Nasdaq earnings lead Street views on surge in IPOs and demand for investment products

The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York, U.S., December 3, 2021. REUTERS/Jeenah Moon

Jan 26 (Reuters) – Nasdaq Inc (NDAQ.O) on Wednesday reported a nearly 16% rise in fourth-quarter profit, beating Wall Street estimates, buoyed by the blistering pace of U.S. IPOs and the strong demand for its investments. Related products.

Tech, healthcare and fintech companies led the IPO rush in the quarter, including the more than $100 billion debut of Rivian Automotive Inc (RIVN.O).

The tech-heavy Nasdaq hosted 1,000 IPOs in 2021, with 752 IPOs representing $181 billion in capital raised, including chipmaker GlobalFoundries Inc (GFS.O) and crypto exchange Coinbase Global ( COIN.O).

There are more than double the number of companies that filed for market access in 2022 compared to the previous year, but recent market volatility may cause delays in IPO timelines, Chief Executive Adena Friedman said on a call with analysts.

“And in our index business, we expect index asset values ​​to experience some impact associated with different market levels and investor appetite for products that track our indices,” she said. about market volatility.

But the Nasdaq could also benefit from higher futures trading volumes due to the use of its core indices and market hedging strategies, she said.

Excluding one-time items, the Nasdaq gained $1.93 per share, beating analysts’ average estimate of 15 cents, according to IBES data from Refinitiv.

The transatlantic exchange operator has also repositioned itself as a fintech company, targeting the software sector with analytics, data and cloud services.

Nasdaq’s solutions segment revenue jumped 19% to $581 million, with its analytics products, which help clients make investment decisions across multiple asset classes, emerging as key growth drivers .

The Nasdaq also launched a cloud-based data management platform for investment management firms during the quarter.

Net revenue increased 12% to $885 million from a year ago.

Like other financial institutions, inflationary pressures weighed on the Nasdaq as operating expenses rose 15%, largely due to higher employee compensation.

Reporting by Manya Saini in Bengaluru and John McCrank in New York; Editing by Shinjini Ganguli and Jonathan Oatis

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