute information about their firms and funds to
asset owners and consultants worldwide.
Through the Solovis platform, endowments, foundations, pensions and family
offices transform how they collect and aggregate investment data, analyze
portfolio performance, model and predict future outcomes, and share
meaningful portfolio insights with key stakeholders. The Nasdaq Fund
Network and Nasdaq Data Link are additional platforms in our suite of
investment data analytics offerings and data management tools. Nasdaq Fund
Network gathers and distributes daily net asset values from over 44,000 funds
and other investment vehicles across North America. We have extended
Nasdaq Fund Network to support the distribution of collective investment
trusts, hedge funds, managed accounts, separate accounts, 529 educational
saving plans and demand deposit accounts. Nasdaq Data Link strengthens our
position as a leading source for financial, economic, and alternative datasets.
For investment management firms, investment banks and other investors, the
platform powers data-driven decision-making for users across the globe via
universal APIs, and provides for efficient data discovery and delivery.
Corporate solutions serves both public and private companies and
organizations
through our Investor Relations Intelligence, Governance
Solutions and ESG Solutions products. Our public company clients can be
companies listed on our exchanges or other U.S. and global exchanges. Our
private company clients include a diverse group of organizations ranging from
family-owned companies, government organizations, law firms, privately held
entities, and various non-profit organizations to hospitals and healthcare
systems. We help organizations enhance their
ability to understand and expand their global shareholder base, improve
corporate governance, and navigate the evolving ESG landscape through our
suite of advanced technology, analytics, and consulting services. We also
advise clients on a range of governance and sustainability-related issues.
Our Investor Relations Intelligence offerings include a global team of expert
consultants that deliver advisory services including Equity Surveillance &
Shareholder Analysis, Investor Engagement and Perception Studies, as well as
an industry-leading platform, Nasdaq IR Insight®, to investor relations
professionals and executive teams. These solutions allow investor relations
officers and executives to better manage their investor relations programs,
understand their investor base, target new investors, manage meetings and
consume key data such as investor profiles, equity research, consensus
estimates and news.
Through our Governance Solutions products, we provide a global technology
offering and consulting services that streamline the meeting process for board
of directors and executive leadership teams and enable them to accelerate
decision making and strengthen governance. Our solutions help protect
sensitive data and facilitate productive collaboration, which enables board
members and teams to work faster and more effectively.
Our ESG Solutions includes our ESG Advisory practice and our ESG software
offering. Our ESG Advisory practice helps companies analyze, assess and
action best practices to attract long-term capital. In June 2022, we acquired
Metrio, a provider of ESG data collection, analytics and reporting services.
Metrio software is a cloud-based solution that helps firms manage ESG data,
perform greenhouse gas emissions calculations and accounting, and optimize
granular data collection, report publication and dashboarding against targets.
In September 2023, we announced the launch of Nasdaq Metrio, which
integrates Nasdaq OneReport and Metrio legacy technologies into a new
SaaS-based, end-to-end sustainability platform. The new platform enables
corporates to collect, measure, disclose and communicate investor-grade,
audited ESG data efficiently across dozens of raters, rankers and framework
organizations to drive strategic outcomes and attract investors. The platform
also features a new Carbon Accounting and Management product for
companies looking to focus on their scope 1, 2 and 3 emissions. We continue
to launch new ESG solutions as discussed further in “Environmental, Social
and Governance Matters” below.
Financial Technology
The Financial Technology segment delivers world leading platforms that
improve the liquidity, transparency and integrity of the global economy by
architecting and operating the world’s best markets. This segment comprises
Financial Crime Management Technology, Regulatory Technology and Capital
Markets Technology solutions.
We are a leading global technology solutions provider and partner to
exchanges, clearing organizations, central securities depositories, regulators,
banks, brokers, buy-side firms and corporate businesses, and power more than
130 marketplaces in more than 55 countries. Our solutions can handle a wide
array of assets, including but not limited to cash equities, equity derivatives,
currencies, various interest-bearing securities, commodities, energy products
and digital currencies. Our solutions can also be used in the creation of new
asset classes by non-capital markets customers, as discussed further below.
Financial Crime Management Technology
Our Financial Crime Management Technology business includes our Verafin
solution which delivers a leading platform that improves the integrity and
transparency of the financial world by providing SaaS solutions for fraud
detection and AML.
The financial services industry has seen a growing demand for products and
services focused on anti-financial crime. Our Verafin solution provides a
cloud-based platform to help detect, investigate, and report money laundering
and financial fraud to approximately 2,500 financial institutions in North
America.
Regulatory Technology
Regulatory Technology includes surveillance and AxiomSL solutions.
Our surveillance solutions include a SaaS platform designed for banks,
brokers and other market participants to assist in complying with market rules,
regulations and internal market surveillance policies and serves more than 170
clients. We also provide a solution to regulators and exchanges with a robust
platform to manage cross-market, cross-asset and multi-venue surveillance.
This offering powers surveillance for more than 50 exchanges and 18
regulators.
AxiomSL is a global leader in risk data management and regulatory reporting
solutions for the financial industry, including banks, broker dealers and asset
managers. Its unique enterprise data management platform delivers data
lineage, risk aggregation, analytics, workflow automation, reconciliation,
validation and audit functionality, as well as disclosures. AxiomSL’s platform
supports compliance across a wide range of global and local regulations.
Capital Markets Technology
Capital Markets Technology includes market technology, trade management
services and Calypso.
Our market technology solutions can handle a wide array of assets, including
but not limited to cash equities, equity derivatives, currencies, various interest-
bearing securities, commodities, energy products and digital currencies. Our
solutions can also be used in the creation of new asset classes by non-capital
markets customers, as discussed further below.
4
Nasdaq’s market technology is utilized by leading markets in North America,
Europe and Asia as well as emerging markets in the Middle East, Latin
America, and Africa.
We continue to build out our SaaS business portfolio by extending and
migrating our current offerings to SaaS. Our market technology business has
evolved from its origins serving the capital markets, as we leverage our
flexible and modular architecture technology that provides next generation
capital markets capabilities in an open and agile environment, to develop our
SaaS platform and offerings. We expect to continue to expand adoption of this
SaaS model by our clients in the future.
For market infrastructure operators, which include exchanges, regulators,
clearinghouses and central securities depositories, we provide and deliver
mission-critical solutions across the trade lifecycle, which is designed to cover
all aspects of a market operator’s needs, from trading and clearing to risk
management, market surveillance, index development, data, management,
testing and quality assurance.
In addition to serving the market operators in the core capital markets, there is
a demand for mission critical solutions to enable robust operation of new
emerging asset classes such as crypto currencies and native digital markets.
Our market technology business currently offers its services to several digital
assets exchanges, and the SaaS-based Marketplace Services Platform provides
next-generation marketplace capabilities spanning the transaction lifecycle to
facilitate the exchange of assets, services and information across various types
of market ecosystems and machine-to-machine transactions. The Marketplace
Services Platform is targeted at new emerging digital markets and enables
end-to-end marketplace implementation without the resources required for on-
premise solutions.
Numerous market technology projects involve complex delivery management
and systems integration. Through our integration services, we can assume
responsibility for projects that involve migration to a new system and the
establishment of entirely new marketplaces. We also offer operation and
support for
the applications, systems platforms, networks and other
components included in an information technology solution, as well as
advisory services. Our ongoing migration to the cloud, discussed below,
created a blueprint for our Marketplace Technology clients that will be used to
demonstrate, guide and migrate their markets to the cloud, as well as for our
own future market migrations.
Our trade management services provide market participants with a wide
variety of alternatives for connecting to and accessing our markets for a fee.
Our marketplaces may be accessed via a number of different protocols used
for quoting, order entry, trade reporting and connectivity to various data feeds.
WorkX, a web-based, front-end interface allows market participants to view
data, utilize risk management tools, and submit and review trade reports.
WorkX enables a seamless workflow and enhanced trade intelligence. In
addition, we offer a variety of add-on compliance tools to help market
participants comply with regulatory requirements.
We provide colocation services to market participants, whereby we offer firms
cabinet space and power to house their own equipment and servers within our
data centers. Additionally, we offer a number of wireless connectivity
offerings between certain data centers using millimeter wave and microwave
technology.
We completed the previously announced wind-down of our broker services
operations business in 2022. This business primarily offered technology and
customized securities administration solutions to financial participants in the
Nordic market. Such services and solutions primarily consisted of flexible
back-office systems, which allowed customers
to efficiently manage
safekeeping, settlement and corporate actions and reporting, and included
connectivity to exchanges and central securities depositories.
Calypso is a leading provider of front-to-back trading technology solutions for
the financial markets. The Calypso platform provides customers with a single
platform designed to enable consolidation, innovation and growth. The
platform supports front, middle and back office activities in exchange-traded
and OTC instruments and supports multiple financial asset classes and the
associated financial instruments. Calypso’s software application specializes in
capital markets,
investment management, risk management, clearing,
collateral, treasury and liquidity management.
Market Services
Our Market Services segment includes our equity derivative trading and
clearing, cash equity trading, fixed income, currency and commodities trading.
We operate 19 exchanges across several asset classes, including derivatives,
commodities, cash equity, debt, structured products and ETPs.
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We provide trading services in North America and Europe. In the U.S., we
operate six options exchanges: Nasdaq PHLX, The Nasdaq Options Market,
Nasdaq BX Options, Nasdaq ISE, Nasdaq GEMX and Nasdaq MRX. These
exchanges facilitate the trading of equity, ETF, index and foreign currency
options. Our combined options market share in 2023 represented the largest
share of the U.S. market for multi-listed equity options. Our options trading
platforms provide trading opportunities to retail investors, algorithmic trading
firms and market makers, who tend to prefer electronic trading, and
institutional investors, who typically require high touch services to execute
their trades, which are often performed on our trading floor in Philadelphia.
We also operate three cash equity exchanges: The Nasdaq Stock Market,
Nasdaq BX and Nasdaq PSX. Our U.S. cash equity exchanges offer trading of
both Nasdaq-listed and non-Nasdaq-listed securities. The Nasdaq Stock
Market is the largest single venue of liquidity for trading U.S.-listed cash
equities. Market participants include market makers, broker-dealers, ATSs,
institutional investors, and registered securities exchanges. We also operate a
U.S. corporate bond exchange for the listing of corporate bonds.
Market Services also includes revenues from U.S. Tape plans. The plan
administrators sell quotation and last sale information for all transactions,
whether traded on The Nasdaq Stock Market or other exchanges, to market
participants and to data distributors, who then provide the information to
subscribers. After deducting costs, the plan administrators distribute the tape
revenues to the respective plan participants based on a formula required by
Regulation NMS that takes into account both trading and quoting activity.
In Canada, we operate an exchange with three independent markets for the
trading of Canadian-listed securities: Nasdaq Canada CXC, Nasdaq Canada
CX2 and Nasdaq Canada CXD.
In Europe, we operate exchanges in Tallinn (Estonia), Riga (Latvia) and
Vilnius (Lithuania) as Nasdaq Baltic and exchanges in Stockholm (Sweden),
Copenhagen (Denmark), Helsinki (Finland), and Reykjavik (Iceland) together
with the clearing operations of Nasdaq Clearing, as Nasdaq Nordic.
Collectively, the Nasdaq Nordic and Nasdaq Baltic exchanges offer trading in
cash equities, depository receipts, warrants, convertibles, rights, fund units and
ETFs, as well as trading and clearing of derivatives and clearing of resale and
repurchase agreements. Our platform allows the exchanges to share the same
trading system, which enables efficient cross-border trading and settlement,
cross-exchange membership and a single source for Nordic data products.
Settlement and registration of cash equity trading takes place in Sweden,
Finland, and Denmark via the local central securities depositories. In addition,
Nasdaq owns a central securities depository that provides notary, settlement,
central maintenance and other services in the Baltic countries and Iceland.
In Europe, Nasdaq Nordic offers trading in derivatives, such as stock options
and futures and index options and futures. Nasdaq Clearing offers central
counterparty clearing services for stock options and futures and index options
and futures.
Nasdaq Fixed Income, or NFI, provides a wide range of products and services,
such as trading and clearing, for fixed income products in Sweden, Denmark,
Finland, Iceland, Estonia, Lithuania and Latvia. Nasdaq is the largest bond
listing venue in the Nordics, with more than 5,600 listed retail and institutional
bonds. In addition, Nasdaq Nordic facilitates the trading and clearing of
Nordic fixed income derivatives in a unique market structure. Buyers and
sellers agree to trades in fixed income derivatives through bilateral
negotiations and then report those trades to Nasdaq Clearing. Nasdaq Clearing
offers central counterparty clearing services for fixed-income options and
futures and interest rate swaps. Nasdaq Clearing also operates a clearing
service for the resale and repurchase agreement market.
Nasdaq Commodities is the brand name for Nasdaq’s European commodity-
trading and clearing. Nasdaq
related products and services such as
Commodities’ offerings include derivatives in power, natural gas and carbon
emission markets, seafood and electricity certificates. These products are
listed on Nasdaq Oslo ASA, except for seafood, which is listed on Fish Pool, a
third-party platform. In June 2023, we entered into an agreement to sell our
European energy trading and clearing business, subject to regulatory approval.
Nasdaq Oslo ASA is the commodity derivatives exchange for European
products. All trades with Nasdaq Oslo ASA are subject to clearing with
Nasdaq Clearing, which offers central counterparty clearing services for
commodities options and futures.
We also own a majority stake in Puro.earth, a Finnish-based leading platform
for carbon removal. Puro.earth offers engineered carbon removal instruments
that are verified and tradable through an open, online platform. Puro.earth’s
marketplace capabilities add to our suite of ESG-focused technologies and
workflow solutions and give our clients further resources to achieve their ESG
objectives.
Enablers, Differentiators and Competition
Technology
Technology plays a key role in ensuring the growth, reliability and regulation
of financial markets. We have established a technology risk program to
evaluate the resiliency of critical systems, including risks associated with
cybersecurity. This program is focused on identifying areas for improvement
in systems, and implementing changes and upgrades to technology and
processes to minimize future risk. We have continued our focus on improving
the security of our technology with an emphasis on employee awareness
through training, targeted phishing education campaigns, and new tool
deployment for our securities operations team. See “Item 1A. Risk Factors,” in
this Annual Report on Form 10-K for further discussion.
6
We are focused on amplifying the impact that artificial intelligence, or AI, has
on the business and in our products. We continue to develop products and
services using AI, including generative AI, and the use of AI in product
development is a priority for us in 2024. We are currently leveraging AI to
further develop products and solutions in investment analytics, investor
relations and fraud and anti-money laundering, as well as to modernize
markets with the SEC approval of the first AI-powered order type. For
example, we are working on developing AI systems to track financial
transactions across the ecosystem to determine potential fraud, money
laundering, or other actions. These solutions can be utilized by our clients,
including banks, other exchanges and brokers firms that use our solutions to
reduce or eliminate threats.
We are committed to the ethical and responsible use of AI in our products,
services and business operations. Our AI governance structure aligns the
application of AI with our core values through a framework that addresses the
new and unique risks that AI technology presents, while enabling us to
explore innovation and take advantage of opportunities that AI presents to
better serve our customers, advance our business objectives and bring value to
our shareholders. Our AI governance framework applies risk management
across AI-related product development and business usage in the company
through a multi-disciplinary approach. The framework puts into practice
Nasdaq’s responsible AI usage principles and considers the U.S. National
Institute of Standards and Technology AI Risk Management Framework. It is
administered through company-wide policies, procedures and supporting
preventative and detective controls.
We believe that our focus on AI to enhance features of our existing offerings
and in the development of new solutions, together with our significant
proprietary data sets, provides us with a competitive advantage.
During 2023, Nasdaq continued its shift to utilizing and deploying cloud
infrastructure. We also migrated two additional exchanges to the cloud, in
addition to the options exchange that we migrated in 2022. We believe that
migrating our exchanges to the cloud, through our partnership with AWS will
result in improved performance and increased flexibility for our customers.
We expect to move additional North American markets to the cloud with AWS
during the next several years. The shift to cloud-based markets will enable
Nasdaq to provide its clients access to cloud-based capabilities, including
virtual connectivity services, market analytics and machine learning, at a
lower cost. We also expect to leverage the cloud-based infrastructure for our
market technology clients, assisting such clients in developing their own
platforms and customizing their offerings for their local, rapidly changing
industry dynamics. Additionally, we expanded our existing colocation facility
to meet the growing demand of market participants that seek proximity to the
Nasdaq trading systems. Our expanded and enhanced facility is designed to
provide the optimal environment for the next generation of
compute workloads and offer clients access to a wider range of services and
capabilities.
To facilitate the exchange migration to AWS, Nasdaq will also leverage its
Fusion technology platform. Fusion positions Nasdaq’s North American and
European markets to manage, operate and deploy a common platform that can
be used across our nine Nasdaq derivative markets, while enabling our
markets for cloud deployment.
Competitive Strengths
We are a global, client-focused technology company with expertise in markets
and financial technology. We deploy robust technology capabilities and have
developed innovative solutions to further address client needs across the
financial ecosystem. Our business segments complement each other and we
believe that our strong competitive position in large, high-growth markets
positions us for sustained growth.
A Unique Value Proposition
We operate leading platforms that can improve the liquidity, transparency, and
integrity of the global financial ecosystem, allowing us to:
• Develop efficient and reliable technologies to facilitate and protect the
financial system across asset classes;
• Empower our clients to effectively navigate the capital markets, achieve
their sustainability goals, and maintain corporate governance excellence;
and
• Provide data, tools and insights that drive sound decision making while
complying with evolving regulatory requirements.
Technological Strength
The strength and resiliency of our technology, enhanced by our new Financial
Technology division, in meeting the advancing demands of our global
customer base is vital to the continued success of our business and
distinguishes us from our competitors.
We strive to be a trusted partner to a diverse range of clients that participate
across the global financial ecosystem, including:
• Banks and Financial Institutions - Providing safety and integrity through
a suite of trade surveillance, cloud-native fraud and anti-money laundering
solutions and robust regulatory reporting software.
• Market Infrastructure Operators - Assisting market infrastructure
operators in increasing efficiency, meeting customer needs, and growing
revenue across the trade lifecycle.
• Brokers and Traders - Helping brokers and traders to confidently plan,
optimize, manage risk and execute their business vision.
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• Market Participants - Providing market participants with access to
liquidity and enabling them to efficiently consume, monitor, analyze, and
capitalize on real-time market changes.
• Listed Companies - Enabling companies to access capital markets
effectively, manage stakeholders and leverage technology to operate and
govern effectively.
• Investors and Asset Managers - Offering products and services to assist
investors and asset managers in optimizing their portfolios and offerings.
Competition
Capital Access Platforms
Our Data business includes proprietary data products. Proprietary data
products are made up exclusively of data derived from each exchange’s
systems. Competition in the data business is influenced by rapidly changing
technology and the creation of new product and service offerings.
Our proprietary data products face competition globally from alternative
exchanges and trading venues that offer similar products. Our data business
competes with other exchanges and third-party vendors to provide information
to market participants. Examples of our competitors in proprietary data
products are ICE, Cboe, and TSX.
Our Listing Services business in both the U.S. and Europe provides a means
of facilitating capital formation through public capital markets. There are
competing ways of raising capital, and we seek to demonstrate the benefits of
listing shares on our exchange. Our primary competitor for larger company
stock share listings in the U.S. is NYSE. The Nasdaq Stock Market competes
with local and international markets located outside the U.S. for listings of
equity securities of both U.S. and non-U.S. companies that choose to list (or
dual-list) outside of their home country. For example, The Nasdaq Stock
Market competes for listings with exchanges in Europe and Asia, such as
London Stock Exchange Group plc, or LSE, and The Stock Exchange of Hong
Kong Limited. Additionally, we face competition from private equity firms
that may elect to keep their portfolio companies as private companies.
The Listings Services business in Europe is characterized by a large number of
exchanges competing for new or secondary listings. Each country has one or
more national exchanges, which are often the first choice of companies in
each respective country. For those considering an alternative, competing
European exchanges that frequently attract many listings from outside their
respective home countries include LSE, Euronext N.V. and Deutsche Börse
AG. In addition to the larger exchanges, companies seeking capital or liquidity
from public capital markets are able to raise capital without a regulated market
listing and can consider trading their shares on smaller markets and quoting
facilities.
Our Index business offers Nasdaq-branded indices and financial products and
faces competition from providers of various competing financial indices. For
example, there are a number of indices that aim to track the technology sector
and thereby compete with the Nasdaq-100 Index and the Nasdaq Composite
Index. We face competition from investment banks, dedicated index providers,
markets and other product developers, including S&P Dow Jones Indices,
MSCI and FTSE Russell.
includes our analytics and corporate solutions
Workflow & Insights
businesses. Our analytics business faces competition from a broad array of
data and analytics suppliers, both established firms and small start-ups. Our
primary competitors are Morningstar, FactSet and any number of smaller
firms along with start-up data providers and aggregators. Our analytics
business offerings compete with other analytics providers, including Addepar
and Caissa.
Our corporate solutions business faces competition that can be varied and
fragmented. For our Investor Relations Intelligence solutions, there are many
regional competitors and relatively few global providers. Other exchange
operators are partnering with firms that have capabilities in this area and
seeking to acquire relevant assets in order to provide investor relations
services to customers alongside listing services. Our ESG Solutions, including
Nasdaq Metrio and ESG Advisory, are positioned in evolving markets with
competitors offering multiple point solutions providing software, data or
consulting services. The competitive landscape for our Governance Solutions
products varies by customer segment and geography. Most competitors offer
SaaS solutions that are supported by a data centered strategy, while certain
firms offer specialized services that focus on a single niche segment.
Customers frequently seek single-source providers that are able to address a
broad range of needs within a single platform.
Financial Technology
For our Financial Crime Management Technology and trade and market
surveillance businesses, competitors include core banking solution providers
ranging from small to large, independent solution providers, FinTech start-ups
and in-house custom builds. We compete against enterprise solution providers
and point solutions for clients with larger AUM. Competitors also include
companies that serve multiple industries in addition to financial services with
generalized solutions, such as business intelligence tools, data integrators,
investigation platforms and software covering the broader compliance
lifecycle. Recently, there has been an increase of FinTech start-ups shifting
into the surveillance, fraud detection and AML space offering highly-
specialized solutions for advanced data analytics, artificial intelligence and
machine learning technology. The Financial Crime Management Technology
and surveillance offerings compete on a number of factors, including but not
limited to, increased workflow efficiency, quality of the data, quality of alerts
and pricing.
8
Our Financial Crime Management Technology and surveillance offerings must
demonstrate the ability to decrease false-positives and provide in-depth views
into potential abuses and risks that stem from those cases. These offerings help
firms reduce both the reputational and regulatory risk as well as the
complexity in efforts to keep markets and financial institutions safe.
Our AxiomSL product, which includes financial, statistical and prudential
reporting as well as shareholder disclosures, trade reporting and ESG
reporting, competitors include large independent solution providers, in-house
solutions at financial institutions as well as some smaller independent point
solution providers. As regulatory reporting becomes more granular and time
sensitive, the ability of our platform to operate with speed at scale, and with
consistency across functional business domains continues to set AxiomSL
apart.
For our Calypso product, which includes solutions for cross-asset, front-to-
back trading, treasury, risk and collateral management, competitors include
similar enterprise solution providers in size and footprint, as well as
local/regional players focusing on the smaller end of the client base. In the
higher tier of client base, such as global banks, internal development is very
often either the incumbent solution or an alternative to FinTech vendors.
Competitors also sometimes include companies that provide point solutions,
such as pricing library providers, and post-trade service providers.
Our market technology business faces competition from exchanges and
exchange-related businesses that internally develop their technology. This
model has gradually changed as many operators have recognized the cost-
savings made possible by buying technology from third parties. As a result,
two types of competitors have emerged in our market technology business:
exchange operators and technology providers unaffiliated with exchanges.
These organizations make available a range of off-the-shelf technology,
including
information
dissemination, and offer customization and operation expertise. Market
conditions in market technology are evolving rapidly, which makes continuous
investment and innovation a necessity. Our partnership with AWS enables us
to compete with other companies that are developing cloud-based exchanges
and market technology offerings.
settlement, depository and
trading, clearing,
Our trade management services business competes with other exchange
operators, extranet providers, and data center providers.
Market Services
We face intense competition in North America and Europe. We seek to
provide market participants with greater functionality, trading system stability
and performance, high levels of customer service, and efficient pricing. In
both North America and Europe, our competitors include other exchange
operators, operators of non-exchange trading systems and banks and
brokerages that operate their own internal trading pools and platforms.
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In the U.S., our options markets compete with exchanges operated by Cboe
Global Markets, Inc., or Cboe, Miami International Holdings, Inc., or MIAX,
Intercontinental Exchange, Inc., or ICE, Members Exchange, or MEMX, and
BOX Options Market. In cash equities in the U.S., we compete with
exchanges operated by Cboe, ICE, MIAX, The Investors Exchange, Members
Exchange and Long Term Stock Exchange. We also face competition from
ATSs, known as “dark pools,” and other less-heavily regulated broker-owned
trade facilitation systems, as well as from other types of OTC trading. In
Canada, our cash equities exchange competes principally with exchanges such
as the Toronto Stock Exchange, or TSX.
Our U.S. Tape plans earn revenue from consolidated data products which are
distributed by SEC-mandated consolidators (one for Nasdaq-listed stocks and
another for NYSE and other-listed stocks) that share the revenue among the
exchanges that contribute data. The consolidated data business is under
competitive pressure from other securities exchanges that trade Nasdaq-listed
securities. In addition, The Nasdaq Stock Market similarly competes for the
tape fees from the sale of information on securities listed on other markets.
In Europe, our cash equities markets compete with exchanges such as
Euronext N.V., Deutsche Börse AG, LSE and many Multilateral Trading
Facilities, or MTFs, such as Cboe, Turquoise and Aquis. Our competitors in
the trading and clearing of options and futures on European equities include
Eurex, Cboe, ICE Futures Europe and London Clearing House, or LCH. In
addition, in equities markets in Europe, we face competition from other
broker-owned systems, dark pools, Systematic Internalizers, or SIs, and other
types of OTC trading. Competition among exchanges for trading European
equity derivatives tends to occur where there is competition in the trading of
the underlying equities. In addition to exchange-based competition, we face
competition from OTC derivative markets.
The implementation of MiFID II and MiFIR has resulted in further
competitive pressure on our European trading business. SIs are attracting a
significant share of electronically matched volume and compete aggressively
for the trading of equity securities listed on our Nordic exchanges. Different
bilateral trading systems pursuing block business also remain active in
Europe. Regulators are continuously monitoring the market structure and
have, in a series of consultations, asked for input regarding suggested changes
to MiFID II.
Our European fixed income and commodities products and services are subject
to competitive pressure from European exchanges and clearinghouses.
Intellectual Property
We believe that our intellectual property assets are important for maintaining
the competitive differentiation of our products, systems, software and services,
enhancing our ability to access technology of third parties and maximizing our
return on research and development investments.
To support our business objectives and benefit from our investments in
research and development, we actively create and maintain a wide array of
intellectual property assets, including patents and patent applications related to
our innovations, products and services; trademarks related to our brands,
products and services; copyrights in software and creative content; trade
secrets; and through other intellectual property rights, licenses of various
kinds and contractual provisions. We enter into confidentiality and invention
assignment agreements with our employees and contractors, and utilize non-
disclosure agreements with third parties with whom we conduct business in
order to secure and protect our proprietary rights and to limit access to, and
disclosure of, our proprietary information.
We own, or have licensed, rights to trade names, trademarks, domain names
and service marks that we use in conjunction with our operations and services.
We have registered many of our most important trademarks in the U.S. and in
foreign countries. For example, our primary “Nasdaq” mark is a registered
trademark that we actively seek to protect in the U.S. and in over 50 other
countries worldwide.
Over time, we have accumulated a robust portfolio of issued patents in the
U.S. and in many other jurisdictions across the world. We currently hold rights
to patents relating to certain aspects of our products, systems, software and
services, but we primarily rely on the innovative skills, technical competence
and marketing abilities of our personnel. No single patent is in itself core to
the operations of Nasdaq or any of its principal business areas.
Corporate Venture Program
We operate a corporate venture program to make minority investments
primarily in emerging growth FinTech companies that are strategically
relevant to, and aligned with, Nasdaq. Investments are made through the
venture program to further our research and development efforts and
accelerate the path to commercial viability. We expect that capital invested
will continue to be modest and will not have a material impact on our
consolidated financial statements, existing capital return or deployment
priorities. Since its inception in 2017, our venture program has grown in size
and has invested in companies covering various sectors, including data,
analytics and workflow technologies, blockchain and digital assets, market
infrastructure, anti-financial crime, new marketplaces, enabling technologies
and ESG. As of December 31, 2023, our investments, which include equity
and convertible debt investments, were valued at $169 million.
culture of inclusivity and expanding our portfolio of ESG-related solutions
and services.
The Nominating & ESG Committee has formal responsibility and oversight
for corporate ESG policies and programs and receives regular reporting on
key ESG matters and initiatives. Our Corporate ESG Steering Committee
serves as the central coordinating body for our ESG strategy; it is co-chaired
by executive leaders and comprised of a cross-functional group of Nasdaq
senior executives.
We continued to be committed to our decarbonization and climate strategy,
achieving carbon neutrality across all our business operations for the sixth
consecutive year and are working towards our short- and long-term net zero
science-based targets, which were validated and approved by the Science
Based Targets initiative in 2022. In 2023, we were named to the Dow Jones
Sustainability North America Index for the eighth consecutive year. We were
included on Just Capital’s Just100 list of America’s most just companies and
received recognition from the Bloomberg Gender-Equity Index and The
Human Rights Campaign’s Corporate Equality Index. In addition, Nasdaq
maintained industry leading scores from ESG rating agencies:
• MSCI: maintained a rating of “AA,” placing Nasdaq in MSCI’s “Leaders”
category.
• CDP: earned a place on CDP’s “Climate A List” for climate disclosures and
actions for the second consecutive year.
• EcoVadis: maintained “Gold Medal” status, a recognition reserved for the
top 5% of all rated companies.
• 2023 S&P Corporate Sustainability Assessment: maintained a score of 60,
placing Nasdaq in the 96th percentile of our industry group.
Our environmental footprint is relatively small due to the nature of our
business operations. We remain committed to reducing our environmental
impact, focusing on several key areas, including our energy use, the
management of our workspaces and how we conduct business travel, and
engagement with our value chain. We seek to reduce our atmospheric carbon
emissions and we manage our water use and the waste associated with our
business operations.
We help companies of all ESG maturity levels through our robust combination
of technology, tools, data, insights and capital market solutions.
Environmental, Social and Governance Matters
In 2023, we launched three new ESG-related solutions:
Nasdaq is committed to our long-term ESG and sustainability strategy,
advocacy and oversight. We continue to engage with internal and external
stakeholders at all levels regarding sustainability matters. During 2023, we
advanced our corporate, community and commercial ESG efforts, including
furthering our commitment to climate change awareness, reducing our
environmental impact, building a workplace
• Nasdaq Metrio, a SaaS-based, end-to-end platform designed to help
corporate clients collect, measure and report sustainability data;
• Nasdaq eVestment ESG Analytics, a data analytics platform that unlocks
greater transparency for the global institutional market, helping investors
make data-driven impact investment decisions; and
• Nasdaq Sustainable Lens, a SaaS-based ESG intelligence platform that
harnesses the power of generative artificial
10
intelligence to help companies navigate complexity and respond to
stakeholders’ demands for greater transparency.
During 2023, we also maintained, and continued to expand, our portfolio of
ESG services and solutions for our clients and stakeholders.
each of which operates an options market under its own SRO license. As
SROs, each entity has separate rules pertaining to its broker-dealer members
and listed companies, as applicable. Broker-dealers that choose to become
members of our exchanges are subject to the rules of those exchanges.
In 2023, we requested our existing leading suppliers by spend to attest to our
Supplier Code of Ethics. The Supplier Code of Ethics, which is available on
our website, encourages our suppliers and vendors to adopt sustainability and
environmental practices in line with our published Environmental Practices
Statement and to promote a diverse and inclusive workforce. Additionally, our
new suppliers are required to attest to the Supplier Code of Ethics in
connection with the commencement of their engagement.
For more information regarding our ESG efforts in 2023, both internally and
externally, please see the section entitled “Human Capital Management”
below and our Proxy Statement.
All of our U.S. national securities exchanges are subject to SEC oversight, as
prescribed by the Exchange Act, including periodic and special examinations
by the SEC. Our exchanges also are potentially subject to regulatory or legal
action by the SEC at any time in connection with alleged regulatory
violations. We have been subject to a number of routine reviews and
inspections by the SEC or external auditors in the ordinary course, and we
have been and may in the future be subject to SEC enforcement proceedings.
To the extent such actions or reviews and inspections result in regulatory or
other changes, we may be required to modify the manner in which we conduct
our business, which may adversely affect our business, operating results and
financial condition.
Regulation
We are subject to extensive regulation in the U.S., Canada and Europe.
U.S. Regulation
U.S. federal securities laws establish a system of cooperative regulation of
securities markets, market participants and listed companies. SROs conduct
the day-to-day administration and regulation of the nation’s securities markets
under the close supervision of, and subject to extensive regulation, oversight
and enforcement by, the SEC. SROs, such as national securities exchanges, are
registered with the SEC.
This regulatory framework applies to our U.S. business in the following ways:
National Securities Exchanges. SROs in the securities industry are an essential
component of the regulatory scheme of the Exchange Act responsible for
providing fair and orderly markets and protecting investors. The Exchange
Act and the rules thereunder, as well as each SRO’s own rules, impose many
regulatory and operational responsibilities on SROs, including the day-to-day
responsibilities for market and broker-dealer oversight. Moreover, an SRO is
responsible for enforcing compliance by its members, and persons associated
with its members, with the provisions of the Exchange Act, the rules and
regulations thereunder, and the rules of the SRO, including rules and
regulations governing the business conduct of its members.
Nasdaq currently operates three cash equity, six options markets and one
corporate bond market in the U.S. We operate The Nasdaq Stock Market, The
Nasdaq Options Market and the Corporate Bond Market pursuant to The
Nasdaq Stock Market’s SRO license; Nasdaq BX and Nasdaq BX Options
pursuant to Nasdaq BX’s SRO license; Nasdaq PSX and Nasdaq PHLX
pursuant to Nasdaq PHLX’s SRO license; and Nasdaq ISE, Nasdaq GEMX
and Nasdaq MRX,
revisions
including
Section 19 of the Exchange Act provides that our exchanges must submit to
the SEC proposed changes to any of the SROs’ rules, practices and
procedures,
to provisions of our certificate of
incorporation and by-laws that constitute SRO rules. The SEC will typically
publish such proposed changes for public comment, after which the SEC may
approve or disapprove the proposal, as it deems appropriate. SEC approval
requires a finding by the SEC that the proposal is consistent with the
requirements of the Exchange Act and the rules and regulations thereunder.
Pursuant to the requirements of the Exchange Act, our exchanges must file
with the SEC, among other things, all proposals to change their pricing
structure.
Nasdaq conducts real-time market monitoring, certain equity surveillance not
involving cross-market activity, most options surveillance, rulemaking,
enforcement and membership functions through our Nasdaq Regulation
department. We review suspicious trading behavior discovered by our
regulatory staff, and depending on the nature of the activity, may refer the
activity to FINRA for further investigation. Pursuant to regulatory services
agreements between FINRA and our SROs, FINRA provides certain
regulatory services to our markets, including some regulation of trading
activity and surveillance and investigative functions. Our SROs retain ultimate
regulatory responsibility for all regulatory activities performed under
regulatory agreements by FINRA, and for fulfilling all regulatory obligations
for which FINRA does not have responsibility under the regulatory services
agreements.
In addition to its other SRO responsibilities, The Nasdaq Stock Market, as a
listing market, also is responsible for overseeing each listed company’s
compliance with The Nasdaq Stock Market’s financial and corporate
governance standards. Our
listing qualifications department evaluates
applications submitted by issuers seeking to list their securities on The Nasdaq
Stock Market to determine whether the quantitative and qualitative listing
standards have been
11
satisfied. Once securities are listed, the listing qualifications department
monitors each issuer’s on-going compliance with The Nasdaq Stock Market’s
continued listing standards.
Broker-dealer regulation. Nasdaq’s broker-dealer subsidiaries are subject to
regulation by the SEC, the SROs and various state securities regulators.
Nasdaq operates three broker-dealers: Nasdaq Execution Services, LLC,
NFSTX, LLC, and Nasdaq Capital Markets Advisory LLC. Each broker-
dealer is registered with the SEC, a member of FINRA and registered in the
U.S. states and territories required by the operation of its business. In addition,
we own a minority interest in NPM Securities, LLC.
Nasdaq Execution Services operates as our routing broker for sending orders
from Nasdaq’s U.S. cash equity and options exchanges to other venues for
execution. NFSTX is a registered ATS and acts as an intermediary to facilitate
secondary transactions in certain funds (both registered or not registered under
the Investment Company Act of 1940), business development companies,
certain closed-end funds and private real estate investment funds. Nasdaq
Capital Markets Advisory acts as a third-party advisor to privately-held or
publicly-traded companies during IPOs and various other offerings.
The SEC, FINRA and SROs adopt, and require strict compliance with, rules
and regulations applicable to broker-dealers. The SEC, SROs and state
securities commissions may conduct administrative proceedings which can
result in censures, fines, the issuance of cease-and-desist orders or the
suspension or expulsion of a broker-dealer, its officers or employees. The SEC
and state regulators may also institute proceedings against broker-dealers
seeking an injunction or other sanction. All broker-dealers have an SRO that is
assigned by the SEC as the broker-dealer’s Designated Examining Authority.
The Designated Examining Authority is responsible for examining a broker-
dealer for compliance with the SEC’s financial responsibility rules. FINRA is
the current Designated Examining Authority for each of our broker-dealer
subsidiaries.
Our registered broker-dealers are subject to regulatory requirements intended
to ensure their general financial soundness and liquidity, which require that
they comply with certain minimum capital requirements. As of December 31,
2023, each of our broker-dealers were in compliance with applicable capital
requirements.
Regulatory contractual relationships with FINRA. Our SROs have signed a
series of regulatory service agreements covering the services FINRA provides
to the respective SROs. Under these agreements, FINRA personnel act as our
agents in performing the regulatory functions outlined above, and FINRA bills
us a fee for these services. These agreements have enabled us to reduce our
headcount while ensuring that the markets for which we are responsible are
properly regulated. However, we have reduced the scope of services provided
by FINRA under these regulatory services agreements and are performing
certain of those regulatory functions directly. In addition, our SROs retain
ultimate
regulatory responsibility for all regulatory activities performed under these
agreements by FINRA.
Exchange Act Rule 17d-2 permits SROs to enter into agreements, commonly
called Rule 17d-2 agreements, approved by the SEC with respect to
enforcement of common rules relating to common members. Our SROs have
entered into several such agreements under which FINRA assumes regulatory
responsibility for various rules or areas covered by agreements.
Regulation NMS and Options Intermarket Linkage Plan. We are subject to
Regulation NMS for our cash equity markets, and our options markets have
joined the Options Intermarket Linkage Plan. These are designed to facilitate
the routing of orders among exchanges to create a national market system as
mandated by the Exchange Act. One of the principal purposes of a national
market system is to assure that brokers may execute investors’ orders at the
best market price. Both Regulation NMS and the Options Intermarket Linkage
Plan require that exchanges avoid trade-throughs, locking or crossing of
markets and provide market participants with electronic access to the best
prices among the markets for the applicable cash equity or options order.
In addition, Regulation NMS requires that every national securities exchange
on which an NMS stock is traded and every national securities association act
jointly pursuant to one or more national market system plans to disseminate
consolidated information, including a national best bid and national best offer,
on quotations for transactions in NMS stocks, and that such plan or plans
provide for the dissemination of all consolidated information for an individual
NMS stock through a single plan processor.
The UTP Plan was filed with and approved by the SEC as a national market
system plan in accordance with the Exchange Act and Regulation NMS to
provide for
the collection, consolidation and dissemination of such
information for Nasdaq-listed securities. The Nasdaq Stock Market serves as
the processor for the UTP Plan pursuant to a contract for a two-year term
through October 2025. The Nasdaq Stock Market also serves as the
administrator for the UTP Plan. To fulfill its obligations as the processor, The
Nasdaq Stock Market has designed, implemented, maintained, and operated a
data processing and communications system, hardware, software and
communications infrastructure to provide processing for the UTP Plan. As the
administrator, The Nasdaq Stock Market manages the distribution of market
data, the collection of the resulting market data revenue, and the dissemination
of that revenue to plan members in accordance with the terms of the UTP Plan
and of Regulation NMS.
12
In September 2023, the SEC adopted an order to require changes to the
governance of securities information processors. The new order would limit
the voting right of affiliated SROs (including those owned by Nasdaq) and
would limit the ability of SROs to serve as administrators for securities
information processors. A schedule for implementing the new order has not
been imposed by the SEC, so we are not certain of the timing or the impact on
our business or our role as a securities information processor.
In December 2020, the SEC adopted a rule to modify the infrastructure for the
collection, consolidation and dissemination of market data for exchange-listed
national market stocks, or NMS data. The rule changes include, among other
things, requiring exchanges to add more “core data” to the securities
information processors, including partial depth-of-book, certain odd-lot
regulatory, and administrative data;
quotations/transactions, auction,
eliminating central, official consolidators of tape plans and enabling multiple
competing consolidators to register to aggregate and disseminate core data;
and authorizing persons to purchase and aggregate core data directly from the
exchanges for their own use. In September 2022, the SEC disapproved fees
proposed by exchanges to implement the rule but did not direct the exchanges
to take further action to implement the rule. Accordingly, a schedule for
implementing the rule has not been imposed by the SEC, and we are not
certain of the timing, or the impact, of these new rules on our business or role
as a securities information processor.
Regulation SCI. Regulation SCI is a set of rules designed to strengthen the
technology infrastructure of the U.S. securities markets. Regulation SCI
applies to national securities exchanges, operators of certain ATSs, market
data information providers and clearing agencies, subjecting these entities to
extensive compliance obligations, with the goals of reducing the occurrence of
technical issues that disrupt the securities markets and improving recovery
time when disruptions occur. We implemented an inter-disciplinary program
to ensure compliance with Regulation SCI. We have also created Regulation
SCI policies and procedures, updated internal policies and procedures, and
developed an
to ensure
compliance.
technology governance program
information
Regulation of Registered Investment Advisor Subsidiary. Our subsidiary NDW
is an investment advisor registered with the SEC under the Investment
Advisors Act of 1940. In this capacity, NDW is subject to oversight and
inspections by the SEC. Among other things, registered investment advisors
like NDW must comply with certain disclosure obligations, advertising and
fee restrictions and requirements relating to client suitability and custody of
funds and securities. Registered investment advisors are also subject to anti-
fraud provisions under both federal and state law.
CFTC Regulation. The Dodd-Frank Wall Street Reform and Consumer
Protection Act resulted in increased CFTC regulation of our use of certain
regulated derivatives products, as well as the operations of some of our
subsidiaries outside the U.S. and their customers.
Canadian Regulation
Regulation of Nasdaq Canada is performed by the Canadian Securities
Administrators, an umbrella organization of Canada’s provincial and territorial
securities regulators. As a recognized exchange in Ontario, Nasdaq Canada
must comply with the terms and conditions of its exchange recognition order.
While exempt from exchange recognition in each jurisdiction in Canada other
than Ontario where Nasdaq Canada carries on business, Nasdaq must also
comply with the terms and conditions of an exemption order granted by the
other jurisdictions in order to maintain its exemptive status. Oversight of the
exchange is performed by Nasdaq Canada’s lead regulator, the Ontario
Securities Commission.
Nasdaq Canada is subject to several national marketplace related instruments
which set out requirements for marketplace operations, trading rules and
managing electronic trading risk. Exchange terms and conditions include but
are not limited to, requirements for governance, regulation, rules and
rulemaking, fair access, conflict management and financial viability.
European Regulation
Regulation of our markets in the European Union and the European Economic
Area focuses on matters relating to financial services, listing and trading of
securities, clearing and settlement of securities and commodities, as well as
issues related to market abuse.
We are subject to MiFID II and MiFIR, the European Union’s Market Abuse
Regulation, which primarily affects our European trading businesses. Many of
the provisions of MiFID II and MiFIR are implemented through technical
standards drafted by the European Securities and Markets Authority and
approved by the European Commission. In addition, in 2016, the European
Union adopted legislation on governance and control of the production and
use of benchmark indices. The Benchmark Regulation became effective in the
European Union beginning in 2018, and Nasdaq must be in compliance
beginning January 1, 2026 in relation to benchmarks provided by non-
European Nasdaq entities. As the regulatory environment continues to evolve
and related opportunities arise, we intend to continue developing our products
and services to ensure that the exchanges and clearinghouse that comprise
Nasdaq Nordic and Nasdaq Baltic maintain favorable liquidity and offer fair
and efficient trading.
13
In addition, proposed rules under MiFID II and MiFIR rules are expected to
include provisions potentially impacting various parts of Nasdaq’s exchanges
and data business, including a proposal to establish a European consolidated
tape of pre- and/or post-trade data. The final rules have not yet been issued,
and therefore we cannot be certain of the impact on Nasdaq Europe’s
offerings.
with sufficient resources and powers to meet the exchange’s obligations.” That
requires the exchange to, among other things, supervise trading and price
information, compliance with laws, regulations and good market practice,
participant compliance with trading participation rules, financial instrument
compliance with relevant listing rules and the extent to which issuers meet
their obligation to submit regular financial information to relevant authorities.
The entities that operate trading venues in the Nordic and Baltic countries are
each subject to local regulations. As a result, we have a strong local presence
in each jurisdiction in which we operate regulated businesses. The regulated
entities have decision-making power and can adopt policies and procedures
and retain resources to manage all operations subject to their license. In
Sweden, general supervision of the Nasdaq Stockholm exchange is carried out
by the SFSA, while Nasdaq Clearing’s role as CCP in the clearing of
derivatives is supervised by the SFSA and overseen by the Swedish central
bank (Riksbanken). Additionally, as a function of the Swedish two-tier
supervisory model, certain surveillance of the exchange market is carried out
by the Nasdaq Stockholm exchange, through its surveillance function.
Nasdaq Stockholm’s exchange activities are regulated primarily by the SSMA,
which implements MiFID II into Swedish law and which sets up basic
requirements for the board of directors of the exchange and the exchange’s
share capital, and which also outlines the conditions on which exchange
licenses are issued. The SSMA also provides that any changes to the
exchange’s articles of association following initial registration must be
approved by the SFSA. Nasdaq Clearing holds the license as a CCP under
EMIR.
The SSMA requires exchanges to conduct their activities in an honest, fair and
professional manner, and in such a way as to maintain public confidence in the
securities markets. When operating a regulated market, an exchange must
apply the principles of free access (i.e., that each person which meets the
requirements established by law and by the exchange may participate in
trading), neutrality (i.e., that the exchange’s rules for the regulated market are
applied in a consistent manner to all those who participate in trading) and
transparency (i.e., that the participants must be given prompt, simultaneous
and correct information concerning trading and that the general public must be
given the opportunity to access this information). Additionally, the exchange
operator must identify and manage the risks that may arise in its operations,
use secure technical systems and identify and handle the conflicts of interest
that may arise between the exchange or its owners’ interests and the interest in
safeguarding effective risk management and secure technical systems. Similar
requirements are set up by EMIR in relation to clearing operations.
The SSMA also contains the framework for both the SFSA’s supervisory work
in relation to exchanges and clearinghouses and the surveillance to be carried
out by the exchanges themselves. The latter includes the requirement that an
exchange should have “an independent surveillance function
Due to the underlying EU regulation, the regulatory requirements in the other
Nordic and Baltic countries in which a Nasdaq entity has a trading venue are
similar to the requirements in Sweden described above. The supervisory
authorities in Sweden, Iceland, Denmark, Finland and Norway all cooperate to
safeguard effective and comprehensive supervision of
the exchanges
comprising Nasdaq Nordic and the systems operated by it, and to ensure a
common supervisory approach.
Nasdaq owns a central securities depository known as Nasdaq CSD SE
(Societas Europaea)¸ that provides notary, settlement, central maintenance and
other services in the Baltic countries and in Iceland. Nasdaq CSD SE is
licensed under the European Central Securities Depositories Regulation and is
supervised by the respective regulatory institutions.
We operate a licensed exchange, Nasdaq Oslo ASA, in Norway that trades and
lists commodity derivatives. Although Norway is not a member of the EU, as
a result of the European Economic Area, or EEA, agreement (entered into
between the EU and European Free Trade Association) the regulatory
environment is broadly similar to what applies in EU member states. Since
Norway has adopted legislation mirroring the provisions of MiFID II and
MIFIR, the regulatory environment in Norway is similar to Sweden. The
Financial Supervisory Authority of Norway supervises the Norwegian
exchange on an autonomous basis and the Norwegian exchange also has a
separate market surveillance function overseen by the Financial Supervisory
Authority.
Confidence in capital markets is paramount for trading to function properly.
Nasdaq Nordic carries out market surveillance through an independent unit
that is separate from the business operations. The surveillance work is
conceptually organized into two functions: one for the review and admission
of listing applications and surveillance activities related to issuers (issuer
surveillance) and one for surveillance of trading (trading surveillance). The
real-time trading surveillance for the Finnish, Icelandic, Danish and Swedish
markets has been centralized in Stockholm. In addition, there are designated
personnel who carry out surveillance activities at Nasdaq Oslo and the three
Baltic exchanges. In Finland, Sweden and Estonia, decisions to list new
companies on the main market are made by listing committees that have
external members in addition to members from each respective exchange and
in the other countries the decision is made either by the respective president of
the exchange or by the executive board.
14
If there is suspicion that a listed company or member has acted in breach of
exchange regulations, the matter is handled by the respective surveillance
department. Serious breaches are considered by the respective disciplinary
committee in Denmark, Finland, Iceland, Sweden and Norway. Suspected
insider trading is reported to the appropriate authorities in the respective
country.
In the United Kingdom, The Nasdaq Stock Market, Nasdaq Oslo ASA,
Nasdaq Stockholm AB, Nasdaq Copenhagen A/S, and Nasdaq Helsinki Ltd
are each subject to regulation by the Financial Conduct Authority as
“Recognised Overseas Investment Exchanges.” Nasdaq Clearing is registered
as a recognized third country CCP with the Bank of England under the
temporary recognition regime. The registration became effective on December
31, 2020, and lasts for four years (which may be extended further), during
which time Nasdaq Clearing may continue to act as a CCP vis-a-vis UK
members. Nasdaq Clearing has submitted its application for permanent
recognition and is awaiting further information as to the process and timeline
from the Bank of England.
Human Capital Management
Nasdaq has continued to strengthen our commitment to, and investment in,
attracting, retaining, developing and motivating our employees during 2023.
We also continued our efforts to create a diverse and inclusive work
environment of equal opportunity, where employees feel respected and valued
for
its employees have
opportunities to make positive contributions to our local communities.
their contributions, and where Nasdaq and
As of December 31, 2023, Nasdaq had 8,525 full and part-time employees,
including employees of non-wholly owned consolidated subsidiaries.
Employee Safety
We are committed to ensuring the safety and well-being of our employees and
stakeholders, and complying with local government regulations in the areas in
which we operate. We have adopted a hybrid work environment, where
employees both work in our offices and from home, which we believe enables
a more consistent in-office experience, greater levels of connectivity and
engagement, and an improved sense of community across Nasdaq.
Talent Management and Development
We continued to increase our efforts in attracting and retaining our employees.
Nasdaq seeks to hire world-class, innovative, and diverse talent across the
globe.
In 2023, our internal employee engagement score, based on our biannual
employee engagement surveys, maintained its record high rating achieved in
2022. Our workforce voluntary attrition rate during 2023 was approximately
7.3%, which was nearly four percentage points lower than 2022.
Our Talent Attraction Team focused on strategic marketing and branding to
position Nasdaq as a leading employer of choice for talent in our industry,
helping to increase our pool of top candidates for open positions, particularly
diverse candidates. We ran targeted attraction campaigns in our major markets
using (with permission) local employee stories and photos, and partnered with
diverse talent organizations, such as the National Society of Black Engineers,
AfroTech, Sistas in Sales, Women in Tech, Information Technology Senior
Management Forum and the Society of Hispanic Professional Engineers to
help improve brand awareness of Nasdaq and attract a higher number of
diverse candidates for potential hiring, as compared to 2022.
During 2023, we continued a series called the Manager Forum, facilitated by
our CEO and other senior and mid-career leaders, to engage managers in
sustained leadership development, alongside our existing formal leadership
development curriculum.
Our artificial intelligence-driven career development platform, the Career
Hub, matches employees, based on their career aspirations, to internal
training, potential mentors, short-term projects and full-time internal roles.
This helped us again increase our career satisfaction scores in our biannual
employee engagement survey and supported employee retention.
