UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2021
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period	from ________ to ________

Commission file number: 001-38855

___________________________________

Nasdaq, Inc.

(Exact name of registrant as specified in its charter)

Delaware	52-1165937
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

151 W. 42nd Street,	New York,	New York	10036
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: +1 212 401 8700

No Changes

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	NDAQ	The Nasdaq Stock Market
0.875% Senior Notes due 2030	NDAQ30	The Nasdaq Stock Market
1.75% Senior Notes due 2029	NDAQ29	The Nasdaq Stock Market
1.75% Senior Notes due 2023	NDAQ23	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒ 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at April 27, 2021
Common Stock, $0.01 par value per share	164,093,333	shares

Nasdaq, Inc.

		Page
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets - March 31, 2021 (unaudited) and December 31, 2020	2
	Condensed Consolidated Statements of Income - Three Months Ended March 31, 2021 and 2020 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders' Equity - Three Months Ended March 31, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	49
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
SIGNATURES		52

i

About this Form 10-Q

Throughout this Form 10-Q, unless otherwise specified:

•“Nasdaq,” “we,” “us” and “our” refer to Nasdaq, Inc.

•    “Nasdaq Baltic” refers to collectively, Nasdaq Tallinn AS, Nasdaq Riga, AS, and AB Nasdaq Vilnius.

•    “Nasdaq BX” refers to the cash equity exchange operated by Nasdaq BX, Inc.

•“Nasdaq BX Options” refers to the options exchange operated by Nasdaq BX, Inc.

•“Nasdaq Clearing” refers to the clearing operations conducted by Nasdaq Clearing AB.

•“Nasdaq CXC” and “Nasdaq CX2” refer to the Canadian cash equity trading books operated by Nasdaq CXC Limited.

•“Nasdaq First North” refers to our alternative marketplaces for smaller companies and growth companies in the Nordic and Baltic regions.

•“Nasdaq GEMX” refers to the options exchange operated by Nasdaq GEMX, LLC.

•“Nasdaq ISE” refers to the options exchange operated by Nasdaq ISE, LLC. 

•“Nasdaq MRX” refers to the options exchange operated by Nasdaq MRX, LLC. 

•“Nasdaq Nordic” refers to collectively, Nasdaq Clearing AB, Nasdaq Stockholm AB, Nasdaq Copenhagen A/S, Nasdaq Helsinki Ltd, and Nasdaq Iceland hf.

•“Nasdaq PHLX” refers to the options exchange operated by Nasdaq PHLX LLC.

•“Nasdaq PSX” refers to the cash equity exchange operated by Nasdaq PHLX LLC.

•“The Nasdaq Options Market” refers to the options exchange operated by The Nasdaq Stock Market LLC.

•“The Nasdaq Stock Market” refers to the cash equity exchange and listing venue operated by The Nasdaq Stock Market LLC.

* * * * * *

Nasdaq also provides as a tool for the reader the following list of abbreviations and acronyms that are used throughout this Quarterly Report on Form 10-Q.

