AI Takeaway
Nasdaq delivered strong Q2 FY2026 results with total revenue up 20.5% YoY to $2,532M and net revenue (less transaction-based expenses) up 14.9% to $1,500M, driven by record IPO activity, Index AUM surpassing $1.0 trillion, and double-digit Financial Technology growth, though gross margin compressed slightly to 59.2% amid rising transaction-based expenses.
Revenue
$2.53B
++20.51% YoY
EPS (Basic)
$0.90
++13.92% YoY
Gross Margin
59.2%
-2.92% YoY
Operating Income
$712M
++25.35% YoY
Filed · Source: SEC EDGAR 10-Q filing
Nasdaq (NDAQ) reported Q2 FY2026 revenue of $2.53B, up 20.5% year over year. The company posted net income of $507M, up 12.2% from a year earlier, with diluted EPS of $0.89. Gross margin was 59.2%.
Nasdaq welcomed seven of the 10 largest operating company IPOs on U.S. exchanges, including SpaceX (the largest IPO in history at $86B in offering proceeds), setting a quarterly record with 26 operating company IPOs raising over $105B and a 74% win rate. This drove Capital Access Platforms segment revenue up 19.4% YoY to $621M for the quarter.
Source: 10-Q Item 2 MD&A
The Index business generated $109B in net inflows over the trailing twelve months (including $51B in Q2 alone), with end-of-period and average ETP AUM both exceeding $1.0 trillion for the first time ever ($1,114B ending balance vs. $745B prior year). Index segment revenue grew 38.4% YoY to $271M, aided by a $6M one-time contract modification benefit.
Source: 10-Q Item 2 MD&A
Financial Technology segment revenue grew 16.3% YoY to $539M with 16% ARR growth, marking the second consecutive quarter of double-digit growth in every subdivision (Financial Crime Management +21.6%, Regulatory Technology +15.2%, Capital Markets Technology +15.1%). The company signed 58 new clients, 7 cross-sells, and 107 upsells during the quarter.
Source: 10-Q Item 2 MD&A
Market Services delivered record quarterly net revenues of $340M (+11.2% YoY), driven by record U.S. equity options volumes (industry ADV of 66.5M contracts vs. 52.5M prior year) and record notional value traded via the Closing Cross during the June Triple Witch and Russell reconstitution events.
Source: 10-Q Item 2 MD&A
The effective tax rate increased to 22.4% from 17.5% in the prior-year quarter, driving a 51.6% increase in income tax provision to $146M; this contributed to net income growth (+12.2%) lagging well behind operating income growth (+25.4%/+25.2% per MD&A table).
Source: 10-Q Item 2 MD&A
Brokerage, clearance and exchange fees more than doubled YoY (+106.6%) to $320M and transaction rebates rose 11.2% to $712M, contributing to cost of revenue growth (+29.8%) outpacing revenue growth (+20.5%) and gross margin declining from 62.2% to 59.2%.
Source: 10-Q Income Statement (XBRL) / Item 2 MD&A
The effective tax rate jumped to 22.4% in Q2 FY2026 from 17.5% in the prior-year period, increasing the income tax provision by 51.6% to $146M; sustained higher tax rates could continue to weigh on net income growth relative to operating income growth.
Source: 10-Q Item 2 MD&A
Current assets fell 38.3% YoY to $4,533M and cash & equivalents declined 29.0% to $520M, while the current ratio stands at just 1.01, indicating a thin liquidity buffer relative to current liabilities of $4,505M.
Source: 10-Q Balance Sheet (XBRL)
Total liabilities of $15,348M against stockholders' equity of $11,988M yield a debt-to-equity ratio of approximately 1.28, and long-term debt remains substantial at $8,492M, which combined with $4,767M in cumulative YTD financing outflows (driven by debt repayments, dividends, and buybacks) could constrain financial flexibility.
Source: 10-Q Balance Sheet & Cash Flow (XBRL)
Non-GAAP adjustments for the quarter included $6M related to legal and regulatory matters, and merger/strategic initiative and restructuring charges totaled $19M combined, reflecting continued costs from strategic initiatives including the Adenza integration and restructuring program.