We have invested in professional development for our employees, including
offering access to more than 26,000 professional development programs;
providing tuition assistance to employees enrolled in degree-granting
academic programs; holding internal career fairs and career development
programs; connecting employees to our formal mentoring programs and
providing one-on-one professional coaching opportunities. We welcomed
approximately 150 interns to Nasdaq during 2023.
To reward our employees at various stages of their tenure with Nasdaq, we
continued our anniversary recognition program that includes Nasdaq-branded
merchandise, and, for major milestones, recognition on our Nasdaq Tower in
Times Square. Additionally, our peer-to-peer employee recognition program
rewards employees and highlights recognized employees on our internal social
media channels, further amplifying the recognition.
A Culture of Inclusion
At Nasdaq, three pillars guide our diversity, equity and inclusion efforts:
Workforce, Workplace and Marketplace. Workforce seeks to ensure that our
employee population is representative of the communities in which we
operate. Workplace seeks to create a positive, equitable workplace experience
for all employees of Nasdaq. Marketplace aims to positively influence our
peers in the capital market ecosystem and invest in the local communities
where we operate.
15
Nasdaq sponsors twelve employee-led internal affinity networks. These
networks include more than 2,900 members, representing approximately 36%
of our eligible employees and contractors. Nasdaq’s Employee Networks
support the diverse communities that comprise our workforce, including
Black, Asian American, Hispanic, LGBTQ+, female, disabled, veteran, and
parent/caregiver communities. Nasdaq’s Employee Networks provide both
formal and informal development programs and guidance for their members.
The networks benefit the entire Nasdaq workforce through educational events,
guest speakers, and volunteering opportunities.
Nasdaq regularly and proactively reviews and monitors diversity data across
its businesses, including workforce composition, talent pipeline, and sentiment
by business unit. In 2023, we expanded our Inclusion Learning Library,
offering two new courses aimed at helping managers lead more inclusively in
addition to our two fundamental diversity trainings. We also added customized
developmental programs for underrepresented talent, including executive
mentoring and accelerated leadership development programs. In 2023, we
graduated our first class of Acclerate(her), which is our high-potential
leadership program for our female employees to enhance their skills and
increase advancement opportunities. Additionally, we expanded our leadership
development program aimed to help foster community, understanding and
develop
from diverse
backgrounds.
leadership skills
for employees
fundamental
Our dedication to fostering diversity extends globally, as Nasdaq was included
in the 2023 Seramount Alliance for Global Inclusion and was named to the
2023 Seramount Global Inclusion Index. We received acknowledgement from
the Human Rights Campaign, for the fifth consecutive year, underscoring our
commitment to LGBTQ+ employees.
Workplace Demographics
Our global female employee base in 2023 was approximately 35%, including
the employees that joined us from Adenza in November 2023. Our minority
representation in the U.S., which includes Asian, Black/African American,
Hispanic/Latino, Multiracial, Native American, Native Hawaiian, and Pacific
Islander employees, was 32% in 2023, including Adenza employees.
Gender and Ethnicity Performance Data as of December 31, 2023 and
2022
Gender:
We continue to seek to monitor our diversity metrics, both through
development of our internal talent pool and by focusing on interviewing
diverse candidates externally for new employment opportunities. During our
annual executive succession planning exercise with our Board of Directors,
we realized a 3% increase, as compared to 2022, in the diversity of our senior
executive succession candidate pool (considering gender, race and LGBTQ+
status) due to a focus by our senior executives on identifying and cultivating
talent deeper in their organizations.
Nasdaq monitors our employee sentiment semi-annually, and has a 92%
average participation rate in these employee surveys. We also introduced a
new Inclusion Index that helps us to understand where in the organization we
may have employees having a differing experience from one another, thus
allowing us to seek to understand root causes and explore and implement
solutions.
In 2023, Nasdaq was honored with multiple awards, affirming our
commitment to excellence and inclusion in human capital management.
Nasdaq was named to Seramount 100 Best Companies, the 2023 Seramount
Inclusion Index and the ParityLIST for both Women and People of Color to
Advance.
16
Finally, to increase transparency of our workforce, Nasdaq publishes statistics
on the composition of its own global workforce by gender, and of its U.S.
workforce by gender, race and ethnicity, in our U.S. EEO-1 report and our
Sustainability Report, which are available on our website.
Compensation and Benefits
Our Total Rewards program is designed to attract, retain, and empower
employees to successfully execute our growth strategy and our mission to
better serve our clients. Our comprehensive Total Rewards program reflects
our commitment to protecting our employees’ health, well-being and financial
security.
compensation programs
Our pay-for-performance
includes market-
competitive base salaries, annual bonuses or sales commissions, and equity
grants. The majority of our employees are granted annual, long-term equity
awards, enabling them to be owners of the company, committed to our long-
term success and aligning their interests with the short-term and long-term
interests of our shareholders.
Beyond compensation, we offer a suite of programs, benefits, perquisites, and
resources. Our core benefits include health (medical, dental, and vision) and
risk insurances (life and disability), retirement plans, and an employee stock
purchase plan. We also offer robust paid time-off benefits which include
vacation, incidental sick days and parental leave.
In addition, all Nasdaq employees, regardless of their location in any of our
global offices, are offered paid time off for key life events. Beginning January
1, 2024, we announced a new flexible time off policy for our North American
employees. These programs, coupled with our hybrid work schedules, are
designed to meet the diverse needs of our work force.
In 2023, we recognized the importance of well-being in the overall
performance of our workforce. We introduced toolkits and trainings to help to
support both our leaders and employees.
Community Involvement
We are committed to creating lasting, positive change within our Company
and the communities we serve. Our employees take pride in being active in
our communities. Through our Nasdaq GoodWorks Corporate Responsibility
Program, we have committed to supporting the communities in which we live
and work by providing eligible full and part-time employees two paid days off
per year to volunteer. We also match charitable donations of all Nasdaq
employees and contractors up to $1,000, or more in certain circumstances, per
calendar year. In 2023, Nasdaq employees raised over $450,000, including
donations and matches, supporting almost 600 charities worldwide.
* In the charts above, not disclosed percentage includes employees that have
chosen not to disclose and race and ethnicities that are less than 0.3%.
In 2023, we conducted a pay equity analysis, which supplements our annual
multifaceted compensation review program, successfully concluding that
review in the fourth quarter of the year. Our pay equity analysis for 2024 has
already begun as part of the annual compensation review program to be
completed in the same cycle next year.
17
Nasdaq’s “Purpose” comprises our philanthropic, community outreach,
entrepreneurial support and employee volunteerism programs, all designed to
leverage our unique place at the center of capital creation, markets, and
technology and drive stronger economies, more equitable opportunities and
contribute to a more sustainable world.
During 2023, Nasdaq held its third annual “Purpose Week,” which is a week
dedicated to celebrating and advancing economic progress for all. Purpose
included a series of company-wide webinars, volunteer
Week 2023
opportunities, and global activities involving and recognizing company
employees. Purpose Week also included a series of workshops with Nasdaq
Foundation partnership organizations. We hosted two investor education
workshops for employees.
Our inaugural Purpose Forum convened thought leaders, change makers, and
innovators from around the world to discuss how Nasdaq can empower
individuals to embrace their purpose, advance their economic growth and
reach their full potential.
The Nasdaq Foundation works with organizations that promote and support
under-resourced communities by reimagining investor engagement and
equipping communities with the financial knowledge needed to share in the
wealth that markets create.
During 2023, the Nasdaq Foundation provided 13 grants to organizations that
seek to fulfill that mission. These grants were awarded to, among others: Defy
Ventures, which provides entrepreneur training for formerly incarcerated
Black and indigenous men and women and people of color; the GO Project for
the GO Families Financial Literacy Workshop Series in New York City; and
the Global Entrepreneur Network, in partnership with Hello Alice, for the
Equitable Access Program aimed at enhancing credit access and financial
education to underserved entrepreneurs facing credit challenges.
Nasdaq Website and Availability of SEC Filings
We file periodic reports, proxy statements and other information with the SEC.
The SEC maintains a website that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with
the SEC. The address of that site is www.sec.gov.
Our website is http://ir.nasdaq.com. Information on our website is not a part of
this Form 10-K. We make available free of charge on our website, or provide a
link to, our Forms 10-K, Forms 10-Q and Forms 8-K and any amendments to
these documents, that are filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC. To access these filings, go to
our website and click on “Financials” then click on “SEC Filings.”
Item 1A. Risk Factors
The risks and uncertainties described below are not the only ones facing us.
Additional risks and uncertainties not presently known to us or that we
currently believe to be immaterial may also adversely affect our business. If
any of the following risks actually occur, our business, financial condition, or
operating results could be adversely affected.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
Economic conditions and market factors, which are beyond our control,
may adversely affect our business and financial condition.
Our business performance is 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,
pandemics and other factors that are generally beyond our control. To the
extent that global or national economic conditions weaken and result in slower
growth or recessions, our business may be negatively impacted. Adverse
market conditions could reduce customer demand for our services and the
ability of our customers, lenders and other counterparties to meet their
obligations to us. Poor economic conditions may result in a reduction in the
demand for our products and services, including our market technology, fraud
detection, AML and surveillance solutions, data, indices and corporate
solutions, or could result in a decline in the number of IPOs, reduced trading
volumes or values and deterioration of the economic welfare of our listed
companies, which could cause an increase in delistings.
Trading volumes and values are driven primarily by general market conditions
and declines in trading volumes or values may affect our market share and
impact our pricing. In addition, our Market Services businesses receive
revenues from a relatively small number of customers concentrated in the
financial industry, so any event that impacts one or more customers or the
financial industry in general could impact our revenues.
The number of listings on our markets is primarily influenced by factors such
as investor demand, the global economy, available sources of financing, and
tax and regulatory policies. Adverse conditions may jeopardize the ability of
our listed companies to comply with the continued listing requirements of our
exchanges, or reduce the number of issuers launching IPOs, including SPACs,
and direct listings. The number of IPOs on our exchanges decreased in both
2023 and 2022, and the number of delistings increased in 2023.
Our Capital Access Platforms revenues may be significantly affected by
global economic conditions. Professional subscriptions to our data products
are at risk if staff reductions occur in financial services companies or if our
customers consolidate, which could result in significant reductions in our
professional user revenue or expose us to increased risks relating to
dependence on a smaller number of
18
customers. In addition, adverse market conditions may cause reductions in the
number of non-professional investors with investments in the market and in
ETP AUM tracking Nasdaq indices as well as trading in futures linked to
Nasdaq indices.
There may be less demand for our analytics, corporate solutions, market
technology and risk and regulatory products and services if global economic
conditions remain weak. Our customers historically reduce purchases of new
services and technology when growth rates decline, thereby diminishing our
opportunities to sell new products and services or upgrade existing products
and services.
Additionally, during a global economic downturn, or periods of economic,
political or regulatory uncertainty, our sales cycle may become longer or more
unpredictable due to customer budget constraints or unplanned administrative
delays to approve purchases.
A reduction in trading volumes or values, market share of trading, the number
of our listed companies, or demand for our products and services due to
economic conditions or other market factors could adversely affect our
business, financial condition and operating results.
The industries we operate in are highly competitive.
We face significant competition in our Capital Access Platforms, Financial
Technology and Market Services segments from other market participants. We
face intense competition from other exchanges and markets for market share
of trading activity and listings. This competition includes both product and
price competition.
The liberalization and globalization of world markets has resulted in greater
mobility of capital, greater international participation in local markets and
more competition. As a result, both in the U.S. and in other countries, the
competition among exchanges and other execution venues has become more
intense. Marketplaces in both Europe and the U.S. have also merged to
achieve greater economies of scale and scope.
Regulatory changes also have facilitated the entry of new participants in the
European Union that compete with our European markets. The regulatory
environment, both in the U.S. and in Europe, is structured to maintain this
environment of intense competition. In addition, a high proportion of business
in the securities markets is becoming concentrated in a smaller number of
institutions and our revenue may therefore become concentrated in a smaller
number of customers.
We also compete globally with other regulated exchanges and markets, ATSs,
MTFs and other traditional and non-traditional execution venues. Some of
these competitors also are our customers. Competitors may develop market
trading platforms that are more competitive than ours. Competitors may
leverage data more effectively or enter into strategic partnerships, mergers or
acquisitions that could make their trading, listings, clearing, data or
technology businesses more competitive than ours.
We face intense price competition in all areas of our business. In particular, the
trading industry is characterized by price competition. We have in the past
lowered prices, and in the U.S., increased rebates for trade executions to
attempt to gain or maintain market share. These strategies have not always
been successful and have at times hurt operating performance. Additionally,
we have also been, and may once again be, required to adjust pricing to
respond to actions by competitors and new entrants, or due to new SEC
regulations, which could adversely impact operating results. We also compete
with respect to the pricing of data products and with respect to products for
pre-trade book data and for post-trade last sale data.
If we are unable to compete successfully in the industries in which we do
business, our business, financial condition and operating results will be
adversely affected.
System limitations or failures could harm our business.
Our businesses depend on the integrity and performance of the technology,
computer and communications systems supporting them. If new systems fail
to operate as intended or our existing systems cannot expand to cope with
increased demand or otherwise fail to perform, we could experience
unanticipated disruptions in service, slower response times and delays in the
introduction of new products and services. We could experience a systems
failure due to human error by our employees, contractors or vendors, electrical
or telecommunications failures or disruptions, hardware or software failures or
defects, cyberattacks, sabotage or similar unexpected events. These
consequences could result in service outages, lower trading volumes or values,
financial losses, decreased customer satisfaction, litigation and regulatory
sanctions. Our markets and the markets that rely on our technology have
experienced systems failures and delays in the past and we could experience
future systems failures and delays.
Although we currently maintain and expect to maintain multiple computer
facilities, and leverage third party cloud providers, that are designed to
provide redundancy and back-up to reduce the risk of system disruptions and
have facilities in place that are expected to maintain service during a system
disruption, such systems and facilities may prove inadequate. If trading
volumes increase unexpectedly or other unanticipated events occur, we may
need to expand and upgrade our technology, transaction processing systems
and network infrastructure. We do not know whether we will be able to
accurately project the rate, timing or cost of any volume increases, or expand
and upgrade our systems and infrastructure to accommodate any increases in a
timely manner.
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While we have programs in place to identify and minimize our exposure to
vulnerabilities and work in collaboration with the technology industry to share
corrective measures with our business partners, we cannot guarantee that such
events will not occur in the future. Any system issue that causes an
interruption in services, decreases the responsiveness of our services or
otherwise affects our services could impair our reputation, damage our brand
name and negatively impact our business, financial condition and operating
results.
We must continue to introduce new products, initiatives and enhancements
to maintain our competitive position.
We intend to launch new products and initiatives and continue to explore and
pursue opportunities to strengthen our business and grow our company. We
may spend substantial time and money developing new products, initiatives
and enhancements to existing products. If these products and initiatives are not
successful or their launches are delayed, we may not be able to offset their
costs, which could have an adverse effect on our business, financial condition
and operating results.
In our technology operations, we have invested substantial amounts in the
development of system platforms, the rollout of our platforms and the
adoption of new technologies, including cloud-based infrastructure and
artificial intelligence for certain of our offerings. Although investments are
carefully planned, there can be no assurance that the demand for such
platforms or technologies will justify the related investments. If we fail to
generate adequate revenue from planned system platforms or the adoption of
new technologies, or if we fail to do so within the envisioned timeframe, it
could have an adverse effect on our results of operations and financial
condition. In addition, clients may delay purchases in anticipation of new
products or enhancements. We may allocate significant amounts of cash and
other resources to product technologies or business models for which market
demand is lower than anticipated. In addition, the introduction of new
products by competitors, the emergence of new industry standards or the
development of entirely new technologies to replace existing product offerings
could render our existing or future products obsolete.
A decline in trading and clearing volumes or values or market share will
decrease our trading and clearing revenues.
Trading and clearing volumes and values are directly affected by economic,
political and market conditions, broad trends in business and finance,
unforeseen market closures or other disruptions in trading, the level and
volatility of interest rates, inflation, changes in price levels of securities and
the overall level of investor confidence. Over the past several years, trading
and clearing volumes and values across our markets have fluctuated
significantly depending on market conditions and other factors beyond our
control. Because a significant percentage of our revenues is tied directly to the
volume or value of securities traded and cleared on our markets, it is
likely that a general decline in trading and clearing volumes or values would
lower revenues and may adversely affect our operating results if we are unable
to offset falling volumes or values through pricing changes. Declines in
trading and clearing volumes or values may also impact our market share or
pricing structures and adversely affect our business and financial condition.
If our total market share in securities decreases relative to our competitors, our
venues may be viewed as less attractive sources of liquidity. If our exchanges
are perceived to be less liquid, then our business, financial condition and
operating results could be adversely affected.
Since some of our exchanges offer clearing services in addition to trading
services, a decline in market share of trading could lead to a decline in
clearing and depository revenues. Declines in market share also could result in
issuers viewing the value of a listing on our exchanges as less attractive,
thereby adversely affecting our listing business. Finally, declines in market
share of Nasdaq-listed securities, or recently adopted SEC rules and
regulations, could lower The Nasdaq Stock Market’s share of tape pool
revenues under the consolidated data plans, thereby reducing the revenues of
our U.S. Tape plans business.
Our role in the global marketplace positions us at greater risk for a
cyberattack.
Our systems and operations are vulnerable to damage or disruption from
security breaches. Due to our adoption of a hybrid work environment, we have
a broader and more distributed network footprint and increased reliance on the
home networks of employees, and such remote work may cause heightened
cybersecurity and operational risks. Some of these threats include attacks from
foreign governments, hacktivists, insiders and criminal organizations. Foreign
governments may seek to obtain a foothold in U.S. critical infrastructure,
hacktivists may seek to deploy denial of service attacks to bring attention to
their cause, insiders may pose a risk of human error or malicious activity and
criminal organizations may seek to profit from stolen data. Computer
malware, such as viruses and worms, also continue to be a threat with
ransomware increasingly being used by criminals to extort money. Given our
position in the global securities industry, we may be more likely than other
companies to be a direct target, or an indirect casualty, of such events.
While we continue to employ and invest additional resources to monitor our
systems and protect our infrastructure, these measures may prove insufficient
depending upon the attack or threat posed. Any system issue, whether as a
result of an intentional breach, collateral damage from a new virus or a non-
malicious act, the use of artificial intelligence by bad actors, including the use
of such tools to engage in social engineering or similar activities, or due to a
cybersecurity breach of a customer that results in a loss of our data or
compromises our systems or those of our other customers utilizing the same
products, could damage our reputation and result in: a loss of customers;
disrupted customer relationships; the loss of our intellectual property or
sensitive
20
data; lower trading volumes or values, significant liabilities, litigation or
regulatory fines or otherwise have a negative impact on our business, our
products and services, financial condition and operating results. Further,
cybersecurity incidents that impact our vendors and other third parties that
support our organization and industry could directly or indirectly impact us.
For example, a data breach involving one of our vendors occurred in 2023,
and was identified and mitigated by the vendor before material damage to
Nasdaq occurred. There can be no assurance we will be able to identify and
mitigate every incident involving cybersecurity attacks, breaches or incidents.
A system breach may go undetected for an extended period of time.
address our regulatory responsibilities, and our business will be negatively
affected if our platforms or the technology solutions we sell to our customers
fail to function as expected. If we are unable to develop our platforms to
include other products and markets, or if our platforms do not have the
required functionality, performance, capacity, reliability and speed required by
our business and our regulators, as well as by our customers, we may not be
able to compete successfully. Further, our failure to anticipate or respond
adequately to changes in technology and customer preferences or any
significant delays in product development efforts, could have a material
adverse effect on our business, financial condition and operating results.
cybersecurity
Expanded
cybersecurity
regulations, and
infrastructure and compliance costs, may adversely impact our results of
operations.
increased
As cybersecurity threats continue to increase in frequency and sophistication,
and as the domestic and international regulatory and compliance structure
related to information, cybersecurity, data privacy and data usage becomes
increasingly complex and exacting, we may be required to devote significant
additional resources to strengthen our cybersecurity capabilities, and to
identify and remediate any security vulnerabilities. Compliance with laws and
regulations concerning cybersecurity, data privacy and data usage could result
in significant expense, and any failure to comply could result in proceedings
against us by regulatory authorities or other third parties. Costs for bolstering
cybersecurity capabilities, and increased cybersecurity and data privacy
compliance costs, could adversely impact our business, financial condition
and operating results. Additionally, our clients increasingly demand rigorous
contractual, certification and audit provisions regarding cybersecurity, data
protection and data usage, which may also increase our overall compliance
burden and costs in meeting such obligations.
The success of our business depends on our ability to keep up with rapid
technological and other competitive changes affecting our industry.
Specifically, we must complete development of, successfully implement and
maintain platforms that have the functionality, performance, capacity,
reliability and speed required by our business and our regulators, as well as
by our customers.
industry
evolving
standards,
regulatory
The markets in which we compete are characterized by rapidly changing
technology,
frequent
and
enhancements to existing products and services, the adoption of new services
and products and changing customer demands. We are reliant on our
customers that purchase our on-premise solutions to maintain a certain level of
network infrastructure for our products to operate and to allow for our support
of those products, and there is no assurance that a customer will implement
such measures. We may not be able to keep up with rapid technological and
other competitive changes affecting our industry. For example, we must
continue to enhance our platforms to remain competitive as well as to
Our artificial intelligence initiatives under development and the use of
artificial
in certain of our existing products may be
unsuccessful and may give rise to various risks, which could adversely affect
our business, reputation, or operating results.
intelligence
We are making significant investments in artificial intelligence, or AI,
including generative AI, to, among other things, develop new products or
features for our existing products, including our anti-financial crime, investor
relations and investment analytics solutions, and to enhance and refine our
internal business operations. As AI is a new and evolving technology in the
early stages of commercial use, there are significant risks involved in the
development and deployment of AI, and there can be no assurance that the use
of AI will enhance our products or services or augment our business or
operating results. Market acceptance of AI technologies is uncertain, and we
may be unsuccessful in our product development efforts. Moreover, our AI-
related product initiatives and offerings, or use in our internal business
operations, may give rise to risks related to harmful content, accuracy, bias,
discrimination, intellectual property infringement, the ability to obtain
intellectual property protection, misappropriation or leakage, defamation, data
privacy, and cybersecurity, among others. In addition, these risks include the
possibility of new or enhanced laws or regulations, for which compliance may
be costly and burdensome or involve litigation or other legal liability, or
additional oversight, audits or enforcement under existing laws or regulations.
The use of AI may also give rise to ethical concerns or negative public
perceptions, which may cause brand or reputational harm. Additionally, our
competitors may be developing their own AI products and technologies,
which may be superior in features or functionality, or cost, to our offerings.
Any of these factors could adversely affect our business, reputation, or
operating results.
Failure to attract and retain key personnel may adversely affect our ability
to conduct our business.
Our future success depends, in large part, upon our ability to attract and retain
highly qualified and skilled professional personnel that can learn and embrace
new technologies. In the current tight labor market, we have intensified our
efforts to recruit and retain talent. Competition for key personnel in
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the various localities and business segments in which we operate is intense.
We have, and may continue to, experience higher compensation costs to retain
personnel, and hire new talent, that may not be offset by improved
productivity, higher revenues or increased sales. Our ability to attract and
retain key personnel, in particular senior officers or technology personnel,
including from companies that we acquire, will be dependent on a number of
factors, including prevailing market conditions, office/remote working
arrangements and compensation and benefit packages offered by companies
competing for the same talent. There is no guarantee that we will have the
continued service of key employees who we rely upon to execute our business
strategy and identify and pursue strategic opportunities and initiatives. Our
ability to execute our business strategy could be impaired if we are unable to
replace such persons without incurring significant costs or in a timely manner
or at all.
Our clearinghouse operations expose us to risks, including credit or
liquidity risks
include defaults by clearing members, or
that may
insufficiencies in margins or default funds.
We are subject to risks relating to our operation of a clearinghouse, including
counterparty and liquidity risks, risk of defaults by clearing members and risks
associated with adequacy of the customer margin and of default funds. Our
clearinghouse operations expose us to counterparties with differing risk
profiles. We may be adversely impacted by the financial distress or failure of a
clearing member, which may cause us negative financial impact, reputational
harm or
regulatory
enforcement actions.
regulatory consequences,
litigation or
including
We are exposed to credit risk from third parties, including customers,
counterparties and clearing agents.
We are exposed to credit risk from third parties, including customers,
counterparties and clearing agents. These parties may default on their
obligations to us due to bankruptcy, lack of liquidity, operational failure or
other reasons.
We clear a range of equity-related and fixed-income-related derivative
products, commodities and resale and repurchase agreements. We assume the
counterparty risk for all transactions that are cleared through Nasdaq Clearing
on our markets and guarantee that our cleared contracts will be honored. We
enforce minimum financial and operational criteria for membership eligibility,
require members and investors to provide collateral, and maintain established
risk policies and procedures to ensure that the counterparty risks are properly
monitored and proactively managed; however, none of these measures
provides absolute assurance against experiencing financial losses from
defaults by our counterparties on their obligations. No guarantee can be given
that the collateral provided will at all times be sufficient. Although we
maintain clearing capital resources to serve as an additional layer of protection
to help ensure that we are able to meet our obligations, these resources also
may not be sufficient.
We also have credit risk related to transaction and subscription-based revenues
that are billed to customers on a monthly or quarterly basis, in arrears.
Credit losses such as those described above could adversely affect our
consolidated financial position and results of operations.
Technology issues relating to our role as exclusive processor for Nasdaq-
listed stocks could affect our business.
Nasdaq, as technology provider to the UTP Operating Committee, has
implemented measures to enhance the resiliency of the existing processor
system. Nasdaq transferred the processor technology platform to our INET
platform and this migration further enhanced the resiliency of the processor
systems. However, if future outages occur or the processor systems fail to
function properly while we are operating the systems, it could have an adverse
effect on our business, reputation and financial condition.
Stagnation or decline in the listings market could have an adverse effect on
our revenues.
The market for listings is dependent on the prosperity of companies and the
availability of risk capital. A stagnation or decline in the number of new
listings, or an increase in the number of delistings, on The Nasdaq Stock
Market and the Nasdaq Nordic and Nasdaq Baltic exchanges could cause a
decrease in revenues for future years. In 2023, we again experienced a
decrease in new listings from IPOs, including SPACs, and an increase in
delistings. A prolonged decrease in the number of listings, or failure of
existing SPACs to successfully complete transactions with target companies
and dissolve, could negatively impact the growth of our revenues. Our
Corporate Solutions business is also impacted by declines in the listings
market or increases in acquisitions activity as there may be fewer publicly-
traded customers that need our products.
RISKS RELATED TO TRANSACTIONAL ACTIVITIES AND
STRATEGIC RELATIONSHIPS
We may not be able to successfully integrate acquired businesses, which may
result in an inability to realize the anticipated benefits of our acquisitions.
We must rationalize, coordinate and integrate the operations of our acquired
businesses, including the acquisition of Adenza, which was completed in
November 2023. This process involves complex technological, operational
and personnel-related challenges, which are time-consuming and expensive
and may disrupt our business. The difficulties, costs and delays that could be
encountered may include:
• difficulties, costs or complications in combining the companies’ operations,
including technology platforms, and security measures and infrastructure
that may need greater remediation than anticipated, which could lead to us
not achieving the synergies we anticipate or customers not renewing their
contracts with us as we migrate platforms;
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• incompatibility of systems and operating methods;
• reliance on, or provision of, transition services;
• inability to use capital assets efficiently to develop the business of the
combined company;
• difficulties of complying with government-imposed regulations in the U.S.
and abroad, which may be conflicting;
• resolving possible inconsistencies in standards, controls, procedures and
policies, business cultures and compensation structures;
• the diversion of management’s attention from ongoing business concerns
and other strategic opportunities;
• difficulties in operating businesses we have not operated before;
• difficulties of integrating multiple acquired businesses simultaneously;
• the retention of key employees and management;
• the implementation of disclosure controls, internal controls and financial
reporting systems at non-U.S. subsidiaries to enable us to comply with U.S.
GAAP and U.S. securities laws and regulations, including the Sarbanes-
Oxley Act of 2002, required as a result of our status as a reporting company
under the Exchange Act;
• the coordination of geographically separate organizations;
• the coordination and consolidation of ongoing and future research and
development efforts;
• possible tax costs or inefficiencies associated with integrating the operations
of a combined company;
• pre-tax restructuring and revenue investment costs;
• the retention of strategic partners and attracting new strategic partners; and
• negative impacts on employee morale and performance as a result of job
changes and reassignments.
Foreign acquisitions, or acquisitions involving companies with numerous
foreign subsidiaries, involve risks in addition to those mentioned above,
including those related to integration of operations across different cultures
and languages, our ability to enforce contracts in various jurisdictions,
currency risks and the particular economic, political and regulatory risks
associated with specific countries. We may not be able to address these risks
successfully, or at all, without incurring significant costs, delays or other
operating problems that could disrupt our business and have a material
adverse effect on our financial condition.
For these reasons, we may not achieve the anticipated financial and strategic
benefits from our acquisitions and strategic initiatives. Any actual cost savings
and synergies may be lower than we expect and may take a longer time to
achieve than we anticipate, and we may fail to realize the anticipated benefits
of acquisitions.
We rely on third parties to perform certain functions, and our business
could be adversely affected if these third parties fail to perform as expected
or experience service interruptions affecting our operations.
We rely on third parties for regulatory, data center, cloud computing, data
storage and processing, connectivity, data content, clearing, maintaining
markets and exchange liquidity and other services. Interruptions or delays in
services from our third-party providers could impair the delivery of our
services and harm our business. To the extent that any of our vendors or other
third-party service providers experiences difficulties or a significant
disruption, breach or outage, materially changes their business relationship
with us or is unable for any reason to perform their obligations, including due
to geopolitical instability, our business or our reputation may be materially
adversely affected.
Our access to cloud service provider infrastructure could be limited by a
number of events, including technical or infrastructure failures, natural
disasters or cybersecurity attacks. As we continue to grow our SaaS
businesses, our dependency on the continuing operation and availability of
these cloud service providers increases. If our cloud services from third party
providers are unavailable to us for any reason, or there are cloud service
disruptions or a delay or inability to access our exchanges, platforms or certain
of our cloud products or features, such unavailability or delays may adversely
affect our clients, which could significantly impact our reputation, operations,
business, and financial results.
For example, in 2023, we continued to migrate our North American markets to
AWS in a phased approach, as we added two additional exchanges to our
cloud-enabled infrastructure. AWS operates a platform that we use to provide
services to our clients, and therefore we are vulnerable to service outages on
the AWS platform that affect Nasdaq workloads running or stored in the AWS
environment. If AWS does not deliver our system requirements on time, fails
to provide maintenance and support to our specifications or a migration
experiences integration challenges, the successful migration of our exchanges
to the AWS cloud platform may be significantly delayed, which may
adversely affect our reputation and financial results.
We also rely on members of our trading community to maintain markets and
add liquidity. To the extent that any of our largest members experience
difficulties, materially change their business relationship with us or are unable
for any reason to perform market making activities, our business or our
reputation may be materially adversely affected.
23
We may be required to recognize impairments of our goodwill, intangible
assets or other long-lived assets in the future.
Our business acquisitions typically result in the recording of goodwill and
intangible assets, and the recorded values of those assets may become
impaired in the future. As of December 31, 2023, goodwill totaled $14.1
billion and intangible assets, net of accumulated amortization, totaled $7.4
billion. The determination of the value of such goodwill and intangible assets
requires management to make estimates and assumptions that affect our
consolidated financial statements.
We assess goodwill and intangible assets, as well as other long-lived assets,
including equity method investments, equity securities, and property and
equipment, for potential impairment on an annual basis or more frequently if
indicators of impairment arise. We estimate the fair value of such assets by
assessing many factors, including historical performance and projected cash
flows. Considerable management judgment is necessary to project future cash
flows and evaluate the impact of expected operating and macroeconomic
changes on these cash flows. The estimates and assumptions we use are
consistent with our internal planning process. However, there are inherent
uncertainties in these estimates.
There were no impairment charges recorded relating to goodwill and
indefinite-lived intangible assets and there were no material impairment
charges recorded relating to other long-lived assets in 2023, 2022 and 2021.
We may experience future events that may result in asset impairments. Future
disruptions to our business, prolonged economic weakness, due to pandemics
or otherwise, or significant declines in operating results at any of our reporting
units or businesses, may result in impairment charges to goodwill, intangible
assets or other long-lived assets. A significant impairment charge in the future
could have a material adverse effect on our operating results.
Acquisitions, divestments,
ventures and other
investments,
transactional activities may require significant resources and/or result in
significant unanticipated losses, costs or liabilities.
joint
Over the past several years, acquisitions, such as Adenza, have been, or are
expected to be, significant factors in our growth. We have divested businesses
and may continue to divest additional businesses or assets in the future.
Although we cannot predict our transactional activities, we believe that
additional acquisitions, divestments, investments, joint ventures and other
transactional activities will be important to our strategy. Such transactions may
be material in size and scope. Other potential purchasers of assets in our
industry may have greater financial resources than we have. Therefore, we
cannot be sure that we will be able to complete future transactions on terms
favorable to us.
We also invest in early-stage companies through our Nasdaq Ventures
program and hold minority interests in other entities. Given the size of these
investments, we do not have operational control of these entities and may have
limited visibility into risk management practices. Thus, we may be subject to
additional capital requirements in certain circumstances and financial and
reputational risks if there are operational failures.
We may finance future transactions by issuing additional equity and/or debt.
The issuance of additional equity in connection with any such transaction
could be substantially dilutive to existing shareholders. In addition, the
announcement or implementation of future transactions by us or others could
have a material effect on the price of our common stock. The issuance of
additional debt could increase our leverage substantially. Additional debt may
reduce our liquidity, curtail our access to financing markets, impact our
standing with credit rating agencies and increase the cash flow required for
debt service. Any incremental debt incurred to finance a transaction could also
place significant constraints on the operation of our business.
Furthermore, any future transactions could entail a number of additional risks,
including:
• the inability to maintain key pre-transaction business relationships;
• increased operating costs;
• the inability to meet our target for return on invested capital;
• increased debt obligations, which may adversely affect our targeted debt
ratios;
• risks to the continued achievement of our strategic direction;
• risks associated with divesting employees, customers or vendors when
divesting businesses or assets;
• declines in the value of investments;
• exposure to unanticipated liabilities, including after a transaction is
completed;
• incurred but unreported claims for an acquired company;
• difficulties in realizing projected efficiencies, synergies and cost savings;
and
• changes in our credit rating and financing costs.
RISKS RELATED TO LIQUIDITY AND CAPITAL RESOURCES
A downgrade of our credit rating could increase the cost of our funding
from the capital markets.
Our debt is currently rated investment grade by two of the major rating
agencies. These rating agencies regularly evaluate us, and their ratings of our
long-term debt and commercial paper are based on a number of factors,
including our financial strength and corporate development activity, as well as
factors not entirely within our control, including
24
conditions affecting our industry generally. There can be no assurance that we
will maintain our current ratings. Our failure to maintain such ratings could
reduce or eliminate our ability to issue commercial paper and adversely affect
the cost and other terms upon which we are able to obtain funding and
increase our cost of capital. A reduction in credit ratings would also result in
increases in the cost of our commercial paper and other outstanding debt as
the interest rate on the outstanding amounts under our credit facilities and our
senior notes fluctuates based on our credit ratings.
Our leverage limits our financial flexibility, increases our exposure to
weakening economic conditions and may adversely affect our ability to
obtain additional financing.
Our indebtedness as of December 31, 2023 was $10.5 billion. We may borrow
additional amounts by utilizing available liquidity under our existing credit
facilities, issuing additional debt securities or issuing short-term, unsecured
commercial paper notes through our commercial paper program.
Our leverage and reliance on the capital markets could:
• reduce funds available to us for operations and general corporate purposes
or for capital expenditures as a result of the dedication of a substantial
portion of our consolidated cash flow from operations to the payment of
principal and interest on our indebtedness;
• increase our exposure to a continued downturn in general economic
conditions;
ability to pursue new financing opportunities, and it may be more expensive
for us to issue new debt securities. Limited access to capital or credit in the
future could have an impact on our ability to refinance debt, maintain our
credit rating, meet our regulatory capital requirements, engage in strategic
initiatives, make acquisitions or strategic investments in other companies, pay
dividends, repurchase our stock or react to changing economic and business
conditions. If we are unable to fund our capital or credit requirements, it could
have an adverse effect on our business, financial condition and operating
results.
In addition to our debt obligations, we will need to continue to invest in our
operations for the foreseeable future to integrate acquired businesses and to
fund new initiatives. If we do not achieve the expected operating results, we
will need to reallocate our cash resources. This may include borrowing
additional funds to service debt payments, which may impair our ability to
make investments in our business or to integrate acquired businesses.
If we need to raise funds through incurring additional debt, we may become
subject to covenants more restrictive than those contained in our credit
facilities, the indentures governing our notes and our other debt instruments.
Furthermore, if adverse economic conditions occur, we could experience
decreased revenues from our operations which could affect our ability to
satisfy financial and other restrictive covenants to which we are subject under
our existing indebtedness.
• place us at a competitive disadvantage compared with our competitors with
RISKS RELATED TO LEGAL AND REGULATORY MATTERS
less debt;
• affect our ability to obtain additional financing in the future for refinancing
indebtedness, acquisitions, working capital, capital expenditures or other
purposes; and
• increase our cost of debt and reduce or eliminate our ability to issue
commercial paper.
In addition, we must comply with the covenants in our credit facilities. Among
other things, these covenants restrict our ability to effect certain fundamental
transactions, dispose of certain assets, incur additional indebtedness and grant
liens on assets. Failure to meet any of the covenant terms of our credit
facilities could result in an event of default. If an event of default occurs, and
we are unable to receive a waiver of default, our lenders may increase our
borrowing costs, restrict our ability to obtain additional borrowings and
accelerate repayment of all amounts outstanding.
We will need to invest in our operations to maintain and grow our business
and to integrate acquisitions, and we may need additional funds, which may
not be readily available.
We depend on the availability of adequate capital to maintain and develop our
business. Although we believe that we can meet our current capital
requirements from internally generated funds, cash on hand and borrowings
under our revolving credit facility and commercial paper program, if the
capital and credit markets experience volatility, access to capital or credit may
not be available on terms acceptable to us or at all. Rising interest rates could
adversely affect our
We operate in a highly regulated industry and may be subject to censures,
fines and enforcement proceedings if we fail to comply with regulatory
obligations that can be ambiguous and can change unexpectedly.
We operate in a highly regulated industry and are subject to extensive
regulation in the U.S., Europe and Canada. The securities trading industry is
subject to significant regulatory oversight and could be subject to increased
governmental and public scrutiny in the future that can change in response to
global conditions and events, or due to changes in trading patterns, such as
due to the recent volatility involving the trading of certain stocks.
Our ability to comply with complex and changing regulation is largely
dependent on our establishment and maintenance of compliance, audit and
reporting systems that can quickly adapt and respond, as well as our ability to
attract and retain qualified compliance and other risk management personnel.
There is no assurance that our policies and procedures will always be effective
or that we will always be successful in monitoring or evaluating the risks to
which we are or may be exposed.
25
Our regulated markets are subject to audits, investigations, administrative
proceedings and enforcement actions relating to compliance with applicable
rules and regulations. Regulators have broad powers to impose fines, penalties
or censure, issue cease-and-desist orders, prohibit operations, revoke licenses
or registrations and impose other sanctions on our exchanges, broker-dealers,
central securities depositories, clearinghouse and markets for violations of
applicable requirements.
In the future, we could be subject to regulatory investigations or enforcement
proceedings that could result in substantial sanctions, including revocation of
our operating licenses. Any such investigations or proceedings, whether
successful or unsuccessful, could result in substantial costs, the diversion of
resources, including management time, and potential harm to our reputation,
which could have a material adverse effect on our business, results of
operations or financial condition. In addition, our exchanges could be required
to modify or restructure their regulatory functions in response to any changes
in the regulatory environment, or they may be required to rely on third parties
to perform regulatory and oversight functions, each of which may require us
to incur substantial expenses and may harm our reputation if our regulatory
services are deemed inadequate.
The regulatory framework under which we operate and new regulatory
requirements or new interpretations of existing regulatory requirements
could require substantial time and resources for compliance, which could
make it difficult and costly for us to operate our business.
Under current U.S. federal securities laws, changes in the rules and operations
of our securities markets, including our pricing structure, must be reviewed
and in many cases explicitly approved by the SEC. The SEC may approve,
disapprove, or recommend changes to proposals that we submit. In addition,
the SEC may delay either the approval process or the initiation of the public
comment process. Favorable SEC rulings and interpretations can be
challenged in and reversed by federal courts of appeals, reducing or
eliminating the value of such prior interpretations. Any delay in approving
changes, or the altering of any proposed change, could have an adverse effect
on our business, financial condition and operating results.
We must compete not only with non-exchanges, such as ATSs that are not
subject to the same SEC approval requirements and processes, but also with
other exchanges that may have lower regulation and surveillance costs than us.
There is a risk that trading will shift to exchanges or non-exchanges that
charge lower fees because, among other reasons, they spend significantly less
on regulation.
In 2016, the SEC approved a plan for Nasdaq and other exchanges to establish
a CAT to improve regulators’ ability to monitor trading activity. In addition to
increased regulatory obligations, implementation of a CAT has resulted in
significant additional expenditures,
the new
technology to meet many of the plan’s requirements. Creating the CAT has
required the development and
implement
including
to
implementation of complex and costly technology. This development effort
has been funded by the SROs (including Nasdaq) in exchange for promissory
notes. In September 2023, the SEC approved a “Funding Model” for the CAT
that allocated one-third of CAT expenses to the SROs, including Nasdaq, and
two-thirds of CAT expenses to the industry. This SEC approval order has been
appealed to the 11th Circuit U.S. Court of Appeals, and the appeal remains
pending. In January 2024, the SROs submitted filings, which remain pending,
to the SEC to establish the rate at which the industry would reimburse the
SROs for its two-thirds share of CAT expenses. Those two pending matters
could be resolved unfavorably to the SEC and to the SROs, resulting in a
delay in recovering expenses or the inability to recover those expenses. As of
December 31, 2023, we have accrued a net receivable of $115 million in
connection with our portion of expenses related to the CAT implementation. In
addition, the ongoing failure to timely launch or properly operate such
technology exposes Nasdaq and other exchanges to SEC fines.
In addition, our registered broker-dealer subsidiaries are subject to regulation
by the SEC, FINRA and other SROs. These subsidiaries are subject to
regulatory requirements intended to ensure their general financial soundness
and liquidity, which require that they comply with certain minimum capital
requirements. The SEC and FINRA impose rules that require notification
when a broker-dealer’s net capital falls below certain predefined criteria,
dictate the ratio of debt to equity in the regulatory capital composition of a
broker-dealer and constrain the ability of a broker-dealer to expand its
business under certain circumstances. Additionally, the SEC’s Uniform Net
Capital Rule and FINRA rules impose certain requirements that may have the
effect of prohibiting a broker-dealer from distributing or withdrawing capital
and requiring prior notice to the SEC and FINRA for certain withdrawals of
capital. Any failure to comply with these broker-dealer regulations could have
a material adverse effect on the operation of our business, financial condition
and operating results.
Our non-U.S. business is subject to regulatory oversight in all the countries in
which we operate regulated businesses, such as exchanges, clearinghouses or
central securities depositories. In
these countries, we have received
authorization from the relevant authorities to conduct our regulated business
activities. The authorities may issue regulatory fines or may ultimately revoke
our authorizations if we do not suitably carry out our regulated business
activities. The authorities are also entitled to request that we adopt measures in
order to ensure that we continue to fulfill the authorities’ requirements. We are
also subject to current and forthcoming regulations applicable to the financial
services sector generally including, but not limited to, the Digital Operational
Resilience Act, or DORA, which will become effective in 2025. Such
regulations may impact our operational, contracting and compliance costs by
requiring
risk management procedures,
implementation of new
requirements for procuring information and communication
the
26
technology services, and ongoing processes to monitor compliance; failure to
maintain compliance may cause us to be subject to regulatory actions and
fines. Additionally, we are subject to the obligations under the Benchmark
Regulation ((EU) 2016/1011), compliance with which could be costly or cause
a change in our business practices.
Certain of our customers operate in a highly regulated industry. Regulatory
authorities could impose regulatory changes that could impact the ability of
our customers to use our exchanges. The loss of a significant number of
customers or a reduction in trading activity on any of our exchanges as a result
of such changes could have a material adverse effect on our business, financial
condition and operating results. In addition, regulatory changes could impact
the ability of current or prospective customers to procure commercial services
from us, increase our cost of delivery or performance due to regulatory-driven
changes to services or related business processes and lengthen sales cycles as
customers are required to conduct additional diligence and contracting
processes prior to procuring our services.
Regulatory changes and changes in market structure and proprietary data
could have a material adverse effect on our business.
the securities markets,
Regulatory changes adopted by the SEC or other regulators of our markets,
and regulatory changes that our markets may adopt in fulfillment of their
regulatory obligations, could materially affect our business operations. In
recent years, there has been increased regulatory and governmental focus on
issues affecting
including market structure,
technological oversight and fees for proprietary market data, connectivity and
transactions. The SEC, FINRA and the national securities exchanges have
introduced several initiatives to ensure the oversight, integrity and resilience
of markets. In December 2022, the SEC proposed significant rule changes
that, if adopted in their current form, would substantially alter how stocks are
traded in the United States. In October 2023, the SEC proposed to require
exchanges to modify their pricing practices for certain types of transactions.
While we and other market participants have the opportunity to submit
comments on these proposals, and we will adjust our business model in
accordance with any new SEC regulations implemented, the adoption of these
proposals regarding trading may negatively impact our business and revenue.
With respect to our regulated businesses, our business model can be severely
impacted by policy decisions. In May 2020, the SEC adopted an order to
require changes to the governance of securities information processors. In
December 2020, the SEC adopted a rule to modify the infrastructure for the
collection, consolidation and dissemination of market data for exchange-listed
national market stocks. In 2022, the U.S. Court of Appeals for District of
Columbia Circuit vacated portions of the governance order but upheld the
remainder of the SEC’s 2022 actions. If the remaining aspects of the order and
rule are fully implemented, they may adversely affect our revenues. The
timing for the implementation is currently unknown, and we believe they may
take two or more years to fully implement. If the remaining aspects of the
order and rule are ultimately implemented as set forth in their adopting
releases, demand for certain of our proprietary tape share data products may
be reduced, or we may have to reduce our pricing to compete with other
entrants into the market for consolidated data. Our opponents in some markets
are larger and better funded and, if successful in influencing certain policies,
may successfully advocate for positions that adversely impact our business.
These regulatory changes could impose significant costs, including litigation
costs, and other obligations on the operation of our exchanges and processor
systems and have other impacts on our business.
In Canada, all new marketplace fees and changes to existing fees, including
trading and market data fees, must be filed with and approved by the Ontario
Securities Commission. The Canadian Securities Administrators adopted a
Data Fees Methodology that restricts the total amount of fees that can be
charged for professional uses by all marketplaces to a reference benchmark.
Currently, all marketplaces are subject to annual reviews of their market data
fees tying market data revenues to pre- and post- trade market share metrics.
Permitted fee ranges are based on an interim domestic benchmark that is
subject to change to an international benchmark, which could lower the
permitted fees charged by marketplaces, which could adversely impact our
revenues.
Our European exchanges currently offer market data products to customers on
a non-discriminatory and reasonable commercial basis. The MiFID II/MiFIR
rules entail that the price for regulated market data such as pre- and post-trade
data shall be based on cost plus a reasonable margin. However, these terms are
not clearly defined. There is a risk that a different interpretation of these terms
may influence the fees for European market data products adversely. In
addition, any future actions by European Union institutions could affect our
ability to offer market data products in the same manner as today, thereby
causing an adverse effect on our market data revenues.
27
We are subject to litigation risks and other liabilities.
Many aspects of our business potentially involve substantial liability risks.
Although under current law we are immune from private suits arising from
conduct within our regulatory authority and from acts and forbearances
incident to the exercise of our regulatory authority, this immunity only covers
certain of our activities in the U.S., and we could be exposed to liability under
national and local laws, court decisions and rules and regulations promulgated
by regulatory agencies.
We face risks related to compliance with economic sanctions (including those
administered by the U.S. Office of Foreign Assets Control), export controls,
corruption (including the U.S. Foreign Corrupt Practices Act) and money
laundering. While we maintain compliance programs to prevent and detect
potential violations, such programs cannot completely eliminate the risk of
non-compliance. Since our Financial Crime Management Technology and
surveillance solutions are important offerings, a significant compliance event
involving one of these areas could more negatively impact our business than a
comparable business without this service offering.
Liability could also result from disputes over the terms of a trade, claims that a
system failure or delay cost a customer money, claims we entered into an
unauthorized transaction or claims that we provided materially false or
misleading statements in connection with a securities transaction. Although
we carry insurance that may limit our risk of damages in some cases, we still
may incur significant legal expenses and may sustain uncovered losses or
losses in excess of available insurance that would affect our business, financial
condition and results of operations.
We have self-regulatory obligations and also operate for-profit businesses,
and these two roles may create conflicts of interest.
We have obligations to regulate and monitor activities on our markets and
ensure compliance with applicable law and the rules of our markets by market
participants and listed companies. In the U.S., some have expressed concern
about potential conflicts of interest of “for-profit” markets performing the
regulatory functions of an SRO. We perform regulatory functions and bear
regulatory responsibility related to our listed companies and our markets. Any
failure by us to diligently and fairly regulate our markets or to otherwise fulfill
our regulatory obligations could significantly harm our reputation, prompt
SEC scrutiny and adversely affect our business and reputation.
Our Nordic and Baltic exchanges monitor trading and compliance with listing
standards in accordance with the European Union’s Market Abuse Regulation
and other applicable laws. As further described in Note 18, “Commitments,
Contingencies and Guarantees” to the consolidated financial statements of this
Form 10-K, during 2023, the SFSA initiated a review of the Nasdaq
Stockholm exchange regarding the obligation of Nasdaq Stockholm to report
suspected market abuse. Any failure to diligently and fairly regulate the
Nordic and Baltic exchanges could significantly harm our reputation, prompt
scrutiny from regulators and adversely affect our business and reputation.
Laws and regulations regarding security and safeguarding of our systems
and services, protection of sensitive customer data and the handling of
personal data and information may affect our services or result in increased
costs, legal claims or fines against us.
Our business operates certain systems that may be considered “critical
infrastructure” under certain regulations and licenses or sells certain systems
or services to customers that are used by customers in their role as providers
of critical infrastructure or to fulfill certain core business requirements or
process certain sensitive data. New cybersecurity regulations may impact the
requirements and cost of delivery for impacted systems and services and, in
the event of an incident, increase the cost and complexity of our response and
the potential financial and reputation impact from fines or private litigation.
These regulations may also impact customer decision making and conditions
on contracting for our services.
Our businesses and internal operations rely on the processing of data in many
jurisdictions and the movement of data, including personal data, across
the
national borders. Legal and contractual requirements relating
processing, including, but not limited to, collection, storage, handling, use,
disclosure, transfer and security, of personal data continue to evolve and
regulatory scrutiny and customer requirements in this area are increasing
around the world. Significant uncertainty exists as privacy and data protection
laws may be interpreted and applied differently across jurisdictions and may
create inconsistent or conflicting requirements with privacy and other laws to
which we are subject.
to
Laws and regulations such as the European Union and United Kingdom
General Data Protection Regulation, the California Privacy Rights Act and
other comparable laws and regulations adopted globally and within the United
States and Canada can apply to our processing of their residents’ personal data
by Nasdaq legal entities regardless of the location of such entities; such laws
may also require our customers located in such jurisdictions to contractually
obligate our compliance.
28
In addition to directly applying to some of our business activities, these laws
and industry-specific regulations, such as the Health Insurance Portability and
Accountability Act and the Gramm Leach Bliley Act, impact many of our
customers, which may affect their decisions to purchase our services. As a
supplier to such customers, regulators may engage in direct enforcement
actions or seek to impose liability on us if we do not comply with applicable
regulations. Our efforts to comply with privacy and data protection laws may
entail substantial expenses, may divert resources from other initiatives and
projects, and could impact the services that we offer. The enactment of more
restrictive
laws, rules or regulations, future enforcement actions or
investigations, or the creation of new rights to pursue damages could impact
us through increased costs or restrictions on our business, and noncompliance
could result in regulatory penalties and significant legal liability.
Changes in tax laws, regulations or policies could have a material adverse
effect on our financial results.
Changes in tax laws, regulations or policies could result in us having to pay
higher taxes, which may reduce our net income, or could adversely affect our
ability to continue our capital allocation program or effect strategic
transactions in a tax-favorable manner. In addition, such changes, including
federal or state financial transaction taxes, may increase the cost of our
offerings or services, which may cause our clients to reduce their use of our
services.
Some of our subsidiaries are subject to tax in the jurisdictions in which they
are organized or operate, and in computing our tax obligation in these
jurisdictions, we take various tax positions. We cannot ensure that upon
review of these positions, the applicable authorities will agree with our
positions. A successful challenge by a tax authority could result in additional
taxes imposed on our clients or our subsidiaries.
