stockrowWhat it does
Nasdaq, founded in 1971 and headquartered in New York City, operates a technology platform for financial markets. Adena Friedman is its chief executive. It runs 19 exchanges across equities, options, derivatives, fixed income, commodities and exchange-traded products, while also supplying market infrastructure and software to organizations that operate or participate in markets.
The company has three segments. Capital Access Platforms serves listed and private companies, investors, asset managers and consultants with listing venues, market data, index products, investment analytics, investor-relations software, governance tools and sustainability-related products. Financial Technology sells software and services to exchanges, clearing organizations, central securities depositories, banks, brokers, buy-side firms and companies. Its offerings include Nasdaq Verafin for fraud and anti-money-laundering work; AxiomSL for regulatory reporting and risk-data management; Calypso for trading, treasury, risk and collateral management; and market-technology systems.
Market Services operates the trading and clearing venues themselves. Participants use these venues to trade U.S., Canadian, Nordic and Baltic securities and derivatives, and can buy connectivity, trade-management and colocation services. The company also provides clearing services in certain European markets.
Management said on the call that Nasdaq acquired LeveL Markets in October 2026, adding a U.S. alternative trading system and the ability to connect its clients to global markets through LeveL Connect.
How it makes money
Nasdaq earns transaction and clearing fees when customers trade on its venues, and recurring or usage-based fees for data, listings, software, analytics, connectivity and index licences. Its latest-year segment revenues were $4.2 billion in Market Services, $2.1 billion in Capital Access Platforms and $1.9 billion in Financial Technology; in Q3 2026, net revenue was $1.5 billion.
In Market Services, fees depend on trading volumes, market share, capture rates, clearing activity, access protocols, colocation cabinet space and power, and connectivity. Some revenues, including U.S. Section 31 fees, are passed through to customers and offset by transaction-based expenses. Trading therefore has exposure to market activity and pricing.
Capital Access Platforms receives initial and annual listing fees, subscriptions for real-time and historical market data, and fees for corporate workflow, analytics and data-management products. Index revenue comes from licensing Nasdaq-branded indices and financial products. Licence fees can be based on a percentage of underlying assets, the dollar value of product issuance, the number of products, or contracts traded. This links part of index revenue to assets in index-linked products and derivatives activity.
Financial Technology combines recurring subscriptions, cloud deployments, professional services, implementation and integration work, and support. Its offerings serve financial-crime management, regulatory reporting, surveillance, trading, clearing, risk, collateral and market operations. Management said on the call that 85% of Financial Technology bookings in Q3 2026 were for cloud-based solutions. Nasdaq defines ARR as the current annualized value from subscription contracts with defined contract values, excluding one-time and metric-variable contracts.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Market Services | $4.2 billion | 51.4% | 11.7% |
| Capital Access Platforms | $2.1 billion | 26.1% | 9.87% |
| Financial Technology | $1.9 billion | 22.6% | 14.1% |
Customers and how it sells
Nasdaq’s exchange customers include market makers, broker-dealers, alternative trading systems, institutional investors and registered exchanges. Its market-data customers include sell-side firms, institutional investors, retail online brokers, proprietary trading firms, other venues, internet portals and data distributors. Data distributors package subscriptions for their own users.
Its Financial Technology customers include exchanges, regulators, clearing organizations, central securities depositories, banks, brokers, buy-side firms and corporate businesses. The segment serves approximately 3,800 global clients, including all Global Systemically Important Banks, and powers more than 135 marketplaces and regulators in more than 55 countries. Nasdaq Verafin serves financial institutions, while AxiomSL, Calypso and surveillance products address different regulatory, trading, risk and operations workflows.
Its listing and corporate-solutions customers include public companies, private companies, funds, governments, law firms, non-profit organizations, hospitals and healthcare systems. At December 31, 2025, 5,599 companies listed securities on Nasdaq’s U.S., Nordic, Baltic and First North exchanges.
The United States generated $5.9 billion, or 72.0%, of FY2025 revenue. All other countries generated $2.3 billion, or 28.0%. Nasdaq operates North American and European markets and sells technology across more than 55 countries.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $5.9 billion | 72.0% | 2.23% |
| All other countries | $2.3 billion | 28.0% | 46.2% |
Suppliers and costs
Nasdaq uses cloud infrastructure through its partnership with AWS as it migrates exchange and non-exchange workloads from traditional on-premises deployments. It uses its Fusion platform to support common technology across North American and European derivatives markets and cloud deployment. The company expects to move additional markets to AWS over the next several years.
The business does not manufacture physical products. Its operating model requires technology infrastructure, data centers, cybersecurity, product development, implementation and support teams, regulatory and compliance capabilities, and personnel. It employed 9,525 people in FY2025.
Transaction-based expenses are a material cost of operating markets because certain trading fees and rebates are paid or passed through. Other costs include employee compensation, technology investment, marketing, severance, data-center operations and professional services. Management said on the call that Q3 2026 operating expense was $638 million, up 12%, driven by compensation, severance, marketing and technology investment.
