Nasdaq’s Q3 EPS Hits $0.96 as Revenue Grows 13%
Key Facts
Nasdaq said on October 22 that diluted earnings per share reached $0.96 in the third quarter, up 31% from the same period last year. Net revenue was $1.481 billion, up 13% on a reported basis and 14% organically. U.S. GAAP operating income also reached $732 million, up 25% year over year. On the company’s adjusted measure, earnings per share were $1.04, up 18% on a reported basis and 19% organically. The results show growth in revenue and earnings, alongside higher operating expenses and varied performance across business lines.
Solutions accounted for most revenue, reaching $1.172 billion, up 17% on a reported basis and 18% organically year over year. By comparison, net revenue from market services was $309 million, up 2%, according to the company’s statement. Within solutions, capital access platforms posted revenue growth of 20% on both reported and organic bases. Financial technology revenue reached $529 million, up 16% on both bases. The difference highlights that solutions-based businesses grew faster than market services during the quarter.
Index revenue was $286 million, up 39% on both reported and organic bases from the third quarter a year earlier. Nasdaq said net inflows into index products totaled $141 billion in the 12 months ended with the quarter. That figure included $49 billion of inflows in the third quarter alone. Recurring revenue reached an annualized run rate of $3.365 billion, up 12% on a reported basis and 14% organically. The figures reflect a growing contribution from indexes and subscriptions to the company’s portfolio, alongside market services revenue.
Annualized software-as-a-service revenue represented 38% of total annualized recurring revenue, according to the earnings statement. This revenue grew 12% on a reported basis and 16% organically year over year. Nasdaq said adjusted operating income was $843 million, up 15% on a reported basis and 16% organically. Adjusted operating expenses reached $638 million, up 9% on a reported basis and 12% organically from the third quarter of 2025. The company attributed the expense increase mainly to higher compensation and benefits costs and technology investment to support long-term growth.
Nasdaq raised its 2026 adjusted operating expense outlook to a range of $2.550 billion to $2.580 billion. It kept its annual tax rate outlook within a range of 22.5% to 24.5%. Chief Executive Officer Adena Friedman said, "Markets are evolving toward an always-on, AI-led future, with increasing integration across asset classes and geographies." The view is consistent with the company’s announcement that it completed its acquisition of LeveL Markets on October 15, before the third-quarter results were released. Nasdaq said the deal strengthens its ability to connect investors with liquidity in a more continuous and global trading environment.
Nasdaq said LeveL Markets processes hundreds of millions of shares daily across more than 7,000 symbols and serves more than 2,500 clients. It added that the platform’s average daily trading volume rose 56% in 2025 compared with 2024. On liquidity, the company generated $521 million in operating cash flow during the third quarter. It said this cash flow enabled it to return capital to shareholders under its capital allocation framework. Returns during the quarter included $173 million in dividends and $323 million in share repurchases.
Nasdaq therefore returned $496 million to shareholders in the third quarter through dividends and share repurchases. The remaining balance in its share repurchase program was $2.2 billion as of September 30. The chief financial officer said the company had returned more than $1.7 billion to shareholders from the start of the year through the end of the quarter, through dividends and repurchases. On the October 22 earnings announcement day, the Nasdaq Composite fell 2.6%, despite gains among most U.S. stocks. Market coverage said the decline was concentrated in technology stocks amid renewed concerns about AI spending following results from major companies.
Nasdaq shares, trading under the ticker NDAQ, closed at $96.12 on October 21, then rose to $103.30 on October 22. The stock closed at $102.56 on October 23, according to EL7 daily data. The stock’s rise on the earnings announcement day coincided with a decline in the Composite, a divergence between the shares and the broader market. The company had completed its acquisition of LeveL Markets on October 15, before reporting its quarterly results. The updated expense and tax rate guidance remains Nasdaq’s stated framework for the remainder of fiscal 2026.