RISKS RELATED TO INTELLECTUAL PROPERTY AND BRAND
REPUTATION
Damage to our reputation or brand name could have a material adverse
effect on our businesses.
One of our competitive strengths is our strong reputation and brand name.
Various issues may give rise to reputational risk, including issues relating to:
• our ability to maintain the security of our data and systems;
• the quality and reliability of our technology platforms and systems;
• the ability to fulfill our regulatory obligations;
• the ability to execute our business plan, key initiatives or new business
ventures and the ability to keep up with changing customer demand;
• the representation of our business in the media;
• the accuracy of our financial statements, other financial and statistical
information or ESG-related disclosures;
• the accuracy of our financial guidance or other information provided to our
investors;
• the quality of our corporate governance structure;
• the quality of our products the reliability of our solutions and the accuracy
of our information and data offerings;
• the quality of our disclosure controls or internal controls over financial
reporting, including any failures in supervision;
• extreme price volatility on our markets;
• any negative publicity surrounding our listed companies or our listing rules;
• any negative publicity surrounding the use of our products and/or services
by our customers, including in connection with emerging asset classes such
as crypto assets; and
• any misconduct, fraudulent activity or theft by our employees or other
persons formerly or currently associated with us.
Negative publicity or misrepresentations by third parties, particularly on social
media, may adversely impact our credibility as a leader in the global capital
markets and as a source for data and analytics. This may have an adverse
effect on our brands, business and operating results. Damage to our reputation
could cause some issuers not to list their securities on our exchanges or switch
to a different exchange. Reputational damage may also reduce trading
volumes or values on our exchanges or cause us to lose customers. This may
have a material adverse effect on our business, financial condition and
operating results.
Failure to meet customer expectations or deadlines for the implementation
of our products could result in negative publicity, losses and reduced sales,
each of which may harm our reputation, business and results of operations.
We generally mutually agree with our customers on the duration, budget and
costs associated with the implementation of certain of our products,
particularly our market technology large-scale market infrastructure projects.
Various factors may cause implementations to be delayed, inefficient or
otherwise unsuccessful, including due to unforeseen project complexities, our
deployment of insufficient resources or other external factors. The effects of a
failure to meet an implementation schedule could include monetary credits for
current or future service engagements, a reduction in fees for the project, or
the expenditure of additional expenses to mitigate such delays. In addition,
time-consuming implementations may also increase the personnel we must
allocate to such customer, thereby increasing our costs and diverting attention
from other projects. Unsuccessful, lengthy, or costly customer implementation
projects could result
in claims from customers, decreased customer
satisfaction, harm to our reputation, and opportunities for competitors to
displace us, each of which could have an adverse effect on our reputation,
business and results of operations.
29
Our reputation or business could be negatively impacted by ESG matters
and our reporting of such matters.
our intellectual property rights could result in the expenditure of significant
financial and managerial resources.
We communicate certain ESG-related initiatives, goals, and/or commitments
regarding environmental matters, social matters, vendors and suppliers and
other matters in our annual Sustainability Report, Task Force on Climate-
related Financial Disclosures, on our website, in our filings with the SEC and
elsewhere. These initiatives, goals, or commitments, such as our commitment
to achieve net-zero for Scope 3 greenhouse gas emissions by 2050, could be
difficult to achieve and costly to implement. We could fail to achieve, or be
perceived to fail to achieve, these initiatives, goals, or commitments. In
addition, we could be criticized for the timing, scope or nature of these
initiatives, goals, or commitments, or for any revisions to them. We could be
subject to litigation or regulatory enforcement actions regarding the accuracy,
adequacy, or completeness of our ESG-related disclosures. Our actual or
perceived
initiatives, goals, or
commitments could negatively impact our reputation or otherwise materially
harm our business.
to achieve our ESG-related
failure
Failure to protect our intellectual property rights, or allegations that we
have infringed on the intellectual property rights of others, could harm our
brand-building efforts and ability to compete effectively.
To protect our intellectual property rights, we rely on a combination of
trademark laws, copyright laws, patent laws, trade secret protection,
confidentiality agreements and other contractual arrangements with our
affiliates, clients, strategic partners, employees and others. However, the
efforts we have taken to protect our intellectual property and proprietary rights
might not be sufficient, or effective, at stopping unauthorized use of those
rights. We may be unable to detect the unauthorized use of, or take appropriate
steps to enforce, our intellectual property rights.
jurisdictions. However, effective
We have registered, or applied to register, our trademarks in the United States
and in over 50 foreign jurisdictions and have pending U.S. and foreign
applications for other trademarks. We also maintain copyright protection for
software products and pursue patent protection for inventions developed by us.
We hold a number of patents, patent applications and licenses in the United
States and other foreign
trademark,
copyright, patent and trade secret protection might not be available or cost-
effective in every country in which we offer our services and products.
Moreover, changes in patent law, regulation or practices at the U.S. Patent and
Trademark Office and/or analogous offices in other jurisdictions, such as
changes in the law regarding patentable subject matter, could also impact our
ability to obtain patent protection for our innovations. The scope of protection
under our patents may not be sufficient in some cases, or existing patents may
be deemed invalid or unenforceable. Failure to protect our intellectual
property adequately could harm our brand and affect our ability to compete
effectively. Further, defending
Third parties may assert intellectual property rights claims against us, which
may be costly to defend, could require the payment of damages and could
limit our ability to use certain technologies, trademarks or other intellectual
property. Any intellectual property claims, with or without merit, could be
expensive to litigate or settle and could divert management resources and
attention. Successful challenges against us could require us to modify or
discontinue our use of technology or business processes where such use is
found to infringe or violate the rights of others, or require us to purchase
licenses from third parties, any of which could adversely affect our business,
financial condition and operating results.
GENERAL RISK FACTORS
We are a holding company that depends on cash flow from our subsidiaries
to meet our obligations, and any restrictions on our subsidiaries’ ability to
pay dividends or make other payments to us may have a material adverse
effect on our results of operations and financial condition.
As a holding company, we require dividends and other payments from our
subsidiaries to meet cash requirements. Minimum capital requirements
mandated by regulatory authorities having jurisdiction over some of our
regulated subsidiaries indirectly restrict the amount of dividends that can be
paid upstream.
If our subsidiaries are unable to pay dividends and make other payments to us
when needed, or if regulators or counterparties require us to increase capital
deployed in certain of our regulated subsidiaries, we may be unable to satisfy
our obligations, which would have a material adverse effect on our business,
financial condition and operating results.
We may experience fluctuations in our operating results, which may
adversely affect the market price of our common stock.
Our industry is risky and unpredictable and is directly affected by many
national and international factors beyond our control, including:
• economic, political and geopolitical market conditions;
• natural disasters, terrorism, pandemics, war or other catastrophes;
• broad trends in finance and technology;
• changes in price levels and volatility in the stock markets;
• the level and volatility of interest rates;
• volatility in commodity markets, including the energy markets;
• inflation;
• disruptions or delays in our supply chains;
30
• changes in government monetary or tax policy;
• the imposition of governmental economic sanctions on countries in which
we do business or where we plan to expand our business; and
• the perceived attractiveness of the U.S. or European capital markets.
Any one of these factors could have a material adverse effect on our business,
financial condition and operating results by causing a substantial decline in the
financial services markets and reducing trading volumes or values.
Additionally, since borrowings under our credit facilities bear interest at
variable rates and commercial paper is issued at prevailing interest rates, any
increase in interest rates on debt that we have not fixed using interest rate
hedges will increase our interest expense, reduce our cash flow or increase the
cost of future borrowings or refinancings. Other than variable rate debt, we
believe our business has relatively large fixed costs and low variable costs,
which magnifies the impact of revenue fluctuations on our operating results.
As a result, a decline in our revenue may lead to a relatively larger impact on
operating results. A substantial portion of our operating expenses is related to
personnel costs, regulation and corporate overhead, none of which can be
adjusted quickly and some of which cannot be adjusted at all. Our operating
expense levels are based on our expectations for future revenue. If actual
revenue is below management’s expectations, or if our expenses increase
before revenues do, both revenues less transaction-based expenses and
operating results would be materially and adversely affected. Because of these
factors, it is possible that our operating results or other operating metrics may
fail to meet the expectations of stock market analysts and investors. If this
happens, the market price of our common stock may be adversely affected.
Our operational processes are subject to the risk of error, which may result
in financial loss or reputational damage.
We have instituted extensive controls to reduce the risk of error inherent in our
operations; however, such risk cannot completely be eliminated. Our
businesses are highly dependent on our ability to process and report, on a daily
basis, a large number of transactions across numerous and diverse markets.
Some of our operations require complex processes, and the introduction of
new products or services or changes in processes or reporting due to
regulatory requirements may result in an increased risk of errors for a period
after
likelihood of such errors or
vulnerabilities is heightened as we acquire new products from third parties,
whether as a result of acquisitions or otherwise.
implementation. Additionally,
the
Data, other content or information that we distribute may contain errors or be
delayed, causing reputational harm. Use of our products and services as part of
the investment process creates the risk that clients, or the parties whose assets
are managed by our clients, may pursue claims against us in the event of such
delay or error, and significant litigation against us might unduly burden
management, personnel, financial and other resources.
In addition, the sophisticated software we sell to our customers may contain
undetected errors or vulnerabilities, some of which may be discovered only
after delivery, or could fail to perform its intended purpose. Because our
clients depend on our solutions for critical business functions, any service
interruptions, failures or other issues may result in lost or delayed market
acceptance and lost sales, or negative customer experiences that could damage
our reputation, resulting in the loss of customers, loss of revenues and liability
for damages, which may adversely affect our business, operating results and
financial condition.
Climate change may have a long-term adverse impact on our business, and
climate and ESG-related disclosure requirements may reduce demand for
listings on our exchanges.
While we seek to mitigate our business risks associated with climate change
by establishing robust environmental and sustainability programs, there are
inherent climate related risks wherever our business is conducted. There is an
increased focus from our regulators, investors, clients, employees, and other
stakeholders concerning corporate citizenship and sustainability matters.
Access to clean water and reliable energy in the communities where we
conduct our business, whether for our offices, data centers, vendors, clients or
other stakeholders, is a priority. For example, changes in weather where we
operate may increase the costs of powering and cooling our data centers or the
facilities that we use to operate our exchanges and clearinghouses, develop our
products or provide cloud-based services. Climate related events, including
extreme weather events and their impact on the critical infrastructure in the
United States and elsewhere, have the potential to disrupt our business or the
business of our clients; cause increased volatility in commodity markets in
which Nasdaq Clearing operates as a clearinghouse, which may result in
Nasdaq Clearing holding insufficient collateral for such volatility; lead to an
increase in costs of raw materials, which may adversely affect certain of our
listed companies operating in certain sectors and create adverse market
conditions, including trading volatility beyond historical levels, any of which
could adversely affect our business, reputation, financial condition and
operating results. Additionally, if the SEC or other federal, state or
international regulatory agencies impose comprehensive reporting obligations
regarding climate change on U.S. public companies, there may be a decrease
in new listings or an increase in delistings of our listed companies, which may
adversely affect our business, financial condition and operating results. Such
new regulations, whether in the U.S.
31
or in other countries in which we operate, could also cause us to incur
additional compliance and reporting costs.
Because we have operations in numerous countries, we are exposed to
currency risk.
Our businesses operate in various international markets, which are subject
to political, economic and social uncertainties.
Our businesses operate in various international markets, including but not
limited to Northern Europe, the Baltics, the Middle East, Latin America,
Africa and Asia, and our non-U.S. operations are subject to the risk inherent in
the international environment. Political, economic or social events or
developments in one or more of our non-U.S. locations or in the U.S. arising
from such international developments, such as limitations imposed on
securing new listings on our exchanges or restrictions on entering into
transactions with new or existing customers, could adversely affect our sales,
operations and financial results. Some locations, such as Lithuania, India, the
Philippines and in other emerging markets, have economies that may be
subject to greater political, economic and social uncertainties than countries
with more developed institutional structures, which may increase our
operational risk.
Unforeseen or catastrophic events could interrupt our critical business
functions. In addition, our U.S. and European businesses are heavily
concentrated in particular areas and may be adversely affected by events in
those areas.
We may incur losses as a result of unforeseen or catastrophic events, such as
terrorist attacks, natural disasters, pandemics, extreme weather, fire, power
loss, telecommunications failures, human error, theft, sabotage and vandalism.
Given our position in the global capital markets, we may be more likely than
other companies to be a target for malicious disruption activities.
In addition, our U.S. and European business operations are heavily
concentrated in the east coast of the U.S., and Stockholm, Sweden,
respectively. Any event that impacts either of those geographic areas could
potentially affect our ability to operate our businesses.
We have disaster recovery and business continuity plans and capabilities for
critical systems and business functions to mitigate the risk of an interruption.
Any interruption in our critical business functions or systems could negatively
impact our financial condition and operating results. Additionally, some
colocation customers may lack adequate disaster recovery solutions to avoid
loss of trade flow from a sustained interruption of our critical systems.
We have operations in the U.S., the Nordic and Baltic countries, Canada, the
United Kingdom, Australia and many other foreign countries. We therefore
have significant exposure to exchange rate movements between the Euro,
Swedish Krona, the Canadian dollar and other foreign currencies against the
U.S. dollar. Significant inflation or disproportionate changes in foreign
exchange rates with respect to one or more of these currencies could occur as
a result of general economic conditions, acts of war or terrorism, changes in
governmental monetary or tax policy, changes in local interest rates or other
factors. These exchange rate differences will affect the translation of our non-
U.S. results of operations, interest expense and financial condition into U.S.
dollars as part of the preparation of our consolidated financial statements.
If our risk management methods are not effective, our business, reputation
and financial results may be adversely affected.
We utilize widely-accepted methods to identify, assess, monitor and manage
our risks, including oversight of risk management by Nasdaq’s Global Risk
Management Committee, which comprises senior executives and has the
responsibility for regularly reviewing risks and referring significant risks to
the board of directors or specific board committees. Local risk management
committees in our international offices provide local risk oversight and
escalation to local boards, as appropriate. Certain risk management methods
require subjective evaluation of dynamic information regarding markets,
customers or other matters. That variable information may not in all cases be
accurate, complete, up-to-date or properly evaluated. If we do not successfully
identify, assess, monitor or manage the risks to which we are exposed, our
business, reputation, financial condition and operating results could be
materially adversely affected.
Decisions to declare future dividends on our common stock will be at the
discretion of our board of directors and there can be no guarantee that we
will pay future dividends to our stockholders.
Our board of directors regularly declares quarterly cash dividend payments on
our outstanding common stock. Future declarations of dividends and the
establishment of future record and payment dates are subject to approval by
Nasdaq’s board of directors. The board’s determination to declare dividends
will depend upon our profitability and financial condition, contractual
restrictions, restrictions imposed by applicable law and other factors that the
board deems relevant. Based on an evaluation of these factors, the board may
determine not to declare future dividends at all or to declare future dividends
at a reduced amount.
32
Provisions of our certificate of incorporation, by-laws, exchange rules
(including provisions included to address SEC concerns) and governing law
restrict the ownership and voting of our common stock. In addition, such
provisions could delay or prevent a change in control of us and entrench
current management.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk management and strategy
Our organizational documents place restrictions on the voting rights of certain
stockholders. The holders of our common stock are entitled to one vote per
share on all matters to be voted upon by the stockholders except that no person
may exercise voting rights in respect of any shares in excess of 5% of the then
outstanding shares of our common stock. Any change to the 5% voting
limitation would require SEC approval.
In response to the SEC’s concern about a concentration of our ownership, the
rules of some of our exchange subsidiaries include a prohibition on any
member or any person associated with a member of the exchange from
beneficially owning more than 20% of our outstanding voting interests. SEC
consent would be required before any investor could obtain more than a 20%
voting interest in us. The rules of some of our exchange subsidiaries also
require the SEC’s approval of any business ventures with exchange members,
subject to exceptions.
Our organizational documents contain provisions that may be deemed to have
an anti-takeover effect and may delay, deter or prevent a change of control of
us, such as a tender offer or takeover proposal that might result in a premium
over the market price for our common stock. Additionally, certain of these
provisions make it more difficult to bring about a change in the composition of
our board of directors, which could result in entrenchment of current
management.
Our certificate of incorporation and by-laws:
• do not permit stockholders to act by written consent;
• require certain advance notice for director nominations and actions to be
taken at annual meetings; and
• authorize the issuance of undesignated preferred stock, or “blank check”
preferred stock, which could be issued by our board of directors without
stockholder approval.
Section 203 of the Delaware General Corporation Law imposes restrictions on
mergers and other business combinations between us and any holder of 15%
or more (or, in some cases, a holder who previously held 15% or more) of our
common stock. In general, Delaware law prohibits a publicly held corporation
from engaging in a “business combination” with an “interested stockholder”
for three years after the stockholder becomes an interested stockholder, unless
the corporation’s board of directors and stockholders approve the business
combination in a prescribed manner.
Finally, many of the European countries where we operate regulated entities
require prior governmental approval before an investor acquires 10% or
greater of our common stock.
regulatory enforcement actions or
Nasdaq’s brand and role as a critical infrastructure provider for global
financial markets, and operator of the Nasdaq Stock Market, make us an
attractive target for cybersecurity risks, including from international political
opponents, hacktivists and ransomware or other financially motivated
criminals targeting the financial sector. Our cybersecurity risks include
financial and reputational damage, along with collateral damage from loss of
customer confidence in our exchange, products or offerings, as applicable,
from
potential
governmental authorities or shareholders, or the failure to comply with
contractual breach notifications. To date, no risks from cybersecurity threats,
including as a result of any previous cybersecurity incidents, have materially
affected or are reasonably likely to materially affect our business, our business
strategy, our results of operations or financial condition. For further
information, see “Our role in the global marketplace positions us at greater
risk for a cyberattack” and “Expanded cybersecurity regulations, and
increased cybersecurity infrastructure and compliance costs, may adversely
impact our results of operations” in “Item 1A, Risk Factors” of this Annual
Report on Form 10-K.
litigation, either
Our risk management and mitigation approach includes the adoption of
security controls and adaptive ongoing threat analysis. Our policies and our
baseline security controls incorporate robust security infrastructure, risk-based
controls and multi- layered defense systems. We have 16 System and
Organization Controls Type 2, or SOC 2, certifications with respect to our
information security and infrastructure. Our adaptive analysis monitors the
threat landscape relevant to Nasdaq, our vendors and financial industry peers,
and threats arising from geopolitical events. As the external threat landscape
evolves, our information security controls are regularly evaluated, updated and
enhanced to help protect against emerging risks. Additionally, we conduct
extensive cybersecurity assessments of our acquired entities, both prior to
acquisition and following completion of the transaction, to understand
potential threats and mitigate any potential security gaps, as well as to ensure
compliance with our security infrastructure and access management practices
and policies.
We periodically engage external advisors to perform an analysis of our
information security procedures, which include a review of program
documentation and an overall maturity assessment of Nasdaq’s information
security programs. These advisors provide recommendations to further
enhance our procedures. The findings are then presented to the Audit & Risk
Committee of the Board of Directors, or the Audit & Risk Committee. In
2023, our management team and the Board of Directors conducted tabletop
exercises and simulations in cybersecurity matters with assistance from
internal and outside experts.
33
We use certain cloud-based third-party vendors for the core trading systems of
certain of our exchanges and certain of our governance products and solutions.
Prior
to engaging such vendors, we analyze each provider’s SOC2
certifications and perform due diligence and testing for information security
and interoperability with our systems, and annually review the SOC2
certifications. Our security assurance and threat assessment team, within our
Information Security organization, collaborates with our external threat
intelligence providers to proactively review Nasdaq, and our vendors with
respect to emerging threats and associated risks.
For our third-party service providers, our risk assessment process evaluates
the probability and potential impact of incidents related to operational errors,
technology disruptions, information security breaches, workforce issues,
internal and external fraud, financial actions, and legal and regulatory matters.
This assessment process is part of our Supplier Risk Management program,
which establishes processes for identifying, assessing, and periodically
reviewing our exposure to risk through third party vendors.
Governance
Cybersecurity is an integral part of risk management at Nasdaq. The Board of
Directors appreciates the rapidly evolving nature of threats presented by
cybersecurity incidents and is committed to the prevention, timely detection,
and mitigation of the effect any such incidents may have on us. We use a
cross-departmental approach to assess and manage cybersecurity risk, with our
Information Security; Legal, Risk and Regulatory; and Internal Audit
functions presenting on key topics to the Audit & Risk Committee, which
provides oversight of our cybersecurity risk. Additionally, members from
these organizations, along with Finance and Accounting, comprise a rapid
response team that would mobilize in the event of a significant cybersecurity
incident and would analyze and evaluate the incident while also advising the
executive management team. Our Global Risk Management Committee,
which includes our Chair and CEO and other senior executives, assists the
Board of Directors in its cybersecurity risk oversight role.
Our Audit & Risk Committee receives quarterly or, if needed, more frequent
reports on cybersecurity and information security matters from our Chief
Information Security Officer, or CISO, and his team. The CISO has more than
25 years of experience in information technology and information security,
particularly in the financial services industry, and our Information Security
organization has more than 100 members, with expertise in application
security; governance and compliance; program and vulnerability management;
security engineering; security operations security assurance; and threat
intelligence and security architecture.
that contains
This regular reporting to the Audit & Risk Committee also includes a
cybersecurity dashboard
information on cybersecurity
governance processes, and from time to time, also includes the status of
internal cybersecurity, ongoing prevention and
projects
mitigation efforts, security features of the products and services we provide
our customers, or the results of security events during the period. The Audit &
Risk Committee also reviews and discusses recent cyber incidents affecting
the industry and the emerging threat landscape.
to strengthen
Cybersecurity is a shared responsibility, and our goal is for all employees to be
vigilant in helping to protect our organization and themselves, at all times. We
routinely perform simulations and tabletop exercises, and incorporate external
resources and advisors as needed, to help strengthen our cybersecurity
protection and information security procedures and safeguards. All employees
are required to complete annual cybersecurity awareness training and have
access to continuous cybersecurity educational opportunities throughout the
year. Nasdaq also maintains a cybersecurity and information security risk
insurance policy, and our Nasdaq Information Security Management System
conforms to ISO 27001 requirements and is ISO 27001 certified.
On an annual basis, the Information Security team reviews and updates its
governance documents, including the Information Security Charter, the
Information Security Policy, and the Information Security Program Plan, and
then presents the revised documents to the Audit & Risk Committee for
review and/or approval. Additionally, the Information Security team maintains
a formal cybersecurity strategic three-year plan, which outlines the strategic
vision and associated goals for the cybersecurity of our global operations. The
plan is regularly updated with new initiatives that align with technology
innovations and changes in the threat landscape, and is reviewed and approved
by the CISO and the Audit & Risk Committee. Throughout the three-year plan
term, the CISO regularly provides management with progress reports.
Item 2. Properties
We conduct our business operations in leased facilities. We do not own any
real property. Our U.S. headquarters are located in New York, New York, and
our European headquarters are located in Stockholm, Sweden. We also lease
space in multiple locations around the world, which are used for research and
development, sales and support, and administrative activities, as well as for
data centers and disaster preparedness facilities.
Generally, our properties are not allocated for use by a particular segment.
Instead, most of our properties are used by two or more segments. We
regularly monitor the facilities we occupy to ensure that they suit our needs in
a hybrid work environment. We believe the facilities that we occupy are
adequate for the purposes for which they are currently used and are well-
maintained. See Note 16, “Leases,” to the consolidated financial statements
for further discussion.
34
Item 3. Legal Proceedings
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
For a description of our legal proceedings, if any, see “Legal and Regulatory
Matters” of Note 18, “Commitments, Contingencies and Guarantees,” to the
consolidated financial statements, which is incorporated herein by reference.
The table below represents repurchases made by or on behalf of us or any
“affiliated purchaser” of our common stock during the fiscal quarter ended
December 31, 2023:
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Purchases of Equity Securities
Market Information
Our common stock is listed on The Nasdaq Stock Market under the ticker
symbol “NDAQ.” As of February 13, 2024, we had approximately 202
holders of record of our common stock.
Issuer Purchases of Equity Securities
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.
(c)
Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs
(d) Maximum
Dollar Value of
Shares that
May Yet Be
Purchased
Under the Plans
or Programs (in
millions)
(a)
Total Number of
Shares Purchased
(b) Average
Price Paid Per
Share
— $
19,360 $
1,751,513 $
Period
October 2023
Share repurchase
program
Employee
transactions
November 2023
Share repurchase
program
Employee
transactions
December 2023
Share repurchase
program
Employee
transactions
Total Quarter Ended December 31, 2023
Share repurchase
program
Employee
transactions
2,084,774 $
333,261 $
17,883 $
37,243 $
— $
—
— $
2,000
48.85
52.36
N/A
N/A
1,751,513 $
1,908
—
N/A
N/A
54.44
56.22
52.69
52.39
333,261 $
1,890
N/A
N/A
2,084,774 $
1,890
N/A
N/A
In the preceding table:
• N/A - Not applicable.
• See “Share Repurchase Program,” of Note 12, “Nasdaq Stockholders’
Equity,” to the consolidated financial statements for further discussion of
our share repurchase program.
• Employee transactions represents shares surrendered to us to satisfy tax
withholding obligations arising from the vesting of restricted stock and
PSUs previously issued to employees.
35
The following performance graph and related information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by
reference into any of our other filings under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The following graph compares the total return of our common stock to the Nasdaq Composite Index, the S&P 500 and a peer group selected by us for the past five
years. We changed our peer group in the table below to the S&P 500 GICS 4020 Index, or New Peer Group, which is a blend of exchanges, as well as data,
financial technology and banking companies to align more closely with Nasdaq’s diverse business and competitors.
PERFORMANCE GRAPH
Nasdaq, Inc.
Nasdaq Composite Index
S&P 500
New Peer Group
2022 Peer Group
Fiscal Year Ended December 31,
2018
2019
2020
2021
2022
2023
$
100 $
100
100
100
100
134 $
137
131
125
128
169 $
198
156
139
153
$
270
242
200
188
171
240 $
163
164
167
142
231
236
207
193
170
The figures represented below assume an initial investment of $100 in the common stock or index at the closing price on December 31, 2018 and the reinvestment
of all dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Nasdaq, Inc., the Nasdaq Composite Index, the S&P 500 and Peer Groups
The prior peer group, collectively referred to as the 2022 Peer Group, was comprised of the following companies:
2022 Peer Group
•
•
•
•
•
ASX Limited
B3 S.A.
Bolsas Mexicana de Valores, S.A.B. de C.V.
Cboe
CME Group Inc.
• Deutsche Börse AG
• Euronext N.V.
• Hong Kong Exchanges and Clearing Limited
• ICE
• Japan Exchange Group, Inc.
• LSE
• Singapore Exchange Limited
• TMX Group Limited
36
Item 6. [Reserved]
Nasdaq’s Operating Results
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.
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.
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions, except per share amounts)
Revenues less
transaction-
based expenses $
Operating
expenses
Operating
income
Net income
attributable to
Nasdaq
Diluted earnings
per share
Cash dividends
declared per
common share $
$
$
3,895 $
3,582 $
3,420
8.7 %
4.7 %
2,317
2,018
1,979
14.8 %
2.0 %
1,578
1,564
1,441
0.9 %
8.5 %
1,059 $
1,125 $
1,187
(5.9)%
(5.2)%
2.08 $
2.26 $
2.35
(8.0)%
(3.8)%
0.86 $
0.78 $
0.70
10.3 %
11.4 %
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.”
37
The following chart summarizes our ARR (in millions):
The ARR chart includes:
▪
▪
Proprietary market data subscriptions and annual listing fees
within our Data & Listing Services business, index data
subscriptions and guaranteed minimum on futures contracts
within our Index business and subscription contracts under our
Workflow & Insights business.
SaaS subscription and support contracts related to Verafin,
surveillance, market technology, AxiomSL, Calypso and trade
management services, excluding one-time service requests.
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):
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.
38
Segment Operating Results
CAPITAL ACCESS PLATFORMS
The following table presents our revenues by segment:
The following table presents revenues from our Capital Access Platforms
segment:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Year Ended December 31,
Percentage Change
(in millions)
2023
2022
2021
2023 vs. 2022 2022 vs. 2021
Capital Access
Platforms
Financial
Technology
Market
Services, net
Other revenues
Total revenues
less
transaction-
based
expenses
$1,770
$1,682
$1,566
5.2 %
7.4 %
1,099
987
39
864
988
48
772
27.2 %
11.9 %
1,005
77
(0.1)%
(1.7)%
(18.8)% (37.7)%
Data & Listing
Services
Index
Workflow &
Insights
Total Capital
Access
Platforms
(in millions)
$
749 $
528
727 $
486
493
469
678
459
429
3.0 %
8.6 %
7.2 %
5.9 %
5.1 %
9.3 %
$
1,770 $
1,682 $
1,566
5.2 %
7.4 %
$
3,895 $
3,582 $
3,420
8.7 %
4.7 %
Data & Listing Services Revenues
The following chart presents our Capital Access Platforms, Financial
Technology and Market Services segments as a percentage of our total
expenses.
revenues,
transaction-based
less
The following table presents key drivers from our Data & Listing Services
business:
IPOs
The Nasdaq Stock Market - operating
companies
The Nasdaq Stock Market - SPACs
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic
Total new listings
The Nasdaq Stock Market
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic
Number of listed companies
The Nasdaq Stock Market
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic
Year Ended December 31,
2023
2022
2021
103
27
7
330
23
87
74
38
366
63
319
433
174
1,000
207
4,044
4,230
4,178
1,218
1,251
1,235
As of December 31,
2023
2022
2021
ARR (in millions)
$
682 $
664 $
627
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.
39
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:
As of or
Three Months Ended December 31,
2023
2022
2021
Number of licensed ETPs
TTM change in period end ETP AUM tracking Nasdaq
indices (in billions)
Beginning balance
388
$
Net appreciation (depreciation)
Net impact of ETP sponsor
switches
Net inflows
Ending balance
Quarterly average ETP AUM
tracking Nasdaq indices (in billions) $
$
ARR
$
379
362
424 $
(142)
(1)
34
315 $
326 $
68 $
359
83
(92)
74
424
400
67
315 $
128
(1)
31
473 $
436 $
72 $
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:
As of or
Three Months Ended December 31
2023
2022
(in millions)
2021
FINANCIAL TECHNOLOGY
The following table presents revenues from our Financial Technology
segment:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
Financial Crime
Management
Technology
Regulatory
Technology
Capital Markets
Technology
Total Financial
Technology
$
223 $
176 $
104
26.7 %
69.2 %
212
664
130
558
$
1,099 $
864 $
127
541
772
63.1 %
2.4 %
19.0 %
3.1 %
27.2 %
11.9 %
Financial Crime Management Technology Revenues
The following table presents key drivers for Financial Crime Management
Technology business:
As of or
Twelve Months Ended December 31,
2023
2022
(in millions)
2021
ARR
Quarterly annualized SaaS
revenues
$
226 $
182 $
226
182
149
149
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.
ARR
Quarterly annualized SaaS revenues
$
481 $
411
458 $
388
417
356
Regulatory Technology Revenues
The following table presents key drivers for Regulatory Technology 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.
As of or
Twelve Months Ended December 31,
2023
2022
(in millions)
2021
ARR
Quarterly annualized SaaS
revenues
$
325 $
130 $
165
116
120
104
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.
40
Capital Markets Technology Revenues
The following table presents key drivers for Capital Markets Technology
business:
ARR
Quarterly annualized SaaS
revenues
As of or
Three Months Ended December 30,
2023
2022
(in millions)
2021
$
799 $
499 $
475
108
39
31
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Market Services $
Transaction-based expenses:
3,156 $
3,632 $
3,471
(13.1)%
4.6 %
(in millions)
Transaction
rebates
Brokerage,
clearance and
exchange fees
Total Market
Services, net
(1,838)
(2,092)
(2,168)
(12.1)%
(3.5)%
(331)
(552)
(298)
(40.0)%
85.2 %
$
987 $
988 $
1,005
(0.1)%
(1.7)%
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
$
U.S. Equity
Derivative
Trading
Cash Equity
Trading
U.S. Tape
plans
Other
Total Market
Services, net $
374 $
371 $
397
141
75
397
149
71
343
429
155
78
0.8 %
8.2 %
— %
(7.5)%
(5.4)%
5.6 %
(3.9)%
(9.0)%
987 $
988 $
1,005
(0.1)%
(1.7)%
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
U.S. Equity
Derivative
Trading
Revenues
$
1,257 $
1,252 $
1,367
0.4 %
(8.4)%
Section 31 fees
55
89
32
(38.2)%
178.1 %
Transaction-based expenses:
Transaction
rebates
(879)
Section 31 fees
Brokerage and
clearance fees
U.S. Equity
derivative
trading
revenues, net
(55)
(4)
(878)
(89)
(3)
(1,018)
0.1 %
(13.8)%
(32)
(6)
(38.2)%
178.1 %
33.3 %
(50.0)%
$
374 $
371 $
343
0.8 %
8.2 %
in
Section 31 fees are recorded as U.S. equity derivative and cash equity trading
revenues with a corresponding amount recorded
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.
41
U.S. equity options
Total industry average daily
volume (in millions)
Nasdaq PHLX matched market
share
The Nasdaq Options Market
matched market share
Nasdaq BX Options matched
market share
Nasdaq ISE Options matched
market share
Nasdaq GEMX Options matched
market share
Nasdaq MRX Options matched
market share
Total matched market share
executed on Nasdaq’s exchanges
Year Ended December 31,
2023
2022
2021
40.4
38.2
37.2
11.3 %
11.6 %
12.4 %
6.1 %
3.3 %
5.9 %
2.4 %
2.0 %
8.0 %
2.8 %
5.7 %
2.3 %
1.6 %
8.1 %
1.4 %
6.6 %
4.3 %
1.6 %
31.0 %
32.0 %
34.4 %
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
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.
trading revenues
less
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
Cash Equity
Trading
Revenues
$ 1,355 $
1,605
1,578
(15.6)%
1.7 %
Section 31 fees
Transaction-
based expenses:
Transaction
rebates
Section 31 fees
Brokerage and
clearance fees
Cash equity
trading
revenues, net
253
436
229
(42.0)%
90.4 %
(939)
(1,184)
(1,118)
(20.7)%
5.9 %
(253)
(436)
(229)
(42.0)%
90.4 %
(19)
(24)
(31)
(20.8)%
(22.6)%
$
397 $
397 $
429
— %
(7.5)%
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.
Year Ended December 31,
2023
2022
2021
Total U.S.-listed securities
Total industry average daily
share volume (in billions)
Matched share volume (in
billions)
The Nasdaq Stock Market
matched market share
Nasdaq BX matched market
share
Nasdaq PSX matched market
share
Total matched market share
executed on Nasdaq’s
exchanges
Market share reported to the
FINRA/Nasdaq Trade
Reporting Facility
Total market share
11.0
455.6
11.9
522.8
11.4
491.9
15.8 %
16.2 %
15.8 %
0.4 %
0.3 %
0.5 %
0.8 %
0.6 %
0.7 %
16.5 %
17.5 %
17.1 %
36.7 %
53.2 %
35.2 %
52.7 %
34.9 %
52.0 %
Nasdaq Nordic and Nasdaq Baltic securities
Average daily number of
equity trades executed on
Nasdaq’s exchanges
Total average daily value of
shares traded (in billions)
Total market share executed
on Nasdaq’s exchanges
666,411
$
4.5
71.0 %
908,813
1,036,523
$
5.4
$
6.4
71.5 %
76.9 %
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.
42
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
U.S. Tape
plans
$
141 $
149 $
155
(5.4)%
(3.9)%
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
Other
$
75 $
71 $
78
5.6 %
(9.0)%
In the table above, other includes transaction rebates of $20 million,
$30 million, and $32 million in 2023, 2022, and 2021 respectively.
Year Ended December 31,
2023
2022
2021
Nasdaq Nordic and Nasdaq Baltic options and futures
Total average daily volume of options
and futures contracts
301,320
296,626
287,182
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs.
2022
2022 vs.
2021
(in millions)
$
1,082 $
1,003 $
938
7.9%
6.9%
128
140
144
(8.6)%
(2.8)%
233
129
113
47
323
34
148
80
207
104
125
51
258
33
82
15
186
109
12.6%
24.0%
11.3%
(4.6)%
85
(9.6)%
47.1%
57
(7.8)%
(10.5)%
278
64
87
31
25.2%
3.0%
80.5%
433.3%
(7.2)%
(48.4)%
(5.7)%
(51.6)%
$
2,317 $
2,018 $
1,979
14.8%
2.0%
Compensation and
benefits
Professional and
contract services
Computer operations
and data
communications
Occupancy
General, administrative
and other
Marketing and
advertising
Depreciation and
amortization
Regulatory
Merger and strategic
initiatives
Restructuring charges
Total 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.
43
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:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
$
115 $
(284)
7 $
(129)
1
(125)
1,542.9 %
120.2 %
600.0 %
3.2 %
(169)
(122)
(124)
38.5 %
(1.6)%
—
(1)
—
2
84
81
— %
(100.0)%
(150.0)%
(97.5)%
(7)
31
52
(122.6)%
(40.4)%
$
(177) $
(89) $
93
98.9 %
(195.7)%
Interest income
Interest expense
Net interest
expense
Net gain on
divestiture of
business
Other income
(loss)
Net income (loss)
from
unconsolidated
investees
Total non-
operating income
(expenses)
The following table presents our interest expense:
Year Ended December 31,
Percentage Change
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
(in millions)
272 $
120 $
115
126.7 %
4.3 %
9
3
284 $
7
2
129 $
7
3
125
28.6 %
50.0 %
120.2 %
— %
(33.3)%
3.2 %
$
Interest expense
on debt
Accretion of debt
issuance costs
and debt
discount
Other fees
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.
44
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:
Year Ended December 31,
Percentage Change
2023
2022
(in millions)
2021
2023 vs. 2022 2022 vs. 2021
Income tax
provision
Effective tax
rate
$
344
$
352
$
347
(2.3)%
1.4 %
24.6 %
23.9 %
22.6 %
For further discussion of our tax matters, see Note 17, “Income Taxes,” to the
consolidated financial statements.
NON-GAAP FINANCIAL MEASURES
information
this non-GAAP
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
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.
45
• 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,”
the consolidated financial statements for further
discussion.
to
• 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
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.
in
◦ 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:
Year Ended December 31,
2023
2022
2021
(in millions, except per share amounts)
$
1,059
$
1,125
$
1,187
206
148
80
25
—
7
12
—
9
21
508
(134)
374
153
170
82
15
—
16
(29)
26
—
—
2
265
(66)
199
87
31
—
33
(52)
44
(84)
—
(82)
147
(61)
86
$
1,433
$
1,324
$
1,273
24.6 %
23.9 %
22.6 %
0.4 %
25.0 %
0.1 %
24.0 %
1.7 %
24.3 %
508.4
497.9
505.1
$
2.08
$
2.26
$
2.35
0.74
0.40
0.17
2.82
$
2.66
$
2.52
U.S. GAAP net income
attributable to Nasdaq
Non-GAAP adjustments:
Amortization expense of
acquired intangible assets
Merger and strategic initiatives
expense
Restructuring charges
Lease asset impairments
Extinguishment of debt
Net loss (income) from
unconsolidated investees
Legal and regulatory matters
Net gain on divestiture of
business
Pension settlement charge
Other
Total non-GAAP adjustments
Total non-GAAP tax
adjustments
Total non-GAAP adjustments,
net of tax
Non-GAAP net income
attributable to Nasdaq
U.S. GAAP effective tax rate
Total adjustments from non-
GAAP tax rate
Non-GAAP effective tax rate
Weighted-average common shares
outstanding for diluted earnings
per share
U.S. GAAP diluted earnings per
share
Total adjustments from non-
GAAP net income
Non-GAAP diluted earnings per
share
$
46
LIQUIDITY AND CAPITAL RESOURCES
Repatriation of Cash
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
investments, debt
repayments, and shareholder return activity, including share repurchases and
dividends.
through balancing acquisitions,
internal
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
Financial investments
Working capital
$
Cash and Cash Equivalents
December 31, 2023
December 31, 2022
(in millions)
453 $
188
71
502
181
(231)
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.
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 (used in):
Operating activities
Investing activities
Financing activities
Year Ended December 31,
2023
2022
(in millions)
2021
$
1,696 $
(5,994)
4,220
1,706 $
49
1,036
1,083
(2,653)
1,418
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
47
$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.
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.
See Note 9, “Debt Obligations,” to the consolidated financial statements for
further discussion of our debt obligations.
Other Capital Requirements
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.
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.
48
Cash Dividends on Common Stock
The following table presents our quarterly cash dividends paid per common
share on our outstanding common stock:
First quarter
Second quarter
Third quarter
Fourth quarter
Total
2023
2022
$
$
0.20 $
0.22
0.22
0.22
0.86 $
0.18
0.20
0.20
0.20
0.78
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:
Maturity Date
December 31, 2023
December 31, 2022
Short-term debt:
Commercial paper
Total short-term debt
Long-term debt - senior unsecured notes:
June 2025
June 2026
June 2028
March 2029
February 2030
January 2031
February 2032
July 2033
February 2034
December 2040
April 2050
March 2052
August 2053
June 2063
November 2026
2025 Notes
2026 Notes
2028 Notes
2029 Notes
2030 Notes
2031 Notes
2032 Notes
2033 Notes
2034 Notes
2040 Notes
2050 Notes
2052 Notes
2053 Notes
2063 Notes
2023 Term Loan
2022 Revolving Credit
Facility
Total long-term debt
Total debt obligations
(in millions)
291 $
291 $
$
$
497
499
991
658
658
645
819
674
1,239
644
487
541
738
738
339
664
664
—
498
—
637
637
644
—
653
—
644
486
541
—
—
—
December 2027
(4)
10,163 $
10,454 $
$
$
(5)
4,735
5,399
49
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.
Contractual Obligations and Contingent Commitments
Quantitative and Qualitative Disclosures About Market Risk
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:
Payments Due by Period
Total
<1 year
1-3 years
3-5 years
5+ years
$
16,759 $
714 $
2,103 $
1,651 $
12,291
616
442
17,817 $
$
84
92
890 $
133
130
2,366 $
113
92
1,856 $
286
128
12,705
(in millions)
Debt obligation by
contractual maturity
Operating lease
obligations
Purchase obligations
Total
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.
As a result of our operating, investing and financing activities, we are exposed
to market risks such as interest rate risk and foreign currency exchange rate
risk. We are also exposed to credit risk as a result of our normal business
activities.
We have implemented policies and procedures to measure, manage, monitor
and report risk exposures, which are reviewed regularly by management and
the board of directors. We identify risk exposures and monitor and manage
such risks on a daily basis.
We perform sensitivity analyses to determine the effects of market risk
exposures. We may use derivative instruments solely to hedge financial risks
related to our financial positions or risks that are incurred during the normal
course of business. We do not use derivative instruments for speculative
purposes.
Interest Rate Risk
We are subject to the risk of fluctuating interest rates in the normal course of
business. Our exposure to market risk for changes in interest rates relates
primarily to our financial investments and debt obligations, which are
discussed below.
Financial Investments
As of December 31, 2023, our investment portfolio was primarily comprised
of highly rated European government debt securities, which pay a fixed rate of
interest. These securities are subject to interest rate risk and the fair value of
these securities will decrease if market interest rates increase. If market
interest rates were to increase immediately and uniformly by a hypothetical
100 basis points from levels as of December 31, 2023, the fair value of this
portfolio would decline by $3 million.
Debt Obligations
As of December 31, 2023, substantially all of our debt obligations were fixed-
rate obligations. Interest rates on certain tranches of notes are subject to
adjustment to the extent our debt rating is downgraded below investment
grade, as further discussed in Note 9, “Debt Obligations,” to the consolidated
financial statements. While changes in interest rates will have no impact on
the interest we pay on fixed-rate obligations, we are exposed to changes in
interest rates as a result of the borrowings under our 2022 Revolving Credit
Facility, our commercial paper program and the 2023 Term Loan as these
facilities have a variable interest rate. As of December 31, 2023, we have $291
million outstanding borrowings under our commercial paper program and
$339 million outstanding under the 2023 Term Loan. A hypothetical 100 basis
points increase in interest rates on our outstanding commercial paper and our
2023 Term Loan would increase our annual interest expense by approximately
$6 million based on borrowings as of December 31, 2023.
We may utilize interest rate swap agreements to achieve a desired mix of
variable and fixed rate debt.
50
Foreign Currency Exchange Rate Risk
We are subject to foreign currency exchange rate risk. Our primary
transactional exposure to foreign currency denominated revenues less
transaction-based expenses and operating income for the years ended
December 31, 2023 and 2022 are presented in the following tables:
Euro
Swedish
Krona
Canadian
Dollar
Other Foreign
Currencies
U.S. Dollar
Total
(in millions, except currency rate)
Year Ended December 31, 2023
Average foreign
currency rate to
the U.S. dollar
1.081
0.094
0.741
#
N/A
N/A
6.6%
4.0%
0.8%
3.0%
85.6%
100.0%
10.7%
(3.8)%
(7.0)%
(8.3)%
108.4%
100.0%
$(26)
$(15)
$(3)
$(12)
$—
Percentage of
revenues less
transaction-based
expenses
Percentage of
operating income
Impact of a 10%
adverse currency
fluctuation on
revenues less
transaction-based
expenses
Impact of a 10%
adverse currency
fluctuation on
operating income
Our investments in foreign subsidiaries are exposed to volatility in currency
exchange rates through translation of the foreign subsidiaries’ net assets or
equity to U.S. dollars. Substantially all of our foreign subsidiaries operate in
functional currencies other than the U.S. dollar. The financial statements of
these subsidiaries are translated into U.S. dollars for consolidated reporting
using a current rate of exchange, with net gains or losses recorded in
accumulated other comprehensive loss within stockholders’ equity in the
Consolidated Balance Sheets.
Our primary exposure to net assets in foreign currencies as of December 31,
2023 is presented in the following table:
$
Swedish Krona
Norwegian Krone
British Pound
Canadian Dollar
Australian Dollar
Euro
Net Assets
Impact of a 10% Adverse
Currency Fluctuation
(in millions)
3,012 $
144
140
102
96
60
301
14
14
10
10
6
$(17)
$(6)
$(11)
$(13)
$—
In the table above, Swedish Krona includes goodwill of $2,230 million and
intangible assets, net of $498 million.
Euro
Swedish
Krona
Canadian
Dollar
Other Foreign
Currencies
U.S. Dollar
Total
Credit Risk
Year Ended December 31, 2022
Average foreign
currency rate to
the U.S. dollar
1.054
0.099
(in millions, except currency rate)
0.768
#
N/A
N/A
Percentage of
revenues less
transaction-based
expenses
Percentage of
operating income
Impact of a 10%
adverse currency
fluctuation on
revenues less
transaction-based
expenses
Impact of a 10%
adverse currency
fluctuation on
operating income
6.2%
5.1%
0.9%
3.2%
84.6%
100.0%
10.1%
(2.8)%
(5.9)%
(4.7)%
103.3%
100.0%
$(22)
$(18)
$(3)
$(12)
$—
$(16)
$(4)
$(9)
$(8)
$—
__________
# Represents multiple foreign currency rates.
N/A Not applicable.
The adverse impacts shown above should be viewed individually by currency
and not in aggregate due to the correlation between changes in exchanges rates
for certain currencies.
Credit risk is the potential loss due to the default or deterioration in credit
quality of customers or counterparties. We are exposed to credit risk from
third parties, including customers, counterparties and clearing agents. These
parties may default on their obligations to us due to bankruptcy, lack of
liquidity, operational failure or other reasons. We limit our exposure to credit
risk by evaluating the counterparties with which we make investments and
execute agreements. For our investment portfolio, our objective is to invest in
securities to preserve principal while maximizing yields, without significantly
increasing risk. Credit risk associated with investments is minimized
substantially by ensuring that these financial assets are placed with
governments which have investment grade ratings, well-capitalized financial
institutions and other creditworthy counterparties.
Our subsidiary, Nasdaq Execution Services, may be exposed to credit risk due
to the default of trading counterparties in connection with the routing services
it provides for our trading customers. System trades in cash equities routed to
other market centers for members of our cash equity exchanges are routed by
Nasdaq Execution Services for clearing to the NSCC. In this function, Nasdaq
Execution Services is to be neutral by the end of the trading day, but may be
exposed to intraday risk if a trade extends beyond the trading day and into the
next day,
to
counterparty risk in the period between accepting the trade and routing it to
the clearinghouse. In this interim period, Nasdaq Execution Services is not
novating like a clearing broker but instead is subject to the short-term risk of
counterparty failure before
leaving Nasdaq Execution Services susceptible
thereby
51
the clearinghouse enters the transaction. Once the clearinghouse officially
accepts the trade for novation, Nasdaq Execution Services is legally removed
from trade execution risk. However, Nasdaq has membership obligations to
NSCC independent of Nasdaq Execution Services’ arrangements.
Pursuant to the rules of the NSCC and Nasdaq Execution Services’ clearing
agreement, Nasdaq Execution Services is liable for any losses incurred due to
a counterparty or a clearing agent’s failure to satisfy its contractual
obligations, either by making payment or delivering securities. Adverse
movements in the prices of securities that are subject to these transactions can
increase our credit risk. However, we believe that the risk of material loss is
limited, as Nasdaq Execution Services’ customers are not permitted to trade
on margin and NSCC rules limit counterparty risk on self-cleared transactions
by establishing credit limits and capital deposit requirements for all brokers
that clear with NSCC. Historically, Nasdaq Execution Services has never
incurred a liability due to a customer’s failure to satisfy its contractual
obligations as counterparty to a system trade. Credit difficulties or insolvency,
or the perceived possibility of credit difficulties or insolvency, of one or more
larger or visible market participants could also result in market-wide credit
difficulties or other market disruptions.
We have credit risk related to transaction and subscription-based revenues that
are billed to customers on a monthly or quarterly basis, in arrears. Our
potential exposure to credit losses on these transactions is represented by the
receivable balances in our Consolidated Balance Sheets. We review and
evaluate changes in the status of our counterparties’ creditworthiness. Credit
losses such as those described above could adversely affect our consolidated
financial position and results of operations.
We also are exposed to credit risk through our clearing operations with
Nasdaq Clearing. See Note 15, “Clearing Operations,” to the consolidated
financial statements for further discussion. Our clearinghouse holds material
amounts of clearing member cash deposits, which are held or invested
primarily to provide security of capital while minimizing credit, market and
liquidity risks. While we seek to achieve a reasonable rate of return, we are
primarily concerned with preservation of capital and managing the risks
associated with these deposits. As the clearinghouse may pass on interest
revenues (minus costs) to the members, this could include negative or reduced
yield due to market conditions. The following is a summary of the risks
associated with these deposits and how these risks are mitigated.
• Liquidity Risk. Liquidity risk is the risk a clearinghouse may not be able to
meet its payment obligations in the right currency, in the right place and the
right time. To mitigate this risk, the clearinghouse monitors liquidity
requirements closely and maintains funds and assets in a manner which
minimizes the risk of loss or delay in the access by the clearinghouse to
such funds and assets. For example, holding funds with a central bank
where possible or investing in highly liquid government debt instruments
serves to reduce liquidity risks.
• Interest Rate Risk. Interest rate risk is the risk that interest rates rise causing
the value of purchased securities to decline. If we were required to sell
securities prior to maturity, and interest rates had risen, the sale of the
securities might be made at a loss relative to the latest market price. Our
clearinghouse seeks to manage this risk by making short term investments
of members’ cash deposits. In addition, the clearinghouse investment
guidelines allow for direct purchases or repurchase agreements with short
dated maturities of high quality sovereign debt (for example, European
government and U.S. Treasury securities), central bank certificates and
multilateral development bank debt instruments.
• Security Issuer Risk. Security issuer risk is the risk that an issuer of a
security defaults on its payment when the security matures. This risk is
mitigated by limiting allowable investments and collateral under reverse
repurchase agreements to high quality sovereign, government agency or
multilateral development bank debt instruments.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with U.S. GAAP requires management to make judgments, assumptions, and
estimates that affect the amounts reported in the consolidated financial
statements and accompanying notes. Note 2, “Summary of Significant
Accounting Policies,” to the consolidated financial statements describes the
significant accounting policies and methods used in the preparation of the
consolidated financial statements. The accounting policies described below
are significantly affected by critical accounting estimates. Such accounting
policies require significant judgments, assumptions, and estimates used in the
preparation of the consolidated financial statements, and actual results could
differ materially from the amounts reported based on these policies.
Revenue Recognition
• Credit Risk. When the clearinghouse has the ability to hold cash collateral at
a central bank, the clearinghouse utilizes its access to the central bank
system to minimize credit risk exposures. When funds are not held at a
central bank, we seek to substantially mitigate credit risk by ensuring that
investments are primarily placed in large, highly rated financial institutions,
highly rated government debt
instruments and other creditworthy
counterparties.
