Nasdaq, Inc.
Analysis
Nasdaq now earns most of its money from recurring software, data and index fees, and those grew fast enough last year to outrun rising costs. The bet is that today's spending turns into tomorrow's subscriptions, and the evidence is starting to arrive.How much of Nasdaq's growth now comes from recurring fees rather than trading?
- FinTech flipped from the laggard to the growth engine.
A year ago it was the division expected to miss. In Q1 FY2026 it posted record growth, with all three parts in double digits and recurring revenue up 16%. Software now sets the pace, so quiet trading quarters matter less. How much of the 2025 enterprise deals is billing at Verafin yet?
- Cost guidance has been raised twice in two quarters.
The 2026 expense outlook rose in Q2 FY2026, to $2.53 billion to $2.57 billion, on pay tied to a strong year and heavier marketing for the IPO pipeline. Profit grows only when sales outrun costs, so this spending has to earn its place. Which investments drove the higher 2026 cost guidance, and when do they pay off?
- Index became a trillion-dollar franchise.
Funds tracking Nasdaq's indexes passed $1 trillion in assets for the first time, on record quarterly inflows, and the Nasdaq-100 is now licensed to BlackRock and State Street as well. Fees on other people's money grow without new spending.
- Recurring solutions revenueThe bull case rests on Nasdaq becoming a subscription vendor, with recurring solutions revenue dominating the mix and growing faster than the rest of the company.
- Listings and index linkIts listing and index franchises reinforce each other: landmark IPOs deepen the pool of companies whose shares track Nasdaq benchmarks and pay asset-based fees.
- New market infrastructureManagement is turning regulatory approvals on extended trading hours and tokenized shares into dated launches, which bulls treat as real revenue potential.
- Revenue tied to market levelsMuch of the recent acceleration came from asset values and trading volumes rather than pricing, so revenue would slow if markets fell or volumes normalized.
- Slow enterprise installationsThe financial-crime enterprise push is signed but slow to install, so revenue keeps arriving later than management's earlier comments implied.
- Rising expense guidanceExpense guidance has been raised more than once this year and the share count is higher than before the Adenza deal, so per-share gains rely on revenue outrunning both.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$50K | Jun 24 | Aug 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jun 23 | Aug 22 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 11 | May 13 |
Donald Trump Republican · Executive | Sale | ≥$1K | Feb 23 | May 13 |
Donald Trump Republican · Executive | Sale | ≥$100K | Feb 10 | May 13 |
Congressional trading data provided by QuiverQuant
How Nasdaq turned $8.3B of revenue into $2.3B of operating income.
| Revenue | ||
|---|---|---|
| Market Services | $4.2B | ▲ 11.75% YoY |
| Capital Access Platforms | $2.1B | ▲ 8.37% YoY |
| Market Technology | $1.9B | ▲ 14.13% YoY |
| Total revenue | $8.3B | |
| Gross profit | $5.2B | 63.5% |
| Operating income | $2.3B | 28.2% |