Title
Nasdaq (NDAQ) Q3 FY2026: "Net Revenue Up 12.6%, Capital Access Platforms and Financial Technology Grow"
Introduction
Nasdaq’s total revenue increased 20.9% year over year in the third quarter of 2026. Net revenue, after transaction-based expenses, increased 12.6%, so revenue retained before operating expenses also grew. However, cash declined 39.6% from year-end, making the relationship between earnings and cash important. The source includes complete income and cash flow statements: quarterly operating income rose from $586 million to $732 million, consolidated net income rose from $423 million to $539 million, and operating cash flow for the first nine months increased from $1,630 million to $1,921 million.
By LineVest News MinJeKim. Sources: Nasdaq’s Form 10-Q, including the condensed consolidated balance sheets (p.2), statements of income (p.3), changes in stockholders’ equity (p.5), cash flows (p.6), related notes and management’s discussion. The filing date was October 22, 2026. SEC filing record. Amounts are in millions of U.S. dollars; no KRW conversion is used. ‘Not separately disclosed’ does not mean zero.
1. Consolidated Balance Sheet Analysis
1-1. Comparison of Major Asset Categories
The prior period is December 31, 2025, and the current period is September 30, 2026. Amounts are in millions of U.S. dollars.
| Item | Prior Period | Current Period | Change | Interpretation |
|---|---|---|---|---|
| Cash and cash equivalents | 604 | 365 | -39.6% | Lower cash balance |
| Receivables, net | 943 | 1,171 | +24.2% | More receivables outstanding |
| Inventories | Not separately disclosed | Not separately disclosed | — | No separate line item |
| Property and equipment, net | 728 | 767 | +5.4% | Higher net carrying amount |
| Intangible assets, net | 6,511 | 6,106 | -6.2% | Lower balance excluding goodwill |
A decline in cash alone does not establish operating weakness. Debt repayments and share repurchases can also reduce cash. The cash flow statement is available: during the first nine months, operating activities generated 1,921, while cash uses included share repurchases of 1,226, dividends of 500, debt and credit commitment repayments of 431, and purchases of property and equipment of 199.
Receivables grew faster than third-quarter total revenue. However, receivables are a balance compared with year-end, while revenue is a flow compared with the prior-year quarter. These growth rates alone do not establish slower collections. Note 3 identifies customer-contract receivables within ‘Receivables, net,’ and management attributes the increase primarily to a higher Section 31 fee rate, higher Index receivables driven by average assets under management, and billing timing.
The increase in property and equipment reflects investment after depreciation, disposals and other changes. The increase of 39 therefore cannot be used as capital expenditure. Note 5 identifies factors affecting intangible assets, including nine-month amortization of 364, an impairment of 20 related primarily to customer relationships and licenses in the Nordic power futures business, and foreign currency translation changes.
Goodwill, the excess of acquisition consideration over the value assigned to identifiable net assets, totals 14,247. Goodwill and intangible assets together represent 74.3% of total assets. If weaker earnings prospects require impairment charges that reduce carrying amounts, the effect on equity warrants attention. Note 5 reports no goodwill impairment during the first nine months of 2026, but records an intangible asset impairment of 20 in the second quarter and no other material intangible asset impairment.
1-2. Liability Structure — Financial Debt vs Operating Liabilities
Reported short- and long-term debt declined 2.9%, from 9,004 to 8,740. Short-term debt fell from 431 to 269, while long-term debt decreased from 8,573 to 8,471. A decline in debt balances can reflect currency translation and other changes as well as repayments, so it must be distinguished from cash repayments.
Among major operating liabilities, accounts payable and accrued expenses declined from 280 to 252, while accrued personnel costs fell from 364 to 320. The current portion of deferred revenue, representing consideration received before revenue recognition, increased 4.3%, from 785 to 819. This balance represents unsatisfied performance obligations and has not yet been recognized as revenue.
Non-current operating lease liabilities increased from 462 to 476. Including current lease liabilities, total operating lease liabilities increased from 522 to 555, as disclosed in Note 15. These are payment obligations under operating leases and should not be confused with finance lease liabilities.
Total liabilities declined 18.3%, from 18,821 to 15,380. However, 3,312 of the 3,441 decline came from default funds and margin deposit liabilities. The corresponding assets declined by the same amount. The entire reduction in liabilities therefore should not be interpreted as debt repayment by the company.
1-3. Equity Structure
Paid-in capital, comprising common stock and additional paid-in capital, declined 20.6%, from 5,128 to 4,073. Retained earnings, representing accumulated earnings after distributions, increased 11.1%, from 9,588 to 10,654. Accumulated earnings exceed paid-in capital, but that alone does not establish sufficient cash.
Total equity declined 1.9%, from 12,232 to 12,003. Despite higher retained earnings, lower paid-in capital and a larger treasury stock deduction contributed to the decline. Accumulated other comprehensive loss also increased from 1,773 to 1,944. The statement of changes in stockholders’ equity shows a 1,236 reduction in additional paid-in capital from the share repurchase program, partly offset by compensation and stock issuances, and a 68 increase in treasury stock from employee shares withheld. The 1,066 increase in retained earnings equals nine-month net income attributable to Nasdaq of 1,566 less dividends of 500; it is not itself net income.