As part of our market technology product offering, we enter into certain long-
term contracts with customers to develop customized technology solutions,
license the right to use software and provide support and other services to our
customers which results in these contracts containing multiple performance
obligations. We allocate the contract transaction price to each performance
obligation using our best estimate of the standalone selling price of each
distinct
52
good or service in the contract. In instances where standalone selling price is
not directly observable, such as when we do not sell the product or service
separately, we determine the standalone selling price predominantly through
an expected cost plus a margin approach.
We generally recognize revenue over time as our customers simultaneously
receive and consume the benefits provided by our performance because our
customer controls the asset for which we are creating, our performance does
not create an asset with alternative use, and we have a right to payment for
performance completed to date. For these services, we recognize revenue over
time using costs incurred to date relative to total estimated costs at completion
to measure progress toward satisfying our performance obligation. Incurred
costs represent work performed, which corresponds with, and thereby depicts,
the transfer of control to the customer.
Accounting for our long-term contracts requires judgment relative to assessing
risks and their impact on the estimate of revenues and costs. Our estimates are
impacted by factors such as the potential for schedule and technical issues,
productivity and the complexity of work performed. Revenue and cost
estimates for our long-term contracts are reviewed and reassessed at least
quarterly. When adjustments in estimated total contract costs are required, any
changes in the estimated revenues from prior estimates are recognized in the
current period for the effect of such change. If estimates of total costs to be
incurred on a contract exceed estimates of total revenues, a provision for the
entire estimated loss on the contract is recorded in the period in which the loss
is determined.
Due to the significance of judgment in the estimation process, as discussed
above, changes in assumptions and estimates may adversely or positively
affect financial performance in future periods.
For further discussion related to recognition of these revenues, see “Revenue
From Contracts with Customers
- Market
Technology,” of Note 2, “Summary of Significant Accounting Policies,” to the
consolidated financial statements.
- Revenue Recognition
Business combination
We account for business acquisitions under the acquisition method of
accounting. The assets acquired and liabilities assumed in connection with
business acquisitions are recorded at the date of acquisition at their estimated
fair values, with any excess of the purchase price over the estimated fair
values of the net assets acquired recorded as goodwill. Within one year from
the date of acquisition, we may update the value allocated to the assets
acquired and liabilities assumed, and the resulting goodwill balance, based on
information received regarding the valuation of such assets and liabilities that
was not available at the time of purchase.
We use various methods to determine fair value depending on the type of
assets acquired and liabilities assumed. We make estimates and assumptions
about projected future cash flows including, but not limited to, forecasted
revenue, cash flows, attrition rates, long term growth rates, royalty rates,
EBITDA margin and discount rates.
Significant judgment is required in estimating the fair value of assets acquired
and liabilities assumed and in assigning useful lives to certain definite-lived
intangible and tangible assets. Accordingly, we may engage third-party
valuation specialists to assist in these determinations. The fair value estimates
are based on available information as of the acquisition date and assumptions
deemed reasonable by management but are inherently uncertain.
See Note 4, “Acquisitions,” to the consolidated financial statements for further
discussion of the Adenza Acquisition.
During 2023, 2022 and 2021, we have not recorded any material measurement
period adjustments to purchase price allocations.
Goodwill, Indefinite-Lived Intangible Assets and Related Impairment
Testing
identifiable
intangibles, such as customer
Goodwill represents the excess of purchase price over the value assigned to
the net assets, including identifiable intangible assets, of a business acquired.
Goodwill is allocated to our reporting units based on the assignment of the fair
values of each reporting unit of the acquired company. We recognize
specifically
relationships,
technology, exchange and clearing registrations, trade names and licenses
when a specific right or contract is acquired. Goodwill and intangible assets
deemed to have indefinite useful lives, primarily exchange and clearing
registrations, are not amortized but instead are tested for impairment at least
annually as of October 1 and more frequently whenever events or changes in
circumstances indicate that the fair value of the asset may be less than its
carrying amount, such as changes in the business climate, poor indicators of
operating performance or the sale or disposition of a significant portion of a
reporting unit.
In November 2023, following the acquisition of Adenza, we refined our
divisional structure. Our
three previous reportable segments, Market
Platforms, Capital Access Platforms and Anti-Financial Crime, have been
changed to align with our new corporate structure that includes the following
three segments: Capital Access Platforms, Financial Technology and Market
Services. Under ASC 350-20, “Intangibles Goodwill and Other,” when a
company reorganizes its reporting structure, an impairment test must be
performed both before and after the change, and goodwill must be reassigned
to reporting units. Accordingly, goodwill was reassigned based on relative fair
value of each reporting unit.
53
We perform our goodwill impairment test at the reporting unit level. For 2023,
we performed the goodwill impairment test under our previous organizational
structure which included three reporting units: Market Platforms, Capital
Access Platforms and Anti-Financial Crime segments and under our current
organization structure, which includes the following three reporting units:
Capital Access Platforms, Financial Technology and Market Services
segments.
When testing goodwill and indefinite-lived intangible assets for impairment,
we have the option of first performing a qualitative assessment to determine
whether it is more likely than not that the fair value of a reporting unit or
indefinite-lived intangible asset is less than their respective carrying amounts
as the basis to determine if it is necessary to perform a quantitative
impairment test. If we choose not to complete a qualitative assessment, or if
the initial assessment indicates that it is more likely than not that the carrying
amount of a reporting unit or the carrying amount of an indefinite-lived
intangible asset exceeds their respective estimated fair values, a quantitative
test is required. Our decision to perform a qualitative impairment assessment
in a given year is influenced by a number of factors, including but not limited
to, the size of the reporting unit’s goodwill, the significance of the excess of
the reporting unit’s estimated fair value or the indefinite-lived intangible
asset’s fair value over their respective carrying amounts at the last quantitative
assessment date, and the amount of time in between quantitative fair value
assessments.
In performing a quantitative impairment test, we compare the fair value of
each reporting unit and indefinite-lived intangible asset with their respective
carrying amounts. The fair value of each reporting unit is estimated using a
combination of a discounted cash flow valuation, which incorporates
assumptions regarding future growth rates, terminal values, and discount rates,
as well as guideline public company valuations, which incorporates relevant
trading multiples of comparable companies and other factors. The estimates
and assumptions used consider historical performance and are consistent with
the assumptions used in determining future profit plans for each reporting unit,
which are approved by our board of directors. The fair value of indefinite-
lived intangible assets is primarily determined on the basis of estimated
discounted value, using the Greenfield Approach for exchange and clearing
registrations and licenses, and the relief from royalty approach or excess
earnings approach for trade names, both of which incorporate assumptions
regarding future revenue projections and discount rates. If the carrying
amounts of the reporting unit or the indefinite-lived intangible asset exceed
their respective fair values, an impairment charge is recognized in an amount
equal to the difference, limited to the total amount of goodwill allocated to
that reporting unit or the total carrying value of the indefinite-lived intangible
asset.
The following table presents the balances of goodwill for our reportable
segments pre-segment realignment at the time of our 2023 annual impairment
test:
Market Platforms
Capital Access Platforms
Anti-Financial Crime
October 1, 2023
(in millions)
2,845
4,138
1,005
7,988
$
$
The following table presents the balances of goodwill for our reportable
segments post segment realignment, excluding the goodwill acquired as part
of the Adenza acquisition. The carrying value of goodwill was reassigned to
our new reportable segments based on a relative fair value allocation
approach.
Capital Access Platforms
Financial Technology
Market Services
October 1, 2023
(in millions)
4,138
1,922
1,928
7,988
$
$
In 2023 and 2022, we elected to perform a quantitative impairment test for
goodwill and indefinite-lived intangible assets. In conducting the quantitative
assessment, we determined that the fair value of our goodwill for each of our
reporting units and the fair value of our indefinite-lived intangible assets
sufficiently exceed their respective carrying amounts. As a result, there were
no goodwill or indefinite-lived intangible assets impairment charges recorded
in any of those years.
Although we believe our estimates of fair value are reasonable, the
determination of certain valuation inputs is subject to management’s
judgment. Changes in these inputs could materially affect the results of our
impairment review. If our forecasts of cash flows or other key inputs are
negatively revised in the future, the estimated fair value of each reporting unit
and of our indefinite-lived intangible assets would be adversely impacted,
potentially leading to an impairment in the future that could materially affect
our operating results.
Subsequent to our annual impairment test, no indications of impairment were
identified.
Other Long-Lived Assets and Related Impairment
We review our other long-lived assets, such as finite-lived intangible assets,
property and equipment, and operating lease assets for potential impairment
when there is evidence that events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The carrying amount
of an asset is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to result from the use and eventual disposition of the asset.
Fair value of finite-lived intangible assets and property and equipment is
based on various valuation techniques. Any required impairment loss is
measured as the amount by which the carrying amount of the asset exceeds its
fair value and is recorded as a reduction in the carrying amount of the related
asset and a charge to operating results.
54
There were no material finite-lived intangible assets impairment charges in
2023 and 2022. We recorded an impairment charge of $14 million in 2021
related to a finite-lived intangible asset for customer relationships associated
with the wind down of a previous acquisition included in depreciation and
amortization expense in the Consolidated Statements of Income.
We recorded pre-tax, non-cash property and equipment asset impairment
charges of $12 million in 2023, $14 million in 2022 and $4 million in 2021.
See Note 20, “Restructuring Charges,” to the consolidated financial statements
for a discussion of these plans.
In the first quarter of 2023, we initiated a review of our real estate and facility
capacity requirements due to our new and evolving work models. As a result
of this ongoing review, we recorded impairment charges of $23 million in
2023 of which $18 million related to operating lease asset impairment and exit
costs and is included in occupancy expense in the Consolidated Statements of
Income and $5 million related to impairment of leasehold improvements,
which are recorded in depreciation and amortization expense in the
Consolidated Statements of Income. We fully impaired our lease assets for
locations that we vacated with no intention to sublease. Substantially all of the
property, equipment and leasehold improvements associated with the vacated
leased office space were fully impaired as there are no expected future cash
flows for these items.
No material impairments were recorded to reduce the carrying value of our
other long-lived assets during 2023, 2022 or 2021.
Income Taxes
Estimates and judgments are required in the calculation of certain tax
liabilities and in the determination of the recoverability of certain deferred tax
assets, which arise from net operating loss carryforwards, tax credit
carryforwards and temporary differences between the tax and financial
statement recognition of revenues and expenses. Our deferred tax assets are
reduced by a valuation allowance if it is more likely than not that some portion
or all of the recorded deferred tax assets will not be realized in future periods.
Management is required to determine whether a tax position is more likely
than not to be sustained upon examination, including resolution of any related
appeals or litigation processes, based on the technical merits of the position.
Once it is determined that a position meets the recognition thresholds, the
position is measured to determine the amount of benefit to be recognized in
the consolidated financial statements.
In assessing the need for a valuation allowance, we consider all available
evidence including past operating results, the existence of cumulative losses in
the most recent fiscal years, estimates of future taxable income and the
feasibility of tax planning strategies. In the event that we change our
determination as to the amount of deferred tax assets that can be realized, we
will adjust our valuation allowance with a corresponding impact to the
provision for income taxes in the period in which such determination is made.
In addition, the calculation of our tax liabilities involves uncertainties in the
application of tax regulations in the U.S. and other tax jurisdictions. We
recognize potential liabilities for anticipated tax audit issues in such
jurisdictions based on our estimate of whether, and the extent to which,
additional taxes and interest may be due. While we believe that our tax
liabilities reflect the probable outcome of identified tax uncertainties, it is
reasonably possible that the ultimate resolution of any tax matter may be
greater or less than the amount accrued. If events occur and the payment of
these amounts ultimately proves unnecessary, the reversal of the liabilities
would result in tax benefits being recognized in the period when we determine
the liabilities are no longer necessary. If our estimate of tax liabilities proves
to be less than the ultimate assessment, a further charge to expense would
result.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information about quantitative and qualitative disclosures about market risk is
incorporated herein by reference from “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations - Quantitative and
Qualitative Disclosures About Market Risk.”
Item 8. Financial Statements and Supplementary Data
Nasdaq’s consolidated financial statements, including Consolidated Balance
Sheets as of December 31, 2023 and 2022, Consolidated Statements of
Income for the years ended December 31, 2023, 2022 and 2021, Consolidated
Statements of Comprehensive Income for the years ended December 31, 2023,
2022 and 2021, Consolidated Statements of Changes in Stockholders’ Equity
for the years ended December 31, 2023, 2022 and 2021, Consolidated
Statements of Cash Flows for the years ended December 31, 2023, 2022 and
2021 and notes to our consolidated financial statements, together with a report
thereon of Ernst & Young LLP, dated February 21, 2024, are attached hereto
as pages F-1 through F-45 and incorporated by reference herein.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
55
Item 9A. Controls and Procedures
Disclosure controls and procedures.
Nasdaq’s management, with the participation of Nasdaq’s Chief Executive
Officer and Executive Vice President and Chief Financial Officer, has
evaluated the effectiveness of Nasdaq’s disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of
the end of the period covered by this report. In November 2023, Nasdaq
completed the acquisition of Adenza. We accounted for this acquisition as a
business combination. The scope of management’s assessment of the
effectiveness of the Company’s disclosure controls and procedures did not
include the internal controls over financial reporting of Adenza. This
exclusion is in accordance with the SEC staff’s general guidance that an
assessment of a recently acquired business may be omitted from the scope of
management’s assessment for one year following the acquisition. The
recognition of goodwill and intangible assets, however, is covered by our
internal controls over mergers and acquisitions, which were included in
management’s assessment of the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2023. Based upon that
evaluation, Nasdaq’s Chief Executive Officer and Executive Vice President
and Chief Financial Officer, have concluded that, as of the end of such period,
Nasdaq’s disclosure controls and procedures are effective.
Changes in internal control over financial reporting. Based on the
evaluation completed by management, in which our Chief Executive Officer
and Chief Financial Officer participated, our management has concluded that,
except as noted above with respect to the acquisition of Adenza, there were no
changes in Nasdaq’s internal control over financial reporting (as defined in
Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred
during the quarter ended December 31, 2023 that have materially affected, or
are reasonably likely to materially affect, Nasdaq’s internal control over
financial reporting.
Management’s Report on Internal Control Over Financial Reporting
is responsible for
Management
the
consolidated financial statements appearing in the reports that we file with the
SEC. The consolidated financial statements were prepared in conformity with
U.S. generally accepted accounting principles and include amounts based on
management’s estimates and judgments.
the preparation and
integrity of
Management is also responsible for establishing and maintaining adequate
internal control over Nasdaq’s financial reporting. Although there are inherent
limitations in the effectiveness of any system of internal control over financial
reporting, or ICFR, we maintain a system of internal control that is designed
to provide reasonable assurance as to the fair and reliable preparation and
presentation of the consolidated financial statements, as well as to safeguard
assets from unauthorized use or disposition that could have a material effect
on the financial statements.
Our management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2023, based on criteria established in
the Committee of
Internal Control—Integrated Framework
Sponsoring Organizations of the Treadway Commission (COSO) (2013
framework). This evaluation included review of the documentation of
controls, evaluation of the design effectiveness of controls, testing of the
operating effectiveness of controls and a conclusion on this evaluation.
issued by
Our management has excluded the ICFR of Adenza, which we acquired on
November 1, 2023 as discussed in Note 4 “Acquisitions,” to the Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K.
Total revenues subject to Adenza’s ICFR represented 4% and 3% of revenues
less transaction-based expenses and operating income, respectively, for the
fiscal year ended December 31, 2023. Total assets subject to Adenza’s ICFR
represented 36% of our consolidated total assets as of December 31, 2023 (of
which $11 billion, or 34% of our consolidated total assets, represents
intangible assets acquired and the goodwill resulting from the Adenza
acquisition, which were subject to our ICFR as of December 31, 2023) and net
assets of Adenza represented 3% of our consolidated net assets, excluding
intangible assets acquired and the corresponding deferred tax liability as well
as the goodwill resulting from the Adenza acquisition, which were subject to
our ICFR as of December 31, 2023. Under guidelines established by the SEC,
companies are permitted to exclude acquisitions from their assessment of
ICFR for a period of up to one year following an acquisition while integrating
the acquired company.
Based on its assessment, our management believes that, as of December 31,
2023, our internal control over financial reporting is effective. Ernst & Young
LLP, an independent registered public accounting firm, has issued an
attestation report on Nasdaq’s internal control over financial reporting, which
is included herein.
56
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Nasdaq, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Nasdaq, Inc.’s internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, Nasdaq, Inc. (the Company) maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023,
based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control
Over Financial Reporting, management’s assessment of and conclusion on the
effectiveness of internal control over financial reporting did not include the
internal controls of Adenza, which is included in the 2023 consolidated
financial statements of the Company and constituted 2% and 3% of total and
net assets, respectively, as of December 31, 2023 and 4% and 3% of revenues
less transaction-based expenses and operating income, respectively, for the
year then ended. Our audit of internal control over financial reporting of the
Company also did not include an evaluation of the internal control over
financial reporting of Adenza.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the consolidated
balance sheets of the Company as of December 31, 2023 and 2022, the related
consolidated statements of income, comprehensive income, changes in
stockholders’ equity and cash flows for each of the three years in the period
ended December 31, 2023, and the related notes and our report dated February
21, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable
assurance regarding prevention or
timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 21, 2024
57
Item 9B. Other Information
During the three months ended December 31, 2023, none of the Company’s
directors or officers adopted, terminated or modified a “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement” (as such terms are
defined in Item 408 of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information about Nasdaq’s directors, as required by Item 401 of Regulation
S-K, is incorporated by reference, if applicable, from the discussion under the
caption “Director Nominees” in Nasdaq’s Proxy Statement. Information about
Nasdaq’s executive officers, as required by Item 401 of Regulation S-K, is
incorporated by reference from the discussion under the caption “Other Items-
Executive Officers” in the Proxy Statement. Information about Section 16
reports, as required by Item 405 of Regulation S-K, is incorporated by
reference from the discussion under the caption “Other Items-Delinquent
Section 16(a) Reports” in the Proxy Statement. Information about Nasdaq’s
code of ethics, as required by Item 406 of Regulation S-K, is incorporated by
reference from the discussion under the caption “Operating with Integrity” in
the Proxy Statement. Information about Nasdaq’s nomination procedures,
Audit & Risk Committee and Audit & Risk Committee financial experts, as
required by Items 407(c)(3), 407(d)(4) and 407(d)(5) of Regulation S-K, is
incorporated by reference from the discussions under the headings “Director
Nominees” and “Board Committees” in the Proxy Statement.
Item 11. Executive Compensation
Information about Nasdaq’s director and executive compensation, as required
by Items 402, 407(e)(4) and 407(e)(5) of Regulation S-K, is incorporated by
reference from the discussions under the headings “Director Compensation”
and “Executive Compensation” in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Information about security ownership of certain beneficial owners and
management, as required by Item 403 of Regulation S-K, is incorporated by
reference from the discussion under the heading “Other Items-Security
Ownership of Certain Beneficial Owners and Management” in the Proxy
Statement.
Equity Compensation Plan and ESPP Information
Nasdaq’s Equity Plan provides for the issuance of our equity securities to all
employees and directors as part of their compensation plan.
In addition, in jurisdictions where participation in the ESPP is permitted, all
our employees are eligible. The employees that joined us from Adenza are not
yet eligible for participation in the ESPP, as payroll and benefits integration
efforts remain ongoing following the consummation of the Adenza acquisition
in November 2023. Employees may purchase shares of our common stock at a
15% discount to the lesser of the closing price of our common stock on (i) the
first trading day of the offering period or (ii) the last trading day of the
offering period. Offering periods under the ESPP are six months in duration.
As of December 31, 2023, all our employees are eligible to participate.
The Equity Plan and the ESPP have been previously approved by our
stockholders. The following table sets forth information regarding outstanding
options and shares reserved for future issuance under all of Nasdaq’s
compensation plans as of December 31, 2023.
Number of
shares
to be issued upon
exercise of
outstanding
options, warrants
and rights(a)
Weighted-average
exercise price of
outstanding
options,
warrants and
rights(b)
Number of
shares remaining
available
for future issuance
under equity
compensation
plans (excluding
shares reflected in
column(a))(c)
1,420,323 $
41.79
36,014,602
—
1,420,323 $
—
41.79
—
36,014,602
Plan Category
Equity compensation
plans approved by
stockholders
Equity compensation
plans not approved
by stockholders
Total
In the table above:
• The number of shares to be issued upon exercise of outstanding options,
warrants and rights include only the number of shares to be issued upon
exercise of outstanding options, warrants and rights. As of December 31,
2023, we also had 6,217,621 shares to be issued upon vesting of outstanding
restricted stock and PSUs.
• The number of shares remaining available for future issuance under equity
compensation plans (excluding shares reflected in column (a) includes
24,598,016 shares of common stock that may be awarded pursuant to the
Equity Plan and (b) 11,416,586 shares of common stock that may be issued
pursuant to the ESPP.
58
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Information about certain relationships and related transactions, as required by
Item 404 of Regulation S-K, is incorporated herein by reference from the
discussion under the heading “Other Items-Certain Relationships and Related
Transactions”
Information about director
independence, as required by Item 407(a) of Regulation S-K, is incorporated
herein by reference from the discussion under the heading “Director
Nominees” in the Proxy Statement.
the Proxy Statement.
in
Item 14. Principal Accountant Fees and Services
Information about principal accountant fees and services, as required by
Item 9(e) of Schedule 14A, is incorporated herein by reference from the
discussion under the heading “Annual Evaluation and 2024 Selection of the
Independent Auditors” in the Proxy Statement.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)(1) Financial Statements
See “Index to Consolidated Financial Statements.”
(a)(2) Financial Statement Schedules
All schedules are omitted because they are not applicable or the required
information is included in the consolidated financial statements or notes.
(a)(3) Exhibits
Exhibit
Number
2.1
2.2
Share Purchase Agreement, dated as of November 18, 2020,
by and among Osprey Acquisition Corporation, a wholly
owned subsidiary of Nasdaq, Verafin Holdings Inc., certain
shareholders of Verafin (the “Sellers”), and Shareholder
Representative Services LLC, solely in its capacity as the
representative of the Sellers (incorporated herein by reference
to Exhibit 2.2 to the Annual Report on Form 10-K for the year
ended December 31, 2020 filed on February 23, 2021).†
Amendment to Share Purchase Agreement, dated as of
February 11, 2021, by and among Osprey Acquisition
Corporation, a wholly owned subsidiary of Nasdaq, Verafin
Holdings Inc., certain shareholders of Verafin (the “Sellers”),
and Shareholder Representative Services LLC, solely in its
capacity as the representative of the Sellers (incorporated
herein by reference to Exhibit 2.3 to the Annual Report on
Form 10-K for the year ended December 31, 2020 filed on
February 23, 2021).
59
2.3
3.1
3.1.1
3.1.2
3.1.3
3.1.4
3.2
4.1
4.2
4.2.1
4.3
Agreement and Plan of Merger, dated as of June 10, 2023, by
and among Nasdaq, Inc., Argus Merger Sub 1, Inc., Argus
Merger Sub 2, LLC, Adenza Holdings, Inc. and Adenza
Parent, LP. (incorporated herein by reference to Exhibit 2.1 to
the Current Report on Form 8-K filed on June 12, 2023).†
Amended and Restated Certificate of Incorporation of Nasdaq
(incorporated herein by reference to Exhibit 3.1 to the Current
Report on Form 8-K filed on January 28, 2014).
Certificate of Elimination of Nasdaq’s Series A Convertible
Preferred Stock (incorporated herein by reference to Exhibit
3.1.1 to the Current Report on Form 8-K filed on January 28,
2014).
Certificate of Amendment of Nasdaq’s Amended and Restated
Certificate of Incorporation (incorporated herein by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed on
November 19, 2014).
Certificate of Amendment of Nasdaq’s Amended and Restated
Certificate of Incorporation (incorporated herein by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed on
September 8, 2015).
Certificate of Amendment of Nasdaq’s Amended and Restated
Certificate of Incorporation (incorporated herein by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed on July
20, 2022).
Nasdaq’s By-Laws (incorporated herein by reference to
Exhibit 3.2 to the Current Report on Form 8-K filed on
November 21, 2016).
Form of Common Stock certificate (incorporated herein by
reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 2015 filed on November
4, 2015).
Stockholders’ Agreement, dated as of February 27, 2008,
between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)
and Borse Dubai Limited (incorporated herein by reference to
Exhibit 10.2 to the Current Report on Form 8-K filed on
March 3, 2008).
First Amendment to Stockholders’ Agreement, dated as of
February 19, 2009, between Nasdaq, Inc. (f/k/a The NASDAQ
OMX Group, Inc.) and Borse Dubai Limited (incorporated
herein by reference to Exhibit 4.10.1 to the Annual Report on
Form 10-K for the year ended December 31, 2008 filed on
February 27, 2009).
Registration Rights Agreement, dated as of February 27, 2008,
among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.),
Borse Dubai Limited and Borse Dubai Nasdaq Share Trust
(incorporated herein by reference to Exhibit 10.3 to the
Current Report on Form 8-K filed on March 3, 2008).
4.3.1
4.4
4.4.1
4.5
4.6
4.7
4.8
4.9
4.10
First Amendment to Registration Rights Agreement, dated
as of February 19, 2009, among Nasdaq, Inc. (f/k/a The
NASDAQ OMX Group, Inc.), Borse Dubai Limited and
Borse Dubai Nasdaq Share Trust (incorporated herein by
reference to Exhibit 4.11.1 to the Annual Report on Form
10-K for the year ended December 31, 2008 filed on
February 27, 2009).
Stockholders’ Agreement, dated as of December 16, 2010,
between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group,
Inc.) and Investor AB (incorporated herein by reference to
Exhibit 4.12 to the Annual Report on Form 10-K for the year
ended December 31, 2010 filed on February 24, 2011).
First Amendment to Nasdaq Stockholders’ Agreement, dated
as of December 14, 2022, between Nasdaq, Inc. and Investor
AB (incorporated herein by reference to Exhibit 4.1 to the
Current Report on Form 8-K filed on December 16, 2022).
Stockholders’ Agreement, dated as of November 1, 2023, by
and among Nasdaq, Inc., Adenza Parent, LP and Thoma
Bravo, L.P. (incorporated herein by reference to Exhibit 4.1
to the Current Report on Form 8-K filed on November 3,
2023).
Registration Rights Agreement, dated as of November 1,
2023, by and among Nasdaq, Inc. and Adenza Parent, LP.
(incorporated herein by reference to Exhibit 4.2 to the
Current Report on Form 8-K filed on November 3, 2023).
Indenture, dated as of June 7, 2013, between Nasdaq, Inc.
(f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo
Bank, National Association, as Trustee (incorporated herein
by reference to Exhibit 4.1 to the Current Report on Form 8-
K filed on June 10, 2013).
Sixth Supplemental Indenture, dated as of April 1, 2019,
among Nasdaq, Inc., Wells Fargo Bank, National
Association, as Trustee, and HSBC Bank USA, National
Association, as paying agent and as registrar and transfer
agent (incorporated by reference to Exhibit 4.2 to the Form
8-A filed on April 1, 2019).
Seventh Supplemental Indenture, dated February 13, 2020,
among Nasdaq, Inc., Wells Fargo Bank, National
Association, as Trustee, and HSBC Bank USA, National
Association, as paying agent and as registrar and transfer
agent (incorporated herein by reference to Exhibit 4.2 to the
Company’s Form 8-A filed on February 13, 2020).
Eighth Supplemental Indenture, dated April 28, 2020, by and
between Nasdaq, Inc. and Wells Fargo Bank, National
Association, as Trustee (incorporated herein by reference to
Exhibit 4.2 to the Current Report on Form 8-K filed on April
28, 2020).
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
Tenth Supplemental Indenture, dated December 21, 2020, by
and between Nasdaq, Inc. and Wells Fargo Bank, National
Association, as Trustee (incorporated herein by reference to
Exhibit 4.3 to the Current Report on Form 8-K filed on
December 21, 2020).
Eleventh Supplemental Indenture, dated December 21, 2020,
by and between Nasdaq, Inc. and Wells Fargo Bank, National
Association, as Trustee (incorporated herein by reference to
Exhibit 4.4 to the Current Report on Form 8-K filed on
December 21, 2020).
Twelfth Supplemental Indenture, dated July 30, 2021, by and
among Nasdaq, Inc., Wells Fargo Bank, National Association,
as Trustee and HSBC Bank USA, National Association, as
registrar and transfer agent (incorporated herein by reference
to Exhibit 4.2 to the Company’s 8-A filed on July 30, 2021).
Thirteenth Supplemental Indenture, dated as of March 7, 2022,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.2 to the Company’s Current Report on Form 8-K
filed on March 7, 2022).
Fourteenth Supplemental Indenture, dated as of June 28, 2023,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.2 to the Current Report on Form 8-K filed on June
28, 2023).
Fifteenth Supplemental Indenture, dated as of June 28, 2023,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.3 to the Current Report on Form 8-K filed on June
28, 2023).
Sixteenth Supplemental Indenture, dated as of June 28, 2023,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.4 to the Current Report on Form 8-K filed on June
28, 2023).
Seventeenth Supplemental Indenture, dated as of June 28,
2023, by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.5 to the Current Report on Form 8-K filed on June
28, 2023).
Eighteenth Supplemental Indenture, dated as of June 28, 2023,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee (incorporated herein by reference to
Exhibit 4.6 to the Current Report on Form 8-K filed on June
28, 2023).
60
4.20
Nineteenth Supplemental Indenture, dated as of June 28, 2023,
by and between Nasdaq, Inc. and Computershare Trust
Company, N.A. (as successor to Wells Fargo Bank, National
Association), as trustee and HSBC Bank USA, National
Association, as paying agent, registrar and transfer agent
(incorporated herein by reference to Exhibit 4.7 to the Current
Report on Form 8-K filed on June 28, 2023).
4.21
Description of Securities.
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Amended and Restated Board Compensation Policy, effective
on June 16, 2023 (incorporated herein by reference to Exhibit
10.1 to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2023 filed on August 2, 2023).*
Nasdaq Executive Corporate Incentive Plan, effective as of
January 1, 2015 (incorporated herein by reference to Exhibit
10.1 to the Current Report on Form 8-K filed on May 11,
2015).*
Nasdaq, Inc. Equity Incentive Plan (as amended and restated
as of April 24, 2018) (incorporated herein by reference to
Exhibit 10.1 to the Form S-8 filed on May 25, 2018).*
Form of Nasdaq Non-Qualified Stock Option Award
Certificate (incorporated herein by reference to Exhibit 10.3 to
the Annual Report on Form 10-K for the year ended
December 31, 2010 filed on February 24, 2011).*
Form of Nasdaq Restricted Stock Unit Award Certificate
(employees) (incorporated herein by reference to Exhibit 10.2
to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023 filed on August 2, 2023).*
Form of Nasdaq Restricted Stock Unit Award Certificate
(directors) (incorporated herein by reference to Exhibit 10.3 to
the Quarterly Report on Form 10-Q for the quarter ended June
30, 2023 filed on August 2, 2023).*
Form of Nasdaq Three-Year Performance Share Unit
Agreement (incorporated herein by reference to Exhibit 10.4
to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023 filed on August 2, 2023).*
Form of Nasdaq Continuing Obligations Agreement
(incorporated by reference to Exhibit 10.9 to the Company’s
Annual Report on Form 10-K for the year ended December
31, 2021 filed on February 23, 2022).
Amended and Restated Supplemental Executive Retirement
Plan, dated as of December 17, 2008 (incorporated herein by
reference to Exhibit 10.6 to the Annual Report on Form 10-K
for the year ended December 31, 2008 filed on February 27,
2009).*
10.10
10.11
10.12
10.13
10.14
10.15
10.17
10.18
10.19
10.20
Amendment No. 1 to Amended and Restated Supplemental
Executive Retirement Plan, effective as of December 31, 2008
(incorporated herein by reference to Exhibit 10.6.1 to the
Annual Report on Form 10-K for the year ended December
31, 2008 filed on February 27, 2009).*
Nasdaq Supplemental Employer Retirement Contribution
Plan, dated as of December 17, 2008 (incorporated herein by
reference to Exhibit 10.7 to the Annual Report on Form 10-K
for the year ended December 31, 2008 filed on February 27,
2009).*
Nasdaq, Inc. Deferred Compensation Plan (incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on June 16, 2022).*
Nonqualified Stock Option Award Certificate to Adena T.
Friedman from Nasdaq, Inc. in connection with grant made on
January 3, 2017 (incorporated herein by reference to Exhibit
10.1 to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 2017 filed on November 7, 2017).*
Employment Agreement between Nasdaq and Adena
Friedman, made and entered into on November 19, 2021 and
effective as of January 1, 2022 (incorporated herein by
reference to Exhibit 10.14 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2021 filed on
February 23, 2022).*
Nonqualified Stock Option Award Certificate to Adena T.
Friedman from Nasdaq, Inc. in connection with grant made on
January 3, 2022 (incorporated herein by reference to Exhibit
10.15 to the Company’s Annual Report on Form 10-K for the
year ended December 31, 2021 filed on February 23, 2022).*
Employment Agreement by and between Nasdaq, Inc. and
Bradley J. Peterson, dated June 22, 2022 (incorporated herein
by reference to Exhibit 10.5 to the Quarterly Report on Form
10-Q for the quarter ended June 30, 2022 filed on August 3,
2022).*
Employment Offer Letter by and between Nasdaq, Inc. and
Michelle Daly (incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K filed on May 3, 2021).*
General Release and Separation Agreement by and between
Nasdaq, Inc. and Ann M. Dennison, dated as of August 31,
2023 (incorporated herein by reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2023 filed on November 3, 2023).*
Employment Offer Letter by and between Nasdaq, Inc. and
Sarah Youngwood, dated as of August 31, 2023 (incorporated
herein by reference to Exhibit 10.2 to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 2023 filed on
November 3, 2023).*
61
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
11
Nasdaq Change in Control Severance Plan for Executive Vice
Presidents and Senior Vice Presidents, effective November 26,
2013, as amended December 6, 2022 (incorporated by
reference herein to Exhibit 10.19 to the Annual Report on
Form 10-K for the year ended December 31, 2022, filed on
February 22, 2023.*
Amended and Restated Credit Agreement, dated as of
December 16, 2022, among Nasdaq, Inc., the various lenders
and issuing bank party thereto and Bank of America, N.A., as
administrative agent (incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed on
December 16, 2022). †
Amendment No. 1 to Amended and Restated Credit
Agreement, dated as of March 29, 2023, among Nasdaq, Inc.,
the Lenders party hereto, Bank of America, N.A., as
administrative agent and BofA Securities, Inc., as
Sustainability Coordinator (incorporated herein by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q for the
quarter ended March 30, 2023 filed on May 4, 2023).†
Amendment No. 2 to Amended and Restated Credit
Agreement, dated as of June 16, 2023, among Nasdaq, Inc., a
Delaware corporation, the lenders party thereto and Bank of
America, N.A., as administrative agent (incorporated herein
by reference to Exhibit 10.1 to the Current Report on Form 8-
K filed on June 20, 2023).
Term Loan Credit Agreement, dated as of June 28, 2023,
among Nasdaq, Inc., the lenders and other parties party
thereto, and Bank of America, N.A., as Administrative Agent
(incorporated herein by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed on June 28, 2023).†
Form of Commercial Paper Dealer Agreement between
Nasdaq, Inc., as Issuer, and the Dealer party thereto
(incorporated herein by reference to Exhibit 10.3 to the
Current Report on Form 8-K filed on April 26, 2017).
Verafin Holdings Inc. Amended and Restated Management
Incentive Plan (incorporated by reference herein to Exhibit
10.24 to the Annual Report on Form 10-K for the year ended
December 31, 2022, filed on February 22, 2023.)*
Verafin Holdings Inc. Amended and Restated Management
Incentive Plan Award Agreement, by and between Verafin
Solutions ULC and Brendan Brothers, dated as of January 11,
2023 (incorporated by reference herein to Exhibit 10.25 to the
Annual Report on Form 10-K for the year ended December
31, 2022, filed on February 22, 2023.)*
Statement regarding computation of per share earnings
(incorporated herein by reference from Note 13 to the
consolidated financial statements under Part II, Item 8 of this
Form 10-K).
21.1
23.1
24.1
31.1
31.2
32.1
97.1
101
List of all subsidiaries.
Consent of Ernst & Young LLP.
Powers of Attorney.
Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”).
Certification of Executive Vice President and
Chief Financial Officer pursuant to Section 302 of Sarbanes-
Oxley.
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of Sarbanes-Oxley.
Supplemental Executive Officer Recoupment Policy.*
The following materials from the Nasdaq, Inc. Annual Report
on Form 10-K for the year ended December 31, 2023,
formatted in iXBRL (Inline eXtensible Business Reporting
Language): (i) Consolidated Balance Sheets as of December
31, 2023 and December 31, 2022; (ii) Consolidated Statements
of Income for the years ended December 31, 2023, 2022 and
2021 (iii) Consolidated Statements of Comprehensive Income
for the years ended December 31, 2023, 2022 and 2021; (iv)
Consolidated Statements of Changes in Stockholders’ Equity
for the years ended December 31, 2023, 2022 and 2021; (v)
Consolidated Statements of Cash Flows for the years ended
December 31, 2023, 2022 and 2021; and (vi) notes to
consolidated financial statements.
104
Cover Page Interactive Data File, formatted in iXBRL and
contained in Exhibit 101.
____________
* Management contract or compensatory plan or arrangement.
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-
K.
(b) Exhibits:
See Item 15(a)(3) above.
(c) Financial Statement Schedules:
All schedules are omitted because they are not applicable or the required
information is included in the consolidated financial statements or notes.
Item 16. Form 10-K Summary
None.
62
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
*
Thomas A. Kloet
Director
*
Holden Spaht
Director
*
Johan Torgeby
Director
*
Toni Townes-Whitley
Director
*
Jeffery W. Yabuki
Director
*
Alfred W. Zollar
Director
* Pursuant to Power of Attorney
By:
Name:
Title:
/s/ John A. Zecca
John A. Zecca
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on February 21, 2024.
Nasdaq, Inc.
(Registrant)
By:
Name:
Title:
Date:
/s/ Adena T. Friedman
Adena T. Friedman
Chief Executive Officer
February 21, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of February 21, 2024.
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
/s/ Adena T. Friedman
Adena T. Friedman
Chief Executive Officer and Chair of the Board
/s/ Sarah Youngwood
Sarah Youngwood
Executive Vice President and Chief Financial Officer
/s/ Michelle Daly
Michelle Daly
Senior Vice President, Controller and Principal
Accounting Officer
*
Michael R. Splinter
Director
*
Melissa M. Arnoldi
Director
*
Charlene T. Begley
Director
*
Steven D. Black
Director
*
Essa Kazim
Director
63
Nasdaq, Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of Nasdaq, Inc. and its subsidiaries are presented herein on the page indicated:
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
F-1
F-2
F-4
F-5
F-6
F-7
F-8
F-9
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the
current period audit of the financial statements that was communicated or
required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which
it relates.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Nasdaq, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Nasdaq,
Inc. (the Company) as of December 31, 2023 and 2022, the related
consolidated statements of income, comprehensive income, changes in
stockholders’ equity and cash flows for each of the three years in the period
ended December 31, 2023, and the related notes (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the
Company at December 31, 2023 and 2022, and the results of its operations
and its cash flows for each of the three years in the period ended December
31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of December 31, 2023, based on
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013
framework), and our report dated February 21, 2024 expressed an unqualified
opinion thereon.
Basis for Opinion
the responsibility of
These financial statements are
the Company’s
management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
F-2
Description of
the Matter
the Company completed
Accounting for the Acquisition of Adenza
As described in Note 4 to the consolidated financial
statements, during 2023
its
acquisition of Adenza, which was accounted for as a
business combination for total purchase consideration of
$5,750 million in cash consideration (subject to customary
post-closing adjustments) and the issuance of 85,608,414
shares of Nasdaq common stock at a price of $48.71 per
share. The transaction resulted in the recognition of $5,933
million of goodwill and $5,050 million of intangible assets.
Intangible assets consisted of customer relationships of
$3,740 million, technology of $950 million and trade names
of $360 million.
Auditing the Company’s accounting for its acquisition of
Adenza was complex due to the significant estimation
uncertainty in the Company’s determination of the fair value
of identified intangible assets. The significant estimation
uncertainty was primarily due to the sensitivity of the fair
value of the customer relationships intangible asset to certain
underlying assumptions. The Company used the income
approach, specifically the excess earnings method, to
measure the fair value of the customer relationships
intangible asset, and the significant assumptions used in
estimating its fair value included customer attrition rate,
revenue growth, EBITDA margin, and the discount rate.
These significant assumptions are forward looking and could
be affected by future economic and market conditions.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design and
tested the operating effectiveness of controls over the
Company’s processes with respect to estimates that impact
the accounting for the Adenza acquisition. For example, we
tested controls over the estimation process supporting the
recognition and measurement of the identified intangible
assets, including the customer relationships intangible asset,
which encompassed testing controls over management’s
review of assumptions used in the valuation model.
the underlying data supporting
To test the estimated fair value of the customer relationship
intangible asset, we performed audit procedures that included,
among others, evaluating the Company’s use of valuation
methodologies, evaluating significant assumptions utilized by
the Company, and evaluating the completeness and accuracy
of
those significant
assumptions. We involved our valuation specialists to assist
with our evaluation of the methodology used by the Company
and significant assumptions included in the fair value
estimate, including testing the customer attrition rate, revenue
growth, EBITDA margin that form the basis of the forecasted
results, and the discount rate. Additionally, we compared the
significant assumptions to current industry, market and
economic trends, to the historical results of the acquired
business, and to the Company’s budgets and forecasts, in
these
addition
assumptions. We also evaluated
the
Company’s disclosures included in Note 4 in relation to these
acquisition matters.
to performing sensitivity analyses over
the adequacy of
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1986.
New York, New York
February 21, 2024
F-3
Nasdaq, Inc.
Consolidated Balance Sheets
(in millions, except share and par value amounts)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Default funds and margin deposits (including restricted cash and cash equivalents of $6,645 and $6,470,
respectively)
Financial investments
Receivables, net
Other current assets
Total current assets
Property and equipment, net
Goodwill
Intangible assets, net
Operating lease assets
Other non-current assets
Total assets
Liabilities
Current liabilities:
Accounts payable and accrued expenses
Section 31 fees payable to SEC
Accrued personnel costs
Deferred revenue
Other current liabilities
Default funds and margin deposits
Short-term debt
Total current liabilities
Long-term debt
Deferred tax liabilities, net
Operating lease liabilities
Other non-current liabilities
Total liabilities
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 900,000,000 shares authorized, shares issued: 598,014,520 at December 31, 2023
and 513,157,630 at December 31, 2022; shares outstanding: 575,159,336 at December 31, 2023 and 491,592,491
at December 31, 2022
Additional paid-in capital
Common stock in treasury, at cost: 22,855,184 shares at December 31, 2023 and 21,565,139 shares at December
31, 2022
Accumulated other comprehensive loss
Retained earnings
Total Nasdaq stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to consolidated financial statements.
F-4
$
$
$
$
453 $
20
7,275
188
929
231
9,096
576
14,112
7,443
402
665
32,294 $
332 $
84
303
594
146
7,275
291
9,025
10,163
1,642
417
220
21,467
6
5,496
(587)
(1,924)
7,825
10,816
11
10,827
32,294 $
502
22
7,021
181
677
201
8,604
532
8,099
2,581
444
608
20,868
185
243
243
357
122
7,021
664
8,835
4,735
456
452
226
14,704
5
1,445
(515)
(1,991)
7,207
6,151
13
6,164
20,868
Revenues:
Capital Access Platforms
Financial Technology
Market Services
Other revenues
Total revenues
Transaction-based expenses:
Transaction rebates
Brokerage, clearance and exchange fees
Revenues less transaction-based expenses
Operating expenses:
Compensation and benefits
Professional and contract services
Computer operations and data communications
Occupancy
General, administrative and other
Marketing and advertising
Depreciation and amortization
Regulatory
Merger and strategic initiatives
Restructuring charges
Total operating expenses
Operating income
Interest income
Interest expense
Net gain on divestiture of business
Other income (loss)
Net income (loss) from unconsolidated investees
Income before income taxes
Income tax provision
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Nasdaq
Per share information:
Basic earnings per share
Diluted earnings per share
Cash dividends declared per common share
Nasdaq, Inc.
Consolidated Statements of Income
(in millions, except per share amounts)
Year Ended December 31,
2023
2022
2021
$
1,770 $
1,099
3,156
39
6,064
1,682 $
864
3,632
48
6,226
(1,838)
(331)
3,895
(2,092)
(552)
3,582
1,082
128
233
129
113
47
323
34
148
80
2,317
1,578
115
(284)
—
(1)
(7)
1,401
344
1,057
2
1,059 $
2.10 $
2.08 $
0.86 $
1,003
140
207
104
125
51
258
33
82
15
2,018
1,564
7
(129)
—
2
31
1,475
352
1,123
2
1,125 $
2.28 $
2.26 $
0.78 $
$
$
$
$
1,566
772
3,471
77
5,886
(2,168)
(298)
3,420
938
144
186
109
85
57
278
64
87
31
1,979
1,441
1
(125)
84
81
52
1,534
347
1,187
—
1,187
2.38
2.35
0.70
See accompanying notes to consolidated financial statements.
F-5
Nasdaq, Inc.
Consolidated Statements of Comprehensive Income
(in millions)
Net income
Other comprehensive income (loss):
Foreign currency translation gains (losses)
Income tax benefit (expense)
Foreign currency translation, net
(1)
Net unrealized gain from cash flow hedges
Employee benefit plan adjustment gains (losses)
Employee benefit plan income tax provision
Employee benefit plan, net
Total other comprehensive income (loss), net of tax
Comprehensive income
Comprehensive loss attributable to noncontrolling interests
Comprehensive income attributable to Nasdaq
____________
(1)
Primarily relates to the tax effect of unrealized gains and losses on Euro denominated notes.
Year Ended December 31,
2023
2022
2021
$
1,057 $
1,123 $
1,187
39
18
57
2
11
(3)
8
(375)
(32)
(407)
—
5
(2)
3
67
1,124
2
1,126 $
(404)
719
2
721 $
$
(176)
(42)
(218)
—
(1)
—
(1)
(219)
968
—
968
See accompanying notes to consolidated financial statements.
F-6
Consolidated Statements of Changes in Stockholders’ Equity
(in millions)
Nasdaq, Inc.
2023
Shares
492
86
(5)
—
3
—
—
1
(2)
$
5
1
6
1,445
(269)
—
122
—
4,169
29
5,496
(515)
(72)
(587)
(1,991)
67
(1,924)
7,207
1,059
(441)
7,825
10,816
13
(2)
11
Year Ended December 31,
2022
Shares
2021
$
Shares
495
—
(9)
(7)
3
—
—
19
(1)
500
—
(5)
(6)
3
—
—
1
(1)
5
—
5
1,949
(308)
(325)
106
—
—
23
1,445
(437)
(78)
(515)
(1,587)
(404)
(1,991)
6,465
1,125
(383)
7,207
6,151
10
3
13
$
5
—
5
2,544
(468)
(475)
90
1
—
257
1,949
(376)
(61)
(437)
(1,368)
(219)
(1,587)
5,628
1,187
(350)
6,465
6,395
3
7
10
Common stock
Beginning balance
Acquisition-related stock issuance
Ending balance
Additional paid-in capital
Beginning balance
Share repurchase program
ASR agreement
Share-based compensation
Stock option exercises, net
Acquisition-related stock issuance
Other issuances of common stock, net
Ending balance
Common stock in treasury, at cost
Beginning balance
Other employee stock activity
Ending balance
Accumulated other comprehensive loss
Beginning balance
Other comprehensive income (loss)
Ending balance
Retained earnings
Beginning balance
Net income attributable to Nasdaq
Cash dividends declared and paid
Ending balance
Total Nasdaq stockholders’ equity
Noncontrolling interests
Beginning balance
Net activity related to noncontrolling interests
Ending balance
Total Equity
575 $
10,827
492 $
6,164
500 $
6,405
See accompanying notes to consolidated financial statements.
F-7
Nasdaq, Inc.
Consolidated Statements of Cash Flows
(in millions)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation
Deferred income taxes
Extinguishment of debt and bridge fees
Net gain on divestiture of business
Non-cash restructuring charges
Net (income) loss from unconsolidated investees
Operating lease asset impairments
Other reconciling items included in net income
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net
Other assets
Accounts payable and accrued expenses
Section 31 fees payable to SEC
Accrued personnel costs
Deferred revenue
Other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of securities
Proceeds from sales and redemptions of securities
Proceeds from divestiture of business, net of cash divested
Acquisition of businesses, net of cash and cash equivalents acquired
Purchases of property and equipment
Investments related to default funds and margin deposits, net
Other investing activities
(1)
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from (repayments of) commercial paper, net
Repayments of debt and credit commitment
Payment of debt extinguishment cost and bridge fees
Proceeds from issuances of debt, net of issuance costs
Repurchases of common stock
ASR agreement
Dividends paid
Proceeds received from employee stock activity and other issuances
Payments related to employee shares withheld for taxes
Default funds and margin deposits
Other financing activities
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents, restricted cash and cash equivalents at beginning of period
Cash and cash equivalents, restricted cash and cash equivalents at end of period
Reconciliation of Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash and cash equivalents (default funds and margin deposits)
Total
Supplemental Disclosure Cash Flow Information
Interest paid
Income taxes paid, net of refund
Year Ended December 31,
2023
2022
2021
$
1,057 $
1,123 $
1,187
323
122
68
25
—
12
7
13
30
3
9
149
(160)
13
88
(63)
1,696
(712)
719
—
(5,766)
(158)
(74)
(3)
(5,994)
(371)
(260)
(25)
5,608
(269)
—
(441)
29
(72)
22
(1)
4,220
202
258
106
38
16
—
—
(31)
—
28
(101)
98
19
181
—
16
(45)
1,706
(322)
320
—
(41)
(152)
211
33
49
238
(1,097)
(16)
541
(308)
(325)
(383)
23
(78)
2,440
1
1,036
(1,293)
124
6,994
7,118 $
453 $
20
6,645
7,118 $
177 $
254 $
1,498
5,496
6,994 $
502 $
22
6,470
6,994 $
116 $
274 $
$
$
$
$
$
278
90
94
33
(84)
—
(52)
—
6
(6)
(140)
(17)
(162)
28
106
(278)
1,083
(316)
285
190
(2,430)
(163)
(132)
(87)
(2,653)
420
(804)
(33)
826
(468)
(475)
(350)
26
(61)
2,330
7
1,418
(331)
(483)
5,979
5,496
393
29
5,074
5,496
118
501
__________________________
(1)
Includes purchases and proceeds from sales and redemptions related to the default funds and margin deposits of our clearing operations. For further information, see "Default Fund Contributions and
Margin Deposits," within Note 15, "Clearing Operations."
See accompanying notes to consolidated financial statements.
F-8
Nasdaq, Inc.
Notes to Consolidated Financial Statements
1. ORGANIZATION AND NATURE OF OPERATIONS
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
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.
to deliver world-leading platforms
improve
that
the
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 three
business segments: Capital Access Platforms, Financial Technology and
Market Services.
For further discussion of our businesses, see “Products and Services,” of “Part
1, Item 1. Business.”
Capital Access Platforms
Our Capital Access Platforms segment includes Data & Listing Services,
Index and Workflow & Insights.
Our Data business distributes historical and real-time market data to the sell-
side, the institutional investing community, retail online brokers, proprietary
trading firms and other venues, as well as internet portals and data distributors.
Our data products can enhance transparency of market activity within our
exchanges and provide critical information to professional and non-
professional investors globally.
Our Listing Services business operates in the U.S. and Europe on a variety of
listing platforms around the world to provide multiple global capital raising
solutions for public companies. Our main listing markets are The Nasdaq
Stock Market and the Nasdaq Nordic and Nasdaq Baltic exchanges. Through
Nasdaq First North, our Nordic and Baltic operations also offer alternative
marketplaces for smaller companies and growth companies.
As of December 31, 2023, there were 4,044 total listings on The Nasdaq Stock
Market, including 600 ETPs. The combined market capitalization was
approximately $27.2 trillion. In Europe, the Nasdaq Nordic and Nasdaq Baltic
exchanges, together with Nasdaq First North, were home to 1,218 listed
companies with a combined market capitalization of approximately $2.1
trillion.
Our Index business develops and licenses Nasdaq-branded indices and
financial products. We also license cash-settled options, futures and options on
futures on our indices. As of December 31, 2023, 388 ETPs listed on 27
exchanges in over 20 countries tracked a Nasdaq index and accounted for
$473 billion in AUM.
investment decisions, deploy
Workflow & Insights
includes our analytics and corporate solutions
businesses. Our analytics business provides asset managers, investment
consultants and institutional asset owners with information and analytics to
their resources more
make data-driven
productively, and provide liquidity solutions for private funds. Through our
eVestment and Solovis solutions, we provide a suite of cloud-based solutions
that help institutional investors and consultants conduct pre-investment due
diligence, and monitor their portfolios post-investment. The eVestment
platform also enables asset managers to efficiently distribute information
about their firms and funds to asset owners and consultants worldwide.