401(k) Plan: Voluntary Defined Contribution Savings Plan

2020 Credit Facility: $1.25 billion senior unsecured revolving credit facility, which matures on December 22, 2025

2022 Notes: $600 million aggregate principal amount of 0.455% senior unsecured notes due December 21, 2022

2023 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due May 19, 2023

2024 Notes: $500 million aggregate principal amount of 4.25% senior unsecured notes due June 1, 2024

2026 Notes: $500 million aggregate principal amount of 3.85% senior unsecured notes due June 30, 2026

2029 Notes: €600 million aggregate principal amount of 1.75% senior unsecured notes due March 28, 2029

2030 Notes: €600 million aggregate principal amount of 0.875% senior unsecured notes due February 13, 2030

2031 Notes: $650 million aggregate principal amount of 1.650% senior unsecured notes due January 15, 2031

2040 Notes: $650 million aggregate principal amount of 2.500% senior unsecured notes due December 21, 2040

2050 Notes: $500 million aggregate principal amount of 3.25% senior unsecured notes due April 28, 2050

ASU: Accounting Standards Update

ASU 2016-13: Measurement of Credit Losses on Financial Instruments

AUM: Assets Under Management

CCP: Central Counterparty

EMIR: European Market Infrastructure Regulation

Equity Plan: Nasdaq Equity Incentive Plan

ESG: Environmental, Social and Governance

ESPP: Nasdaq Employee Stock Purchase Plan

ETF: Exchange Traded Fund

ETP: Exchange Traded Product

Exchange Act: Securities Exchange Act of 1934, as amended

FICC: Fixed Income and Commodities Trading and Clearing

FINRA: Financial Industry Regulatory Authority

IPO: Initial Public Offering

LIBOR: London Interbank Offered Rate

NFF: Nasdaq Financial Framework; Nasdaq's end-to-end technology solutions for market infrastructure operators,

ii

buy-side firms, sell-side firms and other non-financial markets

NPM: The NASDAQ Private Market, LLC

NSCC: National Securities Clearing Corporation

OCC: The Options Clearing Corporation

OTC: Over-the-Counter

PSU: Performance Share Unit

SaaS: Software as a Service

SEC: U.S. Securities and Exchange Commission

SERP: Supplemental Executive Retirement Plan

SFSA: Swedish Financial Supervisory Authority

S&P: Standard & Poor’s

S&P 500: S&P 500 Stock Index

SPAC: Special Purpose Acquisition Company

TSR: Total Shareholder Return

U.S. GAAP: U.S. Generally Accepted Accounting Principles

* * * * * *

NASDAQ, the NASDAQ logos, and other brand, service or product names or marks referred to in this report are trademarks or service marks, registered or otherwise, of Nasdaq, Inc. and/or its subsidiaries. FINRA and Trade Reporting Facility are registered trademarks of FINRA.

* * * * * *

This Quarterly Report on Form 10-Q includes market share and industry data that we obtained from industry publications and surveys, reports of governmental agencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently available market data. For market comparison purposes, The Nasdaq Stock Market data in this Quarterly Report on Form 10-Q for IPOs is based on data generated internally by us; therefore, the data may not be comparable to other publicly-available IPO data. Data in this Quarterly Report on Form 10-Q for new listings of equity securities on The Nasdaq Stock Market is based on data generated internally by us, which includes issuers that switched from other listing venues, closed-end funds and ETPs. Data in this Quarterly Report on Form 10-Q for IPOs and new listings of equity securities on the Nasdaq Nordic and Nasdaq Baltic exchanges and Nasdaq First North also is based on data generated internally by us. IPOs and new listings data is presented as of period end. While we are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. We refer you to the “Risk Factors” section in our Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 23, 2021. 

 * * * * * *

Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.

iii

Forward-Looking Statements

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains these types of statements. Words such as “may,” “will,” “could,” “should,” “anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words or terms of similar substance used in connection with any discussion of future expectations as to industry and regulatory developments or business initiatives and strategies, future operating results or financial performance, and other future developments are intended to identify forward-looking statements. These include, among others, statements relating to:

•our strategic direction;

•the integration of acquired businesses, including accounting decisions relating thereto;

•the scope, nature or impact of acquisitions, divestitures, investments, joint ventures or other transactional activities;

•the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring, technology, de-leveraging and capital return initiatives;

•our products and services;

•the impact of pricing changes;

•tax matters;

•the cost and availability of liquidity and capital;

•any litigation, or any regulatory or government investigation or action, to which we are or could become a party or which may affect us; and

•the potential impact of the COVID-19 pandemic and the response of governments and other third parties on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners.

Forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following:

•our operating results may be lower than expected;

•our ability to successfully integrate acquired businesses or divest sold businesses or assets, including the fact that any integration or transition may be more difficult, time consuming or costly than expected, and we may be unable to realize synergies from business combinations, acquisitions, divestitures or other transactional activities;

•loss of significant trading and clearing volumes or values, fees, market share, listed companies, market data customers or other customers;

•our ability to develop and grow our non-trading businesses, including our technology and analytics offerings;

•our ability to keep up with rapid technological advances and adequately address cybersecurity risks;

•economic, political and market conditions and fluctuations, including interest rate and foreign currency risk, inherent in U.S. and international operations;

•the performance and reliability of our technology and technology of third parties on which we rely;

•any significant error in our operational processes;

•our ability to continue to generate cash and manage our indebtedness; and

•adverse changes that may occur in the litigation or regulatory areas, or in the securities markets generally, or increased regulatory oversight domestically or internationally.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the uncertainty and any risk related to forward-looking statements that we make. These risk factors are more fully described in the “Risk Factors” section in our Form 10-K that was filed with the SEC on February 23, 2021. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. You should carefully read this entire Quarterly Report on Form 10-Q, including “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and the related notes. Except as required by the federal securities laws, we undertake no obligation to update any forward-looking statement, release publicly any revisions to any forward-looking statements or report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Nasdaq, Inc.

Condensed Consolidated Balance Sheets

(in millions, except share and par value amounts)

	March 31, 2021		December 31, 2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	774	$	2,745
Restricted cash and cash equivalents	38		37
Financial investments	215		195
Receivables, net	574		566
Default funds and margin deposits	3,737		3,942
Other current assets	316		175
Total current assets	5,654		7,660
Property and equipment, net	482		475
Goodwill	8,508		6,850
Intangible assets, net	2,967		2,255
Operating lease assets	396		381
Other non-current assets	483		358
Total assets	$	18,490	$	17,979
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	183	$	175
Section 31 fees payable to SEC	131		224
Accrued personnel costs	174		227
Deferred revenue	519		235
Other current liabilities	377		121
Default funds and margin deposits	3,737		3,942
Short-term debt	435		—
Total current liabilities	5,556		4,924
Long-term debt	5,455		5,541
Deferred tax liabilities, net	542		502
Operating lease liabilities	406		389
Other non-current liabilities	197		187
Total liabilities	12,156		11,543
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 170,860,750 at March 31, 2021 and 171,278,761 at December 31, 2020; shares outstanding: 164,242,471 at March 31, 2021 and 164,933,678 at December 31, 2020	2		2
Additional paid-in capital	2,405		2,547
Common stock in treasury, at cost: 6,618,279 shares at March 31, 2021 and 6,345,083 shares at December 31, 2020	(415)		(376)
Accumulated other comprehensive loss	(1,505)		(1,368)
Retained earnings	5,845		5,628
Total Nasdaq stockholders’ equity	6,332		6,433
Noncontrolling interests	2		3
Total equity	6,334		6,436
Total liabilities and equity	$	18,490	$	17,979

See accompanying notes to condensed consolidated financial statements.

2

Nasdaq, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in millions, except per share amounts)

	Three Months Ended March 31,
	2021		2020
Revenues:
Market Services	$	1,139	$	933
Corporate Platforms	155		128
Investment Intelligence	258		211
Market Technology	100		81
Total revenues	1,652		1,353
Transaction-based expenses:
Transaction rebates	(654)		(479)
Brokerage, clearance and exchange fees	(147)		(173)
Revenues less transaction-based expenses	851		701
Operating expenses:
Compensation and benefits	239		195
Professional and contract services	27		27
Computer operations and data communications	44		35
Occupancy	28		25
General, administrative and other	13		61
Marketing and advertising	10		9
Depreciation and amortization	63		48
Regulatory	7		7
Merger and strategic initiatives	45		7
Restructuring charges	10		12
Total operating expenses	486		426
Operating income	365		275
Interest income	1		2
Interest expense	(29)		(26)
Other income	1		5
Net income from unconsolidated investees	57		17
Income before income taxes	395		273
Income tax provision	97		70
Net income attributable to Nasdaq	$	298	$	203
Per share information:
Basic earnings per share	$	1.81	$	1.23
Diluted earnings per share	$	1.78	$	1.22
Cash dividends declared per common share	$	0.49	$	0.47

See accompanying notes to condensed consolidated financial statements.

