Highlights:
- Nasdaq Inc. posts a 10% slump in its Q2 FY-22 profit as expenses soar.
- Nasdaq’s revenue saw a jump in its net revenue to US$893 million.
- Global IPO market so far in 2022 is down compared to last year.
Nasdaq Inc. (NDAQ) reported a 10% drop in second-quarter profit for the financial year 2022 on Wednesday.
Profits slackened for Nasdaq due to its rising expenses. However, its revenue saw an uptick as traders made a beeline to scoop its various investment-related products to remain ahead of market volatility.
The total operating expense of the transatlantic exchange rose 2.3%, subjugated by inflationary pressures just like other financial companies. Higher compensation and employee benefits expenses have added significantly to the expenses, it said.
Its net income was US$307 million, or US$1.85 a share, for the reported quarter that ended June 30. It was US$341 million, or $2.05 a share, in the year-ago quarter.
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Global IPO market is sluggish in 2022
According to data released by EY, the global IPO market saw a downturn this year. In the second quarter, initial public offerings tanked 65% from last year, raising US$40.6 billion, the EY data revealed. Even the US IPO market experienced a shrink in volumes to a fraction of 2021.
In the second quarter, the Nasdaq stock market hosted 38 IPOs versus the 135 stock market flotations in the previous year.
Driven by 10% growth in its solutions segment, Nasdaq reported a 6% upsurge in its net revenue to US$893 million. Some of the products in this segment include financial crime tech and ESG (environmental, social, and governance) advisories.
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In June, Nasdaq also announced that it was planning to acquire ESG software provider Metrio for an undisclosed amount.
Nasdaq was also among the group of exchanges that won a ruling against the Securities and Exchange Commission (SEC). A US appeals court nixed the regulator’s decree that could have permitted some financial firms to dictate the price and dissemination of essential stock market data.
Bottom line:
US multinational financial services corporation Nasdaq Inc. owns and runs three stock exchanges in the United States. They are the tech-heavy Nasdaq stock exchange, the Philadelphia Stock Exchange, and the Boston Stock Exchange.