Through our Solovis platform, endowments, foundations, pensions and family
offices transform how they collect and aggregate investment data, analyze
portfolio performance, model and predict future outcomes, and share
meaningful portfolio insights with key stakeholders. The Nasdaq Fund
Network and Nasdaq Data Link are additional platforms in our suite of
investment data analytics offerings and data management tools.
Our corporate solutions business includes our Investor Relations Intelligence,
ESG Solutions and Governance Solutions products, which serve both public
and private companies and organizations. Our public company clients can be
companies listed on our exchanges or other U.S. and global exchanges. Our
private company clients include a diverse group of organizations ranging from
family-owned companies, government organizations, law firms, privately held
entities, and various non-profit organizations to hospitals and healthcare
systems. We help organizations enhance their ability to understand and expand
their global shareholder base, improve corporate governance, and navigate the
evolving ESG landscape through our suite of advanced technology, analytics,
reporting and consulting services.
Financial Technology
Financial Technology comprises Financial Crime Management Technology,
Regulatory Technology and Capital Markets Technology solutions.
Financial Crime Management Technology includes our Verafin solution, a
cloud-based anti-financial crime management platform, which helps financial
institutions detect, investigate, and report money laundering and financial
fraud.
F-9
Regulatory Technology comprises our surveillance solutions and AxiomSL.
Our surveillance solutions are designed for brokers and other market
participants to assist them in complying with market rules, regulations as well
as regulators and exchanges for surveillance. AxiomSL is a global leader in
risk data management and regulatory reporting solutions for the financial
industry, including banks, broker dealers and asset managers. Its unique
enterprise data management platform delivers data lineage, risk aggregation,
reconciliation, validation and audit
analytics, workflow automation,
functionality, as well as disclosures. AxiomSL’s platform supports compliance
across a wide range of global and local regulations.
solutions provider and partner
Capital Markets Technology includes market technology, trade management
services and Calypso. Our market technology business is a leading global
to exchanges, clearing
technology
organizations, central securities depositories, regulators, banks, brokers, buy-
side firms and corporate businesses. Our market technology solutions are
utilized by leading markets in North America, Europe and Asia as well as
emerging markets in the Middle East, Latin America, and Africa. Our trade
management services provides market participants with a wide variety of
alternatives for connecting to and accessing our markets for a fee. Our
marketplaces may be accessed via a number of different protocols used for
quoting, order entry, trade reporting and connectivity to various data feeds. We
also provide colocation services to market participants, whereby we offer
firms cabinet space and power to house their own equipment and servers
within our data centers. Additionally, we offer a number of wireless
connectivity offerings between select data centers using millimeter wave and
microwave technology. In June 2022, we completed the wind-down of our
Nordic broker services business. Calypso is a leading provider of front-to-
back technology solutions for the financial markets. The Calypso platform
provides customers with a single platform designed from the outset to enable
consolidation, innovation and growth.
Market Services
Our Market Services segment includes revenues from equity derivatives
trading, cash equity trading, Nordic fixed income trading & clearing, Nordic
commodities and U.S. Tape plans data. We operate multiple exchanges and
other marketplace facilities across several asset classes, including derivatives,
commodities, cash equity, debt, structured products and ETPs. In addition, in
certain countries where we operate exchanges, we also provide clearing,
settlement and central depository services. In June 2023, we entered into an
agreement to sell our European energy trading and clearing business, subject
to regulatory approval. Beginning in the third quarter of 2023, revenues from
this business are reflected in Other Revenues in the Consolidated Statements
of Income for all periods, and in our Corporate segment for our segment
disclosures. Additionally, certain data revenues from this business that were
previously included in our Capital Access Platforms segment are also reflected
in Other Revenues in the Consolidated Statements of Income for all
periods, and in our Corporate segment for our segment disclosures.
Our transaction-based platforms provide market participants with the ability to
access, process, display and integrate orders and quotes. The platforms allow
the routing and execution of buy and sell orders as well as the reporting of
transactions, providing fee-based revenues.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The consolidated financial statements are prepared in accordance with U.S.
GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and
other entities in which Nasdaq has a controlling financial interest. When we
do not have a controlling interest in an entity but exercise significant influence
over the entity’s operating and financial policies, such investment is accounted
for under the equity method of accounting. We recognize our share of earnings
or losses of an equity method investee based on our ownership percentage.
See “Equity Method Investments,” of Note 6, “Investments,” for further
discussion of our equity method investments.
The accompanying consolidated financial statements reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
results. These adjustments are of a normal recurring nature. All significant
intercompany accounts and
in
consolidation.
transactions have been eliminated
Certain prior year amounts have been reclassified to conform to the current
year presentation.
Use of Estimates
In preparing our consolidated financial statements, we make assumptions,
judgments and estimates that can have a significant impact on our revenue,
operating income and net income, as well as on the value of certain assets and
liabilities in our consolidated balance sheets. At least quarterly, we evaluate
our assumptions, judgments and estimates, and make changes as deemed
necessary.
Foreign Currency
Foreign denominated assets and liabilities are remeasured into the functional
currency at exchange rates in effect at the balance sheet date and recorded
through the income statement. Gains or losses resulting from foreign currency
transactions are remeasured using the rates on the dates on which those
elements are recognized during the period, and are included in general,
administrative and other expense in the Consolidated Statements of Income.
Translation gains or losses resulting from translating our subsidiaries’
financial statements from the local functional currency to the reporting
currency, net of tax, are included in accumulated other comprehensive loss
within stockholders’ equity in the Consolidated Balance Sheets. Assets and
liabilities are translated at the balance sheet date while revenues and expenses
are translated at the date the transaction occurs or at an applicable average
rate.
F-10
Cash and Cash Equivalents
Cash and cash equivalents include all non-restricted cash in banks and highly
liquid investments with original maturities of 90 days or less at the time of
purchase. Such equivalent investments included in cash and cash equivalents
in the Consolidated Balance Sheets were $122 million as of December 31,
2023 and $242 million as of December 31, 2022. Cash equivalents are carried
at cost plus accrued interest, which approximates fair value due to the short
maturities of these investments.
Restricted Cash
Restricted cash and cash equivalents, which was $20 million as of December
31, 2023 and $22 million as of December 31, 2022, is restricted from
withdrawal due to a contractual or regulatory requirement or not available for
general use and as such is classified as restricted in the Consolidated Balance
Sheets. As of December 31, 2023 and 2022, restricted cash and cash
equivalents primarily includes funds held for regulatory capital for our trading
and clearing businesses.
Default Funds and Margin Deposits
Nasdaq Clearing members’ cash contributions are included in default funds
and margin deposits in the Consolidated Balance Sheets as both a current asset
and a current liability. These balances may fluctuate over time due to changes
in the amount of deposits required and whether members choose to provide
cash or non-cash contributions. Non-cash contributions include highly rated
government debt securities that must meet specific criteria approved by
Nasdaq Clearing. Non-cash contributions are pledged assets that are not
recorded in the Consolidated Balance Sheets as Nasdaq Clearing does not take
legal ownership of these assets and the risks and rewards remain with the
clearing members.
Receivables, net
Our receivables are concentrated with our customers which primarily include
corporate clients, investment managers, banks, brokers, and exchange
operators. Receivables are shown net of allowance for credit losses. The
allowance is maintained at a level that management believes to be sufficient to
absorb expected losses over the life of our accounts receivable portfolio. The
allowance is increased by the provision for bad debts, which is included in
general, administrative and other expense in the Consolidated Statements of
Income, and decreased by the amount of charge-offs, net of recoveries.
The allowance is primarily based on an aging methodology. This method
applies loss rates based on historical loss information which is disaggregated
by business segment and, as deemed necessary, is adjusted for other factors
and considerations that could impact collectibility. Additionally, we consider
corporate default rate averages over an extended period as compared to the
period covered by our historical loss data and include an adjustment to
historical loss percentages for current conditions and expected future
conditions if necessary.
In circumstances where a specific customer’s inability to meet its financial
obligations is known (i.e., bankruptcy filings), we determine whether a
specific provision for bad debts is required. Accounts receivable are written-
off against the allowance when collection efforts cease. Due to changing
economic, business and market conditions, we review the allowance quarterly
and make changes to the allowance through the provision for bad debts as
appropriate. If circumstances change (i.e., higher than expected defaults or an
unexpected material adverse change in a major customer’s ability to pay), our
estimates of recoverability could be reduced by a material amount. The total
allowance netted against receivables in the Consolidated Balance Sheets was
$18 million as of December 31, 2023 and $15 million as of December 31,
2022. Any provision for bad debt or write-off recorded during the year was
immaterial.
Investments
Purchases and sales of investment securities are recognized on settlement date.
Financial Investments
Financial investments are comprised of trading securities bought principally to
meet regulatory capital requirements mainly for our clearing operations at
Nasdaq Clearing. These investments are classified as trading securities as they
are generally sold in the near term, with changes in fair value included in other
income in the Consolidated Statements of Income.
Fair value is generally obtained from third-party pricing sources. When
available, quoted market prices are used to determine fair value. If quoted
market prices are not available, fair values are estimated using pricing models
with observable market inputs. The inputs to the valuation models vary by the
type of security being priced but are typically benchmark yields, reported
trades, broker-dealer quotes, and prices of similar assets. Pricing models
generally do not entail material subjectivity because the methodologies
employed use inputs observed from active markets. See “Fair Value
Measurements” below for further discussion of fair value measures.
Equity Securities
Investments in equity securities with readily determinable fair values (other
than those accounted for under the equity method or those that result in
consolidation of the investee) are measured at fair value and any changes in
fair value are recognized in other income in the Consolidated Statements of
Income.
Equity investments without readily determinable fair values are accounted for
under the measurement alternative, under which investments are measured at
cost, less any impairment, plus or minus changes resulting from observable
price changes in orderly transactions for the identical or a similar investment
of the same issuer on a prospective basis. We assess relevant transactions that
occur on or before the balance sheet date to identify observable price changes,
and
F-11
we regularly monitor these investments to evaluate whether there is an
indication that the investment is impaired, based on the share price from the
investee’s latest financing round, the performance of the investee in relation to
its own operating targets, the investee’s liquidity and cash position, and
general market conditions. If a qualitative assessment indicates that the
security is impaired, Nasdaq will estimate the fair value of the security and, if
the fair value is less than the carrying amount of the security, will recognize an
impairment loss in net income equal to the difference in the period the
impairment occurs. See Note 6, “Investments,” for further discussion of our
equity securities.
For the years ended December 31, 2023, 2022 and 2021, no material
adjustments were made to the carrying value of our equity securities.
Our investments in equity securities are included in other non-current assets in
the Consolidated Balance Sheets, as we intend to hold these investments for
more than one year.
Equity Method Investments
In general, the equity method of accounting is used when we own 20% to 50%
of the outstanding voting stock of a company or when we are able to exercise
significant influence over the operating and financial policies of a company.
We have certain investments in which we have determined that we have
significant influence and as such account for the investments under the equity
method of accounting. We record our estimated pro-rata share of earnings or
losses each reporting period and record any dividends as a reduction in the
investment balance. We evaluate our equity method investments for other-
than-temporary declines in value by considering a variety of factors such as
the earnings capacity of the investment and the fair value of the investment
compared to its carrying amount. In addition, for investments where the
market value is readily determinable, we consider the underlying stock price.
If the estimated fair value of the investment is less than the carrying amount
and management considers the decline in value to be other than temporary, the
excess of the carrying amount over the estimated fair value is recognized in
net income in the period the impairment occurs. See Note 6, “Investments,”
for further discussion of our equity method investments.
No material impairments were recorded to reduce the carrying value of our
equity method investments in 2023, 2022 or 2021.
Derivative Financial Instruments and Hedging Activities
Non-Designated Derivatives
We use foreign exchange forward contracts to manage foreign currency
exposure of intercompany loans, accounts receivable, accounts payable and
other balance sheet items. These contracts are not designated as hedges for
financial reporting purposes. The change in fair value of these contracts is
recognized in general, administrative and other
expense in the Consolidated Statements of Income and offsets the foreign
currency exposure.
As of December 31, 2023 and 2022, the fair value amounts of our derivative
instruments were immaterial.
Net Investment Hedges
Net assets of our foreign subsidiaries are exposed to volatility in foreign
currency exchange rates. We may utilize net investment hedges to offset the
translation adjustment arising from re-measuring our investment in foreign
subsidiaries.
Our 2029, 2030, 2032 and 2033 Notes have been designated as a hedge of our
net investment in certain foreign subsidiaries to mitigate the foreign exchange
risk associated with certain investments in these subsidiaries. Any increase or
decrease related to the remeasurement of the 2029, 2030, 2032 and 2033
Notes into U.S. dollars is recorded in accumulated other comprehensive loss
within stockholders’ equity in the Consolidated Balance Sheets. See “Net
Investment Hedge” of Note 9, “Debt Obligations,” for further discussion.
Property and Equipment, net
Property and equipment, including leasehold improvements, are carried at cost
less asset impairment charges and accumulated depreciation and amortization.
Depreciation and amortization are recognized using the straight-line method
over the estimated useful lives of the related assets, which range from 10 to 40
years for buildings and improvements, 3 to 5 years for data processing
equipment, and 5 to 10 years for furniture and equipment.
Leasehold improvements are amortized using the straight-line method over the
shorter of their estimated useful lives or the remaining term of the related
lease.
We develop systems solutions for both internal and external use. Certain costs
incurred in connection with developing or obtaining internal use software are
capitalized. In addition, certain costs of computer software to be sold, leased,
or otherwise marketed as a separate product or as part of a product or process
are capitalized beginning when a product’s technological feasibility has been
established and ending when a product is available for general release.
Technological feasibility is established upon completion of a detailed program
design or, in its absence, completion. Prior to reaching technological
feasibility, all costs are charged to expense. Unamortized capitalized costs are
included in data processing equipment and software, within property and
equipment, net in the Consolidated Balance Sheets. Capitalized software costs
are amortized on a straight-line basis over the estimated useful lives of the
software, generally 5 to 10 years. Amortization of these costs is included in
depreciation and amortization expense in the Consolidated Statements of
Income.
Implementation costs incurred in a cloud computing arrangement that is a
service contract are capitalized as a prepaid asset, included in other assets in
our Consolidated Balance Sheets, and are amortized over the expected service
F-12
period in the relevant expense category in the Consolidated Statements of
Income.
Property and equipment are subject to impairment testing when events or
conditions indicate that the carrying amount of an asset may not be
recoverable. The carrying amount of an asset is not recoverable if it exceeds
the sum of the undiscounted cash flows expected to result from the use and
eventual disposition of the asset, or for internal use software, the fair value of
the asset. Any required impairment loss is measured as the amount by which
the carrying amount of the asset exceeds its fair value and is recorded as a
reduction in the carrying amount of the related asset and a charge to operating
results.
See Note 7, “Property and Equipment, net,” for further discussion.
Leases
At inception, we determine whether a contract is or contains a lease. We have
operating leases which are primarily real estate leases for our U.S. and
European headquarters and for general office space. As of December 31,
2023, these leases have varying lease terms with remaining maturities ranging
up to 13 years. Operating lease balances are included in operating lease assets,
other current liabilities, and operating lease liabilities in our Consolidated
Balance Sheets. We do not have any leases classified as finance leases.
Operating lease assets represent our right to use an underlying asset for the
lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease assets and liabilities are
recognized at commencement date based on the present value of lease
payments over the lease term. Since our leases do not provide an implicit rate,
we use our incremental borrowing rate based on the estimated rate of interest
for collateralized borrowing over a similar term of the lease payments at
commencement date in determining the present value of lease payments. The
operating lease asset also includes any lease payments made and excludes
lease incentives. Our lease terms include options to extend or terminate the
lease when we are reasonably certain that we will exercise that option. Lease
expense for lease payments is recognized on a straight-line basis over the lease
term. Certain of our lease agreements include rental payments adjusted
periodically for inflation based on an index or rate. These payments are
included in the initial measurement of the operating lease liability and
operating lease asset. However, rental payments that are based on a change in
an index or a rate are considered variable lease payments and are expensed as
incurred.
We have lease agreements with lease and non-lease components, which are
accounted for as a single performance obligation to the extent that the timing
and pattern of transfer are similar for the lease and non-lease components and
the lease component qualifies as an operating lease. We do not recognize lease
liabilities and operating lease assets for leases with a term of 12 months or
less. We recognize these lease payments on a straight-line basis over the lease
term.
We review our operating lease assets for potential impairment when there is
evidence that events or changes in circumstances indicate that the carrying
amount of the asset may not be recoverable. We fully impair our lease assets
for locations that we vacate with no intention to sublease.
See Note 16, “Leases,” for further discussion.
Goodwill and Indefinite-Lived Intangible Assets
identifiable
intangibles, such as customer
Goodwill represents the excess of purchase price over the value assigned to
the net assets, including identifiable intangible assets, of a business acquired.
Goodwill is allocated to our reporting units based on the assignment of the fair
values of each reporting unit of the acquired company. We recognize
specifically
relationships,
technology, exchange and clearing registrations, trade names and licenses
when a specific right or contract is acquired. Goodwill and intangible assets
deemed to have indefinite useful lives, primarily exchange and clearing
registrations, are not amortized but instead are tested for impairment at least
annually as of October 1 and more frequently whenever events or changes in
circumstances indicate that the fair value of the asset may be less than its
carrying amount, such as changes in the business climate, poor indicators of
operating performance or the sale or disposition of a significant portion of a
reporting unit. When testing goodwill and indefinite-lived intangible assets for
impairment, we have the option of first performing a qualitative assessment to
determine whether it is more likely than not that the fair value of a reporting
unit or indefinite-lived intangible asset is less than their respective carrying
amounts as the basis to determine if it is necessary to perform a quantitative
impairment test. If we choose not to complete a qualitative assessment, or if
the initial assessment indicates that it is more likely than not that the carrying
amount of a reporting unit or the carrying amount of an indefinite-lived
intangible asset exceeds their respective estimated fair values, a quantitative
test is required.
In performing a quantitative impairment test, we compare the fair value of
each reporting unit and indefinite-lived intangible asset with their respective
carrying amounts. If the carrying amounts of the reporting unit or the
indefinite-lived intangible asset exceed their respective fair values, an
impairment charge is recognized in an amount equal to the difference, limited
to the total amount of goodwill allocated to that reporting unit or the total
carrying value of the indefinite-lived intangible asset.
There was no impairment of goodwill or indefinite-lived intangible assets for
the years ended December 31, 2023, 2022 and 2021. Future disruptions to our
business and events, such as prolonged economic weakness or unexpected
significant declines in operating results of any of our reporting units or
businesses, may result in goodwill or indefinite-lived intangible asset
impairment charges in the future.
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Other Long-Lived Assets
We review our other long-lived assets, such as finite-lived intangible assets
and property and equipment, for potential impairment when there is evidence
that events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The carrying amount of an asset is not
recoverable if it exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. Fair value of finite-
lived intangible assets and property and equipment is based on various
valuation techniques. Any required impairment loss is measured as the amount
by which the carrying amount of the asset exceeds its fair value and is
recorded as a reduction in the carrying amount of the related asset and a
charge to operating results.
There were no material finite-lived impairment charges in 2023 and 2022. We
recorded pre-tax, non-cash finite-lived intangible assets impairment charges of
$14 million in 2021 related to a finite-lived intangible asset for customer
relationships associated with the wind down of a previous acquisition. In
addition, we also recorded pre-tax, non-cash property and equipment asset
impairment charges of $12 million in 2023, $8 million in 2022, and $4 million
in 2021.
Revenue Recognition and Transaction-Based Expenses
Revenue From Contracts With Customers
Our revenue recognition policies under “Revenue from Contracts with
Customers (Topic 606),” are described in the following paragraphs.
Contract Balances
Substantially all of our revenues are considered to be revenues from contracts
with customers. The related accounts receivable balances are recorded in our
Consolidated Balance Sheets as receivables which are net of an allowance for
credit losses of $18 million as of December 31, 2023 and $15 million as of
December 31, 2022. The activity during the period relating to changes in the
allowance for credit losses was immaterial. We do not have obligations for
warranties, returns or refunds to customers.
The majority of our contracts with customers do not have significant variable
consideration. We do not have a material amount of revenues recognized from
performance obligations that were satisfied in prior periods. We do not
provide disclosures about
to unsatisfied
performance obligations if contract durations are less than one year.
transaction price allocated
For contract durations that are one-year or greater, the portion of transaction
price allocated to unsatisfied performance obligations is included in Note 3,
“Revenue From Contracts With Customers.” Our deferred revenue primarily
arises from contract liabilities related to our fees for annual and initial listings,
workflow & insights, regulatory technology, and capital markets technology
contracts. Deferred revenue is the only significant contract asset or liability as
of December 31, 2023 and 2022. See Note 8, “Deferred Revenue,” for our
discussion of deferred revenue balances, activity, and expected timing of
recognition. See “Revenue Recognition” below for further descriptions of our
revenue contracts.
Sales commissions earned by our sales force are considered incremental and
recoverable costs of obtaining a contract with a customer. These costs are
deferred and amortized on a straight-line basis over the period of benefit that
we have determined to be the contract term or estimated service period. Sales
commissions for renewal contracts are deferred and amortized on a straight-
line basis over the related contractual renewal period. Amortization expense is
included in compensation and benefits expense in the Consolidated Statements
of Income. The balance of deferred costs and related amortization expense are
not material to our consolidated financial statements. Sales commissions are
expensed when incurred if contract durations are one year or less. Sales taxes
are excluded from transaction prices.
Certain judgments and estimates were used in the identification and timing of
satisfaction of performance obligations and
the related allocation of
transaction price and are discussed below. We believe that these represent a
faithful depiction of the transfer of services to our customers.
Revenue Recognition
Our primary revenue contract classifications are described below. Revenues
are categorized based on similar economic characteristics of the nature,
amount, timing and uncertainty of our revenues and cash flows.
Capital Access Platforms
Data and Listings
Data revenues are earned from U.S. and European proprietary data products.
We earn revenues primarily based on the number of data subscribers and
distributors of our data. Data revenues are subscription-based and are
recognized on a monthly basis.
Listing services revenues primarily include initial listing fees and annual
renewal fees. Under Topic 606, the initial listing fee is allocated to multiple
performance obligations including initial and subsequent listing services and
corporate solutions products (when a company qualifies to receive certain
complimentary IPO products under the applicable Nasdaq rule), as well as a
customer’s material right to renew the option to list on our exchanges. In
performing this allocation, the standalone selling price of the performance
obligations is based on the initial and annual listing fees and the standalone
selling price of the IPO complimentary services is based on its market value.
All listing fees are billed upfront and the identified performance obligations
are satisfied over time since the customer receives and consumes the benefit as
Nasdaq provides the listing service. The amount of revenue related to the IPO
complimentary services performance obligation is recognized ratably over a
three-year period, which is based on contract terms, with the remaining
revenue recognized ratably over six years which is based on our historical
listing experience and projected future listing duration.
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In the U.S., annual renewal fees are charged to listed companies based on their
number of outstanding shares at the end of the prior year and are recognized
ratably over the following twelve-month period since the customer receives
and consumes the benefit as Nasdaq provides the service. Annual fees are
charged to newly listed companies on a pro-rata basis, based on outstanding
shares at the time of listing and recognized over the remainder of the year.
European annual renewal fees, which are received from companies listed on
our Nasdaq Nordic and Nasdaq Baltic exchanges and Nasdaq First North, are
directly related to the listed companies’ market capitalization on a trailing
twelve-month basis and are recognized ratably over the following twelve-
month period since the customer receives and consumes the benefit as Nasdaq
provides the service.
Index
We develop and license Nasdaq-branded indices and financial products and
provide index data products for third-party clients. Revenues primarily include
license fees from these branded indices and financial products in the U.S. and
abroad. We primarily have two types of license agreements: asset-based
licenses and transaction-based licenses. Asset-based licenses are generally
renewable agreements. Customers are charged based on a percentage of AUM
for licensed products, per the agreement, on a monthly or quarterly
basis. These revenues are recognized over the term of the license agreement
since the customer receives and consumes the benefit as Nasdaq provides the
service. Revenue from index data subscriptions are recognized on a monthly
basis. Transaction-based
renewable
agreements. Customers are charged based on transaction volume or a
minimum contract amount, or both. If a customer is charged based on
transaction volume, we recognize revenue when the transaction occurs. If a
customer is charged based on a minimum contract amount, we recognize
revenue on a pro-rata basis over the licensing term since the customer receives
and consumes the benefit as Nasdaq provides the service.
generally
licenses
also
are
Workflow & Insights
Analytics revenues are earned from investment content and analytics products.
We earn revenues primarily based on the number of content and analytics
subscribers and distributors.
Subscription agreements are generally one to three years in term, payable in
advance, and provide for automatic renewal. Subscription-based revenues are
recognized over time on a ratable basis over the contract period beginning on
the date that our service is made available to the customer since the customer
receives and consumes the benefit as Nasdaq provides the service.
Our corporate solutions business includes our Investor Relations Intelligence,
ESG Services and Governance Solutions businesses, which serve both public
and private companies and organizations.
Corporate solutions revenues primarily include subscription and transaction-
based income from our investor relations intelligence and governance
solutions products and services. Subscription-based revenues earned are
recognized over time on a ratable basis over the contract period beginning on
the date that our service is made available to the customer since the customer
receives and consumes the benefit as Nasdaq provides the service. Generally,
fees are billed in advance and the contract provides for automatic renewal. As
part of subscription agreements, customers can also be charged usage fees
based upon actual usage of the services provided. Revenues from usage fees
are recognized at a point in time when the service is provided.
Financial Technology
Financial Crime Management Technology
Our financial crime management technology solution primarily consists of
SaaS revenues. We enter into subscription agreements which allow customers
access to our cloud platform. Subscription agreements are generally three
years in term, payable in advance, with the option of automatic renewal for
some products. Subscription-based revenues are recognized over time on a
ratable basis over the contract period beginning on the date that our service is
made available to the customer since the customer receives and consumes the
benefit as Nasdaq provides the service.
Regulatory Technology
Our surveillance solutions primarily consist of SaaS revenues and we enter
into subscription agreements which allow customers access to our cloud
platform or a connection to our servers to access the software. We recognize
revenue from these agreements similarly to our revenue recognition for the
Financial Crime Management Technology agreements discussed above.
AxiomSL provides financial institutions with risk & financial regulatory
reporting and risk management solutions. The products can be offered as an
on-premise or as a cloud service agreement.
A license for on-premise software provides customers with the right to use the
software at its current state at the time made available to the customer. These
contracts generally consist of the following distinct performance obligations:
license, professional services and maintenance.
In allocating the contractual price to each performance obligation, we have
used our best estimate of the stand-alone selling price. Consideration is first
allocated to performance obligations with established stand-alone selling
prices based on observable evidence such as professional services with the
residual being split between license and maintenance.
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License revenue is recognized upfront at the point in time when the software
is made available to the customer as this is the point the user of the software
can direct the use of and obtain substantially all of the remaining benefits from
the software license. Maintenance revenue is recognized over time on a ratable
basis over the contract period beginning on the date that our service is made
available to the customer since the customer receives and consumes the
benefit as Nasdaq provides the service.
Professional services are typically billed on a time and expense basis and
revenue is recognized based on actual hours incurred. Nasdaq also offers fixed
price contract agreements and revenue is recognized using the input method to
measure progress towards complete satisfaction of the services, because the
customer simultaneously receives and consumes the benefits provided by the
Company.
AxiomSL can also be offered as a cloud service whereby the software is
hosted and managed for customers. These hosted agreements generally
include a license, hosting services and maintenance services. We have
determined that these services are not distinct in the context of the hosting
arrangement as the customer cannot benefit from the license or maintenance
without the hosting services. Cloud revenues are recognized over time on a
ratable basis over the contract period beginning on the date that our service is
made available to the customer since the customer receives and consumes the
benefit as Nasdaq provides the service.
Capital Markets Technology
Calypso’s capital market product consists of the provision of cloud-enabled,
cross-asset, front-to-back solutions for financial markets. Our Calypso product
offering includes on-premise and cloud service agreements and we recognize
revenue from these agreements similarly to our revenue recognition for the
AxiomSL agreements discussed above.
Through our trade management services, we provide market participants with
a wide variety of alternatives for connecting to and accessing our markets for
a fee. We also offer market participants colocation services, whereby we
charge firms for cabinet space and power to house their own equipment and
servers within our data centers. These participants are charged monthly fees
for cabinet space, connectivity and support in accordance with our published
fee schedules. These fees are recognized on a monthly basis when the
performance obligation is met. We also earn revenues from annual and
monthly exchange membership and registration fees. Revenues for monthly
exchange membership and registration fees are recognized on a monthly basis
as the service is provided. Revenues from annual fees for exchange
membership and registration fees are recognized ratably over the following
twelve-month period since the customer receives and consumes the benefit as
Nasdaq provides the service.
Market technology revenues primarily consist of software, license and support
revenues, SaaS revenues, and change request revenues.
We enter into long-term contracts with customers to develop customized
technology solutions, license the right to use software, and provide support
and other services to our customers. We also enter into agreements to modify
the system solutions sold by Nasdaq after delivery has occurred. In addition,
we enter into subscription agreements which allow customers to connect to
our servers to access our software.
Our long-term contracts with customers to develop customized technology
solutions, license the right to use software and provide support and other
services to our customers have multiple performance obligations. The
performance obligations are generally: (i) software license and installation
service and (ii) software support. We have determined that the software
license and installation service are not distinct as the license and the
customized installation service are inputs to produce the combined output, a
functional and integrated software system.
For contracts with multiple performance obligations, we allocate the contract
transaction price to each performance obligation using our best estimate of the
standalone selling price of each distinct good or service in the contract. In
instances where standalone selling price is not directly observable, such as
when we do not sell the product or service separately, we determine the
standalone selling price predominantly through an expected cost plus a margin
approach. For the years ended December 31, 2023, 2022 and 2021 we
recognized revenues of $75 million, $75 million and $77 million, respectively,
related to the market technology contracts described above.
Contract modifications are routine in the performance of our contracts.
Contracts are often modified to account for changes in contract specifications
or requirements. In most instances, contract modifications are for goods and
services that are not distinct, and, therefore, are accounted for as part of the
existing contract.
For our long-term contracts, payments are generally made throughout the
contract life and can be dependent on either reaching certain milestones or
paid upfront in advance of the service period depending on the stage of the
contract. For subscription agreements, contract payment terms can be
quarterly, annually or monthly, in advance. For all other contracts, payment
terms vary.
We generally recognize revenue over time as our customers simultaneously
receive and consume the benefits provided by our performance because our
customer controls the asset for which we are creating, our performance does
not create an asset with alternative use, and we have a right to payment for
performance completed to date. For these services, we recognize revenue over
time using costs incurred to date relative to total estimated costs at completion
to measure progress toward satisfying our performance obligation. Incurred
costs represent work performed, which corresponds with, and thereby depicts,
the transfer of control to the customer. Contract costs generally include labor
and direct overhead. For software support and update services, and for
F-16
subscription agreements which allow customers to connect to our servers to
access our software, we generally recognize revenue ratably over the service
period beginning on the date our service is made available to the customer
since the customer receives and consumes the benefit consistently over the
period as Nasdaq provides the services.
Accounting for our long-term contracts requires judgment relative to assessing
risks and their impact on the estimate of revenues and costs. Our estimates are
impacted by factors such as the potential for schedule and technical issues,
productivity, and the complexity of work performed. When adjustments in
estimated total contract costs are required, any changes in the estimated
revenues from prior estimates are recognized in the current period for the
effect of such change. If estimates of total costs to be incurred on a contract
exceed estimates of total revenues, a provision for the entire estimated loss on
the contract is recorded in the period in which the loss is determined.
Market Technology SaaS revenues are recognized over time on a ratable basis
over the contract period beginning on the date that our service is made
available to the customer due to the fact that the customer receives and
consumes the benefit as Nasdaq provides the service.
Market Services
Transaction-Based Trading and Clearing
Transaction-based trading and clearing includes equity derivative trading and
clearing, cash equity trading and FICC revenues. Nasdaq charges transaction
fees for trades executed on our exchanges, as well as on orders that are routed
to and executed on other market venues. Nasdaq charges clearing fees for
contracts cleared with Nasdaq Clearing.
In the U.S., transaction fees are based on trading volumes for trades executed
on our U.S. exchanges and in Europe, transaction fees are based on the
volume and value of traded and cleared contracts. In Canada, transaction fees
are based on trading volumes for trades executed on our Canadian exchange.
Nasdaq satisfies its performance obligation for trading services upon the
execution of a customer trade and clearing services when a contract is cleared,
as trading and clearing transactions are substantially complete when they are
executed and we have no further obligation to the customer at that time.
Transaction-based trading and clearing fees can be variable and are based on
trade volume tiered discounts. Transaction revenues, as well as any tiered
volume discounts, are calculated and billed monthly in accordance with our
published fee schedules. In the U.S., we also pay liquidity payments to
customers based on our published fee schedules. We use these payments to
improve the liquidity on our markets and therefore recognize those payments
as a cost of revenue.
For U.S. equity derivative trading, we credit a portion of the per share
execution charge to the market participant that provides the liquidity. For U.S.
and Canadian cash equity
trading, including for The Nasdaq Stock Market, Nasdaq PSX and Nasdaq
CXC, we credit a portion of the per share execution charge to the market
participant that provides the liquidity, and for Nasdaq BX and Nasdaq CX2,
we credit a portion of the per share execution charge to the market participant
that takes the liquidity. We record these credits as transaction rebates that are
included in transaction-based expenses in the Consolidated Statements of
Income. These transaction rebates are paid on a monthly basis and the
amounts due are included in accounts payable and accrued expenses in the
Consolidated Balance Sheets.
In the U.S., we pay Section 31 fees to the SEC for supervision and regulation
of securities markets. We pass these costs along to our customers through our
equity derivative trading and clearing fees and our cash equity trading fees.
We collect the fees as a pass-through charge from organizations executing
eligible trades on our options exchanges and our cash equity platforms and we
recognize these amounts in transaction-based expenses when incurred. Section
31 fees received are included in cash and cash equivalents in the Consolidated
Balance Sheets at the time of receipt and, as required by law, the amount due
to the SEC is remitted semiannually and recorded as Section 31 fees payable
to the SEC in the Consolidated Balance Sheets until paid. Since the amount
recorded as revenues is equal to the amount recorded as transaction-based
expenses, there is no impact on our revenues less transaction-based expenses.
As we hold the cash received until payment to the SEC, we earn interest
income on the related cash balances.
Under our Limitation of Liability Rule and procedures, we may, subject to
certain caps, provide compensation for losses directly resulting from our
systems’ actual failure to correctly process an order, quote, message or other
data into our platform. We do not record a liability for any potential claims
that may be submitted under the Limitation of Liability Rule unless they meet
the provisions required in accordance with U.S. GAAP. As such, losses arising
as a result of the rule are accrued and charged to expense only if the loss is
probable and estimable.
U.S. Tape Plans
For U.S. Tape plans, revenues are collected monthly based on published fee
schedules and distributed quarterly to the U.S. exchanges based on a formula
required by Regulation NMS that takes into account both trading and quoting
activity. These revenues are presented on a net basis as all indicators of
principal versus agent reporting under U.S. GAAP have been considered in
analyzing the appropriate presentation of the revenue sharing. The following
are primary indicators of net reporting:
• We are the administrator for the UTP plan, in addition to being a participant
in the plan. In our unique role as administrator, we facilitate the collection
and dissemination of revenues on behalf of the plan participants. As a
participant, we share in the net distribution of revenues according to the
plan on the same terms as all other plan participants.
F-17
• The operating committee of the plan, which comprises representatives from
each of the participants, including us solely in our capacity as a plan
participant, is responsible for setting the level of fees to be paid by
distributors and subscribers and taking action in accordance with the
provisions of the plan, subject to SEC approval.
• Risk of loss on the revenue is shared equally among plan participants
according to the plan.
Other Revenues
Other revenues related to our European power trading and clearing business,
following our announcement in June 2023 to sell this business, subject to
regulatory approval. Prior to June 2023, these amounts were included in our
Market Services and Capital Access Platforms segments. Other revenues also
include revenues related to our Nordic broker services business for which we
completed the wind-down in June 2022, as well as revenues associated with
our U.S. Fixed Income business, which was sold in June 2021. Prior to the
closing of the transaction, these revenues were included in our Market
Services and Capital Access Platforms segments. 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. For the
years ended December 31, 2023, 2022 and 2021, other revenues also include a
transitional services agreement associated with a divested business.
Earnings Per Share
We present both basic and diluted earnings per share. Basic earnings per share
is computed by dividing net income attributable to Nasdaq by the weighted-
average number of common shares outstanding for the period. Diluted
earnings per share is computed by dividing net income attributable to Nasdaq
by the weighted-average number of common shares and common share
equivalents outstanding during the period and reflects the assumed conversion
of all dilutive securities, which primarily consist of restricted stock, PSUs, and
employee stock options. Common share equivalents are excluded from the
computation in periods for which they have an anti-dilutive effect. Stock
options for which the exercise price exceeds the average market price over the
period are anti-dilutive and, accordingly, are excluded from the calculation.
Shares which are considered contingently issuable are included in the
computation of dilutive earnings per share on a weighted average basis when
management determines the applicable performance criteria would have been
met if the performance period ended as of the date of the relevant
computation. See Note 13, “Earnings Per Share,” for further discussion.
Pension and Post-Retirement Benefits
Pension and other post-retirement benefit plan information for financial
reporting purposes is developed using actuarial valuations. We assess our
pension and other post-retirement benefit plan assumptions on a regular basis.
In evaluating these assumptions, we consider many factors, including
evaluation of the discount rate, expected rate of return on plan assets,
mortality rate, healthcare cost trend rate, retirement age assumption, our
historical assumptions compared with actual results and analysis of current
market conditions and asset allocations. See Note 10, “Retirement Plans,” for
further discussion.
Discount rates used for pension and other post-retirement benefit plan
calculations are evaluated annually and modified to reflect the prevailing
market rates at the measurement date of a high-quality fixed-income debt
instrument portfolio that would provide the future cash flows needed to pay
the benefits included in the benefit obligations as they come due. Actuarial
assumptions are based upon management’s best estimates and judgment.
The expected rate of return on plan assets for our U.S. pension plans
represents our long-term assessment of return expectations which may change
based on significant shifts in economic and financial market conditions. The
long-term rate of return on plan assets is derived from return assumptions
based on targeted allocations for various asset classes. While we consider the
pension plans’ recent performance and other economic growth and inflation
factors, which are supported by long-term historical data, the return
expectations for the targeted asset categories represent a long-term prospective
return.
Share-Based Compensation
Nasdaq uses the fair value method of accounting for share-based awards.
Share-based awards, or equity awards, include restricted stock, PSUs, and
stock options. The fair value of restricted stock awards and PSUs, other than
PSUs granted with market conditions, is determined based on the grant date
closing stock price less the present value of future cash dividends. We estimate
the fair value of PSUs granted with market conditions using a Monte Carlo
simulation model at the date of grant. The fair value of stock options are
estimated using the Black-Scholes option-pricing model.
We generally recognize compensation expense for equity awards on a straight-
line basis over the requisite service period of the award, taking into account an
estimated forfeiture rate. Granted but unvested shares are generally forfeited
upon termination of employment.
Excess tax benefits or expense related to employee share-based payments, if
any, are recognized as income tax benefit or expense in the Consolidated
Statements of Income when the awards vest or are settled.
F-18
Nasdaq also has an ESPP that allows eligible employees to purchase a limited
number of shares of our common stock at six-month intervals, called offering
periods, at 85.0% of the lower of the fair market value on the first or the last
day of each offering period. The 15.0% discount given to our employees is
included in compensation and benefits expense in the Consolidated Statements
of Income.
See Note 11, “Share-Based Compensation,” for further discussion of our
share-based compensation plans.
Merger and Strategic Initiatives
We incur incremental direct merger and strategic initiative costs relating to
various completed and potential acquisitions, divestitures, and other strategic
opportunities. These costs generally include integration costs, as well as legal,
due diligence and other third-party transaction costs.
Fair Value Measurements
Fair value is defined as the price that would be received from selling an asset
or paid to transfer a liability, or the exit price, in an orderly transaction
between market participants at the measurement date. When determining the
fair value measurements for assets and liabilities required or permitted to be
either recorded or disclosed at fair value, we consider the principal or most
advantageous market in which we would transact, and we also consider
assumptions that market participants would use when pricing the asset or
liability. Fair value measurement establishes a hierarchy of valuation
techniques based on whether the inputs to those valuation techniques are
observable or unobservable. Observable inputs reflect market data obtained
from independent sources, while unobservable inputs reflect Nasdaq’s market
assumptions. These two types of inputs create the following fair value
hierarchy:
• Level 1 - Quoted prices for identical instruments in active markets.
• Level 2 - Quoted prices for similar instruments in active markets; quoted
prices for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
• Level 3 - Instruments whose significant value drivers are unobservable.
This hierarchy requires the use of observable market data when available.
See Note 14, “Fair Value of Financial Instruments,” for further discussion.
Tax Matters
We use the asset and liability method to determine income taxes on all
transactions recorded in the consolidated financial statements. Deferred tax
assets (net of valuation allowances) and deferred tax liabilities are presented
net by jurisdiction as either a non-current asset or liability in our Consolidated
Balance Sheets, as appropriate. Deferred tax assets and liabilities are
determined based on differences between the financial statement carrying
amounts and the tax basis of existing assets and liabilities (i.e., temporary
differences) and are measured at the enacted rates that will be in effect when
these differences are realized. If necessary, a valuation allowance is
established to reduce deferred tax assets to the amount that is more likely than
not to be realized.
In order to recognize and measure our unrecognized tax benefits, management
determines whether a tax position is more likely than not to be sustained upon
examination, including resolution of any related appeals or litigation
processes, based on the technical merits of the position. Once it is determined
that a position meets the recognition thresholds, the position is measured to
determine the amount of benefit to be recognized in the consolidated financial
statements. Interest and/or penalties related to income tax matters are
recognized in income tax expense.
Subsequent Events
We have evaluated subsequent events through the issuance date of this Annual
Report on Form 10-K.
Recent Accounting Developments
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosures.” ASU 2023-
07 requires disclosure of significant segment expenses that are regularly
provided to the chief operating decision maker ("CODM") and included
within the segment measure of profit or loss, an amount and description of its
composition for other segment items to reconcile to segment profit or loss, and
the title and position of the entity’s CODM and an explanation of how the
CODM uses the reported measure of segment profit or loss in assessing
segment performance and deciding how to allocate resources. ASU 2023-07
will be applied retrospectively and is effective for annual reporting periods in
fiscal years beginning after December 15, 2023, and interim reporting periods
in fiscal years beginning after December 31, 2024. We are currently reviewing
the impact that the adoption of ASU 2023-07 may have on our Consolidated
Financial Statements and disclosures.
F-19
3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables summarize the disaggregation of revenue by major
product and service and by segment for the years ended December 31, 2023
and 2022:
Capital Access Platforms
Data & Listing Services
Index
Workflow & Insights
Financial Technology
Financial Crime Management
Technology
Regulatory Technology
Capital Markets Technology
Market Services, net
Other revenues
Revenues less transaction-based
expenses
Year Ended December 31,
2023
2022
(in millions)
2021
$
749 $
528
493
727 $
486
469
678
459
429
223
212
664
987
39
176
130
558
988
48
104
127
541
1,005
77
$
3,895 $
3,582 $
3,420
Substantially all revenues from the Capital Access Platforms segment are
recognized over time for the years ended December 31, 2023, 2022 and 2021.
For 2023, 6.7% of the Financial Technology segment revenues were
recognized at a point in time. This relates to AxiomSL and Calypso license
revenues for the two months since acquisition. The remaining Financial
Technology revenues were recognized over time. For the years ended
December 31, 2023, 2022 and 2021 approximately 93.0%, 93.2%, and 93.6%
respectively, of Market Services revenues were recognized at a point in time
and 7.0%, 6.8% and 6.4%, respectively, were recognized over time.
Contract Balances
Substantially all of our revenues are considered to be revenues from contracts
with customers. The related accounts receivable balances are recorded in our
Consolidated Balance Sheets as receivables, which are net of allowance for
doubtful accounts of $18 million as of December 31, 2023 and $15 million as
of December 31, 2022. There were no material upward or downward
adjustments to the allowance during the year ended December 31, 2023. We
do not have obligations for warranties, returns or refunds to customers.
For the majority of our contracts with customers, except for our market
technology and listing services contracts, our performance obligations range
from three months to three years and there is no significant variable
consideration.
Deferred revenue is the only significant contract asset or liability as of
December 31, 2023. Deferred revenue represents consideration received that
is yet to be recognized as revenue for unsatisfied performance obligations.
Deferred revenue primarily represents our contract liabilities related to
our fees for Annual and Initial Listings, Workflow & Insights, Financial Crime
Management Technology, Regulatory Technology and Capital Markets
Technology contracts. See Note 8, “Deferred Revenue,” for our discussion on
deferred revenue balances, activity, and expected timing of recognition.
We do not provide disclosures about transaction price allocated to unsatisfied
performance obligations if contract durations are less than one year. For our
initial listings, the transaction price allocated to remaining performance
obligations is included in deferred revenue. For our Financial Crime
Management Technology, Regulatory Technology, Capital Markets
Technology and Workflow & Insights contracts, the portion of transaction
price allocated to unsatisfied performance obligations is presented in the table
below. To the extent consideration has been received, unsatisfied performance
obligations would be included in the table below as well as deferred revenue.
The following table summarizes the amount of the transaction price allocated
to performance obligations that are unsatisfied, for contract durations greater
than one year, as of December 31, 2023:
Financial Crime
Management
Technology
Regulatory
Technology
Capital Markets
Technology
Workflow &
Insights
Total
2024
2025
2026
2027
2028
2029+
Total
$
$
224 $
206
137
53
16
2
638 $
(in millions)
261 $
174
78
44
26
5
588 $
311 $
243
193
131
71
129
1,078 $
159 $
101
47
24
14
—
345 $
955
724
455
252
127
136
2,649
4. ACQUISITIONS
2023 Acquisition
In June 2023, we entered into a definitive agreement to acquire Adenza
Holdings, Inc., or Adenza, a provider of mission-critical risk management and
regulatory software to the financial services industry, for $5.75 billion in cash
(subject to customary post-closing adjustments) and a fixed amount of
85.6 million shares of Nasdaq common stock, based on the volume-weighted
average price per share over 15 consecutive trading days prior to signing.
Nasdaq issued $5.6 billion of debt and entered into a $600 million term loan
and used the proceeds for the cash portion of the consideration. See “Senior
Unsecured Notes” and “2023 Term Loan” in “Financing of the Adenza
Acquisition” of Note 9, “Debt Obligations,” for further discussion.
On November 1, 2023, Nasdaq completed the acquisition of Adenza for a total
of purchase consideration of $9,984 million, which comprises the following:
F-20
(in millions, except
price per share)
Intangible Assets
Shares of Nasdaq common stock issued
Closing price per share of Nasdaq common stock on
November 1, 2023
Fair value of equity portion of the purchase consideration
Cash consideration
Total purchase consideration
$
$
$
$
85.6
48.71
4,170
5,814
9,984
At the closing of the transaction, the 85.6 million shares of Nasdaq common
stock were issued to Thoma Bravo, the sole shareholder of Adenza, and
represented approximately 15% of the outstanding shares of Nasdaq. For
further discussion on the rights of common stockholders refer to “Common
Stock” of Note 12, “Nasdaq Stockholders’ Equity.” Adenza is part of our
Financial Technology segment.
The amounts in the table below represent the preliminary allocation of the
purchase price to the acquired intangible assets, the deferred tax liability on
the acquired intangible assets and other assets acquired and liabilities assumed
based on their preliminary respective estimated fair values on the date of
acquisition. The excess purchase price over the net tangible and acquired
intangible assets has been recorded as goodwill. The goodwill recognized is
attributable primarily to expected synergies and is assigned to our Financial
Technology segment.
Goodwill
Acquired intangible assets
Receivables, net
Other net assets acquired
Cash and cash equivalents
Accrued personnel costs
Deferred revenue
Deferred tax liability on acquired intangible assets
Total purchase consideration
(in millions)
5,933
5,050
236
153
48
(44)
(130)
(1,262)
9,984
$
$
The primary areas of the preliminary purchase price allocation that are not yet
finalized relate to the valuation of the identifiable intangible assets and income
taxes. The allocation of the purchase price will be finalized within one year of
the date of acquisition.
The following table presents the details of acquired intangible assets at the
date of acquisition. Acquired intangible assets with finite lives are amortized
using the straight-line method.
Intangible asset value
(in millions)
Discount rate used
Estimated average
useful life
Customer
Relationships
Technology
Trade
Names
Total Acquired
Intangible
Assets
$
3,740
$
9.5 %
$
950
8.5 %
$
360
8.5 %
5,050
22 years
6 years
20 years
Customer Relationships
Customer relationships represent the contractual relationships with customers.
Methodology
Customer relationships were valued using the income approach, specifically
an excess earnings method. The excess earnings method examines the
economic returns contributed by the identified tangible and intangible assets
of a company, and then isolates the excess return that is attributable to the
intangible asset being valued.
Discount Rate
The discount rate used reflects the amount of risk associated with the
hypothetical cash flows for the customer relationships relative to the overall
business. In developing a discount rate for the customer relationships, we
estimated a weighted-average cost of capital for the overall business and we
utilized this rate as an input when discounting the cash flows. The resulting
discounted cash flows were then tax-effected at the applicable statutory rate.
A discounted tax amortization benefit was added to the fair value of the assets
under the assumption that the customer relationships would be amortized for
tax purposes over a period of 15 years.
Technology
As part of our acquisition of Adenza, we acquired developed technology
relating to AxiomSL and Calypso.
Methodology
The developed technology was valued using the income approach, specifically
the relief-from-royalty method, or RFRM. The RFRM is used to estimate the
cost savings that accrue to the owner of an intangible asset who would
otherwise have to pay royalties or license fees on revenues earned through the
use of the asset. The royalty rate is applied to the projected revenue over the
expected remaining life of the intangible asset to estimate royalty savings. The
net after-tax royalty savings are calculated for each year in the remaining
economic life of the technology and discounted to present value.
F-21
The unaudited supplemental pro forma financial information for the periods
presented is as follows:
Year Ended December 31,
2023
2022
(in millions)
Pro forma revenues less transaction-based
expenses
Pro forma operating income
Pro forma net income attributable to Nasdaq
$
4,329 $
1,485
822
4,096
1,476
812
2022 Acquisition
In June 2022, we acquired Metrio, a provider of ESG data collection, analytics
and reporting services based in Montreal, Canada. Metrio is part of our
Workflow & Insights business in our Capital Access Platforms segment.
The consolidated financial statements for the years ended December 31, 2023
and 2022 include the financial results of the Metrio acquisition from the date
of the acquisition. Pro forma financial results have not been presented as this
acquisition was not material to our financial results.
Acquisition-related costs were expensed as incurred and are included in
merger and strategic initiatives expense in the Consolidated Statements of
Income.
Discount Rate
The discount rate used reflects the amount of risk associated with the
hypothetical cash flows for the developed technology relative to the overall
business as discussed above in “Customer Relationships.”
Trade Name
As part of our acquisition of Adenza, we acquired the AxiomSL and Calypso
trade names. The trade names are recognized in the industry and carry a
reputation for quality. As such, the reputation and positive recognition
embodied in the trade names is a valuable asset to Nasdaq.
Methodology
The AxiomSL and Calypso trade names were valued using the income
approach, specifically the RFRM as discussed above in “Technology.”
Discount Rate
The discount rate used reflects the amount of risk associated with the
hypothetical cash flows for the trade name relative to the overall business as
discussed above in “Customer Relationships.”
Pro Forma Results and Acquisition-Related Costs
From the date of acquisition through December 31, 2023, Adenza revenues of
$149 million were included in Financial Technology revenues in the
Consolidated Statement of Income and Adenza operating income of $55
million was included in our operating income in the Consolidated Statement
of Income.
Acquisition-related costs were expensed as incurred and are included in
merger and strategic initiatives expense in the Consolidated Statements of
Income.
Supplemental Pro Forma Information (Unaudited)
The unaudited supplemental pro forma financial information presented below
is for illustrative purposes only and is not necessarily indicative of the
financial position or results of operations that would have been realized if the
acquisition had been completed on the date indicated, does not reflect
synergies that might have been achieved, nor is it indicative of future
operating results or financial position.
The following supplemental pro forma financial information presents the
combined results of operations as if Adenza had been acquired as of January
1, 2022. The pro forma adjustments are based upon currently available
information and certain assumptions we believe are reasonable under the
circumstances. These adjustments primarily include a net increase in
amortization expense that would have been recognized due to acquired
identifiable intangible assets, a net increase to interest expense to reflect the
additional borrowings for the financing of the Adenza acquisition net of the
interest expense relating to the repayment of Adenza’s historical debt, and the
related income tax effects of the adjustments noted above.