Source: 10-Q Item 2 MD&A (Non-GAAP Reconciliation)
Reported EPS of $1.07 versus the $1.00 analyst consensus — a +7.0% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $2.53B | $2.1B | +20.51% |
Cost of Revenue | $1.03B | $795M | +29.81% |
Gross Profit | $1.5B | $1.31B | +14.85% |
Operating Income | $712M | $568M | +25.35% |
Net Income | $507M | $452M | +12.17% |
EPS (Basic) | $0.90 | $0.79 | +13.92% |
EPS (Diluted) | $0.89 | $0.78 | +14.10% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $27.34B | $30.38B | -10.01% |
Current Assets | $4.53B | $7.35B | -38.34% |
Total Liabilities | $15.35B | $18.57B | -17.33% |
Current Liabilities | $4.5B | $7.66B | -41.16% |
Stockholders' Equity | $11.99B | $11.81B | +1.50% |
Cash & Equivalents | $520M | $732M | -28.96% |
Long-Term Debt | $8.49B | $8.68B | -2.14% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $1.4B | $1.41B | -0.64% |
Investing Cash FlowYTD | $301M | $-317M | +194.95% |
Financing Cash FlowYTD | $-4.77B | $-2.54B | -87.31% |
Dividends PaidYTD | $327M | $293M | +11.60% |
Share BuybacksYTD | $903M | $215M | +320.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 59.2% | 62.2% | -2.92% |
Operating Margin | 28.1% | 27.0% | +1.09% |
Net Margin | 20.0% | — | — |
ROE | 4.2% | — | — |
ROA | 1.9% | — | — |
Current Ratio | $1.006 | — | — |
Debt to Equity | $1.28 | — | — |
Expected release date, analyst estimates & what to watch
Nasdaq delivered a strong Q1 2026 with net income surging 31.4% YoY to $519M, driven by a 13.7% gross profit expansion and significant cost-of-revenue reduction, while the company aggressively returned capital via $548M in share buybacks.
Nasdaq (NDAQ) delivered strong FY2025 results with revenue growing 11.6% to $8.26B and net income surging 60.1% to $1.79B, driven by significant operating leverage and margin expansion across its diversified financial technology and market infrastructure businesses.
Other companies in Financial Exchanges & Data
The filing does not disclose analyst estimate comparisons, but Nasdaq reported strong YoY growth with revenue up 20.5% to $2,532M and diluted EPS up 14.1% to $0.89 (GAAP) or $1.07 on a non-GAAP basis. Operating income grew 25.4% to $712M, reflecting broad-based strength across all three business segments.
Key highlights include a record IPO quarter (26 operating company IPOs raising over $105B, including SpaceX's $86B IPO), the Index business surpassing $1.0 trillion in ETP AUM for the first time, and Financial Technology delivering 16% revenue and ARR growth for the second consecutive quarter of double-digit growth across all subdivisions. Net income rose 12.2% YoY to $507M despite a higher effective tax rate of 22.4%.
Total revenue grew 20.5% YoY to $2,532M, with Capital Access Platforms up 19.4% to $621M, Financial Technology up 16.3% to $539M, and Market Services up 24.6% to $1,372M. On a net basis (less transaction-based expenses), total revenue grew 14.9% to $1,500M.
The filing's Item 1A section references risks disclosed in the most recent Form 10-K without providing new specifics, but the financial data shows rising transaction-based expenses (brokerage/clearance/exchange fees up 106.6% to $320M) compressing gross margin to 59.2% from 62.2%, and a sharply higher effective tax rate of 22.4% versus 17.5% a year ago.
Nasdaq maintains solid profitability with a 28.1% operating margin and 20.0% net margin, but liquidity is tight with a current ratio of just 1.01 and cash of $520M (down 29.0% YoY). The company carries a debt-to-equity ratio of 1.28 with $8,492M in long-term debt, while continuing to return capital via $903M in share buybacks and $327M in dividends over the first six months of FY2026.