- Revenue$8.3B
- Cost of revenue−$3.0B
- Selling, general and administrative−$2.2B
- Other operating costs−$734.0M
- Operating income$2.3B
Competitive position
Nasdaq competes for corporate listings with the New York Stock Exchange LLC, or NYSE, and NYSE American LLC. Companies can switch listing venues, and Nasdaq reported 20 operating-company switches from NYSE or NYSE American to The Nasdaq Stock Market in 2025. It also competes for trading activity, market data, index-linked assets and derivatives volumes, and for financial-market technology, regulatory technology, financial-crime and workflow customers.
In U.S. multi-listed equity options, Nasdaq states that its combined options market share represented a leading share of the U.S. market in 2025. It also states that The Nasdaq Stock Market is a venue of liquidity for U.S.-listed cash equities. Management said on the call that Nasdaq’s U.S. multi-listed-options market-share gap over its closest competitor exceeded 500 basis points year to date, without naming that competitor.
Our reading: Regulatory licences, operating exchanges and clearing infrastructure form a strong moat because markets are subject to extensive U.S., Canadian and European regulation and require resilient systems. (item1)
Our reading: Network effects are strong in listings, trading and market data because listed issuers, liquidity, trading participants and data distribution reinforce one another across Nasdaq-operated venues. (item1)
Our reading: Financial Technology has a moderate moat from embedded workflows, proprietary consortium data and its installed client base, but it competes in software categories where customers can assess alternative systems. (item1, call_prepared)
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| New York Stock Exchange LLC | U.S. corporate listings | High |
| NYSE American LLC | U.S. corporate listings | High |
Growth opportunities
Nasdaq’s stated growth areas include financial-crime management, compliance, marketplace technology, workflow for investment managers and asset owners, and insight solutions. It is also developing cloud-based market infrastructure, AI-enabled data and software capabilities, tokenization tools, and longer trading hours.
In Capital Access Platforms, index growth can come from new index-linked products, assets in exchange-traded products, derivatives volumes and international distribution. Management said on the call that Nasdaq launched 32 index products in Q3 2026 and that 50% of products launched in the quarter were introduced outside the United States. It also said eVestment covered more than 95,000 private funds and that 25% of year-to-date eVestment bookings related to AI use cases.
In Financial Technology, growth initiatives include cloud migration, cross-selling, up-selling, AI agents and expansion of Verafin, AxiomSL, Calypso, surveillance and market technology. Management said on the call that 85% of Q3 Financial Technology bookings were cloud-based; Nasdaq Verafin had more than 850 clients using its agentic AI workforce; and 70 clients had signed paid contracts for those solutions.
Management said on the call that Nasdaq is on track to introduce 23/5 trading on the Nasdaq Stock Market on December 6, 2026. It also said the company remains on track to launch the Nasdaq equity token in the first half of 2027. The company sizes fraud alone as a $500 billion+ global problem and anti-money laundering as a $4.4 trillion problem.
- $5.9BFY2021
- $6.2BFY2022
- $6.1BFY2023
- $7.4BFY2024
- $8.3BFY2025
Structural risks
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Economic conditions, inflation, interest rates, market volatility, geopolitical developments and changes in investment priorities can reduce demand for data, indices, corporate solutions and technology offerings.
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Trading volumes and values can decline, reducing transaction revenue, affecting market share and pricing, and weakening revenues from Market Services. That segment also receives revenue from a relatively small number of customers concentrated in financial services.
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Listing activity depends on investor demand, financing availability, economic conditions and tax and regulatory policies. Adverse conditions can reduce IPOs, increase delistings or make it harder for listed companies to meet continuing-listing requirements.
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Demand for Regulatory Technology, Capital Markets Technology and Financial Crime Management Technology depends on regulatory changes, customers’ financial strength and their growth plans. Management said on the call that sales cycles in new European Verafin jurisdictions can be slow because large banks have lengthy internal processes.
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Nasdaq operates regulated exchanges, clearing operations and technology platforms across the U.S., Canada and Europe. It must meet requirements covering market operation, resilience, fair access, transparency, risk management, cybersecurity and technology controls.
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The company’s infrastructure and product roadmap increasingly use AI and cloud services. It identifies risks from AI technology and applies governance, policies, procedures and preventative and detective controls to AI-related product development and business usage.
Bottom line
Our reading
Our reading: Nasdaq is a mixed market-infrastructure and recurring-solutions business: exchange and clearing activity adds sensitivity to trading, listings and market conditions, while data, index licences and financial technology broaden its revenue sources. (item1, item1a)
Our reading: Its principal operating foundations are regulated venues, embedded market technology, proprietary data and financial-crime consortium data; cloud and AI deployments are extending these offerings across clients. (item1, call_prepared)
Our reading: Market activity, customer technology budgets, regulatory change and execution of new always-on and tokenization initiatives remain material variables. (item1a, call_qa)