F-22
5. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Acquired Intangible Assets
Goodwill
The following table presents the changes in goodwill by business segment
during the year ended December 31, 2023:
(in millions)
Capital Access Platforms
Balance at December 31, 2022
Foreign currency translation adjustments
Balance at December 31, 2023
Financial Technology
Balance at December 31, 2022
Goodwill acquired
Foreign currency translation adjustments
Balance at December 31, 2023
Market Services
Balance at December 31, 2022
Foreign currency translation adjustments
Balance at December 31, 2023
Total
Balance at December 31, 2022
Goodwill acquired
Foreign currency translation adjustments
Balance at December 31, 2023
$
$
$
$
$
$
$
$
4,178
36
4,214
1,933
5,933
7
7,873
1,988
37
2,025
8,099
5,933
80
14,112
Goodwill represents the excess of purchase price over the value assigned to
the net assets, including identifiable intangible assets, of a business acquired.
Goodwill is allocated to our reporting units based on the assignment of the fair
values of each reporting unit of the acquired company. We test goodwill for
impairment at the reporting unit level annually, or in interim periods if certain
events occur indicating that the carrying amount may be impaired, such as
changes in the business climate, poor indicators of operating performance or
the sale or disposition of a significant portion of a reporting unit. There was no
impairment of goodwill for the years ended December 31, 2023, 2022 and
2021; however, events such as prolonged economic weakness or unexpected
significant declines in operating results of any of our reporting units or
businesses may result in goodwill impairment charges in the future.
The following table presents details of our total acquired intangible assets,
both finite- and indefinite-lived:
Finite-Lived Intangible Assets
Gross Amount
Technology
Customer relationships
Trade names and other
Foreign currency translation adjustment
Total gross amount
Accumulated Amortization
Technology
Customer relationships
Trade names and other
Foreign currency translation adjustment
Total accumulated amortization
Net Amount
Technology
Customer relationships
Trade names and other
Foreign currency translation adjustment
Total finite-lived intangible assets
Indefinite-Lived Intangible Assets
Exchange and clearing registrations
Trade names
Licenses
Foreign currency translation adjustment
Total indefinite-lived intangible assets
Total intangible assets, net
December 31, 2023
December 31, 2022
(in millions)
$
$
$
$
$
$
$
$
$
1,254 $
5,743
417
(194)
7,220 $
(169) $
(912)
(21)
120
(982) $
1,085 $
4,831
396
(74)
6,238 $
1,257 $
121
52
(225)
1,205 $
7,443 $
304
2,005
60
(209)
2,160
(97)
(778)
(17)
120
(772)
207
1,227
43
(89)
1,388
1,257
121
52
(237)
1,193
2,581
There was no impairment of indefinite-lived intangible assets for 2023, 2022
and 2021. There were no material finite-lived impairment charges in 2023,
2022 and 2021.
F-23
The following table presents our amortization expense for acquired finite-
lived intangible assets:
2023
Year Ended
December 31,
2022
(in millions)
2021
Amortization expense
$
206 $
153 $
170
The table below presents the estimated future amortization expense (excluding
the impact of foreign currency translation adjustments of $74 million as of
December 31, 2023) of acquired finite-lived intangible assets as of December
31, 2023:
2024
2025
2026
2027
2028
2029+
Total
(in millions)
501
497
494
494
460
3,866
6,312
$
$
6. INVESTMENTS
The following table presents the details of our investments:
December 31, 2023
December 31, 2022
Financial investments
Equity method investments
Equity securities
$
Financial Investments
(in millions)
188 $
380
87
181
390
86
Financial investments are comprised of trading securities, primarily highly
rated European government debt securities, of which $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.
Equity Method Investments
We record our estimated pro-rata share of earnings or losses each reporting
period and record any dividends as a reduction in the investment balance. As
of December 31, 2023 and 2022, our equity method investments primarily
included our 40.0% equity interest in OCC.
The carrying amounts of our equity method investments are included in other
non-current assets
the Consolidated Balance Sheets. No material
impairments were recorded for the years ended December 31, 2023, 2022 and
2021.
in
Net income (loss) recognized from our equity interest in the earnings and
losses of these equity method investments, primarily OCC and NPM, was $(7)
million, $31 million, and $52 million for the years ended December 31, 2023,
2022 and 2021, respectively. For the year ended December 31, 2023, equity
interest in the earnings of OCC was offset by our equity interest in the loss of
NPM and another equity method investment. For the year ended December
31, 2022, lower equity interest in the earnings of OCC, as compared to 2021,
was primarily driven by a reduction in the clearing fee rate that OCC charges
its customers, partially offset by elevated U.S. industry trading volumes.
Equity Securities
in
the Consolidated Balance Sheets. We elected
The carrying amounts of our equity securities are included in other non-
the
current assets
measurement alternative for substantially all of our equity securities as they do
not have a readily determinable fair value. No material adjustments were made
to the carrying value of our equity securities for the years ended December 31,
2023, 2022 and 2021. As of December 31, 2023 and December 31, 2022, our
equity securities primarily represent various strategic investments made
through our corporate venture program.
7. PROPERTY AND EQUIPMENT, NET
The following table presents our major categories of property and equipment,
net:
Data processing equipment and software
Furniture, equipment and leasehold
improvements
Total property and equipment
Less: accumulated depreciation and
amortization and impairment charges
Total property and equipment, net
Year Ended December 31,
2023
2022
(in millions)
913 $
325
1,238
(662)
576 $
786
305
1,091
(559)
532
$
$
Depreciation and amortization expense for property and equipment was $117
million for the year ended December 31, 2023, $105 million for the year
ended December 31, 2022, and $108 million for the year ended December 31,
2021. These amounts are included in depreciation and amortization expense in
the Consolidated Statements of Income.
F-24
We recorded pre-tax, non-cash property and equipment asset impairment
charges on capitalized software that was retired and accelerated depreciation
expense on certain assets as a result of a decrease in their useful life of
$12 million in 2023, $8 million in 2022 and $4 million in 2021. These charges
are included in restructuring charges in the Consolidated Statements of
Income. See Note 20, “Restructuring Charges,” for further discussion. There
were no other material impairments of property and equipment recorded in
2023, 2022 and 2021.
As of December 31, 2023 and 2022, we did not own any real estate properties.
8. DEFERRED REVENUE
Deferred revenue represents consideration received that is yet to be recognized
as revenue. The changes in our deferred revenue during the year ended
December 31, 2023 are reflected in the following table:
Balance at
December 31, 2022 Additions Revenue Recognized
(in millions)
Adjustments
Balance at
December 31, 2023
Capital Access Platforms:
Initial Listings
$
Annual Listings
Workflow &
Insights
Financial Technology:
Financial Crime
Management
Technology
Regulatory
Technology
Capital Markets
Technology
Other
Total
$
In the above table:
116 $
2
19 $
2
(39) $
(1)
172
177
(169)
103
5
29
21
448 $
122
81
211
9
621 $
(102)
(19)
(59)
(9)
(398) $
1 $
—
—
—
1
2
—
4 $
97
3
180
123
68
183
21
675
• Additions reflect deferred revenue billed in the current period, net of
recognition. Regulatory Technology and Capital Markets Technology
additions include deferred revenue acquired as part of the acquisition of
Adenza.
• Revenue recognized includes revenue recognized during the current period
that was included in the beginning balance.
• Adjustments reflect foreign currency translation adjustments.
• Other primarily includes deferred revenue from our non-U.S. listing of
additional shares fees and our Index business. These fees are included in our
Capital Access Platforms segment.
As of December 31, 2023, we estimate that our deferred revenue will be
recognized in the following years:
Fiscal year
ended:
2029+
Total
2028
2025
2026
2024
2027
(in millions)
Capital Access Platforms:
Initial Listings
$
Annual Listings
Workflow &
Insights
Financial Technology:
Financial Crime
Management
Technology
Regulatory
Technology
Capital Markets
Technology
Other
Total
$
37 $
3
26 $
—
20 $
—
178
2
—
120
68
176
12
594 $
2
—
3
5
38 $
1
—
2
3
26 $
10 $
—
—
—
—
2
1
13 $
3 $
1 $
—
—
—
—
—
—
—
—
—
—
—
—
3 $
1 $
97
3
180
123
68
183
21
675
Deferred revenue that will be recognized in 2025 and beyond is included in
other non-current liabilities in the Consolidated Balance Sheets. The timing of
recognition of deferred revenue related to certain market technology contracts
represents our best estimates as the recognition is primarily dependent upon
the completion of customization and any significant modifications made
pursuant to existing market technology contracts.
F-25
9. DEBT OBLIGATIONS
Senior Unsecured Notes
Our 2040 Notes were issued at par. All of our other outstanding senior
unsecured notes were issued at a discount. As a result of the discount, the
proceeds received from each issuance were less than the aggregate principal
amount. As of December 31, 2023, the amounts in the table above reflect the
aggregate principal amount, less the unamortized debt issuance costs, which
are being accreted through interest expense over the life of the applicable
notes. The accretion of these costs was $10 million for the year ended
December 31, 2023. Our Euro denominated notes are adjusted for the impact
of foreign currency translation. Our senior unsecured notes are general
unsecured obligations which rank equally with all of our existing and future
unsubordinated obligations and are not guaranteed by any of our subsidiaries.
The senior unsecured notes were issued under indentures that, among other
things, limit our ability to consolidate, merge or sell all or substantially all of
our assets, create liens, and enter into sale and leaseback transactions. The
senior unsecured notes may be redeemed by Nasdaq at any time, subject to a
make-whole amount.
Upon a change of control triggering event (as defined in the various
supplemental indentures governing the applicable notes), the terms require us
to repurchase all or part of each holder’s notes for cash equal to 101% of the
aggregate principal amount purchased plus accrued and unpaid interest, if any.
The 2029 Notes, 2030 Notes, 2032 Notes and 2033 Notes pay interest
annually. All other notes pay interest semi-annually. The U.S senior unsecured
notes coupon rates may vary with Nasdaq’s debt rating, to the extent Nasdaq is
downgraded below investment grade, up to an upward rate adjustment not to
exceed 2%.
Net Investment Hedge
Our Euro denominated notes have been designated as a hedge of our net
investment in certain foreign subsidiaries to mitigate the foreign exchange risk
associated with certain investments in these subsidiaries. Accordingly, the
remeasurement of these notes is recorded in accumulated other comprehensive
loss within Nasdaq’s stockholders’ equity in the Consolidated Balance Sheets.
For the year ended December 31, 2023, the impact of translation decreased the
U.S. dollar value of our Euro denominated notes by $70 million.
The following table presents the carrying amounts of our debt outstanding, net
of unamortized debt issuance costs:
Short-term debt:
Commercial paper
Long-term debt - senior unsecured notes:
2025 Notes, $500 million, 5.650% notes due
June 28, 2025
2026 Notes, $500 million, 3.850% notes due
June 30, 2026
2028 Notes, $1 billion, 5.350% notes
due June 28, 2028
2029 Notes, €600 million, 1.75% notes due
March 28, 2029
2030 Notes, €600 million, 0.875% notes due
February 13, 2030
2031 Notes, $650 million, 1.650% notes due
January 15, 2031
2032 Notes, €750 million, 4.500% notes due
February 15, 2032
2033 Notes, €615 million, 0.900% notes due
July 30, 2033
2034 Notes $1.25 billion, 5.550% notes due
February 15, 2034
2040 Notes, $650 million, 2.500% notes due
December 21, 2040
2050 Notes, $500 million, 3.250% notes due
April 28, 2050
2052 Notes, $550 million, 3.950% notes due
March 7, 2052
2053 Notes, $750 million, 5.950% notes due
August 15, 2053
2063 Notes, $750 million, 6.100% notes due
June 28, 2063
2023 Term Loan
2022 Revolving Credit Facility
Total long-term debt
Total debt obligations
Commercial Paper Program
December 31, 2023
December 31, 2022
(in millions)
$
291 $
664
497
499
991
658
658
645
819
674
1,239
644
487
541
738
738
—
498
—
637
637
644
—
653
—
644
486
541
—
—
339
(4)
10,163 $
10,454 $
$
$
—
(5)
4,735
5,399
Our U.S. dollar commercial paper program is supported by our 2022
Revolving Credit Facility, which provides liquidity support for the repayment
of commercial paper issued through this program. See “2022 Revolving Credit
Facility” below for further discussion. The effective interest rate of
commercial paper issuances fluctuates as short-term interest rates and demand
fluctuate. The fluctuation of these rates may impact our interest expense. As of
December 31, 2023, we had $291 million outstanding under the commercial
paper program.
F-26
Financing of the Adenza Acquisition
Senior Unsecured Notes
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 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. For further
discussion of the Adenza acquisition, see “2023 Acquisition,” of Note 4,
“Acquisitions.”
2023 Term Loan
In June 2023, in connection with the financing of the Adenza acquisition, we
entered into a term loan credit agreement, or the 2023 Term Loan. 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, for
repayment of certain debt of Adenza and its subsidiaries, and to pay fees, costs
and expenses related to the 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 credit 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.
Credit Facilities
2022 Revolving Credit Facility
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. Nasdaq intends to use funds available under the 2022
Revolving Credit Facility for general corporate purposes and to provide
liquidity support for the repayment of commercial paper issued through the
commercial paper program. Nasdaq is permitted to repay borrowings under
our 2022 Revolving Credit Facility at any time in whole or in part, without
penalty.
As of December 31, 2023, no amounts were outstanding on the 2022
Revolving Credit Facility. The $(4) million balance represents unamortized
debt issuance costs which are being accreted through interest expense over the
life of the credit facility.
Borrowings under the revolving credit facility and swingline borrowings bear
interest on the principal amount outstanding at a variable interest rate based on
either the SOFR (or a successor rate to SOFR), the base rate (as defined in the
2022 Revolving Credit Facility agreement), or other applicable rate with
respect to non-dollar borrowings, plus an applicable margin that varies with
Nasdaq’s debt rating. We are charged commitment fees of 0.100% to 0.250%,
depending on our credit rating, whether or not amounts have been borrowed.
These commitment fees are included in interest expense and were not material
for the years ended December 31, 2023 and 2022.
The 2022 Revolving Credit Facility contains financial and operating
covenants. Financial covenants include a maximum leverage ratio. Operating
covenants include, among other things, limitations on Nasdaq’s ability to incur
additional indebtedness, grant liens on assets, dispose of assets and make
certain restricted payments. The facility also contains customary affirmative
covenants, including access to financial statements, notice of defaults and
certain other material events, maintenance of properties and insurance, and
customary events of default, including cross-defaults to our material
indebtedness.
The 2022 Revolving Credit Facility includes an option for Nasdaq to increase
the available aggregate amount by up to $750 million, subject to the consent
of the lenders funding the increase and certain other conditions.
Other Credit Facilities
Certain of our European subsidiaries have several other credit facilities, which
are available in multiple currencies, primarily to support our Nasdaq Clearing
operations in Europe, as well as to provide a cash pool credit line for one
subsidiary. These credit facilities, in aggregate, totaled $191 million as of
December 31, 2023 and $184 million as of December 31, 2022 in available
liquidity, none of which was utilized. Generally, these facilities each have a
one-year term. The amounts borrowed under these various credit facilities
bear interest on the principal amount outstanding at a variable interest rate
based on a base rate (as defined in the applicable credit agreement), plus an
applicable margin. We are charged commitment fees (as defined in the
applicable credit agreement), whether or not amounts have been borrowed.
These commitment fees are included in interest expense and were not material
for the years ended December 31, 2023 and 2022.
These facilities include customary affirmative and negative operating
covenants and events of default.
Debt Covenants
As of December 31, 2023, we were in compliance with the covenants of all of
our debt obligations.
F-27
10. RETIREMENT PLANS
Defined Contribution Savings Plan
We sponsor a 401(k) plan which is a voluntary defined contribution savings
plan, for U.S. employees. Employees are immediately eligible to make
contributions to the plan and are also eligible for an employer contribution
match at an amount equal to 100.0% of the first 6.0% of eligible employee
contributions. Savings plan expense is included in compensation and benefits
expense in the Consolidated Statements of Income:
Year Ended December 31,
2023
2022
(in millions)
2021
Savings Plan expense
$
19 $
17 $
14
Pension and Supplemental Executive Retirement Plans
We maintain non-contributory, a defined-benefit pension plan, non-qualified
SERPs for certain senior executives and other post-retirement benefit plans for
eligible employees in the U.S. Our pension plan and SERPs are frozen. Future
service and salary for all participants do not count toward an accrual of
benefits under the pension plan and SERPs. Most employees outside the U.S.
are covered by local retirement plans or by applicable social laws. Benefits
under social laws are generally expensed in the periods in which the costs are
incurred. In June 2023, we terminated our U.S. pension plan and are taking
steps to wind down the plan and transfer the resulting liability to an insurance
company which started in 2023 and will be completed in 2024. These steps
include settling all future obligations under our U.S. pension plan through a
combination of lump sum payments to eligible, electing participants
(completed in 2023) and the transfer of any remaining benefits to a third-party
insurance company through a group annuity contract. In connection with the
plan termination and partial settlement, a loss of $9 million was recorded to
compensation and benefits expense in the Consolidated Statement of Income.
We expect to incur an additional settlement loss upon the finalization of the
group annuity purchase during the first half of 2024. The total expense for
these plans is included in compensation and benefits expense in the
Consolidated Statements of Income:
Year Ended December 31,
2023
2022
(in millions)
2021
Retirement Plans expense
$
34 $
24 $
26
Nasdaq recognizes the funded status of our U.S. defined-benefit pension plan,
measured as the difference between the fair value of the plan assets and the
benefit obligation, in the Consolidated Balance Sheets.
As of December 31, 2023, the fair value of our U.S. defined-benefit pension
plan’s assets was $57 million and the benefit obligation was $57 million. As a
result, the U.S. defined-benefit pension plan is fully funded as of December
31, 2023.
As of December 31, 2022, the fair value of our U.S. defined-benefit pension
plan’s assets was $79 million and the benefit obligation was $81 million. As a
result, the U.S. defined-benefit pension plan was underfunded by $2 million as
of December 31, 2022.
During 2023 and 2022, we did not make any contributions to our U.S.
defined-benefit pension plan. For our SERP and other post-retirement benefit
plans, the net underfunded liability was $27 million as of December 31, 2023
and $28 million as of December 31, 2022. The underfunded liability for the
above plans is included in accrued personnel costs and other non-current
liabilities in the Consolidated Balance Sheets. The U.S. pension plan’s assets
are invested per target allocations adopted by Nasdaq’s Pension and 401(k)
Committee and are primarily invested in liability driven portfolios that have
underlying investments in fixed income securities. More specifically, the plan
has investments in long duration cash bonds, as well co-mingled investment
options referred to as a separate account under a life insurance company group
annuity contract. The life insurance company owns the underlying financial
instruments held within the separate accounts and plan sponsors gain access to
them through the purchase of a group annuity contract. These group annuity
contracts are valued on a daily basis and offer daily liquidity, and use a unit
value system of recordkeeping to track a plan sponsor’s interest in the separate
account investment.
Accumulated Other Comprehensive Loss
As of December 31, 2023, accumulated other comprehensive
loss for the U.S. pension plan was $15 million reflecting an unrecognized net
loss of $17 million, partially offset by an income tax benefit of $2 million.
Estimated Future Benefit Payments
We expect to make future benefit payments to participants in SERPs of
approximately $20 million over the next ten years.
Nonqualified Deferred Compensation Plan
In June 2022, we established the Nasdaq, Inc. Nonqualified Deferred
Compensation Plan. This plan provides certain eligible employees with the
opportunity to defer a portion of their annual salary and bonus up to certain
approval limits. All deferrals and associated earnings are our general
unsecured obligations and were immaterial for the year ended December 31,
2023 and 2022.
11. SHARE-BASED COMPENSATION
We have a share-based compensation program for employees and non-
employee directors. Share-based awards granted under this program include
restricted stock (consisting of restricted stock units), PSUs and stock options.
For accounting purposes, we consider PSUs to be a form of restricted stock.
Generally, annual employee awards are granted on or about April 1st of each
year.
F-28
Summary of Share-Based Compensation Expense
Summary of Restricted Stock Activity
The following table presents the total share-based compensation expense
resulting from equity awards and the 15.0% discount for the ESPP for the
years ended December 31, 2023, 2022 and 2021, which is included in
compensation and benefits expense in the Consolidated Statements of Income:
The following table summarizes our restricted stock activity for the year
ended December 31, 2023, 2022, and 2021:
Restricted Stock
Number of Awards
Weighted-Average Grant
Date Fair Value
Year Ended December 31,
2023
2022
2021
(in millions)
Share-based compensation
expense before income taxes
$
122 $
106 $
90
Common Shares Available Under Our Equity Plan
As of December 31, 2023, we had approximately 24.6 million shares of
common stock authorized for future issuance under our Equity Plan.
Restricted Stock
We grant restricted stock to most employees. The grant date fair value of
restricted stock awards is based on the closing stock price at the date of grant
less the present value of future cash dividends. Restricted stock awards
granted to employees below the manager level generally vest 33% on the first
anniversary of the grant date, 33% on the second anniversary of the grant date,
and the remainder on the third anniversary of the grant date. Restricted stock
awards granted to employees at or above the manager level generally vest
33% on the second anniversary of the grant date, 33% on the third anniversary
of the grant date, and the remainder on the fourth anniversary of the grant
date.
Unvested at December 31, 2020
Granted
Vested
Forfeited
Unvested at December 31, 2021
Granted
Vested
Forfeited
Unvested at December 31, 2022
Granted
Vested
Forfeited
Unvested at December 31, 2023
4,917,153 $
1,523,235
(1,624,809)
(416,559)
4,399,020 $
1,785,138
(1,525,442)
(278,203)
4,380,513 $
1,850,790
(1,703,252)
(318,752)
4,209,299 $
28.07
50.52
27.78
34.04
35.39
57.65
31.22
42.07
45.48
52.66
38.21
51.15
51.15
As of December 31, 2023, $119 million of total unrecognized compensation
cost related to restricted stock is expected to be recognized over a weighted-
average period of 1.7 years.
PSUs
PSUs are based on performance measures that impact the amount of shares
that each recipient will receive upon vesting. Prior to April 1, 2020, we had
two performance-based PSU programs for certain officers, a one-year
performance-based program and a three-year cumulative performance-based
program that focuses on TSR. Effective April 1, 2020, to better align the
equity programs for eligible officers, the one-year performance-based program
was eliminated and all eligible officers now participate in the three-year
cumulative performance-based program. The performance periods are
complete for all PSUs granted under the one-year performance-based
program, and all shares underlying these PSUs have vested as of December
31, 2022.
F-29
One-Year PSU Program
The grant date fair value of PSUs under the one-year performance-based
program was based on the closing stock price at the date of grant less the
present value of future cash dividends. Under this program, an eligible
employee received a target grant of PSUs, but could have received from 0.0%
to 150.0% of the target amount granted, depending on the achievement of
performance measures. These awards vest ratably on an annual basis over a
three-year period commencing with the end of the one-year performance
period. Compensation cost was recognized over the performance period and
the three-year vesting period based on the probability that such performance
measures will be achieved, taking into account an estimated forfeiture rate.
Three-Year PSU Program
Under the three-year performance-based program, each eligible individual
receives PSUs, subject to the satisfaction of applicable market performance
conditions, with a three-year cumulative performance period that vest at the
end of the performance period and which settle in shares of our common
stock. Compensation cost is recognized over the three-year performance
period, taking into account an estimated forfeiture rate, regardless of whether
the market condition is satisfied, provided that the requisite service period has
been completed. Performance will be determined by comparing Nasdaq’s TSR
to two peer groups, each weighted 50.0%. The first peer group consists of
exchange companies, and the second peer group consists of all companies in
the S&P 500. For the PSU awards that will be granted in 2024, we will replace
the exchange company peer group with the S&P 500 GICS 4020 Index, which
is a blend of exchanges, as well as data, financial technology and banking
companies to align more closely with Nasdaq’s diverse business and
competitors. The PSU award granted to our Chief Financial Officer in
December 2023, in connection with the commencement of her employment,
also included this new peer group. Nasdaq’s relative performance ranking
against each of these groups will determine the final number of shares
delivered to each individual under the program. The award issuance under this
program will be between 0.0% and 200.0% of the number of PSUs granted
and will be determined by Nasdaq’s overall performance against both peer
groups. However, if Nasdaq’s TSR is negative for the three-year performance
period, regardless of TSR ranking, the award issuance will not exceed 100.0%
of the number of PSUs granted. We estimate the fair value of PSUs granted
under the three-year PSU program using the Monte Carlo simulation model, as
these awards contain a market condition.
Grants of PSUs that were issued in 2021 with a three-year performance period
exceeded the applicable performance parameters. As a result, an additional
387,011 units above the original target were granted in the first quarter of
2024 and were fully vested upon issuance.
The following weighted-average assumptions were used to determine the
weighted-average fair values of the outstanding PSU awards granted under the
three-year PSU program during the years ended December 31, 2023 and 2022:
Weighted-average risk-free
interest rate
Expected volatility
Weighted-average grant date
share price
Weighted-average fair value at
grant date
$
$
Year Ended December 31,
2023
2022
3.87 %
23.94 %
54.68
55.36
$
$
2.61 %
30.04 %
60.55
63.68
In the table above, the risk-free interest rate for periods within the expected
life of the award is based on the U.S. Treasury yield curve in effect at the time
of grant; and we use historic volatility for PSU awards issued under the three-
year PSU program, as implied volatility data could not be obtained for all the
companies in the peer groups used for relative performance measurement
within the program.
In addition, the annual dividend assumption utilized in the Monte Carlo
simulation model is based on Nasdaq’s dividend yield at the date of grant.
Summary of PSU Activity
The following table summarizes our PSU activity for the years ended
December 31, 2023, 2022, and 2021:
PSUs
One-Year Program
Three-Year Program
Number of Awards
Weighted-
Average Grant
Date Fair
Value
Number of Awards
Weighted-
Average Grant
Date Fair Value
Unvested at
December 31,
2020
Granted
Vested
Forfeited
Unvested at
December 31,
2021
Granted
Vested
Forfeited
Unvested at
December 31,
2022
Granted
Vested
Forfeited
Unvested at
December 31,
2023
F-30
508,644 $
—
(299,292)
(60,150)
149,202 $
—
(142,459)
(6,743)
— $
—
—
—
— $
27.78
—
27.66
27.76
28.01
—
28.02
27.85
—
—
—
—
—
2,429,967 $
1,081,707
(1,178,181)
(41,121)
2,292,372 $
1,495,092
(1,735,842)
(85,080)
1,966,542 $
1,693,065
(1,552,311)
(98,974)
36.04
58.66
38.95
47.43
45.01
45.66
32.57
52.27
56.44
47.14
37.59
57.51
2,008,322 $
62.86
In the table above, the granted amount also includes additional awards granted
based on overachievement of performance parameters.
As of December 31, 2023, the total unrecognized compensation cost related to
the PSU program is $52 million and is expected to be recognized over a
weighted-average period of 1.5 years.
Stock Options
In January 2022, in connection with a new five year employment agreement,
our Chief Executive Officer received an aggregate of 613,872 performance-
based non-qualified stock options, which will vest as follows:
• 50% will vest contingent upon the achievement of certain performance
conditions; and
• 50% will vest five years after the grant date, subject to continued
employment through such date.
The fair value of stock options are estimated using the Black-Scholes option-
pricing model. These options expire 10 years after the date of grant. There
were no stock option awards granted for the years ended December 31, 2023
and 2021.
A summary of our outstanding and exercisable stock options at December 31,
2023, 2022 and 2021 is as follows:
Number of Stock
Options
Weighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term (in
years)
Aggregate
Intrinsic
Value (in
millions)
Outstanding at December
31, 2020
Exercised
Forfeited
Outstanding at December
31, 2021
Granted
Outstanding at December
31, 2022
Outstanding at December
31, 2023
Exercisable at December 31,
2023
880,059 $
(73,227)
(381)
806,451 $
613,872
21.07
8.43
8.43
22.23
67.49
1,420,323 $
41.79
1,420,323 $
41.79
806,451 $
22.23
5.0 $
6.2 $
5.2 $
3.0 $
39
32
29
29
There were no stock options exercised in 2023 and 2022. The net cash
proceeds from the exercise of 73,227 stock options for the year ended
December 31, 2021 was $1 million. The total pre-tax intrinsic value of stock
options exercised was $3 million for the year ended December 31, 2021.
As of December 31, 2023, the aggregate pre-tax intrinsic value of the
outstanding and exercisable stock options in the above table was $29 million
and represents the difference between our closing stock price on December 31,
2023 of $58.14 and the exercise price, times the number of shares that would
have been received by the option holder had the option holder exercised the
stock options on that date. This amount can change based on the fair market
value of our common stock. As of December 31, 2023 and 2022, 0.8 million
outstanding stock options were exercisable and the weighted-average exercise
price was $22.23.
ESPP
We have an ESPP under which approximately 11.4 million shares of our
common stock were available for future issuance as of December 31, 2023.
Under our ESPP, employees may purchase shares having a value not
exceeding 10.0% of their annual compensation, subject to applicable annual
Internal Revenue Service limitations. We record compensation expense related
to the 15.0% discount that is given to our employees.
Year Ended December 31,
2023
2022
2021
Number of shares purchased by
employees
Weighted-average price of
shares purchased
Compensation expense (in
millions)
$
$
687,688
591,820
605,274
42.33 $
43.54 $
41.41
7 $
8 $
7
12. NASDAQ STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2023, 900,000,000 shares of our common stock were
authorized, 598,014,520 shares were issued and 575,159,336 shares were
outstanding. As of December 31, 2022, 900,000,000 shares of our common
stock were authorized, 513,157,630 shares were issued and 491,592,491
shares were outstanding. The holders of common stock are entitled to one vote
per share, except that our certificate of incorporation limits the ability of any
shareholder to vote in excess of 5.0% of the then-outstanding shares of
Nasdaq common stock.
F-31
Common Stock in Treasury, at Cost
Cash Dividends on Common Stock
During 2023, our board of directors declared and paid the following cash
dividends:
Declaration Date
Dividend Per
Common
Share
Record Date
Total Amount
Paid
(in millions)
January 24, 2023
April 18, 2023
$
July 18, 2023
October 17, 2023
March 17,
2023
June 16, 2023
September 15,
2023
December 8,
2023
0.20
0.22
0.22
0.22
$
$
97
109
108
127
441
Payment Date
March 31,
2023
June 30, 2023
September 29,
2023
December 22,
2023
The total amount paid of $441 million was recorded in retained earnings
within Nasdaq’s stockholders’ equity in the Consolidated Balance Sheets at
December 31, 2023.
In January 2024, the board of directors approved a regular quarterly cash
dividend of $0.22 per share on our outstanding common stock. The dividend is
payable on March 28, 2024 to shareholders of record at the close of business
on March 14, 2024. The estimated aggregate payment of this dividend is $127
million. Future declarations of quarterly dividends and the establishment of
future record and payment dates are subject to approval by the board of
directors.
The board of directors maintains a dividend policy with the intention to
provide shareholders with regular and increasing dividends as earnings and
cash flows increase.
We account for the purchase of treasury stock under the cost method with the
shares of stock repurchased reflected as a reduction to Nasdaq stockholders’
equity and included in common stock in treasury, at cost in the Consolidated
Balance Sheets. Shares repurchased under our share repurchase program are
currently retired and canceled and are therefore not included in the common
stock in treasury balance. If treasury shares are reissued, they are recorded at
the average cost of the treasury shares acquired. We held 22,855,184 shares of
common stock in treasury as of December 31, 2023 and 21,565,139 shares as
of December 31, 2022, most of which are related to shares of our common
stock withheld for the settlement of employee tax withholding obligations
arising from the vesting of restricted stock and PSUs.
Share Repurchase Program
In September 2023, our board of directors authorized an increase to our share
repurchase program, bringing the aggregate authorized amount to $2.0 billion.
As of December 31, 2023, the remaining aggregate authorized amount under
the existing share repurchase program was $1.9 billion.
These repurchases may be made from time to time at prevailing market prices
in open market purchases, privately-negotiated transactions, block purchase
techniques, an accelerated share repurchase program or otherwise, as
determined by our management. The repurchases are primarily funded from
existing cash balances. The share repurchase program may be suspended,
modified or discontinued at any time, and has no defined expiration date.
The following is a summary of our share repurchase activity, reported based
on settlement date, for the year ended December 31, 2023:
Year Ended December 31,
2023
Number of shares of common stock repurchased
Average price paid per share
Total purchase price (in millions)
$
$
4,694,774
57.36
269
In the table above, the number of shares of common stock repurchased
excludes an aggregate of 1,290,045 shares withheld to satisfy tax obligations
of the grantee upon the vesting of restricted stock and PSUs for the year ended
December 31, 2023.
As discussed above in “Common Stock in Treasury, at Cost,” shares
repurchased under our share repurchase program are currently retired and
cancelled.
Preferred Stock
Our certificate of incorporation authorizes the issuance of 30,000,000 shares
of preferred stock, par value $0.01 per share, issuable from time to time in one
or more series. As of December 31, 2023 and December 31, 2022, no shares
of preferred stock were issued or outstanding.
F-32
Numerator:
Net income
attributable to
common shareholders $
Denominator:
Weighted-average
common shares
outstanding for basic
earnings per share
Weighted-average
effect of dilutive
securities - Employee
equity awards
Weighted-average
common shares
outstanding for
diluted earnings per
share
13. EARNINGS PER SHARE
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table sets forth the computation of basic and diluted earnings
per share:
The following tables present our financial assets and financial liabilities that
were measured at fair value on a recurring basis as of December 31, 2023 and
December 31, 2022.
Year Ended December 31,
2023
2022
2021
(in millions, except share and per share amounts)
1,059 $
1,125 $
1,187
Total
Level 1
Level 2
Level 3
December 31, 2023
504,909,392
492,420,787
497,698,377
3,483,590
5,436,778
7,389,189
European government
debt securities
State-owned enterprises
and municipal
securities
508,392,982
497,857,565
505,087,566
Basic and diluted earnings per share:
Basic earnings per
share
Diluted earnings per
share
$
2.10 $
$
2.08 $
2.28 $
2.26 $
2.38
2.35
Swedish mortgage
bonds
Total assets at fair value $
In the table above, employee equity awards from our PSU program, which are
considered contingently issuable, are included in the computation of dilutive
earnings per share on a weighted average basis when management determines
that the applicable performance criteria would have been met if the
performance period ended as of the date of the relevant computation.
Securities that were not included in the computation of diluted earnings per
share because their effect was antidilutive were immaterial for the years ended
December 31, 2023, 2022 and 2021.
European government
debt securities
State-owned enterprises
and municipal
securities
Swedish mortgage
bonds
Corporate debt
securities
(in millions)
$
170 $
170 $
— $
—
11
—
11
6
187 $
—
170 $
6
17 $
December 31, 2022
—
—
—
Total
Level 1
Level 2
Level 3
(in millions)
$
147 $
147 $
— $
—
7
20
—
—
7
20
7
181 $
—
147 $
7
34 $
—
—
—
—
Total assets at fair value $
Financial Instruments Not Measured at Fair Value on a Recurring Basis
Some of our financial instruments are not measured at fair value on a
recurring basis but are recorded at amounts that approximate fair value due to
their liquid or short-term nature. Such financial assets and financial liabilities
include: cash and cash equivalents, restricted cash and cash equivalents,
receivables, net, certain other current assets, accounts payable and accrued
expenses, Section 31 fees payable to SEC, accrued personnel costs,
commercial paper and certain other current liabilities.
We have certain investments, primarily our investment in OCC, which are
accounted for under the equity method of accounting. We have elected the
measurement alternative for the majority of our equity securities, which
primarily represent various strategic investments made through our corporate
venture program. See “Equity Method Investments,” and “Equity Securities,”
of Note 6, “Investments,” for further discussion.
F-33
We also consider our debt obligations to be financial instruments. As of
December 31, 2023, the majority of our debt obligations were fixed-rate
obligations. We are exposed to changes in interest rates as a result of
borrowings under our 2022 Revolving Credit Facility, as the interest rates on
this facility have a variable rate depending on the maturity of the borrowing
and the implied underlying reference rate. We are also exposed to changes in
interest rates on amounts outstanding from the sale of commercial paper under
our commercial paper program and under the 2023 Term Loan where the
interest rates are based on either the SOFR or the base rate (or other applicable
rate with respect to non-dollar borrowings), plus an applicable margin that
varies with Nasdaq’s credit rating. The fair value of our remaining debt
obligations utilizing discounted cash flow analyses for our floating rate debt,
and prevailing market rates for our fixed rate debt was $10.0 billion as of
December 31, 2023 and $4.4 billion as of December 31, 2022. The discounted
cash flow analyses are based on borrowing rates currently available to us for
debt with similar terms and maturities. Our commercial paper and our fixed
rate and floating rate debt are categorized as Level 2 in the fair value
hierarchy.
For further discussion of our debt obligations, see Note 9, “Debt Obligations.”
Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis
Our non-financial assets, which include goodwill, intangible assets, and other
long-lived assets, are not required to be carried at fair value on a recurring
basis. Fair value measures of non-financial assets are primarily used in the
impairment analysis of these assets. Any resulting asset impairment would
require that the non-financial asset be recorded at its fair value. Nasdaq uses
Level 3 inputs to measure the fair value of the above assets on a non-recurring
basis. As of December 31, 2023 and December 31, 2022, there were no non-
financial assets measured at fair value on a non-recurring basis.
15. CLEARING OPERATIONS
Nasdaq Clearing
Nasdaq Clearing is authorized and supervised under EMIR as a multi-asset
clearinghouse by the SFSA. Such authorization is effective for all member
states of the European Union and certain other non-member states that are part
of the European Economic Area, including Norway. The clearinghouse acts as
the CCP for exchange and OTC trades in equity derivatives, fixed income
derivatives, resale and repurchase contracts, power derivatives, emission
allowance derivatives, and seafood derivatives. In June 2023, we entered into
an agreement to sell our European energy trading and clearing business,
subject to regulatory approval.
Through our clearing operations in the financial markets, which include the
resale and repurchase market, the commodities markets, and the seafood
market, Nasdaq Clearing is the legal counterparty for, and guarantees the
fulfillment of, each contract cleared. These contracts are not used by Nasdaq
Clearing for the purpose of trading on its own behalf. As the legal
counterparty of each transaction, Nasdaq Clearing bears the counterparty risk
between the purchaser and seller in the contract. In its guarantor role, Nasdaq
Clearing has precisely equal and offsetting claims to and from clearing
members on opposite sides of each contract, standing as the CCP on every
contract cleared. In accordance with the rules and regulations of Nasdaq
Clearing, default fund and margin collateral requirements are calculated for
each clearing member’s positions in accounts with the CCP. See “Default
Fund Contributions and Margin Deposits” below for further discussion of
Nasdaq Clearing’s default fund and margin requirements.
Nasdaq Clearing maintains three member sponsored default funds: one related
to financial markets, one related to commodities markets and one related to
the seafood market. Under this structure, Nasdaq Clearing and its clearing
members must contribute to the total regulatory capital related to the clearing
operations of Nasdaq Clearing. This structure applies an initial separation of
default fund contributions for the financial, commodities and seafood markets
in order to create a buffer for each market’s counterparty risks. See “Default
Fund Contributions” below for further discussion of Nasdaq Clearing’s default
fund. A power of assessment and a liability waterfall have also been
implemented to further align risk between Nasdaq Clearing and its clearing
members. See “Power of Assessment” and “Liability Waterfall” below for
further discussion.
Default Fund Contributions and Margin Deposits
As of December 31, 2023, clearing member default fund contributions and
margin deposits were as follows:
Cash Contributions
December 31, 2023
Non-Cash
Contributions
(in millions)
Total Contributions
$
$
900
6,375
7,275
$
$
222
5,750
5,972
$
$
1,122
12,125
13,247
Default fund
contributions
Margin deposits
Total
Of the total default fund contributions of $1,122 million, Nasdaq Clearing can
utilize $858 million as capital resources in the event of a counterparty default.
The remaining balance of $264 million pertains to member posted surplus
balances.
Our clearinghouse holds material amounts of clearing member cash deposits
which are held or invested primarily to provide security of capital while
minimizing credit, market and liquidity risks. While we seek to achieve a
reasonable rate of return, we are primarily concerned with preservation of
capital and managing the risks associated with these deposits.
F-34
Clearing member cash contributions are maintained in demand deposits held
at central banks and large, highly rated financial institutions or secured
through direct investments, primarily central bank certificates and highly rated
European government debt securities with original maturities primarily one
year or less, reverse repurchase agreements and multilateral development bank
debt securities. Investments in reverse repurchase agreements range in
maturity from 3 to 5 days and are secured with highly rated government
securities and multilateral development banks. The carrying value of these
securities approximates their fair value due to the short-term nature of the
instruments and reverse repurchase agreements.
Nasdaq Clearing has invested the total cash contributions of $7,275 million as
of December 31, 2023 and $7,021 million as of December 31, 2022, in
accordance with its investment policy as follows:
December 31, 2023
December 31, 2022
$
Demand deposits
Central bank certificates
Restricted cash and cash equivalents $
European government debt securities
Reverse repurchase agreements
Multilateral development bank debt
securities
Investments
Total
$
$
(in millions)
5,344 $
1,301
6,645 $
306
209
115
630 $
7,275 $
4,775
1,695
6,470
222
192
137
551
7,021
In the table above, the change from December 31, 2022 to December 31, 2023
includes currency translation adjustments of $229 million for restricted cash
and cash equivalents and $5 million for investments.
For the years ended December 31, 2023, 2022 and 2021 investments related to
default funds and margin deposits, net includes purchases of investment
securities of $53,657 million and $47,525 million, and $41,098 million
respectively, and proceeds from sales and redemptions of investment securities
of $53,583 million, $47,736 million and $40,966 million respectively.
In the investment activity related to default fund and margin contributions, we
are exposed to counterparty risk related to reverse repurchase agreement
transactions, which reflect the risk that the counterparty might become
insolvent and, thus, fail to meet its obligations to Nasdaq Clearing. We
mitigate this risk by only engaging in transactions with high credit quality
reverse repurchase agreement counterparties and by limiting the acceptable
collateral under the reverse repurchase agreement to high quality issuers,
primarily government securities and other securities explicitly guaranteed by a
government. The value of the underlying security is monitored during the
lifetime of the contract, and in the event the market value of the underlying
security falls below the reverse repurchase amount, our clearinghouse may
require additional collateral or a reset of the contract.
Default Fund Contributions
Required contributions to the default funds are proportional to the exposures
of each clearing member. When a clearing member is active in more than one
market, contributions must be made to all markets’ default funds in which the
member is active. Clearing members’ eligible contributions may include cash
and non-cash contributions. Cash contributions received are maintained in
demand deposits held at central banks and large, highly rated financial
institutions or invested by Nasdaq Clearing, in accordance with its investment
policy, either in central bank certificates, highly rated government debt
securities, reverse repurchase agreements with highly rated government debt
securities as collateral, or multilateral development bank debt securities.
Nasdaq Clearing maintains and manages all cash deposits related to margin
collateral. All risks and rewards of collateral ownership, including interest,
belong to Nasdaq Clearing. Clearing members’ cash contributions are
included in default funds and margin deposits in the Consolidated Balance
Sheets as both a current asset and a current liability. Non-cash contributions
include highly rated government debt securities that must meet specific
criteria approved by Nasdaq Clearing. Non-cash contributions are pledged
assets that are not recorded in the Consolidated Balance Sheets as Nasdaq
Clearing does not take legal ownership of these assets and the risks and
rewards remain with the clearing members. These balances may fluctuate over
time due to changes in the amount of deposits required and whether members
choose to provide cash or non-cash contributions. Assets pledged are held at a
nominee account in Nasdaq Clearing’s name for the benefit of the clearing
members and are immediately accessible by Nasdaq Clearing in the event of a
default.
F-35
In addition to clearing members’ required contributions to the liability
waterfall, Nasdaq Clearing is also required to contribute capital to the liability
waterfall and overall regulatory capital as specified under its clearinghouse
rules. As of December 31, 2023, Nasdaq Clearing committed capital totaling
$123 million to the liability waterfall and overall regulatory capital, in the
form of government debt securities, which are recorded as financial
investments in the Consolidated Balance Sheets. The combined regulatory
capital of the clearing members and Nasdaq Clearing is intended to secure the
obligations of a clearing member exceeding such member’s own margin and
default fund deposits and may be used to cover losses sustained by a clearing
member in the event of a default.
Margin Deposits
Nasdaq Clearing requires all clearing members to provide collateral, which
may consist of cash and non-cash contributions, to guarantee performance on
the clearing members’ open positions, or initial margin. In addition, clearing
members must also provide collateral to cover the daily margin call if needed.
See “Default Fund Contributions” above for further discussion of cash and
non-cash contributions.
Similar to default fund contributions, Nasdaq Clearing maintains and manages
all cash deposits related to margin collateral. All risks and rewards of
collateral ownership, including interest, belong to Nasdaq Clearing and are
recorded in revenues. These cash deposits are recorded in default funds and
margin deposits in the Consolidated Balance Sheets as both a current asset and
a current liability. Pledged margin collateral is not recorded in our
Consolidated Balance Sheets as all risks and rewards of collateral ownership,
including interest, belong to the counterparty. Assets pledged are held at a
nominee account in Nasdaq Clearing’s name for the benefit of the clearing
members and are immediately accessible by Nasdaq Clearing in the event of a
default.
Nasdaq Clearing marks to market all outstanding contracts and requires
payment from clearing members whose positions have lost value. The mark-
to-market process helps identify any clearing members that may not be able to
satisfy their financial obligations in a timely manner allowing Nasdaq
Clearing the ability to mitigate the risk of a clearing member defaulting due to
exceptionally large losses. In the event of a default, Nasdaq Clearing can
access the defaulting member’s margin and default fund deposits to cover the
defaulting member’s losses.
Regulatory Capital and Risk Management Calculations
Nasdaq Clearing manages risk through a comprehensive counterparty risk
management framework, which comprises policies, procedures, standards and
financial resources. The level of regulatory capital is determined in
accordance with Nasdaq Clearing’s regulatory capital and default fund policy,
as approved by the SFSA. Regulatory capital calculations are continuously
updated through a proprietary capital-at-risk calculation model that establishes
the appropriate level of capital.
As mentioned above, Nasdaq Clearing is the legal counterparty for each
contract cleared and thereby guarantees the fulfillment of each contract.
Nasdaq Clearing accounts for this guarantee as a performance guarantee. We
determine the fair value of the performance guarantee by considering daily
settlement of contracts and other margining and default fund requirements, the
risk management program, historical evidence of default payments, and the
estimated probability of potential default payouts. The calculation is
determined using proprietary risk management software that simulates gains
and losses based on historical market prices, extreme but plausible market
scenarios, volatility and other factors present at that point in time for those
particular unsettled contracts. Based on this analysis, excluding any liability
related to the Nasdaq commodities clearing default (see discussion above), the
estimated liability was nominal and no liability was recorded as of December
31, 2023.
Power of Assessment
To further strengthen the contingent financial resources of the clearinghouse,
Nasdaq Clearing has power of assessment that provides the ability to collect
additional funds from its clearing members to cover a defaulting member’s
remaining obligations up to the limits established under the terms of the
clearinghouse rules. The power of assessment corresponds to 230% of the
clearing member’s aggregate contribution to the financial, commodities and
seafood markets’ default funds.
Liability Waterfall
The liability waterfall is the priority order in which the capital resources
would be utilized in the event of a default where the defaulting clearing
member’s collateral and default fund contribution would not be sufficient to
cover the cost to settle its portfolio. If a default occurs and the defaulting
clearing member’s collateral, including cash deposits and pledged assets, is
depleted, then capital is utilized in the following amount and order:
• junior capital contributed by Nasdaq Clearing, which totaled $41 million as
of December 31, 2023;
• a loss-sharing pool related only to the financial market that is contributed to
by clearing members and only applies if the defaulting member’s portfolio
includes interest rate swap products;
F-36
• specific market default fund where the loss occurred (i.e., the financial,
commodities, or seafood market), which includes capital contributions of
the clearing members on a pro-rata basis; and
• fully segregated senior capital for each specific market contributed by
Nasdaq Clearing, calculated in accordance with clearinghouse rules, which
totaled $17 million as of December 31, 2023.
If additional funds are needed after utilization of the liability waterfall, or if
part of the waterfall has been utilized and needs to be replenished, then
Nasdaq Clearing will utilize its power of assessment and additional capital
contributions will be required by non-defaulting members up to the limits
established under the terms of the clearinghouse rules.
During 2022, Nasdaq Clearing updated its recovery plan and rule book by
introducing additional recovery tools, in line with the new European Union
regulations for the recovery and resolution of central counterparties, which
became effective during 2022.
In addition to the capital held to withstand counterparty defaults described
above, Nasdaq Clearing also has committed capital of $65 million to ensure
that it can handle an orderly wind-down of its operation, and that it is
adequately protected against investment, operational, legal, and business risks.
Market Value of Derivative Contracts Outstanding
The following table presents the market value of derivative contracts
outstanding prior to netting:
Commodity and seafood options, futures and
forwards
Fixed-income options and futures
Stock options and futures
Index options and futures
Total
In the table above:
December 31, 2023
(in millions)
$
$
139
1,027
140
32
1,338
• We determined the fair value of our option contracts using standard
valuation models that were based on market-based observable inputs
including implied volatility, interest rates and the spot price of the
underlying instrument.
• We determined the fair value of our futures contracts based upon quoted
market prices and average quoted market yields.
• We determined the fair value of our forward contracts using standard
valuation models that were based on market-based observable inputs
including benchmark rates and the spot price of the underlying instrument.
Derivative Contracts Cleared
The following table presents the total number of derivative contracts cleared
through Nasdaq Clearing for the years ended December 31, 2023 and 2022:
Commodity and seafood options, futures
and forwards
Fixed-income options and futures
Stock options and futures
Index options and futures
Total
Year Ended December 31,
2023
2022
233,194
19,175,402
20,728,290
40,009,367
80,146,253
288,142
21,992,124
18,619,950
45,616,647
86,516,863
In the table above, the total volume in cleared power related to commodity
contracts was 422 Terawatt hours (TWh) and 413 TWh for the years ended
December 31, 2023 and 2022, respectively.
Resale and Repurchase Agreements Contracts Outstanding and Cleared
The outstanding contract value of resale and repurchase agreements was $580
million and $120 million as of December 31, 2023 and 2022, respectively. The
total number of resale and repurchase agreements contracts cleared was
4,669,740 and 6,287,717 for the years ended December 31, 2023 and 2022,
respectively.
16. LEASES
We have operating leases which are primarily real estate leases predominantly
for our U.S. and European headquarters, data centers and for general office
space. The following table provides supplemental balance sheet information
related to Nasdaq’s operating leases:
Leases
Assets:
Operating lease
assets
Liabilities:
Current lease
liabilities
Non-current lease
liabilities
Total lease
liabilities
Balance Sheet
Classification
Operating lease
assets
Other current
liabilities
Operating lease
liabilities
$
$
$
December 31, 2023
December 31, 2022
(in millions)
402 $
444
62 $
417
479 $
54
452
506
F-37
The following table summarizes Nasdaq’s lease cost:
Operating lease cost
Variable lease cost
Sublease income
Total lease cost
Year Ended December 31,
2023
2022
2021
(in millions)
$
$
88 $
44
(3)
129 $
75 $
32
(3)
104 $
85
28
(4)
109
In the table above, operating lease costs include short-term lease cost, which
was immaterial.
In the first quarter of 2023, we initiated a review of our real estate and facility
capacity requirements due to our new and evolving work models. As a result
of this ongoing review, for the year ended December 31, 2023, we recorded
impairment charges of $23 million, of which $13 million related to operating
lease asset impairment and is included in operating lease cost in the table
above, $5 million related to exit costs and is included in variable lease cost in
the table above and $5 million related to impairment of leasehold
improvements, which are recorded in depreciation and amortization expense
in the Consolidated Statements of Income. We fully impaired our lease assets
for locations that we vacated with no intention to sublease. Substantially all of
the property, equipment and leasehold improvements associated with the
vacated leased office space were fully impaired as there are no expected future
cash flows for these items.
The following table reconciles the undiscounted cash flows for each of the
first five years and total of the remaining years to the operating lease liabilities
recorded in our Consolidated Balance Sheets.
December 31, 2023
(in millions)
2024
2025
2026
2027
2028
2029+
Total lease payments
Less: interest
Present value of lease liabilities
$
$
80
68
55
52
50
270
575
(96)
479
In the table above, interest is calculated using the interest rate for each lease.
Present value of lease liabilities includes the current portion of $62 million.
Total lease payments in the table above exclude $41 million of legally binding
minimum lease payments for leases signed but not yet commenced.
