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Nasdaq delivers strong growth in revenues and income in Q1

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Nasdaq has reported first quarter 2018 net revenues of USD666 million, up USD85 million, or 15 per cent, from USD581 million in the prior year period. 

The first quarter increase in net revenues included USD55 million, or 9 per cent, impact from organic growth, a USD17 million favourable impact from changes in foreign exchange rates and a USD13 million impact from acquisitions.
 
“We achieved strong results in the first quarter of 2018 through a combination of solid organic growth in our recurring revenues, as well as by maximising the benefits of higher industry volumes with strong market share,” says Adena Friedman (pictured), President and CEO, Nasdaq. “Across all of our businesses, we delivered growth through a continued focus on executing for our clients.”
 
“I am also encouraged by the early progress against our 2018 execution priorities. This includes advancing our strategic pivot as an analytics and technology partner, including the recently completed sale of the Public Relations Solutions and Digital Media Services businesses, which allows us to focus our Corporate Services business on the most strategic services and solutions to our corporate clients.  In addition, we continue to expand our pipeline of opportunities in our ‘markets economy’ technology strategy, and build momentum around our competitive position across several core businesses. While industry macro conditions have been developing positively, we remain focused on structurally advancing our capabilities to deliver over the long term for clients and shareholders, across a broad range of environmental backdrops.”
 
GAAP operating expenses were USD393 million in the first quarter of 2018, an increase of USD58 million from USD335 million in the first quarter of 2017. The increase primarily reflects higher compensation and benefits expense, depreciation and amortisation expense and merger and strategic initiatives expense.
 
Non-GAAP operating expenses were USD353 million in the first quarter of 2018, an increase of USD47 million, or 15 per cent, compared to the first quarter of 2017. This reflects a USD19 million increase from acquisitions, an USD18 million organic expense increase, including an increase in compensation expense tied to the strong revenue growth in the period, and a USD10 million unfavourable impact from changes in foreign exchange rates.
 
“With the re-balancing of our organic investments to focus more on our higher growth opportunities, we believe we are optimising our resource allocation to support our new strategic direction,” says Michael Ptasznik, Executive Vice President and Chief Financial Officer, Nasdaq. “At the same time, we’ve become more transparent around our capital plan to drive returns for shareholders. Consistent with our capital deployment framework, we recently announced a 16 per cent increase in the quarterly dividend to USD0.44 per share, and have planned equity repurchases funded by the after-tax proceeds from the divestiture.”
 
On a GAAP basis, net income for the first quarter of 2018 was USD177 million, or USD1.05 per diluted share, compared to USD168 million, or USD0.99 per diluted share, in the first quarter of 2017.
 
On a non-GAAP basis, net income for the first quarter of 2018 was USD209 million, or USD1.24 per diluted share, compared with USD162 million, or USD0.95 per diluted share, in the first quarter of 2017. Non-GAAP EPS in the first quarter of 2018 increased 31 per cent versus the prior year period, with U.S. tax reform contributing USD0.14 per share, or 15 percentage points, of the increase to non-GAAP EPS year over year.
 
At 31 March 2018, the company had cash and cash equivalents of USD405 million and total debt of USD4,115 million, resulting in net debt of USD3,710 million. This compares to net debt of USD3,830 million at 31 December, 2017. Share repurchases totalled USD99 million during the first quarter of 2018. As of 31 March 2018, there was USD627 million remaining under the board authorised share repurchase program.

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