2. Consolidated Income Statement Analysis
2-1. Comparison of Key Earnings Measures
The prior period is July–September 2025, and the current period is July–September 2026. Amounts are in millions of U.S. dollars.
| Item | Prior Period | Current Period | Change |
|---|---|---|---|
| Total revenue | 1,979 | 2,393 | +20.9% |
| Net revenue | 1,315 | 1,481 | +12.6% |
| Operating income | 586 | 732 | +24.9% |
| Operating margin (%) | 44.6 | 49.4 | +4.9 percentage points |
| Net income (consolidated) | 423 | 539 | +27.4% |
| Net margin (%) | 32.2 | 36.4 | +4.2 percentage points |
Net revenue is total revenue less transaction rebates and brokerage, clearance and exchange fees. It differs from operating income because operating expenses, including employee compensation, have not yet been deducted. Both margins in the table use net revenue as the denominator; percentage-point changes are calculated before rounding.
Using the rounded reported amounts, Capital Access Platforms revenue increased 20.0%, from 534 to 641. Financial Technology revenue rose 15.8%, from 457 to 529, and Market Services revenue increased 26.3%, from 967 to 1,221. Other revenue declined from 21 to 2. The filing discusses growth drivers, including pricing, new and existing clients, and higher average assets under management in products linked to Nasdaq indices, although it does not provide a complete numerical breakdown of growth into pricing, customer and acquisition contributions.
Total transaction-based expenses increased 37.3%, from 664 to 912. Rebates declined by 35, but brokerage, clearance and exchange fees increased by 283. Consequently, the 414 increase in total revenue translated into a 166 increase in net revenue. The filing identifies higher Section 31 fees, primarily from a higher average SEC fee rate: quarterly pass-through fees totaled 284, comprising 33 for U.S. equity derivatives and 251 for cash equities, versus zero in the prior-year quarter. These fees are recorded equally in revenue and transaction-based expenses and therefore do not affect net revenue.
2-2. Fixed vs Variable Cost Analysis
The disclosed transaction-based expenses are largely variable costs linked to trading activity. However, their relationship to revenue can change with contract terms, trading mix and regulatory fee rates.
The income statement includes compensation and benefits, depreciation and amortization, and occupancy expenses. Compensation includes variable elements such as performance bonuses, so it cannot all be classified as fixed. Total operating expenses increased 2.7%, from 729 to 749, while net revenue grew 12.6% and operating income grew 24.9%. Operating expenses therefore absorbed a smaller share of net revenue, demonstrating operating leverage, although this does not mean all operating costs were fixed.
3. Cash Flow Statement Analysis
The comparison covers January–September 2025 and January–September 2026. These cumulative figures must be distinguished from third-quarter results alone.
| Item | Prior Period | Current Period | Change |
|---|---|---|---|
| Operating cash flow | 1,630 | 1,921 | +291 |
| Investing cash flow | -462 | 366 | +828 |
| Financing cash flow | -2,386 | -4,982 | -2,596 |
| Ending cash, cash equivalents and restricted cash equivalents | 4,441 | 1,148 | -3,293 |
The cash flow statement reports cash income taxes paid, net of refunds, of 220 and 350, purchases of property and equipment of 177 and 199, and debt and credit commitment repayments of 726 and 431 for the first nine months of 2025 and 2026, respectively. Free cash flow, defined here as operating cash flow less purchases of property and equipment, increased from 1,453 (1,630 − 177) to 1,722 (1,921 − 199).
The balance sheet’s current cash balance of 365 is not the ending balance used in the cash flow statement. The latter includes restricted cash: 365 of cash and cash equivalents, 28 of restricted cash and cash equivalents, and 755 of restricted cash and cash equivalents within default funds and margin deposits, totaling 1,148. This total fell from 3,934 at the beginning of 2026, a decrease of 2,786; the table’s decrease of 3,293 instead compares the two September period-end balances. Mixing these scopes or comparison dates would distort the cash analysis.
4. Additional Analysis Required in This Report
① Revenue growth and profitability are distinct. Net revenue as a proportion of total revenue fell from 66.4% to 61.9%, a decline of 4.6 percentage points calculated before rounding. A smaller proportion remained after transaction-based expenses, reflecting in part the higher Section 31 pass-through fees. This does not indicate a decline in operating margin.
② The composition of current assets also matters. Current assets of 4,532 and current liabilities of 4,517 are similar in size. Both include default funds and margin deposits of 2,530. Customer-related funds must not be treated as cash freely available to the company.
③ Maturity repayments must be distinguished from the overall decline in debt. The filing’s introductory definitions state that the 2026 Notes, originally issued with aggregate principal of 500, were paid at maturity on June 30. This original issuance amount should not be treated as the cash repayment: Note 8 shows the remaining carrying amount of 431 falling to zero, and the cash flow statement reports debt and credit commitment repayments of 431. Total debt declined by 264, also reflecting net commercial paper issuance of 269, a 106 reduction in the dollar value of Euro Notes from currency translation, and other carrying-value changes.
④ Technology growth brings opportunity and operating responsibility. Financial Technology revenue increased. The company identifies keeping pace with technological advances, cybersecurity and system failures as risks. These are risks to monitor as the business grows; their disclosure does not establish that an incident or loss occurred during the quarter.
5. Key Implications and Outlook
Verified positive developments include higher net revenue, lower debt balances and improved operating profit. Continued growth in Capital Access Platforms and Financial Technology, with operating expense growth contained, could support further profit improvement. That further improvement is a conditional outlook; the current quarter’s profit improvement is already established by the financial statements.
The increase in transaction-based expenses and the decline in cash require attention to their composition: higher Section 31 fees pass through equally to revenue and expenses, while cash reflects financing and investment uses as well as operating generation. The concentration of assets in goodwill and intangibles also leaves carrying values sensitive to earnings prospects. The complete income and cash flow statements establish improved quarterly profitability and higher nine-month operating cash flow, despite the lower cash balance.
Disclaimer
This report is based on Nasdaq’s U.S. Securities and Exchange Commission Form 10-Q and is provided for informational purposes. It is not an investment recommendation.