The following table provides information related to Nasdaq’s lease term and
discount rate:
Weighted-average remaining lease term (in years)
Weighted-average discount rate
December 31, 2023
9.6
3.8 %
The following table provides supplemental cash flow information related to
Nasdaq’s operating leases:
Year Ended December 31,
2023
2022
(in millions)
2021
78 $
66 $
26 $
137 $
77
45
Cash paid for amounts included in
the measurement of operating lease
liabilities
Lease assets obtained in exchange
for operating lease liabilities
$
$
17. INCOME TAXES
Income Before Income Tax Provision
The following table presents the domestic and foreign components of income
provision:
before
income
tax
Domestic
Foreign
Income before income tax
provision
$
$
Year Ended December 31,
2023
2022
(in millions)
2021
1,073 $
328
1,216 $
259
1,299
235
1,401 $
1,475 $
1,534
Income Tax Provision
The
income
tax provision
consists of
following
the
Year Ended December 31,
amounts:
Current income taxes provision:
Federal
State
Foreign
Total current income taxes provision
Deferred income taxes provision
(benefit):
Federal
State
Foreign
Total deferred income taxes provision
Total income tax provision
$
$
2023
2022
2021
(in millions)
145 $
52
79
276
51
8
9
68
344 $
170 $
67
77
314
36
6
(4)
38
352 $
144
45
64
253
82
22
(10)
94
347
F-38
We have determined
that undistributed earnings of certain non-U.S.
subsidiaries are not considered indefinitely reinvested and would not give rise
to a material tax liability when remitted. Nasdaq continues to indefinitely
reinvest all other outside basis differences to the extent reversal would incur a
significant tax liability. A determination of an unrecognized deferred tax
liability related to such outside basis differences is not practicable.
A reconciliation of the income tax provision, based on the U.S. federal
statutory rate, to our actual income tax provision for the years ended
follows:
December
2023,
2022
and
31,
as
2021
Year Ended December 31,
is
Federal income tax provision at the
statutory rate
State income tax provision, net of
federal effect
Deduction for foreign derived
intangible income
Excess tax benefits related to
employee share-based
compensation
Non-U.S. subsidiary earnings
Tax credits and deductions
Change in unrecognized tax benefits
Other, net
Actual income tax provision
2023
2022
2021
21.0 %
21.0 %
21.0 %
3.2 %
3.8 %
3.9 %
(1.6)%
(1.0)%
(1.2)%
(0.7)%
2.5 %
(0.2)%
1.0 %
(0.6)%
24.6 %
(0.9)%
1.2 %
(0.3)%
1.1 %
(1.0)%
23.9 %
(1.4)%
1.2 %
(0.3)%
0.6 %
(1.2)%
22.6 %
The increase in our effective tax rate in 2023 compared to 2022 was primarily
due to increased US tax on overseas earnings. The increase in our effective tax
rate in 2022 compared to 2021 was primarily due to an increase in state
unrecognized tax benefits.
The effective tax rate may vary from period to period depending on, among
other factors, the geographic and business mix of earnings and losses. These
same and other factors, including history of pre-tax earnings and losses, are
taken into account in assessing the ability to realize deferred tax assets.
Deferred Income Taxes
The temporary differences, which give rise to our deferred tax assets and
following:
(liabilities),
consisted
the
of
$
Deferred tax assets:
Deferred revenues
U.S. federal net operating loss
Foreign net operating loss
State net operating loss
Compensation and benefits
Deferred interest expense
Tax credits
Federal benefit of uncertain tax positions
Operating lease liabilities
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets, net of valuation allowance $
December 31,
2023
2022
(in millions)
19 $
—
12
3
45
55
26
12
118
29
319
(4)
315 $
18
5
12
3
42
—
3
9
118
33
243
(4)
239
Deferred tax liabilities:
Amortization of software development costs and
depreciation
Amortization of acquired intangible assets and
goodwill
Investments
Unrealized gains
Operating lease assets
Other
Gross deferred tax liabilities
Net deferred tax liabilities
Reported as:
Non-current deferred tax assets
Deferred tax liabilities, net
Net deferred tax liabilities
$
(21) $
(65)
(1,736)
(74)
(11)
(99)
(9)
(1,950) $
(1,635) $
7 $
(1,642)
(1,635) $
(375)
(105)
(29)
(103)
(15)
(692)
(453)
3
(456)
(453)
$
$
$
$
In the table above, non-current deferred tax assets are included in other non-
current assets in the Consolidated Balance Sheets.
We recognized a valuation allowance of $4 million as of December 31, 2023
and 2022 due to recurring operating losses in a foreign jurisdiction. Based on
all available positive and negative evidence, we believe the sources of future
taxable income are sufficient to realize the remainder of Nasdaq’s deferred tax
asset inventory.
F-39
Nasdaq has deferred tax assets associated with net operating losses, or NOLs,
in U.S. state and local and non-U.S. jurisdictions with the following expiration
dates:
Jurisdiction
December 31, 2023
Expiration Date
Foreign NOL
U.S. state and local NOL
Unrecognized Tax Benefits
(in millions)
$
12
3
2039-2043
2025-2042
A reconciliation of the beginning and ending amount of unrecognized tax
benefits is as follows:
Beginning balance
Additions as a result of tax positions taken in
prior periods
Additions as a result of tax positions taken in
the current period
Reductions related to settlements with taxing
authorities
Reductions as a result of lapses of the
applicable statute of limitations
Ending balance
Year Ended December 31,
2023
2022
2021
(in millions)
$
70 $
57 $
2
25
(14)
13
9
(7)
(3)
80 $
(2)
70 $
$
42
16
11
(6)
(6)
57
We had $80 million of unrecognized tax benefits as of December 31, 2023,
$70 million as of December 31, 2022, and $57 million as of December 31,
2021 which, if recognized in the future, would affect our effective tax rate.
Nasdaq does not believe that our unrecognized tax benefits will materially
change over the next 12 months.
We recognize interest and/or penalties related to income tax matters in the
provision for income taxes in our Consolidated Statements of Income, which
was $3 million tax expense for the year ended December 31, 2023 and less
than $1 million for the year ended December 31, 2022 and $2 million tax
benefit for the year ended for December 31, 2021. Accrued interest and
penalties, net of tax effect were $6 million as of December 31, 2023 and $5
million as of December 31, 2022.
Tax Audits
Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income tax
return and applicable state and local income tax returns and non-U.S. income
tax returns. We are subject to examination by federal, state and local, and
foreign tax authorities. Our Federal income tax return is under audit for tax
year 2018 and is subject to examination by the Internal Revenue Service for
the years 2020 through 2022. Several state tax returns are currently under
examination by the respective tax authorities for the years 2014 through 2022.
Non-U.S. tax returns are subject to examination by the respective tax
authorities for the years 2018 through 2023. We regularly assess the likelihood
of additional assessments by each jurisdiction and have established tax
reserves that we believe are adequate in relation to the potential for additional
assessments. Examination outcomes and the timing of
examination settlements are subject to uncertainty. Although the results of
such examinations may have an impact on our unrecognized tax benefits, we
do not anticipate that such impact will be material to our consolidated
financial position or results of operations. We do not expect to settle any
material tax audits in the next twelve months.
18. COMMITMENTS, CONTINGENCIES AND GUARANTEES
Guarantees Issued and Credit Facilities Available
In addition to the default fund contributions and margin collateral pledged by
clearing members discussed in Note 15, “Clearing Operations,” we have
obtained financial guarantees and credit facilities, which are guaranteed by us
through counter indemnities, to provide further liquidity related to our clearing
businesses. Financial guarantees issued to us totaled $4 million as of
December 31, 2023 and 2022. As discussed in “Other Credit Facilities,” of
Note 9, “Debt Obligations,” we also have credit facilities primarily related to
our Nasdaq Clearing operations, which are available in multiple currencies,
and totaled $191 million as of December 31, 2023 and $184 million as of
December 31, 2022 in available liquidity, none of which was utilized.
Other Guarantees
Through our clearing operations in the financial markets, Nasdaq Clearing is
the legal counterparty for, and guarantees the performance of, its clearing
members. See Note 15, “Clearing Operations,” for further discussion of
Nasdaq Clearing performance guarantees.
We have provided a guarantee related to lease obligations for The Nasdaq
Entrepreneurial Center, Inc., which is a not-for-profit organization designed to
convene, connect and engage aspiring and current entrepreneurs. This entity is
not included in the consolidated financial statements of Nasdaq.
We believe that the potential for us to be required to make payments under
these arrangements is unlikely. Accordingly, no contingent liability is recorded
in the Consolidated Balance Sheets for the above guarantees.
Routing Brokerage Activities
to guarantee
require members
One of our broker-dealer subsidiaries, Nasdaq Execution Services, provides a
guarantee to securities clearinghouses and exchanges under its standard
the
membership agreements, which
performance of other members. If a member becomes unable to satisfy its
obligations to a clearinghouse or exchange, other members would be required
to meet its shortfalls. To mitigate these performance risks, the exchanges and
clearinghouses often require members to post collateral, as well as meet
certain minimum financial standards. Nasdaq Execution Services’ maximum
potential liability under these arrangements cannot be quantified. However, we
believe that the potential for Nasdaq Execution Services to be required to
make payments under these arrangements is unlikely. Accordingly, no
contingent liability is recorded in the Consolidated Balance Sheets for these
arrangements.
F-40
Legal and Regulatory Matters
Armenian Stock Exchange Investigation
As disclosed in our prior filings with the SEC, a former non-U.S. subsidiary of
Nasdaq, NASDAQ OMX Armenia OJSC, operated the Armenian Stock
Exchange and the Central Depository of Armenia, which are regulated by the
Central Bank of Armenia under Armenian law. In accordance with the
requirements of Armenian law, Mellat Bank SB CJSC, an Armenian entity
that is designated under Executive Order 13382, was a market participant on
the Armenian Stock Exchange and, as a result, paid participation and
transaction fees to the Armenian Stock Exchange during the period from
2012-2014. In 2014, we voluntarily self-disclosed this matter to the U.S.
Department of Treasury’s Office of Foreign Assets Control, or OFAC, and
received authorization from OFAC to continue, if necessary, certain activities
pertaining to Mellat Bank SB CJSC in Armenia in a limited manner. In 2015,
Nasdaq sold a majority of its ownership of Nasdaq OMX Armenia OJSC, with
the remaining minority interest sold in 2018.
As previously disclosed, OFAC conducted an inquiry into the Armenian Stock
Exchange matter described above and in our prior filings since 2016. During
the first quarter of 2021, we were advised that OFAC was considering a civil
monetary penalty in connection with that matter. In November 2023, we
reached a settlement with, and made a payment to, OFAC, which was
materially in line with the immaterial loss contingency we had accrued in
2022.
CFTC Matter
In June 2022, NASDAQ Futures, Inc. (“NFX”), a non-operational, wholly-
owned subsidiary of Nasdaq, received a telephonic “Wells Notice” from the
staff of the CFTC relating to certain alleged potential violations by NFX of
provisions of the Commodity Exchange Act and CFTC rules thereunder
during the period beginning July 2015 through October 2018. The alleged
potential violations concern the accuracy of NFX’s description of one of its
market maker incentive programs. The Wells Notice informed NFX that the
CFTC staff has made, subject to consideration of NFX’s response, a
preliminary determination to recommend that the CFTC authorize an
enforcement action against NFX in connection with its former futures
exchange business. Nasdaq sold NFX’s futures exchange business to a third-
party in November 2019, including the portfolio of open interest in NFX
contracts. During 2020, all remaining open interest in NFX contracts was
migrated to other exchanges and NFX ceased operation. A Wells Notice is
neither a formal charge of wrongdoing nor a final determination that the
recipient has violated any law. NFX has submitted a response to the Wells
Notice that contests all aspects of the CFTC staff’s position. The CFTC staff
subsequently informed us that it plans to formally recommend that the CFTC
authorize a civil enforcement action. We cannot predict if or when such an
action will be brought, including the scope of the claims or the remedy sought,
but such action could commence at any time, and the scope of claims or
remedies sought could be material. We believe that NFX would have defenses
to any claims if they are the same as those alleged by the CFTC staff during
the Wells Notice process. We are unable to predict the ultimate outcome of
this matter or the amount or type of remedies that the CFTC may seek or
obtain, but any such remedies could have a material negative effect on our
operating results and reputation.
SFSA Inquiry
In September 2023, Nasdaq Stockholm AB, a wholly-owned subsidiary of
Nasdaq and the operator of the Nasdaq Stockholm exchange, received a
written notification from the SFSA regarding a review initiated with regard to
the obligation of Nasdaq Stockholm AB to report suspected market abuse. The
review was initiated in connection with an investigation of alleged insider
trading in the shares of four companies listed on the Nasdaq Stockholm
exchange. The SFSA’s preliminary assessment is that Nasdaq Stockholm AB,
by not reporting certain suspicious transactions in the four listed companies,
breached its obligation under certain provisions of the Market Abuse
Regulation and the Swedish Securities Market Act. In January 2024, the SFSA
notified Nasdaq Stockholm AB that the review will continue, and in February
the SFSA sent a request for submission to Nasdaq for our review and
response. Nasdaq Stockholm AB is cooperating fully and is engaged in
ongoing communications with the SFSA.
Other Matters
Except as disclosed above and in our prior reports filed under the Exchange
Act, we are not currently a party to any litigation or proceeding that we
believe could have a material adverse effect on our business, consolidated
financial condition, or operating results. However, from time to time, we have
been threatened with, or named as a defendant in, lawsuits or involved in
regulatory proceedings.
In the normal course of business, Nasdaq discusses matters with its regulators
raised during regulatory examinations or otherwise subject to their inquiries.
Management believes that censures, fines, penalties or other sanctions that
could result from any ongoing examinations or inquiries will not have a
material impact on its consolidated financial position or results of operations.
However, we are unable to predict the outcome or the timing of the ultimate
resolution of these matters, or the potential fines, penalties or injunctive or
other equitable relief, if any, that may result from these matters.
Related to the legal and regulatory matters described above we have recorded
immaterial legal accruals during the year ended 2023.
F-41
Tax Audits
We are engaged in ongoing discussions and audits with taxing authorities on
various tax matters, the resolutions of which are uncertain. Currently, there are
matters that may lead to assessments, some of which may not be resolved for
several years. Based on currently available information, we believe we have
adequately provided for any assessments that could result from those
proceedings where it is more likely than not that we will be assessed. We
review our positions on these matters as they progress. See “Tax Audits,” of
Note 17, “Income Taxes,” for further discussion.
19. BUSINESS SEGMENTS
Prior to November 1, 2023, we managed, operated and provided our products
and services in three business segments: Market Platforms, Capital Access
Platforms and Anti-Financial Crime. After the closing of the Adenza
acquisition, we realigned our reportable segments to Capital Access Platforms,
Financial Technology and Market Services. See Note 1, “Organization and
Nature of Operations,” for further discussion of our reportable segments.
This Annual Report on Form 10-K presents our results in alignment with the
new corporate structure. All periods presented are restated to reflect the new
structure.
Our management allocates resources, assesses performance and manages these
businesses as three separate segments. We evaluate the performance of our
segments based on several factors, of which the primary financial measure is
operating income. Results of individual businesses are presented based on our
management accounting practices and structure. Our chief operating decision
maker does not review total assets or statements of income below operating
income by segments as key performance metrics; therefore, such information
is not presented below.
The following table presents certain information regarding our business
segments for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
2023
2022
(in millions)
2021
Capital Access Platforms
Total revenues
Depreciation and amortization*
Operating income
Purchase of property and equipment
Financial Technology
Total revenues
Depreciation and amortization*
Operating income
Purchase of property and equipment
Market Services
Total revenues
Transaction-based expenses
Revenues less transaction-based
expenses
Depreciation and amortization*
Operating income
Purchase of property and equipment
Corporate Items
Total revenues
Depreciation and amortization
Operating loss
$
Consolidated
Total revenues
Transaction-based expenses
Revenues less transaction-based
expenses
$
Depreciation and amortization
Operating income
$
Purchase of property and equipment $
$
$
1,770 $
39
971
53
1,682 $
36
914
50
1,099
36
494
50
3,156
(2,169)
987
34
582
55
39
214
(469)
864
35
299
49
3,632
(2,644)
988
32
627
53
48
155
(276)
6,064 $
(2,169)
6,226 $
(2,644)
3,895 $
3,582 $
323 $
1,578 $
158 $
258 $
1,564 $
152 $
1,566
34
842
50
772
36
259
55
3,471
(2,466)
1,005
34
664
58
77
174
(324)
5,886
(2,466)
3,420
278
1,441
163
* excludes amortization of acquired intangible assets
F-42
Below amounts are allocated to Corporate Items in our management reports as
we believe they do not contribute to a meaningful evaluation of a particular
segment’s ongoing operating performance. Management does not consider
these items for the purpose of evaluating the performance of our segments or
their managers or when making decisions to allocate resources. Therefore, we
believe performance measures excluding
items provide
management with a useful representation of our segments’ ongoing activity in
each period. These items, which are presented in the table below, include the
following:
the below
• 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 segments, and the relative operating performance of the segments
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.
These expenses generally include integration costs, as well as legal, due
diligence and other third-party transaction costs. The frequency and the
amount of such expenses vary significantly based on the size, timing and
complexity of the transaction. For the year ended December 31, 2023, these
costs primarily relate 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. See Note 20, “Restructuring Charges,” for further discussion of this
plan.
• Revenues and expenses - divested businesses: For the years ended
December 31, 2023, 2022 and 2021, these amounts include revenues and
expenses related to our European power trading and clearing business,
following our announcement in June 2023 to sell this business, subject to
regulatory approval. Historically, these amounts were included in our
Market Services and Capital Access Platforms results. For 2022 and 2021,
we have included in corporate items the revenues and expenses of our U.S.
Fixed Income business, which was previously included in our Market
Services and Capital Access Platforms results.
Also included are the revenues and expenses of our Nordic broker services
business for which we completed the wind-down in June 2022. For 2021,
we included in corporate items the revenues and expenses associated with
the NPM business which we contributed to a standalone, independent
company, of which we own the largest minority interest, together with a
consortium of third-party financial institutions in July 2021. Prior to July,
these revenues were previously included in our Capital Access Platforms
results. For the years ended December 31, 2023, 2022 and 2021, other
revenues also include a transitional services agreement associated with a
divested business.
• Other items: We have included certain other charges or gains in corporate
items, to the extent we believe they should be excluded when evaluating the
ongoing operating performance of each individual segment. Other items
primarily 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
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.
in
◦ 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.
F-43
Revenues - divested businesses
Expenses:
Amortization expense of acquired
intangible assets
Merger and strategic initiatives
expense
Restructuring charges
Lease asset impairments
Legal and regulatory matters
Extinguishment of debt
Pension Settlement
Expenses - divested businesses
Other
Total expenses
Operating loss
$
Year Ended December 31,
2023
2022
(in millions)
2021
$
39 $
48 $
77
206
153
148
80
25
12
—
9
21
7
508
(469) $
82
15
—
26
16
—
27
5
324
(276) $
170
87
31
—
44
33
—
38
(2)
401
(324)
For further discussion of our segments’ results, see “Segment Operating
Results,” of “Part II, Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”
Geographic Data
The following table presents total revenues and property and equipment, net
by geographic area for 2023, 2022 and 2021. Revenues are classified based
upon the location of the customer. Property and equipment information is
based on the physical location of the assets.
Total
Revenues
Property and
Equipment, Net
2023:
United States
All other countries
Total
2022:
United States
All other countries
Total
2021:
United States
All other countries
Total
$
$
$
$
$
$
(in millions)
4,870 $
1,194
6,064 $
5,100 $
1,126
6,226 $
4,822 $
1,064
5,886 $
367
209
576
344
188
532
325
184
509
Property and equipment, net for all other countries primarily includes assets
held in Sweden. No single customer accounted for 10.0% or more of our
revenues in 2023, 2022 and 2021.
20. 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 connection with
incur
approximately $80 million in pre-tax charges principally related to employee-
related costs, contract terminations, real estate impairments and other related
costs. We expect to achieve benefits primarily in the form of expense and
revenue synergies. Costs related to the 2023 Adenza Restructuring program
will be recorded as restructuring charges in the Consolidated Statements of
Income.
this program, we expect
to
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 connection with the
program, we expect to incur $115 million to $145 million in pre-tax charges
principally related to employee-related costs, consulting, asset impairments
and contract terminations over a two-year period. Costs related to the
divisional alignment program will be recorded as restructuring charges in the
Consolidated Statements of Income.
In September 2019, we initiated the transition of certain technology platforms
to advance the Company’s strategic opportunities as a technology and
analytics provider and continue the realignment of certain business areas. In
connection with these restructuring efforts, we retired certain elements of our
market infrastructure and technology product offerings as we implemented
Nasdaq Financial Framework and other technologies internally and externally.
This represented a fundamental shift in our strategy and technology as well as
executive realignment. In June 2021, we completed our 2019 restructuring
plan and recognized total pre-tax charges of $118 million over a two-year
period. Total pre-tax charges related primarily to non-cash items such as asset
impairments and accelerated depreciation, and third-party consulting costs.
Severance and employee-related charges were also incurred.
F-44
The following table presents a summary of the 2023 Adenza restructuring
program, our 2022 divisional alignment program and our 2019 restructuring
plan charges for the years ended December 31, 2023, 2022 and 2021 as well
as total program costs incurred since the inception date of each program.
Year Ended December 31,
2023
2022
2021
(in millions)
Asset impairment charges
Divisional realignment
2019 program
Consulting services
Adenza restructuring
Divisional realignment
2019 program
Employee-related costs
Adenza restructuring
Divisional realignment
2019 program
Other
Adenza restructuring
Divisional realignment
2019 program
Total restructuring charges
Total Program Costs Incurred
Adenza restructuring
Divisional realignment
2019 program
8 $
—
—
3
—
—
3
—
—
—
1
—
15 $
—
4
—
—
19
—
—
—
1
—
—
—
7
31
$
12 $
—
3
34
—
6
13
—
—
1
11
—
80 $
10
85
118
$
$
$
$
F-45
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Exhibit 4.21
Nasdaq, Inc. (the “Company”) has five classes of securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”):
(1) Common Stock, par value $0.01 per share (“Common Stock”);
(2) 4.500% Senior Notes due 2032;
(3) 0.900% Senior Notes due 2033;
(4) 0.875% Senior Notes due 2030; and
(5) 1.75% Senior Notes due 2029.
As used in this summary, the terms “Nasdaq,” “the Company,” “we,” “our,” and “us” refer solely to Nasdaq, Inc. and not its
subsidiaries, unless otherwise specified.
Description of Common Stock
The following is a description of the material terms and provisions relating to our common stock. Because it is a summary, the
following description is not complete and is subject to and qualified in its entirety by reference to our Amended and Restated
Certificate of Incorporation, as amended, or Certificate, our By-Laws, each of which is incorporated by reference as an exhibit to the
Annual Report on Form 10-K, and provisions of Delaware law, which define the rights of our stockholders.
As of December 31, 2023, 900,000,000 shares of our common stock were authorized.
The holders of our common stock are entitled to one vote per share on all matters to be voted upon by the stockholders except
that no person may exercise voting rights in respect of any shares in excess of 5% of the then outstanding shares of our Common Stock.
Subject to certain additional conditions, this limitation does not apply to persons exempted from this limitation by our Board of
Directors prior to the time such person owns more than 5.0% of the then-outstanding shares of our common stock.
At any meeting of our stockholders, a majority of the votes entitled to be cast will constitute a quorum for such meeting.
Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our
board of directors out of funds legally available for them. In the event of our liquidation, dissolution, or winding-up, the holders of our
common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of
preferred stock, if any, then outstanding. Our common stock has no preemptive or conversion rights or other subscription rights. There
are no redemption or sinking fund provisions applicable to our common stock. All outstanding shares of common stock are fully paid
and non-assessable. Future dividends, if any, will be determined by our board of directors.
Certain Provisions of our Certificate and By-Laws
Some provisions of our Certificate and By-Laws, which provisions are summarized below, may be deemed to have an anti-
takeover effect and may delay, defer, or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest,
including those attempts that might result in a premium over the market price for the shares held by stockholders.
Advance Notice Requirements for Stockholder Proposals and Directors Nominations
Our by-laws provide that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate
candidates for election as directors at an annual meeting of stockholders, must provide timely notice in writing. To be timely, a
stockholder’s notice must be delivered to or mailed and received at our principal executive offices not less than 90 nor more than 120
days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, that in the event that the
annual meeting is called for a date that is not within 30 days before or 70 days after such anniversary date, notice by the stockholder in
order to be timely must be received not earlier than 120 days prior to the meeting and not later than the later of 90 days prior to the
meeting and the close of business on the 10th day following the date on which notice of the date of the annual meeting was first
publicly announced by Nasdaq. In the case of a special meeting of stockholders called for the purpose of electing directors, notice by
the stockholder in order to be timely must be received not earlier than 120 days prior to the meeting and not later than the later of 90
days prior to the meeting or the close of business on the 10th day following the day on which public disclosure of the date of the special
meeting and our nominees was first made. In addition, our by-laws specify certain requirements as to the form and content of a
stockholder’s notice. These provisions may preclude stockholders from bringing
matters before an annual meeting of stockholders or from making nominations for directors at an annual or special meeting of
stockholders.
Proxy Access
Our by-laws include a proxy access provision that permits a stockholder, or a group of stockholders, owning at least three
percent of our outstanding shares of common stock continuously for at least three years to nominate and include in the proxy materials
for an annual meeting of stockholders director nominees constituting up to the greater of two individuals and 25% of the total number
of directors then in office, provided that the stockholder(s) and nominee(s) satisfy the requirements specified in the by-laws.
Stockholder Action
Our Certificate provides that stockholders are not entitled to act by written consent in lieu of a meeting.
Right to Call Special Meeting
Our by-laws provide that stockholders representing 15% or more of our outstanding shares can convene a special meeting of
stockholders.
Amendments; Vote Requirements
The General Corporation Law of the State of Delaware provides generally that the affirmative vote of a majority of the shares
entitled to vote on any matter is required to amend a corporation’s certificate of incorporation, unless a corporation’s certificate of
incorporation requires a greater percentage. Our Certificate imposes majority voting requirements in connection with stockholder
amendments to the by-laws and in connection with the amendment of certain provisions of the Certificate, including those provisions of
the Certificate relating to the limitations on voting rights of certain persons, removal of directors and prohibitions on stockholder action
by written consent.
Authorized But Unissued Shares
The authorized but unissued shares of our common stock will be available for future issuance without stockholder approval in
most cases. These additional shares may be utilized for a variety of corporate purposes, including future public or private offerings to
raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of our
common stock could render more difficult, or discourage, an attempt to obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.
Delaware Business Combination Statute
We are organized under Delaware law. Delaware law generally prohibits a publicly-held or widely-held corporation from
engaging in a “business combination” with an “interested stockholder” for three years after the stockholder becomes an interested
stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns (or, in some cases, within three
years, did own) directly or indirectly 15% or more of the corporation’s outstanding voting stock. A “business combination” includes a
merger, asset sale or other transaction that results in a financial benefit to the interested stockholder. However, Delaware law does not
prohibit these business combinations if:
1. before the stockholder becomes an interested stockholder, the corporation’s board approved either the business combination or
the transaction that resulted in the stockholder becoming an interested stockholder;
2. after the transaction that results in the stockholder becoming an interested stockholder, the interested stockholder owns at least
85% of the corporation’s outstanding voting stock (excluding certain shares); or
3.
the corporation’s board approves the business combination and the holders of at least two-thirds of the corporation’s outstanding
voting stock that the interested stockholder does not own authorize the business combination at a meeting of stockholders.
Stockholders’ Agreements
Investor AB
On December 14, 2022, we entered into an amendment to our stockholders’ agreement with Investor AB (the “Amended
Stockholders’ Agreement”), amending the original stockholders’ agreement that was entered into between Nasdaq and Investor AB on
December 16, 2010.
The Amended Stockholders’ Agreement reinstated Investor AB’s right to propose for nomination one person, reasonably
acceptable to our Nominating & ESG Committee, for election to our Board of Directors so long as Investor AB continues to
beneficially own at least 10% of the outstanding common stock of Nasdaq. We are obligated by the terms of the Amended
Stockholders’ Agreement to (i) include the Investor AB designee as a nominee to the Board of Directors on each slate of nominees for
election to the Board of Directors proposed by management of Nasdaq, (ii) recommend the election of the Investor AB designee to our
stockholders and (iii) otherwise use our reasonable best efforts (which shall include the solicitation of proxies) to cause the Investor AB
designee to be elected to the Board of Directors.
The foregoing summary of the Amended Stockholders’ Agreement does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Amended Stockholders’ Agreement, which was filed as Exhibit 4.1 to Nasdaq’s Current
Report on Form 8-K filed on December 16, 2022.
Thoma Bravo
In connection with our acquisition of Adenza Holdings, Inc. (“Adenza”) on November 1, 2023, we entered into a Stockholders’
Agreement with Adenza Parent, LP (“Seller”), and Thoma Bravo, LP (“Thoma Bravo” and together with Seller, the “Seller Parties”),
dated as of November 1, 2023 (the “Stockholders’ Agreement”), pursuant to which the Seller Parties agreed to be subject to a lock-
up with respect to the transfer of the shares of our common stock issued to the Seller on the closing of the acquisition, with 50% of such
shares released from the lock-up on the six-month anniversary of the closing of the acquisition and the remaining 50% of such shares
released from the lock-up on the 18-month anniversary of the closing of the acquisition (subject to certain exceptions).
The Stockholders’ Agreement further provides that the Seller Parties will be entitled to propose for nomination one director for
election to our Board of Directors (with the initial nominee to be Mr. Holden Spaht), and such right will exist for so long as the Seller
Parties and their controlled affiliates continue to beneficially own at least 10% of the shares of Nasdaq common stock outstanding as of
November 1, 2023.
In addition, the Seller Parties have agreed to be subject to a standstill obligation, including a restriction on acquiring shares in
excess of 19.99% of the outstanding Nasdaq common stock on a fully diluted basis, subject to certain exceptions, for at least two years
following the closing date.
The foregoing description of the Stockholders’ Agreement does not purport to be complete and is qualified in its entirety by the
full text of the Stockholders’ Agreement, which was filed as Exhibit 4.1 to Nasdaq’s Current Report on Form 8-K filed on November 3,
2023.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare. Its address is 480 Washington Boulevard, Jersey City,
New Jersey 07310 and its telephone number is (800) 736-3001.
Listing
Our common stock is listed on The Nasdaq Stock Market under the trading symbol “NDAQ.”
Description of the 4.500% Senior Notes due 2032
The 4.500% Senior Notes due 2032 (the “2032 Notes”) were issued under an indenture, dated as of June 7, 2013 (the “base
indenture”) between Nasdaq, Inc. and Wells Fargo Bank, National Association, as trustee (the “Trustee”) and a nineteenth supplemental
indenture dated as of June 28, 2023 (the “supplemental indenture” and, together with the base indenture, the “indenture”) by and among
Nasdaq, Computershare Trust Company, N.A., as trustee, as successor to Wells Fargo Bank, (the “Trustee”) and HSBC Bank USA,
National Association, as paying agent, registrar and transfer agent. The indenture is publicly available at www.sec.gov.
We issued €750 million aggregate principal amount of the 2032 Notes on June 28, 2023.
This summary is subject to, and qualified in its entirety by reference to, all the provisions of the 2032 Notes and the indenture,
including definitions of certain terms used therein.
General
The 2032 Notes:
•
•
•
•
are senior unsecured obligations of ours;
rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding,
commercial paper issuances and indebtedness under our credit facility;
are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including
claims with respect to trade payables; and
are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured
obligations to the extent of the value of the collateral securing any such indebtedness and other obligations.
The 2032 Notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.
Principal, Maturity and Interest
The 2032 Notes will bear interest at a rate of 4.500% per year. Interest on the Notes is payable annually in arrears on February
15 of each year, beginning on February 15, 2024, and
will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of
days from and including the last date on which interest was paid on the 2032 Notes (or the settlement date if no interest has been paid or
duly provided for on the 2032 Notes), to but excluding the next date on which interest is paid or duly provided for. This payment
convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.
Interest on the 2032 Notes will accrue from and including the settlement date and will be paid to holders of record on the day
immediately prior to the applicable interest payment date.
The 2032 Notes will mature on February 15, 2032. On the maturity date of the 2032 Notes, the holders will be entitled to
receive 100% of the principal amount of such 2032 Notes. The 2032 Notes will not have the benefit of any sinking fund.
If any interest payment date, redemption date or maturity date falls on a day that is not a business day, then the relevant payment
may be made on the next succeeding business day and no interest will accrue because of such delayed payment. With respect to the
2032 Notes, when we use the term “business day” we mean any day except a Saturday, a Sunday or a day on which banking institutions
in the applicable place of payment are authorized or required by law, regulation or executive order to close.
Claims against the Company for payment of principal, interest and additional amounts, if any, on the 2032 Notes will become
void unless presentment for payment is made (where so required under the indenture) within, in the case of principal and additional
amounts, if any, a period of ten years or, in the case of interest, a period of five years, in each case from the applicable original date of
payment therefor.
Euro Notes—Issuance in Euros
Initial holders of the 2032 Notes paid for the 2032 Notes in euros, and principal, premium, if any, and interest payments and
additional amounts, if any, in respect of the 2032 Notes will be payable in euros. If, on or after the date of this prospectus supplement,
the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or the euro is no
longer used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the
settlement of transactions by public institutions within the international banking community, then all payments in respect of the 2032
Notes will be made in U.S. dollars until the euro is again available to us or so used.
The amount payable on any date in euros will be converted to U.S. dollars on the basis of the most recently available market
exchange rate for euros as determined by us in our sole discretion. Any payment in respect of the 2032 Notes so made in U.S. dollars
will not constitute
an event of default under the indenture or the 2032 Notes. Neither the trustee nor the paying agent will be responsible for obtaining
exchange rates, effecting conversions or otherwise handling redenominations.
Ranking
The 2032 Notes are general unsecured obligations of ours and will rank equally with all of our existing and future
unsubordinated obligations.
Holders of any secured indebtedness and other secured obligations of the Company will have claims that are prior to your
claims as holders of the 2032 Notes, to the extent of the value of the assets securing such indebtedness and other obligations, in the
event of any bankruptcy, liquidation or similar proceeding.
Further Issues
The 2032 Notes constituted a separate series of debt securities under the indenture, limited to €750 million. Under the indenture,
we may, without the consent of the holders of the 2032 Notes, issue additional 2032 Notes of the same or a different series from time to
time in the future in an unlimited aggregate principal amount; provided that if any such additional 2032 Notes are not fungible with the
2032 Notes offered hereby (or any other tranche of additional 2032 Notes) for U.S. federal income tax purposes, then such additional
2032 Notes will have different ISIN and/or Common Code numbers than the Notes offered hereby (and any such other tranche of
additional 2032 Notes). The 2032 Notes and any additional 2032 Notes of the same series would rank equally and ratably and would be
treated as a single class for all purposes under the indenture. This means that, in circumstances where the indenture provides for the
holders of debt securities of any series to vote or take any action, any of the outstanding 2032 Notes, as well as any additional 2032
Notes that we may issue by reopening such series, will vote or take action as a single class.
Redemption
Optional Redemption
The 2032 Notes will be redeemable, in whole at any time or in part from time to time, at our option, prior to December 15,
2031, at a redemption price (the “make-whole redemption price”) equal to the greater of (i) 100% of the principal amount of the 2032
Notes and (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled
payments of principal and interest on the 2032 Notes (exclusive of interest accrued and unpaid as of the date of redemption), discounted
to the date of redemption on an
annual basis (ACTUAL/ACTUAL (ICMA)) at the Bund Rate (as defined below), plus 35 basis points, plus accrued and unpaid interest
thereon to the date of redemption. However, if the redemption date is after a record date and on or prior to a corresponding interest
payment date, the interest will be paid on the redemption date to the holder of record on the record date.
Notwithstanding the foregoing, at any time on or after December 15, 2031 (three months before their maturity date), the 2032
Notes will be redeemable, in whole or in part, at our option and at any time or from time to time, at a redemption price equal to 100%
of the principal amount of the 2032 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the date of
redemption.
Notice of any redemption will be mailed at least 10 days, but not more than 60 days, before the redemption date to each
registered holder of 2032 Notes to be redeemed. Once notice of redemption is mailed, the 2032 Notes called for redemption will
become due and payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to, but not
including, the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the 2032 Notes (or portion thereof) to be redeemed on such redemption date.
“Bund Rate” means, with respect to any redemption date, the rate per annum equal to the annual equivalent yield to maturity of
the Comparable German Bund Issue, assuming a price for the Comparable German Bund Issue (expressed as a percentage of its
principal amount) equal to the Comparable German Bund Price for such redemption date.
“Comparable German Bund Issue” means that German Bundesanleihe security selected by the Quotation Agent as having a
maturity comparable to the remaining term of the 2032 Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary
financial practice, in pricing new issues of corporate notes of comparable maturity to the remaining term of the Notes.
“Comparable German Bund Price” means, with respect to any redemption date, (i) the average of four Reference German Bund
Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference German Bund Dealer Quotations or
(ii) if the Quotation Agent obtains fewer than four such Reference German Bund Dealer Quotations, the average of all such quotations.
“Quotation Agent” means a Reference German Bund Dealer appointed by us.
“Reference German Bund Dealer” means any dealer of German Bundesanleihe securities selected by us in good faith.
“Reference German Bund Dealer Quotations” means, with respect to each Reference German Bund Dealer and any redemption
date, the average, as determined by us, of the bid and asked prices for the Comparable German Bund Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference German Bund Dealer at 3:30 p.m.,
Frankfurt, Germany time, on the third business day preceding such redemption date.
If we elect to redeem less than all of the 2032 Notes, and such 2032 Notes are at the time represented by a global note, then the
depositary will select by lot the particular interests to be redeemed. If we elect to redeem less than all of the 2032 Notes, and any of
such 2032 Notes are not represented by a global note, then the trustee will select the particular 2032 Notes to be redeemed in a manner
it deems appropriate and fair (and the depositary will select by lot the particular interests in any global note to be redeemed).
We may at any time, and from time to time, purchase the 2032 Notes at any price or prices in the open market or otherwise.
Repurchase upon Change of Control Triggering Event
If a Change of Control Triggering Event (as defined below) occurs with respect to the 2032 Notes, unless we have exercised our
right to redeem the 2032 Notes, we will be required to make an offer to repurchase all or, at the holder’s option, any part (equal to
€100,000 or any integral multiple of €1,000 in excess thereof) of each holder’s 2032 Notes pursuant to the offer described below (the
“Change of Control Offer”).
In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of
2032 Notes repurchased plus accrued and unpaid interest, if any, on the 2032 Notes repurchased to, but not including, the date of
purchase (the “Change of Control Payment”).
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the
assets of us and our Subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”) other than us or one of our subsidiaries; (2) the approval by the holders of our common stock of any plan or
proposal for our liquidation or dissolution; (3) the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50%
of the then outstanding number of shares of our Voting Stock; or (4) the first day on which a majority of the members of our board of
directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we become a direct or
indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that
transaction or (B) immediately following that transaction no Person or Group (other than a holding company satisfying the
requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding
company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event (as such term is defined in the indenture) occurring in respect of that Change of Control.
“Continuing Directors” means, as of any date of determination, any member of our board of directors who (1) was a member of
our board of directors on the date of the issuance of the 2032 Notes; or (2) was nominated or approved for election, elected or appointed
to our board of directors with the approval of a majority of the Continuing Directors who were members of our board of directors at the
time of such nomination, approval, election or appointment (either by a specific vote or by approval of the proxy statement issued by us
in which such member was named as a nominee for election as a director).
“Person” means any individual, firm, limited liability company, corporation, partnership, association, joint venture, tribunal,
trust, government or political subdivision or agency or instrumentality thereof, or any other entity or organization and includes a
“person” as used in Section 13(d)(3) of the Exchange Act.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote
generally in the election of the board of directors of such Person.
The definition of “Change of Control” includes a phrase relating to the sale, transfer, conveyance or other disposition of “all or
substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable
law. Accordingly, your ability to require us to purchase your 2032 Notes as a result of the sale, transfer, conveyance or other disposition
of less than all of our assets may be uncertain.
Certain Covenants
The indenture contains, among others, restrictive covenants regarding (i) our ability to consolidate or merge with another entity
or to sell, transfer or otherwise convey all or substantially all of our assets to another entity, (ii) create or permit certain significant
subsidiaries to create or permit to exist certain liens and (iii) certain sale and lease-back transactions involving certain subsidiaries.
Events of Default
Holders of the 2032 Notes will have specified rights if an Event of Default (as defined below) occurs. The term “Event of
Default” in respect of the 2032 Notes means any of the following:
(1)
(2)
(3)
(4)
we do not pay interest on any of the 2032 Notes within 30 days of its due date;
we fail to pay the principal (or premium, if any) of any 2033 Note, when such principal becomes due and payable, at
maturity, upon acceleration, upon redemption or otherwise;
we fail to comply with certain covenants under the indenture;
we remain in breach of a covenant or warranty in respect of the indenture or 2032 Notes (other than a covenant
included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written
notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the
outstanding 2032 Notes;
(5)
we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture;
(6)
(7)
we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least
$200,000,000, constituting a default either of payment of principal when due and payable or which results in
acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full
within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding
2032 Notes; or
one or more final judgments for the payment of money in an aggregate amount in excess of $200,000,000 above
available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed.
If an Event of Default (other than an Event of Default specified in clause (5) above) with respect to the 2032 Notes has occurred, the
trustee or the holders of at least 25% in principal amount of the 2032 Notes may declare the entire unpaid principal amount of (and
premium, if any), and all the accrued interest on, the Notes to be due and immediately payable. This is called a declaration of
acceleration of maturity. There is no action on the part of the trustee or any holder of the 2032 Notes required for such declaration if the
Event of Default is the Company’s bankruptcy, insolvency or reorganization. Holders of a majority in principal amount of the 2032
Notes may also waive certain past defaults under the indenture with respect to the 2032 Notes on behalf of all of the holders of the 2032
Notes. A declaration of acceleration of maturity may be canceled, under specified circumstances, by the holders of at least a majority in
principal amount of the 2032 Notes and the trustee.
Except in cases of default, where the trustee has special duties, the trustee is not required to take any action under the indenture at the
request of holders unless the holders offer the trustee protection from expenses and liability satisfactory to the trustee. If an indemnity
satisfactory to the trustee is provided, the holders of a majority in principal amount of 2032 Notes may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may refuse to
follow those directions in certain circumstances specified in the indenture. No delay or omission in exercising any right or remedy will
be treated as a waiver of the right, remedy or Event of Default.
Modification of the Indenture and Waiver of Rights of Holders
Under certain circumstances, we can make changes to the indenture and the 2032 Notes. Some types of changes require the approval of
each holder of 2032 Notes, some require approval by a vote of a majority of the holders of the 2032 Notes, and some changes do not
require any approval at all.
Description of the 0.900% Senior Notes Due 2033
The 0.900% Senior Notes due 2033 (the “2033 Notes”) were issued under an indenture, dated as of June 7, 2013 (the “base
indenture”) between Nasdaq, Inc. and Wells Fargo Bank, National Association, as trustee (the “Trustee”) and a twelfth supplemental
indenture dated as of July 30, 2021 (the “supplemental indenture” and, together with the base indenture, the “indenture”) by and among
Nasdaq, the Trustee and HSBC Bank USA, National Association, as registrar and transfer agent. The indenture is publicly available at
www.sec.gov.
We issued €615 million aggregate principal amount of the 2033 Notes on July 30, 2021.
This summary is subject to, and qualified in its entirety by reference to, all the provisions of the 2033 Notes and the indenture,
including definitions of certain terms used therein.
General
The 2033 Notes:
•
•
•
•
are senior unsecured obligations of ours;
rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding,
commercial paper issuances and indebtedness under our credit facility;
are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including
claims with respect to trade payables; and
are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured
obligations to the extent of the value of the collateral securing any such indebtedness and other obligations.
The 2033 Notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.
Principal, Maturity and Interest
The 2033 Notes will bear interest at a rate of 0.900% per year. Interest on the Notes is payable annually in arrears on July 30 of
each year, beginning on July 30, 2022, and will be computed on the basis of the actual number of days in the period for which interest is
being calculated and the actual number of days from and including the last date on which interest was paid on the 2033 Notes (or the
settlement date if no interest has been paid or duly provided for on the 2033 Notes), to but excluding the next date on which interest is
paid or duly provided for. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the
International Capital Market Association. Interest on the 2033 Notes will accrue from and including the settlement date and will be paid
to holders of record on the day immediately prior to the applicable interest payment date.
The 2033 Notes will mature on July 30, 2033. On the maturity date of the 2033 Notes, the holders will be entitled to receive
100% of the principal amount of such 2033 Notes. The 2033 Notes will not have the benefit of any sinking fund.
If any interest payment date, redemption date or maturity date falls on a day that is not a business day, then the relevant payment
may be made on the next succeeding business day and no interest will accrue because of such delayed payment. With respect to the
2033 Notes, when we use the term “business day” we mean any day except a Saturday, a Sunday or a day on which banking institutions
in the applicable place of payment are authorized or required by law, regulation or executive order to close.
Claims against the Company for payment of principal, interest and additional amounts, if any, on the 2033 Notes will become
void unless presentment for payment is made (where so required under the indenture) within, in the case of principal and additional
amounts, if any, a period of ten years or, in the case of interest, a period of five years, in each case from the applicable original date of
payment therefor.
Euro Notes—Issuance in Euros
Initial holders of the 2033 Notes paid for the 2033 Notes in euros, and principal, premium, if any, and interest payments and
additional amounts, if any, in respect of the 2033 Notes will be payable in euros. If, on or after the date of this prospectus supplement,
the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or the euro is no
longer used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the
settlement of transactions by public institutions within the international banking community, then all payments in respect of the 2033
Notes will be made in U.S. dollars until the euro is again available to us or so used.
The amount payable on any date in euros will be converted to U.S. dollars on the basis of the most recently available market
exchange rate for euros as determined by us in our sole discretion. Any payment in respect of the 2033 Notes so made in U.S. dollars
will not constitute an event of default under the indenture or the 2033 Notes. Neither the trustee nor the paying agent will be responsible
for obtaining exchange rates, effecting conversions or otherwise handling redenominations.
Ranking
The 2033 Notes are general unsecured obligations of ours and will rank equally with all of our existing and future
unsubordinated obligations.
Holders of any secured indebtedness and other secured obligations of the Company will have claims that are prior to your
claims as holders of the 2033 Notes, to the extent of the value of the assets securing such indebtedness and other obligations, in the
event of any bankruptcy, liquidation or similar proceeding.
Further Issues
The 2033 Notes constituted a separate series of debt securities under the indenture, limited to €615 million. Under the indenture,
we may, without the consent of the holders of the 2033 Notes, issue additional 2033 Notes of the same or a different series from time to
time in the future in an unlimited aggregate principal amount; provided that if any such additional 2033 Notes are not fungible with the
2033 Notes offered hereby (or any other tranche of additional 2033 Notes) for U.S. federal income tax purposes, then such additional
2033 Notes will have different ISIN and/or Common Code numbers than the Notes offered hereby (and any such other tranche of
additional 2033 Notes). The 2033 Notes and any additional 2033 Notes of the same series would rank equally and ratably and would be
treated as a single class for all purposes under the indenture. This means that, in circumstances where the indenture provides for the
holders of debt securities of any series to vote or take any action, any of the outstanding 2033 Notes, as well as any additional 2033
Notes that we may issue by reopening such series, will vote or take action as a single class.
Redemption
Optional Redemption
The 2033 Notes will be redeemable, in whole at any time or in part from time to time, at our option, prior to April 30, 2033, at a
redemption price (the “make-whole redemption price”)
equal to the greater of (i) 100% of the principal amount of the 2033 Notes and (ii) as determined by the Quotation Agent (as defined
below), the sum of the present values of the remaining scheduled payments of principal and interest on the 2033 Notes (exclusive of
interest accrued and unpaid as of the date of redemption), discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL
(ICMA)) at the Bund Rate (as defined below), plus 20 basis points, plus accrued and unpaid interest thereon to the date of redemption.
However, if the redemption date is after a record date and on or prior to a corresponding interest payment date, the interest will be paid
on the redemption date to the holder of record on the record date.
Notwithstanding the foregoing, at any time on or after April 30, 2033 (three months before their maturity date), the 2033 Notes
will be redeemable, in whole or in part, at our option and at any time or from time to time, at a redemption price equal to 100% of the
principal amount of the 2033 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
Notice of any redemption will be mailed at least 10 days, but not more than 60 days, before the redemption date to each
registered holder of 2033 Notes to be redeemed. Once notice of redemption is mailed, the 2033 Notes called for redemption will
become due and payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to, but not
including, the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the 2033 Notes (or portion thereof) to be redeemed on such redemption date.
“Bund Rate” means, with respect to any redemption date, the rate per annum equal to the annual equivalent yield to maturity of
the Comparable German Bund Issue, assuming a price for the Comparable German Bund Issue (expressed as a percentage of its
principal amount) equal to the Comparable German Bund Price for such redemption date.
“Comparable German Bund Issue” means that German Bundesanleihe security selected by the Quotation Agent as having a
maturity comparable to the remaining term of the 2033 Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary
financial practice, in pricing new issues of corporate notes of comparable maturity to the remaining term of the Notes.
“Comparable German Bund Price” means, with respect to any redemption date, (i) the average of four Reference German Bund
Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference German Bund Dealer Quotations or
(ii) if the Quotation Agent obtains fewer than four such Reference German Bund Dealer Quotations, the average of all such quotations.
“Quotation Agent” means a Reference German Bund Dealer appointed by us.
“Reference German Bund Dealer” means any dealer of German Bundesanleihe securities selected by us in good faith.
“Reference German Bund Dealer Quotations” means, with respect to each Reference German Bund Dealer and any redemption
date, the average, as determined by us, of the bid and asked prices for the Comparable German Bund Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference German Bund Dealer at 3:30 p.m.,
Frankfurt, Germany time, on the third business day preceding such redemption date.
If we elect to redeem less than all of the 2033 Notes, and such 2033 Notes are at the time represented by a global note, then the
depositary will select by lot the particular interests to be redeemed. If we elect to redeem less than all of the 2033 Notes, and any of
such 2033 Notes are not represented by a global note, then the trustee will select the particular 2033 Notes to be redeemed in a manner
it deems appropriate and fair (and the depositary will select by lot the particular interests in any global note to be redeemed).
We may at any time, and from time to time, purchase the 2033 Notes at any price or prices in the open market or otherwise.
Repurchase upon Change of Control Triggering Event
If a Change of Control Triggering Event (as defined below) occurs with respect to the 2033 Notes, unless we have exercised our
right to redeem the 2033 Notes, we will be required to make an offer to repurchase all or, at the holder’s option, any part (equal to
€100,000 or any integral multiple of €1,000 in excess thereof) of each holder’s 2033 Notes pursuant to the offer described below (the
“Change of Control Offer”).
In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of
2033 Notes repurchased plus accrued and unpaid interest, if any, on the 2033 Notes repurchased to, but not including, the date of
purchase (the “Change of Control Payment”).
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the
assets of us and our Subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”) other than us or one of our subsidiaries; (2) the approval by the holders of our common stock of any plan or
proposal for our liquidation or dissolution; (3) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50% of
the then outstanding number of shares of our Voting Stock; or (4) the first day on which a majority of the members of our board of
directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we become a direct or
indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that
transaction or (B) immediately following that transaction no Person or Group (other than a holding company satisfying the
requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding
company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event (as such term is defined in the indenture) occurring in respect of that Change of Control.
“Continuing Directors” means, as of any date of determination, any member of our board of directors who (1) was a member of
our board of directors on the date of the issuance of the 2033 Notes; or (2) was nominated or approved for election, elected or appointed
to our board of directors with the approval of a majority of the Continuing Directors who were members of our board of directors at the
time of such nomination, approval, election or appointment (either by a specific vote or by approval of the proxy statement issued by us
in which such member was named as a nominee for election as a director).
“Person” means any individual, firm, limited liability company, corporation, partnership, association, joint venture, tribunal,
trust, government or political subdivision or agency or instrumentality thereof, or any other entity or organization and includes a
“person” as used in Section 13(d)(3) of the Exchange Act.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote
generally in the election of the board of directors of such Person.
The definition of “Change of Control” includes a phrase relating to the sale, transfer, conveyance or other disposition of “all or
substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable
law. Accordingly, your ability to require us to purchase your 2033 Notes as a result of the sale, transfer, conveyance or other disposition
of less than all of our assets may be uncertain.
Certain Covenants
The indenture contains, among others, restrictive covenants regarding (i) our ability to consolidate or merge with another entity
or to sell, transfer or otherwise convey all or substantially all of our assets to another entity, (ii) create or permit certain significant
subsidiaries to create or permit to exist certain liens and (iii) certain sale and lease-back transactions involving certain subsidiaries.
Events of Default
Holders of the 2033 Notes will have specified rights if an Event of Default (as defined below) occurs. The term “Event of
Default” in respect of the 2033 Notes means any of the following:
(1)
(2)
we do not pay interest on any of the 2033 Notes within 30 days of its due date;
we fail to pay the principal (or premium, if any) of any 2033 Note, when such principal becomes due and payable, at
maturity, upon acceleration, upon redemption or otherwise;
(3)
we fail to comply with certain covenants under the indenture;
(4)
(5)
(6)
(7)
we remain in breach of a covenant or warranty in respect of the indenture or 2033 Notes (other than a covenant
included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written
notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the
outstanding 2033 Notes;
we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture;
we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least
$200,000,000, constituting a default either of payment of principal when due and payable or which results in
acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full
within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding
2033 Notes; or
one or more final judgments for the payment of money in an aggregate amount in excess of $200,000,000 above
available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed.
If an Event of Default (other than an Event of Default specified in clause (5) above) with respect to the 2033 Notes has occurred, the
trustee or the holders of at least 25% in principal amount of the 2033 Notes may declare the entire unpaid principal amount of (and
premium, if any), and all the accrued interest on, the Notes to be due and immediately payable. This is called a declaration of
acceleration of maturity. There is no action on the part of the trustee or any holder of the 2033 Notes required for such declaration if the
Event of Default is the Company’s bankruptcy, insolvency or reorganization. Holders of a majority in principal amount of the 2033
Notes may also waive certain past defaults under the indenture with respect to the 2033 Notes on behalf of all of the holders of the 2033
Notes. A declaration of acceleration of maturity may be canceled,
under specified circumstances, by the holders of at least a majority in principal amount of the 2033 Notes and the trustee.
Except in cases of default, where the trustee has special duties, the trustee is not required to take any action under the indenture at the
request of holders unless the holders offer the trustee protection from expenses and liability satisfactory to the trustee. If an indemnity
satisfactory to the trustee is provided, the holders of a majority in principal amount of 2033 Notes may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may refuse to
follow those directions in certain circumstances specified in the indenture. No delay or omission in exercising any right or remedy will
be treated as a waiver of the right, remedy or Event of Default.
Modification of the Indenture and Waiver of Rights of Holders
Under certain circumstances, we can make changes to the indenture and the 2033 Notes. Some types of changes require the approval of
each holder of 2033 Notes, some require approval by a vote of a majority of the holders of the 2033 Notes, and some changes do not
require any approval at all.
Description of the 0.875% Senior Notes Due 2030
The 0.875% Senior Notes due 2030 (the “2030 Notes”) were issued under an indenture, dated as of June 7, 2013 (the “base
indenture”) between Nasdaq, Inc. and Wells Fargo Bank, National Association, as trustee (the “Trustee”) and a seventh supplemental
indenture dated as of February 13, 2020 (the “supplemental indenture” and, together with the base indenture, the “indenture”). The
indenture is publicly available at www.sec.gov.
We issued €600 million aggregate principal amount of the 2030 Notes on February 13, 2020.
This summary is subject to, and qualified in its entirety by reference to, all the provisions of the 2030 Notes and the indenture,
including definitions of certain terms used therein.
General
The 2030 Notes:
•
are senior unsecured obligations of ours;
•
•
•
rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding,
commercial paper issuances and indebtedness under our credit facility;
are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including
claims with respect to trade payables; and
are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured
obligations to the extent of the value of the collateral securing any such indebtedness and other obligations.
The 2030 Notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.
Principal, Maturity and Interest
The 2030 Notes will bear interest at a rate of 0.875% per year. Interest on the Notes is payable annually in arrears on February
13 of each year, beginning on February 13, 2021, and will be computed on the basis of the actual number of days in the period for
which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the 2030
Notes (or the settlement date if no interest has been paid or duly provided for on the 2030 Notes), to but excluding the next date on
which interest is paid or duly provided for. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the
rulebook of the International Capital Market Association. Interest on the 2030 Notes will accrue from and including the settlement date
and will be paid to holders of record on the day immediately prior to the applicable interest payment date.
The 2030 Notes will mature on February 13, 2030. On the maturity date of the 2030 Notes, the holders will be entitled to
receive 100% of the principal amount of such 2030 Notes. The 2030 2030 Notes will not have the benefit of any sinking fund.
If any interest payment date, redemption date or maturity date falls on a day that is not a business day, then the relevant payment
may be made on the next succeeding business day and no interest will accrue because of such delayed payment. With respect to the
2030 Notes, when we use the term “business day” we mean any day except a Saturday, a Sunday or a day on which banking institutions
in the applicable place of payment are authorized or required by law, regulation or executive order to close.
Claims against the Company for payment of principal, interest and additional amounts, if any, on the 2030 Notes will become
void unless presentment for payment is made (where so required under the indenture) within, in the case of principal and additional
amounts, if any, a period of ten years or, in the case of interest, a period of five years, in each case from the applicable original date of
payment therefor.
Euro Notes—Issuance in Euros
Initial holders of the 2030 Notes paid for the 2030 Notes in euros, and principal, premium, if any, and interest payments and
additional amounts, if any, in respect of the 2030 Notes will be payable in euros. If, on or after the date of this prospectus supplement,
the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or the euro is no
longer used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the
settlement of transactions by public institutions within the international banking community, then all payments in respect of the 2030
Notes will be made in U.S. dollars until the euro is again available to us or so used.
The amount payable on any date in euros will be converted to U.S. dollars on the basis of the most recently available market
exchange rate for euros as determined by us in our sole discretion. Any payment in respect of the 2030 Notes so made in U.S. dollars
will not constitute an event of default under the indenture or the 2030 Notes. Neither the trustee nor the paying agent will be responsible
for obtaining exchange rates, effecting conversions or otherwise handling redenominations.
Ranking
The 2030 Notes are general unsecured obligations of ours and will rank equally with all of our existing and future
unsubordinated obligations.
Holders of any secured indebtedness and other secured obligations of the Company will have claims that are prior to your
claims as holders of the 2030 Notes, to the extent of the value of the assets securing such indebtedness and other obligations, in the
event of any bankruptcy, liquidation or similar proceeding.
Further Issues
The 2030 Notes constituted a separate series of debt securities under the indenture, limited to €600 million. Under the indenture,
we may, without the consent of the holders of the 2030 Notes, issue additional 2030 Notes of the same or a different series from time to
time in the future in an unlimited aggregate principal amount; provided that if any such additional 2030
Notes are not fungible with the 2030 Notes offered hereby (or any other tranche of additional 2030 Notes) for U.S. federal income tax
purposes, then such additional 2030 Notes will have different ISIN and/or Common Code numbers than the Notes offered hereby (and
any such other tranche of additional 2030 Notes). The 2030 Notes and any additional 2030 Notes of the same series would rank equally
and ratably and would be treated as a single class for all purposes under the indenture. This means that, in circumstances where the
indenture provides for the holders of debt securities of any series to vote or take any action, any of the outstanding 2030 Notes, as well
as any additional 2030 Notes that we may issue by reopening such series, will vote or take action as a single class.
Redemption
Optional Redemption
The 2030 Notes will be redeemable, in whole at any time or in part from time to time, at our option, at a redemption price (the
“make-whole redemption price”) equal to the greater of (i) 100% of the principal amount of the 2030 Notes and (ii) as determined by
the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on
the 2030 Notes (exclusive of interest accrued and unpaid as of the date of redemption), discounted to the date of redemption on an
annual basis (ACTUAL/ACTUAL (ICMA)) at the Bund Rate (as defined below), plus 20 basis points, plus accrued and unpaid interest
thereon to the date of redemption. However, if the redemption date is after a record date and on or prior to a corresponding interest
payment date, the interest will be paid on the redemption date to the holder of record on the record date.
Notwithstanding the foregoing, at any time on or after November 13, 2029 (three months before their maturity date), the 2030
Notes will be redeemable, in whole or in part, at our option and at any time or from time to time, at a redemption price equal to 100%
of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the date of
redemption.
Notice of any redemption will be mailed at least 30 days, but not more than 60 days, before the redemption date to each
registered holder of 2030 Notes to be redeemed. Once notice of redemption is mailed, the 2030 Notes called for redemption will
become due and payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to, but not
including, the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the 2030 Notes (or portion thereof) to be redeemed on such redemption date.
“Bund Rate” means, with respect to any redemption date, the rate per annum equal to the annual equivalent yield to maturity of
the Comparable German Bund Issue, assuming a price for the Comparable German Bund Issue (expressed as a percentage of its
principal amount) equal to the Comparable German Bund Price for such redemption date.
“Comparable German Bund Issue” means that German Bundesanleihe security selected by the Quotation Agent as having a
maturity comparable to the remaining term of the 2030 Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary
financial practice, in pricing new issues of corporate notes of comparable maturity to the remaining term of the Notes.
“Comparable German Bund Price” means, with respect to any redemption date, (i) the average of four Reference German Bund
Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference German Bund Dealer Quotations or
(ii) if the Quotation Agent obtains fewer than four such Reference German Bund Dealer Quotations, the average of all such quotations.
“Quotation Agent” means a Reference German Bund Dealer appointed by us.
“Reference German Bund Dealer” means any dealer of German Bundesanleihe securities selected by us in good faith.
“Reference German Bund Dealer Quotations” means, with respect to each Reference German Bund Dealer and any redemption
date, the average, as determined by us, of the bid and asked prices for the Comparable German Bund Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference German Bund Dealer at 3:30 p.m.,
Frankfurt, Germany time, on the third business day preceding such redemption date.
If we elect to redeem less than all of the 2030 Notes, and such 2030 Notes are at the time represented by a global note, then the
depositary will select by lot the particular interests to be redeemed. If we elect to redeem less than all of the 2030 Notes, and any of
such 2030 Notes are not represented by a global note, then the trustee will select the particular 2030 Notes to be redeemed in a manner
it deems appropriate and fair (and the depositary will select by lot the particular interests in any global note to be redeemed).
We may at any time, and from time to time, purchase the 2030 Notes at any price or prices in the open market or otherwise.
Repurchase upon Change of Control Triggering Event
If a Change of Control Triggering Event (as defined below) occurs with respect to the 2030 Notes, unless we have exercised our
right to redeem the 2030 Notes, we will be required to make an offer to repurchase all or, at the holder’s option, any part (equal to
€100,000 or any integral multiple of €1,000 in excess thereof) of each holder’s 2030 Notes pursuant to the offer described below (the
“Change of Control Offer”).
In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of
2030 Notes repurchased plus accrued and unpaid interest, if any, on the 2030 Notes repurchased to, but not including, the date of
purchase (the “Change of Control Payment”).
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the
assets of us and our Subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”) other than us or one of our subsidiaries; (2) the approval by the holders of our common stock of any plan or
proposal for our liquidation or dissolution; (3) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50% of
the then outstanding number of shares of our Voting Stock; or (4) the first day on which a majority of the members of our board of
directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we become a direct or
indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that
transaction or (B) immediately following that transaction no Person or Group (other than a holding company satisfying the
requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding
company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event (as such term is defined in the indenture) occurring in respect of that Change of Control.
“Continuing Directors” means, as of any date of determination, any member of our board of directors who (1) was a member of
our board of directors on the date of the issuance of the 2030 Notes; or (2) was nominated or approved for election, elected or appointed
to our board of directors with the approval of a majority of the Continuing Directors who were members of our board of directors at the
time of such nomination, approval, election or appointment (either by a specific vote or by approval of the proxy statement issued by us
in which such member was named as a nominee for election as a director).
“Person” means any individual, firm, limited liability company, corporation, partnership, association, joint venture, tribunal,
trust, government or political subdivision or agency or instrumentality thereof, or any other entity or organization and includes a
“person” as used in Section 13(d)(3) of the Exchange Act.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote
generally in the election of the board of directors of such Person.
The definition of “Change of Control” includes a phrase relating to the sale, transfer, conveyance or other disposition of “all or
substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable
law. Accordingly, your ability to require us to purchase your 2030 Notes as a result of the sale, transfer, conveyance or other disposition
of less than all of our assets may be uncertain.
Certain Covenants
The indenture contains, among others, restrictive covenants regarding (i) our ability to consolidate or merge with another entity
or to sell, transfer or otherwise convey all or substantially all of our assets to another entity, (ii) create or permit certain significant
subsidiaries to create or permit to exist certain liens and (iii) certain sale and lease-back transactions involving certain subsidiaries.
Events of Default
Holders of the 2030 Notes will have specified rights if an Event of Default (as defined below) occurs. The term “Event of
Default” in respect of the 2030 Notes means any of the following:
(1)
we do not pay interest on any of the 2030 Notes within 30 days of its due date;
(2)
(3)
(4)
(5)
(6)
(7)
we fail to pay the principal (or premium, if any) of any 2030 Note, when such principal becomes due and payable, at
maturity, upon acceleration, upon redemption or otherwise;
we fail to comply with certain covenants under the indenture;
we remain in breach of a covenant or warranty in respect of the indenture or 2030 Notes (other than a covenant
included in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written
notice of default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the
outstanding 2030 Notes;
we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture;
we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least
$150,000,000, constituting a default either of payment of principal when due and payable or which results in
acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full
within 60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding
2030 Notes; or
one or more final judgments for the payment of money in an aggregate amount in excess of $150,000,000 above
available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed.
If an Event of Default (other than an Event of Default specified in clause (5) above) with respect to the 2030 Notes has occurred, the
trustee or the holders of at least 25% in principal amount of
the 2030 Notes may declare the entire unpaid principal amount of (and premium, if any), and all the accrued interest on, the Notes to be
due and immediately payable. This is called a declaration of acceleration of maturity. There is no action on the part of the trustee or any
holder of the 2030 Notes required for such declaration if the Event of Default is the Company’s bankruptcy, insolvency or
reorganization. Holders of a majority in principal amount of the 2030 Notes may also waive certain past defaults under the indenture
with respect to the 2030 Notes on behalf of all of the holders of the 2030 Notes. A declaration of acceleration of maturity may be
canceled, under specified circumstances, by the holders of at least a majority in principal amount of the 2030 Notes and the trustee.
Except in cases of default, where the trustee has special duties, the trustee is not required to take any action under the indenture at the
request of holders unless the holders offer the trustee protection from expenses and liability satisfactory to the trustee. If an indemnity
satisfactory to the trustee is provided, the holders of a majority in principal amount of 2030 Notes may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may refuse to
follow those directions in certain circumstances specified in the indenture. No delay or omission in exercising any right or remedy will
be treated as a waiver of the right, remedy or Event of Default.
Modification of the Indenture and Waiver of Rights of Holders
Under certain circumstances, we can make changes to the indenture and the 2030 Notes. Some types of changes require the approval of
each holder of 2030 Notes, some require approval by a vote of a majority of the holders of the 2030 Notes, and some changes do not
require any approval at all.
Description of the 1.75% Senior Notes Due 2029
The 1.75% Senior Notes due 2029 (the “2029 Notes”) were issued under an indenture, dated as of June 7, 2013 (the “base
indenture”) between Nasdaq, Inc. and Wells Fargo Bank, National Association, as trustee (the “Trustee”) and a sixth supplemental
indenture dated as of April 1, 2019 (the “supplemental indenture” and, together with the base indenture, the “indenture”). The indenture
is publicly available at www.sec.gov.
We issued €600 million aggregate principal amount of the 2029 Notes on April 1, 2019.
This summary is subject to, and qualified in its entirety by reference to, all the provisions of the 2029 Notes and the indenture,
including definitions of certain terms used therein.
General
The 2029 Notes:
•
•
•
•
are senior unsecured obligations;
rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding,
commercial paper issuances and indebtedness under our 2017 credit facility;
are structurally subordinated in right of payment to all existing and future obligations of our subsidiaries, including claims
with respect to trade payables; and
are effectively subordinated in right of payment to all of our existing and future secured indebtedness and other secured
obligations to the extent of the value of the collateral securing any such indebtedness and other obligations.
The 2029 Notes were issued in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof.
Principal, Maturity and Interest
The 2029 Notes bear interest at a rate of 1.75% per year. Interest on the 2029 Notes is payable annually in arrears on of each year,
beginning on March 28, 2020, and is computed on the basis of the actual number of days in the period for which interest is being
calculated and the actual number of days from and including the last date on which interest was paid on the 2029 Notes (or the
settlement date if no interest has been paid or duly provided for on the 2029 Notes), to but excluding the next date on which interest is
paid or duly provided for. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the
International Capital Market Association. Interest on the 2029 Notes accrues from and including the settlement date and will be paid to
holders of record on the day immediately prior to the applicable interest payment date.
The 2029 Notes will mature on March 28, 2029. On the maturity date of the 2029 Notes, the holders will be entitled to receive
100% of the principal amount of such 2029 Notes. The 2029 Notes will not have the benefit of any sinking fund.
If any interest payment date, redemption date or maturity date falls on a day that is not a business day, then the relevant payment
may be made on the next succeeding business day and no interest will accrue because of such delayed payment. With respect to the
2029 Notes, when we use the term “business day” we mean any day except a Saturday, a Sunday or a day on which
banking institutions in the applicable place of payment are authorized or required by law, regulation or executive order to close.
Claims against the Company for payment of principal, interest and additional amounts, if any, on the 2029 Notes will become void
unless presentment for payment is made (where so required under the indenture) within, in the case of principal and additional amounts,
if any, a period of ten years or, in the case of interest, a period of five years, in each case from the applicable original date of payment
therefor.
Euro Notes—Issuance in Euros
Initial holders of the 2029 Notes paid for the 2029 Notes in euros, and principal, premium, if any, and interest payments and
additional amounts, if any, in respect of the Notes will be payable in euros. If the euro is unavailable to us due to the imposition of
exchange controls or other circumstances beyond our control or the euro is no longer used by the then member states of the European
Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions within the
international banking community, then all payments in respect of the 2029 Notes will be made in U.S. dollars until the euro is again
available to us or so used.
The amount payable on any date in euros will be converted to U.S. dollars on the basis of the most recently available market
exchange rate for euros as determined by us in our sole discretion. Any payment in respect of the 2029 Notes so made in U.S. dollars
will not constitute an event of default under the indenture or the 2029 Notes. Neither the trustee nor the paying agent will be responsible
for obtaining exchange rates, effecting conversions or otherwise handling redenominations.
Interest Rate Adjustment
The interest rate payable on the 2029 Notes will be subject to adjustment from time to time if either Moody’s or S&P, or, in either
case, any substitute rating agency downgrades (or subsequently upgrades) the credit rating assigned to the 2029 Notes.
Ranking
The 2029 Notes are general unsecured obligations of ours and rank equally with all of our existing and future unsubordinated
obligations.
Holders of any secured indebtedness and other secured obligations of the Company will have claims that are prior to claims as
holders of the 2029 Notes, to the extent of the value of the assets securing such indebtedness and other obligations, in the event of any
bankruptcy, liquidation or similar proceeding.
Further Issues
The 2029 Notes constituted a separate series of debt securities under the indenture, limited to €600 million. Under the indenture,
we may, without the consent of the holders of the 2029 Notes, issue additional 2029 Notes of the same or a different series from time to
time in the future in an unlimited aggregate principal amount; provided, that, if any such additional 2029 Notes are not fungible with
the 2029 Notes (or any other tranche of additional 2029 Notes) for U.S. federal income tax purposes, then such additional 2029 Notes
will have different ISIN and/or Common Code numbers than the 2029 Notes (and any such other tranche of additional 2029 Notes).
The 2029 Notes and any additional 2029 Notes of the same series would rank equally and ratably and would be treated as a single class
for all purposes under the indenture. This means that, in circumstances where the indenture provides for the holders of debt securities of
any series to vote or take any action, any of the outstanding 2029 Notes, as well as any additional 2029 Notes that we may issue by
reopening such series, will vote or take action as a single class.
Redemption
Optional Redemption
The 2029 Notes will be redeemable, in whole at any time or in part from time to time, at our option, at a redemption price (the
“make-whole redemption price”) equal to the greater of (i) 100% of the principal amount of the 2029 Notes, and (ii) as determined by
the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on
the 2029 Notes (exclusive of interest accrued and unpaid as of the date of redemption), discounted to the date of redemption on an
annual basis (ACTUAL/ACTUAL (ICMA)) at the Bund Rate (as defined below), plus 30 basis points, plus accrued and unpaid interest
thereon to the date of redemption. However, if the redemption date is after a record date and on or prior to a corresponding interest
payment date, the interest will be paid on the redemption date to the holder of record on the record date.
Notwithstanding the foregoing, at any time on or after December 28, 2028 (three months before their maturity date), the 2029
Notes will be redeemable, in whole or in part, at our option and at any time or from time to time, at a redemption price equal to 100%
of the principal amount of the 2029 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the date of
redemption.
Notice of any redemption will be mailed at least 30 days, but not more than 60 days, before the redemption date to each registered
holder of 2029 Notes to be redeemed. Once notice of redemption is mailed, the 2029 Notes called for redemption will become due and
payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to, but not including, the
redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue
on the 2029 Notes (or portion thereof) to be redeemed on such redemption date.
“Bund Rate” means, with respect to any redemption date, the rate per annum equal to the annual equivalent yield to maturity of the
Comparable German Bund Issue, assuming a price for the Comparable German Bund Issue (expressed as a percentage of its principal
amount) equal to the Comparable German Bund Price for such redemption date.
“Comparable German Bund Issue” means that German Bundesanleihe security selected by the Quotation Agent as having a
maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate notes of comparable maturity to the remaining term of
the Notes.
“Comparable German Bund Price” means, with respect to any redemption date, (i) the average of four Reference German Bund
Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference German Bund Dealer Quotations, or
(ii) if the Quotation Agent obtains fewer than four such Reference German Bund Dealer Quotations, the average of all such quotations.
“Quotation Agent” means a Reference German Bund Dealer appointed by us.
“Reference German Bund Dealer” means any dealer of German Bundesanleihe securities selected by us in good faith.
“Reference German Bund Dealer Quotations” means, with respect to each Reference German Bund Dealer and any redemption
date, the average, as determined by us, of the bid and asked prices for the Comparable German Bund Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference German Bund Dealer at 3:30 p.m.,
Frankfurt, Germany time, on the third business day preceding such redemption date.
If we elect to redeem less than all of the 2029 Notes, and such 2029 Notes are at the time represented by a global note, then the
depositary will select by lot the particular interests to be redeemed. If we elect to redeem less than all of the 2029 Notes, and any of
such 2029 Notes are
not represented by a global note, then the trustee will select the particular 2029 Notes to be redeemed in a manner it deems appropriate
and fair (and the depositary will select by lot the particular interests in any global note to be redeemed).
We may at any time, and from time to time, purchase the 2029 Notes at any price or prices in the open market or otherwise.
Repurchase upon Change of Control Triggering Event
If a Change of Control Triggering Event (as defined below) occurs with respect to the 2029 Notes, unless we have exercised our
right to redeem the 2029 Notes, we are required to make an offer to repurchase all or, at the holder’s option, any part (equal to €100,000
or any integral multiple of €1,000 in excess thereof) of each holder’s 2029 Notes pursuant to the offer described below (the “Change of
Control Offer”).
In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of
2029 Notes repurchased plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of purchase
(the “Change of Control Payment”).
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the
assets of us and our Subsidiaries taken as a whole to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”) other than us or one of our subsidiaries; (2) the approval by the holders of our common stock of any plan or
proposal for our liquidation or dissolution; (3) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50% of
the then outstanding number of shares of our Voting Stock; or (4) the first day on which a majority of the members of our board of
directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we become a direct or
indirect wholly owned Subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that
transaction or (B) immediately following that transaction no Person or Group (other than a holding company satisfying the
requirements of this sentence) is the
beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating
Event (as such term is defined in the indenture) occurring in respect of that Change of Control.
“Continuing Directors” means, as of any date of determination, any member of our board of directors who (1) was a member of
our board of directors on the date of the issuance of the Notes; or (2) was nominated or approved for election, elected or appointed to
our board of directors with the approval of a majority of the Continuing Directors who were members of our board of directors at the
time of such nomination, approval, election or appointment (either by a specific vote or by approval of the proxy statement issued by us
in which such member was named as a nominee for election as a director).
“Person” means any individual, firm, limited liability company, corporation, partnership, association, joint venture, tribunal, trust,
government or political subdivision or agency or instrumentality thereof, or any other entity or organization and includes a “person” as
used in Section 13(d)(3) of the Exchange Act.
“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote
generally in the election of the board of directors of such Person.
The definition of “Change of Control” includes a phrase relating to the sale, transfer, conveyance or other disposition of “all or
substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable
law. Accordingly, the ability to require us to purchase 2029 Notes as a result of the sale, transfer, conveyance or other disposition of less
than all of our assets may be uncertain.
Certain Covenants
The indenture contains, among others, restrictive covenants regarding (i) our ability to consolidate or merge with another entity or
to sell, transfer or otherwise convey all or substantially all of our assets to another entity; (ii) create or permit certain significant
subsidiaries to create or permit to exist certain liens and (iii) certain sale and lease-back transactions involving certain subsidiaries.
Events of Default
Holders of the 2029 Notes will have specified rights if an Event of Default (as defined below) occurs. The term “Event of Default”
in respect of the Notes means any of the following:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
we do not pay interest on any of the Notes within 30 days of its due date;
we fail to pay the principal (or premium, if any) of any Note, when such principal becomes due and payable, at maturity,
upon acceleration, upon redemption or otherwise;
failure by us to comply with the covenants under the indenture;
we remain in breach of a covenant or warranty in respect of the indenture or 2029 Notes (other than a covenant included
in the indenture solely for the benefit of debt securities of another series) for 90 days after we receive a written notice of
default, which notice must be sent by either the trustee or holders of at least 25% in principal amount of the outstanding
2029 Notes;
we file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture;
we default on any indebtedness of ours or of a significant subsidiary having an aggregate amount of at least
$150,000,000, constituting a default either of payment of principal when due and payable or which results in
acceleration of the indebtedness unless the default has been cured or waived or the indebtedness discharged in full within
60 days after we have been notified of the default by the trustee or holders of at least 25% of the outstanding 2029
Notes; or
one or more final judgments for the payment of money in an aggregate amount in excess of $150,000,000 above
available insurance or indemnity coverage shall be rendered against us or any significant subsidiary and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed.
If an Event of Default (other than an Event of Default specified in clause (5) above) with respect to the 2029 Notes has occurred, the
Trustee or the holders of at least 25% in principal amount of
the 2029 Notes may declare the entire unpaid principal amount of (and premium, if any), and all the accrued interest on, the Notes to be
due and immediately payable. This is called a declaration
of acceleration of maturity. There is no action on the part of the trustee or any holder of the 2029 Notes required for such declaration if
the Event of Default is the Company’s bankruptcy, insolvency or reorganization. Holders of a majority in principal amount of the Notes
may also waive certain past defaults under the indenture with respect to the 2029 Notes on behalf of all of the holders of the 2029
Notes. A declaration of acceleration of maturity may be canceled, under specified circumstances, by the holders of at least a majority in
principal amount of the 2029 Notes and the trustee.
Except in cases of default, where the trustee has special duties, the trustee is not required to take any action under the indenture at
the request of holders unless the holders offer the trustee protection from expenses and liability satisfactory to the trustee. If an
indemnity satisfactory to the trustee is provided, the holders of a majority in principal amount of 2029 Notes may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee may
refuse to follow those directions in certain circumstances specified in the indenture. No delay or omission in exercising any right or
remedy will be treated as a waiver of the right, remedy or Event of Default.
Before holders of the 2029 Notes are allowed to bypass the trustee and bring a lawsuit or other formal legal action or take other
steps to enforce their rights or protect their interests relating to the 2029 Notes, the following must occur:
•
•
such holders must give the trustee written notice that an Event of Default has occurred and remains uncured;
holders of at least 25% in principal amount of the 2029 Notes must make a written request that the trustee take action
because of the default and must offer the Trustee indemnity satisfactory to the trustee against the cost and other liabilities
of taking that action; and
•
the trustee must have failed to take action for 60 days after receipt of the notice and offer of indemnity.
Holders are, however, entitled at any time to bring a lawsuit for the payment of money due on the 2029 Notes on or after the due
date.
Modification of the Indenture and Waiver of Rights of Holders
Under certain circumstances, we can make changes to the indenture and the 2029 Notes. Some types of changes require the
approval of each holder of 2029 Notes, some require approval by a vote of a majority of the holders of the 2029 Notes, and some
changes do not require any approval at all.
Subsidiaries of Nasdaq, Inc.*
As of February 15, 2024
Exhibit 21.1
U.S. Entities
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
Adenza Group, Inc. (organized in Delaware)
Adenza Holdings, LLC (organized in Delaware)
Adenza Intermediate I, LLC (organized in Delaware)
Adenza Intermediate II, LLC (organized in Delaware)
Adenza, Inc. (organized in Delaware)
BoardVantage, Inc (organized in Delaware)
Boston Stock Exchange Clearing Corporation (organized in Massachusetts)
Content Services, LLC (organized in Delaware)
Curzon Street Acquisition, LLC (organized in Delaware)
Directors Desk, LLC (organized in Delaware)
Dorsey, Wright & Associates, LLC (organized in Virginia)
eVestment Alliance, LLC (organized in Delaware)
eVestment, Inc. (organized in Delaware)
FINRA/Nasdaq Trade Reporting Facility LLC (organized in Delaware)
FRAMLxchange Inc. (organized in Delaware)
FTEN, Inc. (organized in Delaware)
Granite Redux, Inc. (organized in Delaware)
GraniteBlock, Inc. (organized in Delaware)
International Securities Exchange Holdings, Inc. (organized in Delaware)
Longitude LLC (organized in Delaware)
Nasdaq BX, Inc. (organized in Delaware)
Nasdaq Capital Markets Advisory LLC (organized in Delaware)
Nasdaq Corporate Services, LLC (organized in Delaware)
Nasdaq Corporate Solutions, LLC (organized in Delaware)
Nasdaq Digital Asset Holdings, LLC (organized in Delaware)
NASDAQ Energy Futures, LLC (organized in Delaware)
Nasdaq Execution Services, LLC (organized in Delaware)
Nasdaq Fund Secondaries, LLC (organized in Delaware)
NASDAQ Futures, Inc. (organized in Delaware)
Nasdaq GEMX, LLC (organized in Delaware)
NASDAQ Global, Inc. (organized in Delaware)
Nasdaq Governance Solutions, Inc. (organized in Delaware)
Nasdaq Information, LLC (organized in Delaware)
Nasdaq ISE, LLC (organized in Delaware)
Nasdaq MRX, LLC (organized in Delaware)
Nasdaq PHLX LLC (organized in Delaware)
Nasdaq Private Market, LLC (organized in Delaware)
Nasdaq SB Holdings, LLC (organized in Delaware)
Nasdaq SPS, LLC (organized in Delaware)
Nasdaq Technology Services, LLC (organized in Delaware)
NFSTX, LLC (organized in Delaware)
OneReport, LLC (organized in Delaware)
Operations & Compliance Network, LLC (organized in Delaware)
QDiligence LLC (organized in Illinois)
Solovis, Inc. (organized in Delaware)
Stock Clearing Corporation of Philadelphia (organized in Pennsylvania)
Strategic Financial Solutions, LLC (organized in Nevada)
Sybenetix Inc. (organized in Delaware)
The Center for Board Evaluation, Inc. (organized in North Carolina)
The Nasdaq Options Market LLC (organized in Delaware)
The Nasdaq Stock Market LLC (organized in Delaware)
U.S. Exchange Holdings, Inc. (organized in Delaware)
Verafin AcquisitionCo LLC (organized in Delaware)
Verafin USA Inc. (organized in Delaware)
Non-U.S. Subsidiaries
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
AB Nasdaq Vilnius (organized in Lithuania)
Adenza Australia Pty Ltd. (organized in Australia)
Adenza Brasil Ltda (organized in Brazil)
Adenza Canada, Inc. (organized in Canada)
Adenza Chile SpA (organized in Chile)
Adenza Colombia S.A.S. (organized in Colombia)
Adenza France SARL (organized in France)
Adenza Georgia LLC (organized in Georgia)
Adenza Gemany GmbH (organized in Germany)
Adenza Hong Kong (organized in Hong Kong)
Adenza India Private Ltd. (organized in India)
Adenza Ireland Ltd. (organized in Ireland)
Adenza Israel Ltd. (organized in Israel)
Adenza Japan KK (organized in Japan)
Adenza Korea LLC (organized in South Korea)
Adenza Ltd. (organized in the United Kingdom)
Adenza Netherlands B.V. (organized in the Netherlands)
ADENZA POLAND SOO SPOLKA Z OGRANICZONA ODPOWIEDZIALNOSCIA (organized in Poland)
Adenza Portugal S.A. (organized in Portugal)
Adenza Singapore Pte. Ltd. (organized in Singapore)
Adenza Spain S.L. (organized in Spain)
Adenza Technology (DIFC) Ltd. (organized in Dubai)
Adenza Technology de Mexico, S. de R.L. de C.V. (organized in Mexico)
AS Pensionikeskus AS (organized in Estonia)
Axioma SD, Ltd. (organized in Russia)
AxiomSL Holdings B.V. (organized in the Netherlands)
AxiomSL Ltd. (Hong Kong) (organized in Hong Kong)
AxiomSL Ltd. (UK) (organized in the United Kingdom)
AxiomSL Pty Ltd. (organized in Australia)
AxiomSL Software Spain, S.L. (organized in Spain)
Calypso Group UK Ltd. (organized in the United Kingdom)
Calypso Holdco Ltd. (organized in the United Kingdom)
Calypso Software (Beijing) Co Ltd. (organized in China)
Calypso Technology International Ltd. (organized in Ireland)
Calypso Technology Pte. Ltd. (organized in Singapore)
Calypso UK MidCo. Ltd. (organized in the United Kingdom)
Calypso UK TopCo. Ltd. (organized in the United Kingdom)
Capri Bidco Ltd. (UK) (organized in the United Kingdom)
Capri Holdco Ltd. (UK) (organized in the United Kingdom)
Cinnober Financial Technology AB (organized in Sweden)
Curzon Street Holdings Limited (organized in the United Kingdom)
Ensoleillement Inc. (organized in Canada)
eVestment Alliance (UK) Limited (organized in the United Kingdom)
eVestment Alliance Australia Pty Ltd (organized in Australia)
eVestment Alliance Hong Kong Limited (organized in Hong Kong)
Indxis Ltd (organized in the United Kingdom)
Metrio Software Inc. (organized in Quebec)
Nasdaq (Asia Pacific) Pte. Ltd. (organized in Singapore)
Nasdaq AB (organized in Sweden)
Nasdaq Australia Holding Pty Ltd (organized in Australia)
NASDAQ Canada Inc. (organized in Canada)
Nasdaq Clearing AB (organized in Sweden)
Nasdaq Copenhagen A/S (organized in Denmark)
Nasdaq Corporate Solutions (India) Private Limited (organized in India)
Nasdaq Corporate Solutions International Limited (organized in the United Kingdom)
Nasdaq CSD SE (organized in Latvia)
Nasdaq CXC Limited (organized in Canada)
Nasdaq Exchange and Clearing Services AB (organized in Sweden)
Nasdaq France SAS (organized in France)
Nasdaq Germany GmbH (organized in Germany)
Nasdaq Helsinki Ltd (organized in Finland)
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101. Whittaker & Garnier Limited (organized in the United Kingdom)
Nasdaq Holding AB (organized in Sweden)
Nasdaq Holding Denmark A/S (organized in Denmark)
Nasdaq Holding Luxembourg Sárl (organized in Luxembourg)
Nasdaq Iceland hf. (organized in Iceland)
Nasdaq International Ltd (organized in the United Kingdom)
NASDAQ Korea Ltd (organized in South Korea)
Nasdaq Ltd (organized in Hong Kong)
Nasdaq Nordic Ltd (organized in Finland)
NASDAQ OMX Europe Ltd (organized in the United Kingdom)
Nasdaq Oslo ASA (organized in Norway)
Nasdaq Pty Ltd (organized in Australia)
Nasdaq Riga, AS (organized in Latvia) (92.98% owned, directly or indirectly, by Nasdaq, Inc.)
Nasdaq Spot AB (organized in Sweden)
Nasdaq Stockholm AB (organized in Sweden)
Nasdaq Tallinn AS (organized in Estonia)
Nasdaq Technology (Japan) Ltd (organized in Japan)
Nasdaq Technology AB (organized in Sweden)
Nasdaq Technology Energy Systems AS (organized in Norway)
Nasdaq Technology Italy Srl (organized in Italy)
Nasdaq Teknoloji Servisi Limited Sirketi (organized in Turkey)
Nasdaq Treasury AB (organized in Sweden)
Nasdaq Vilnius Services UAB (organized in Lithuania)
Nasdaq Wizer Solutions AB (organized in Sweden)
OMX Netherlands B.V. (organized in the Netherlands)
OMX Netherlands Holding B.V. (organized in the Netherlands)
OMX Treasury Euro AB (organized in Sweden) (99.9% owned, directly or indirectly, by Nasdaq, Inc.)
OMX Treasury Euro Holding AB (organized in Sweden)
Puro.earth (organized in Finland) (70% owned, directly or indirectly, by Nasdaq, Inc.)
Quandl, Inc. (organized in Canada, Federal)
RF Nordic Express AB (organized in Sweden) (50.1% owned, directly or indirectly, by Nasdaq, Inc.)
Shareholder.com B.V. (organized in the Netherlands)
Simplitium Ltd (organized in the United Kingdom)
SMARTS Broker Compliance Pty Ltd (organized in Australia)
SMARTS Market Surveillance Pty Ltd (organized in Australia)
Sybenetix Limited (organized in the United Kingdom)
Sybenetix Ukraine (organized in the Ukraine)
TopQ Software Limited (organized in the United Kingdom)
TOV AxiomSL (organized in the Ukraine)
Verafin Solutions ULC (organized in Canada)
The list of subsidiaries does not include not-for-profit entities or foreign branches of subsidiaries, or entities in which Nasdaq owns less than 50% of the entity.
Exhibit 23.1
We consent to the incorporation by reference in the following Registration Statements:
Consent of Independent Registered Public Accounting Firm
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Registration Statement (Form S-3 No. 333-255666) of Nasdaq, Inc.,
Registration Statement (Form S-8 No. 333-239891) pertaining to Nasdaq, Inc. Employee Stock Purchase Plan,
Registration Statement (Form S-8 No. 333-225218) pertaining to Nasdaq, Inc. Equity Incentive Plan,
Registration Statement (Form S-8 No. 333-196838) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) Equity
Incentive Plan,
Registration Statement (Form S-8 No. 333-167724) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.)
Employee Stock Purchase Plan,
Registration Statement (Form S-8 No. 333-167723) pertaining to Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) Equity
Incentive Plan,
Registration Statement (Form S-8 No. 333-110602) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan,
Registration Statement (Form S-8 No. 333-106945) pertaining to the Employment Agreement with Robert Greifeld of The
Nasdaq Stock Market, Inc.,
Registration Statement (Form S-8 No. 333-76064) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee Stock Purchase
Plan,
(10) Registration Statement (Form S-8 No. 333-72852) pertaining to The Nasdaq Stock Market, Inc. 2000 Employee Stock Purchase
Plan, and
(11) Registration Statement (Form S-8 No. 333-70992) pertaining to The Nasdaq Stock Market, Inc. Equity Incentive Plan;
(12) Registration Statement (Form S-8 No. 333-265824) pertaining to The Nasdaq, Inc. Deferred Compensation Plan;
of our reports dated February 21, 2024, with respect to the consolidated financial statements of Nasdaq, Inc. and the effectiveness of
internal control over financial reporting of Nasdaq, Inc. included in this Annual Report (Form 10-K) of Nasdaq, Inc. for the year ended
December 31, 2023.
/s/ Ernst & Young LLP
New York, New York
February 21, 2024
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Exhibit 24.1
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for her and in her name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 20, 2024.
/s/ Melissa M. Arnoldi
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for her and in her name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 20, 2024.
/s/ Charlene T. Begley
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 19, 2024.
/s/ Steven D. Black
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 16, 2024.
/s/ Essa Kazim
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 20, 2024.
/s/ Thomas A. Kloet
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 20, 2024.
/s/ Holden Spaht
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 15, 2024.
/s/ Michael R. Splinter
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 19, 2024.
/s/ Johan Torgeby
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for her and in her name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 19, 2024.
/s/ Toni Townes-Whitley
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 20, 2024.
/s/ Jeffrey W. Yabuki
Signature
POWER OF ATTORNEY
ANNUAL REPORT ON FORM 10-K
NASDAQ, INC.
Know all persons by these presents, that the undersigned, a director of Nasdaq, Inc., a Delaware corporation, hereby constitutes and
appoints John A. Zecca and Erika Moore, and each of them acting individually, the undersigned’s true and lawful attorneys-in-fact and
agents, each with full power and substitution and resubstitution, for him and in his name, place, and stead, in any case and all capacities
to:
(1) execute for and on behalf of the undersigned, an Annual Report on Form 10-K of Nasdaq, Inc. for the fiscal year ended December
31, 2023, including any and all amendments and additions thereto (collectively, the “Annual Report”) in accordance with the Securities
Exchange Act of 1934, as amended, and the rules thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file, or cause to be
filed, the Annual Report with all exhibits thereto (including this Power of Attorney), and other documents in connection therewith, with
the United States Securities and Exchange Commission; and
(3) take any other action or any type whatsoever in connection with the foregoing which, in the opinion of such attorneys-in-fact,
may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by
such attorneys-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such
terms and conditions as such attorneys-in-fact may approve in such attorneys-in-fact’s discretion.
The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying
and confirming all that such shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein
granted.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 15, 2024.
/s/ Alfred W. Zollar
Signature
Exhibit 31.1
I, Adena T. Friedman, certify that:
1. I have reviewed this Annual Report on Form 10-K of Nasdaq, Inc.;
CERTIFICATION
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Name:
Title:
/s/ Adena T. Friedman
Adena T. Friedman
Chief Executive Officer
Date: February 21, 2024
CERTIFICATION
Exhibit 31.2
I, Sarah Youngwood, certify that:
1. I have reviewed this Annual Report on Form 10-K of Nasdaq, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Name:
Title:
/s/ Sarah Youngwood
Sarah Youngwood
Executive Vice President and Chief Financial Officer
Date: February 21, 2024
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1
In connection with the Annual Report on Form 10-K of Nasdaq, Inc. (the “Company”) for the period ended December 31, 2023 as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), Adena T. Friedman, as Chief Executive Officer of the Company, and Sarah Youngwood, as
Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of her knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the
Company.
Name:
Title:
Date:
Name:
Title:
Date:
/s/ Adena T. Friedman
Adena T. Friedman
Chief Executive Officer
February 21, 2024
/s/ Sarah Youngwood
Sarah Youngwood
Executive Vice President and Chief Financial Officer
February 21, 2024
This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley
Act of 2002, be deemed filed by the Company for purposes of § 18 of the Securities Exchange Act of 1934, as amended.
NASDAQ, INC.
SUPPLEMENTAL EXECUTIVE OFFICER RECOUPMENT POLICY
Exhibit 97.1
The Management Compensation Committee of the Board (the “Committee”) of the Board of Directors (the “Board”) of Nasdaq,
Inc. (the “Company”) believes that it is appropriate for the Company to adopt this Supplemental Executive Officer Recoupment Policy
(the “Policy”) to be applied to the Executive Officers of the Company and adopts this Policy to be effective as of the Effective Date.
1. Definitions
For purposes of this Policy, the following definitions shall apply:
a) “Company Group” means the Company and each of its Subsidiaries, as applicable.
b) “Covered Compensation” means any Incentive-Based Compensation granted, vested or paid to a person who served as an
Executive Officer at any time during the performance period for the Incentive-Based Compensation and that was Received
(i) on or after the Effective Date, (ii) after the person became an Executive Officer and (iii) at a time that the Company had a
class of securities listed on a national securities exchange or a national securities association.
c) “Effective Date” means October 2, 2023, the effective date of the Nasdaq listing standard.
d) “Erroneously Awarded Compensation” means the amount of Covered Compensation granted, vested or paid to a person
during the fiscal period when the applicable Financial Reporting Measure relating to such Covered Compensation was
attained that exceeds the amount of Covered Compensation that otherwise would have been granted, vested or paid to the
person had such amount been determined based on the applicable Restatement, computed without regard to any taxes paid
(i.e., on a pre-tax basis). For Covered Compensation based on stock price or total shareholder return, where the amount of
Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in a
Restatement, the Committee will determine the amount of such Covered Compensation that constitutes Erroneously
Awarded Compensation, if any, based on a reasonable estimate of the effect of the Restatement on the stock price or total
shareholder return upon which the Covered Compensation was granted, vested or paid and the Committee shall maintain
documentation of such determination and provide such documentation to the Nasdaq.
e) “Exchange Act” means the Securities Exchange Act of 1934.
f) “Executive Officer” means each “officer” of the Company as defined under Rule 16a-1(f) under Section 16 of the Exchange
Act, which shall be deemed to include any individuals identified by the Company as executive officers pursuant to Item
401(b) of Regulation S-K under the Exchange Act. Both current and former Executive Officers are subject to the Policy in
accordance with its terms.
g) “Financial Reporting Measure” means (i) any measure that is determined and presented in accordance with the accounting
principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such
measures and may consist of GAAP or non-GAAP financial measures (as defined under Regulation G of the Exchange Act
and Item 10 of Regulation S-K under the Exchange Act), (ii) stock price or (iii) total
shareholder return. Financial Reporting Measures may or may not be filed with the SEC and may be presented outside the
Company’s financial statements, such as in Managements’ Discussion and Analysis of Financial Conditions and Result of
Operations or in the performance graph required under Item 201(e) of Regulation S-K under the Exchange Act.
h) “Home Country” means the Company’s jurisdiction of incorporation.
i) “Incentive-Based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the
attainment of a Financial Reporting Measure.
j) “Lookback Period” means the three completed fiscal years (plus any transition period of less than nine months that is within
or immediately following the three completed fiscal years and that results from a change in the Company’s fiscal year)
immediately preceding the date on which the Company is required to prepare a Restatement for a given reporting period,
with such date being the earlier of: (i) the date the Board, a committee of the Board, or the officer or officers of the
Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded,
that the Company is required to prepare a Restatement, or (ii) the date a court, regulator or other legally authorized body
directs the Company to prepare a Restatement. Recovery of any Erroneously Awarded Compensation under the Policy is not
dependent on if or when the Restatement is actually filed.
k) “Nasdaq” means the Nasdaq Stock Market LLC.
l) “Received” Incentive-Based Compensation is deemed “Received” in the Company’s fiscal period during which the
Financial Reporting Measure specified in or otherwise relating to the Incentive-Based Compensation award is attained, even
if the grant, vesting or payment of the Incentive-Based Compensation occurs after the end of that period.
m) “Restatement” means a required accounting restatement of any Company financial statement due to the material
noncompliance of the Company with any financial reporting requirement under the securities laws, including (i) to correct
an error in previously issued financial statements that is material to the previously issued financial statements (commonly
referred to as a “Big R” restatement) or (ii) to correct an error in previously issued financial statements that is not material to
the previously issued financial statements but that would result in a material misstatement if the error were corrected in the
current period or left uncorrected in the current period (commonly referred to as a “little r” restatement). Changes to the
Company’s financial statements that do not represent error corrections under the then-current relevant accounting standards
will not constitute Restatements. Recovery of any Erroneously Awarded Compensation under the Policy is not dependent on
fraud or misconduct by any person in connection with the Restatement.
n) “SEC” means the United States Securities and Exchange Commission.
o) “Subsidiary” means any domestic or foreign corporation, partnership, association, joint stock company, joint venture, trust
or unincorporated organization “affiliated” with the Company, that is, directly or indirectly, through one or more
intermediaries, “controlling”, “controlled by” or “under common control with”, the Company. “Control” for this purpose
means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities, contract or otherwise.
2
2. Recoupment of Erroneously Awarded Compensation
In the event of a Restatement, any Erroneously Awarded Compensation Received during the Lookback Period prior to the
Restatement (a) that is then-outstanding but has not yet been paid shall be automatically and immediately forfeited and (b) that has been
paid to any person shall be subject to reasonably prompt repayment to the Company Group in accordance with Section 3 of this Policy.
The Committee must pursue (and shall not have the discretion to waive) the forfeiture and/or repayment of such Erroneously Awarded
Compensation in accordance with Section 3 of this Policy, except as provided below.
Notwithstanding the foregoing, the Committee (or, if the Committee is not a committee of the Board responsible for the Company’s
executive compensation decisions and composed entirely of independent directors, a majority of the independent directors serving on
the Board) may determine not to pursue the forfeiture and/or recovery of Erroneously Awarded Compensation from any person if the
Committee determines that such forfeiture and/or recovery would be impracticable due to any of the following circumstances: (i) the
direct expense paid to a third party (for example, reasonable legal expenses and consulting fees) to assist in enforcing the Policy would
exceed the amount to be recovered (following reasonable attempts by the Company Group to recover such Erroneously Awarded
Compensation, the documentation of such attempts, and the provision of such documentation to Nasdaq), (ii) pursuing such recovery
would violate the Company’s Home Country laws adopted prior to November 28, 2022 (provided that the Company obtains an opinion
of Home Country counsel acceptable to the Nasdaq that recovery would result in such a violation and provides such opinion to the
Nasdaq), or (iii) recovery would likely cause any otherwise tax-qualified retirement plan, under which benefits are broadly available to
employees of Company Group, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
3. Means of Repayment
In the event that the Committee determines that any person shall repay any Erroneously Awarded Compensation, the Committee
shall provide written notice to such person by email or certified mail to the physical address on file with the Company Group for such
person, and the person shall satisfy such repayment in a manner and on such terms as required by the Committee, and the Company
Group shall be entitled to set off the repayment amount against any amount owed to the person by the Company Group, to require the
forfeiture of any award granted by the Company Group to the person, or to take any and all necessary actions to reasonably promptly
recoup the repayment amount from the person, in each case, to the fullest extent permitted under applicable law, including without
limitation, Section 409A of the Internal Revenue Code and the regulations and guidance thereunder. If the Committee does not specify
a repayment timing in the written notice described above, the applicable person shall be required to repay the Erroneously Awarded
Compensation to the Company Group by wire, cash or cashier’s check no later than thirty (30) days after receipt of such notice.
4. No Indemnification
No person shall be indemnified, insured or reimbursed by the Company Group in respect of any loss of compensation by such
person in accordance with this Policy, nor shall any person receive any advancement of expenses for disputes related to any loss of
compensation by such person in accordance with this Policy, and no person shall be paid or reimbursed by the Company Group for any
premiums paid by such person for any third-party insurance policy covering potential recovery obligations under this Policy. For this
purpose, “indemnification” includes any modification to current compensation arrangements or other means that would amount to de
facto indemnification (for example, providing the person a new cash award which would be cancelled to effect the recovery of any
Erroneously Awarded
3
Compensation). In no event shall the Company Group be required to award any person an additional payment if any Restatement would
result in a higher incentive compensation payment.
5. Miscellaneous
This Policy generally will be administered and interpreted by the Committee, provided that the Board may, from time to time,
exercise discretion to administer and interpret this Policy, in which case, all references herein to “Committee” shall be deemed to refer
to the Board. Any determination by the Committee with respect to this Policy shall be final, conclusive and binding on all interested
parties. Any discretionary determinations of the Committee under this Policy, if any, need not be uniform with respect to all persons,
and may be made selectively amongst persons, whether or not such persons are similarly situated.
This Policy is intended to satisfy the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, as it may be amended from time to time, and any related rules or regulations promulgated by the SEC or Nasdaq, including any
additional or new requirements that become effective after the Effective Date which upon effectiveness shall be deemed to
automatically amend this Policy to the extent necessary to comply with such additional or new requirements.
The provisions in this Policy are intended to be applied to the fullest extent of the law. To the extent that any provision of this Policy
is found to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted and
shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to applicable law.
The invalidity or unenforceability of any provision of this Policy shall not affect the validity or enforceability of any other provision of
this Policy. Recoupment of Erroneously Awarded Compensation under this Policy is not dependent upon the Company Group satisfying
any conditions in this Policy, including any requirements to provide applicable documentation to Nasdaq.
The rights of the Company Group under this Policy to seek forfeiture or reimbursement are in addition to, and not in lieu of, any
rights of recoupment, or remedies or rights other than recoupment, that may be available to the Company Group pursuant to the terms
of any law, government regulation or stock exchange listing requirement, the Company’s Compensation Recoupment Policy or any
other policy, code of conduct, employee handbook, employment agreement, equity award agreement, or other plan or agreement of the
Company Group.
6. Amendment and Termination
To the extent permitted by, and in a manner consistent with applicable law, including SEC and Nasdaq rules, the Committee may
terminate, suspend or amend this Policy at any time in its discretion.
7. Successors
This Policy shall be binding and enforceable against all persons and their respective beneficiaries, heirs, executors, administrators or
other legal representatives with respect to any Covered Compensation granted, vested or paid to or administered by such persons or
entities.
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