3

Nasdaq, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(in millions)

	Three Months Ended March 31,
	2021		2020
Net income	$	298	$	203
Other comprehensive loss:
Foreign currency translation losses	(114)		(215)
Income tax expense(1)	(23)		(8)
Foreign currency translation, net	(137)		(223)
Comprehensive income (loss) attributable to Nasdaq	$	161	$	(20)

____________

(1)    Primarily relates to the tax effect of unrealized gains and losses on Euro denominated notes.

See accompanying notes to condensed consolidated financial statements.

4

Nasdaq, Inc. 

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

(in millions)

	Three Months Ended March 31,
	2021			2020
	Shares	$		Shares	$
Common stock	165	2		165	2
Additional paid-in capital
Beginning balance		2,547			2,632
Share repurchase program	(1)	(162)		(1)	(122)
Share-based compensation	1	19		1	17
Stock option exercises, net	—	1		—	—
Ending balance		2,405			2,527
Common stock in treasury, at cost
Beginning balance		(376)			(336)
Other employee stock activity	(1)	(39)		(1)	(28)
Ending balance		(415)			(364)
Accumulated other comprehensive loss
Beginning balance		(1,368)			(1,686)
Other comprehensive loss		(137)			(223)
Ending balance		(1,505)			(1,909)
Retained earnings
Beginning balance		5,628			5,027
Impact of adoption of ASU 2016-13		—			(12)
Net income		298			203
Cash dividends declared per common share		(81)			(78)
Ending balance		5,845			5,140
Total Nasdaq stockholders’ equity		6,332			5,396
Noncontrolling interests
Beginning balance		3			—
Net activity related to noncontrolling interests		(1)			2
Ending balance		2			2
Total Equity	164	$	6,334	164	$	5,398

See accompanying notes to condensed consolidated financial statements.

5

Nasdaq, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in millions)

	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	298	$	203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	63		48
Share-based compensation	19		17
Deferred income taxes	20		(1)
Extinguishment of debt	—		36
Net income from unconsolidated investees	(57)		(17)
Other reconciling items included in net income	3		(1)
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	6		(174)
Other assets	(94)		69
Accounts payable and accrued expenses	12		28
Section 31 fees payable to SEC	(93)		29
Accrued personnel costs	(52)		(53)
Deferred revenue	255		204
Other liabilities	14		(8)
Net cash provided by operating activities	394		380
Cash flows from investing activities:
Purchases of securities	(60)		(92)
Proceeds from sales and redemptions of securities	28		114
Acquisition of businesses, net of cash and cash equivalents acquired	(2,430)		(157)
Purchases of property and equipment	(42)		(26)
Other investing activities	(1)		7
Net cash used in investing activities	(2,505)		(154)
Cash flows from financing activities:
Proceeds from (repayments of) commercial paper, net	435		(42)
Repayments of borrowings under our credit commitment and debt obligations	(100)		(671)
Payment of debt extinguishment cost	—		(36)
Proceeds from issuances of long-term debt, net of issuance costs and utilization of credit commitment	100		1,443
Repurchases of common stock	(162)		(122)
Dividends paid	(81)		(78)
Payments related to employee shares withheld for taxes	(39)		(28)
Other financing activities	(1)		2
Net cash provided by financing activities	152		468
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(11)		(12)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	(1,970)		682
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	2,782		362
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	812	$	1,044
Supplemental Disclosure Cash Flow Information
Cash paid for:
Interest	$	19	$	33
Income taxes, net of refund	$	45	$	41

See accompanying notes to condensed consolidated financial statements.

6

Nasdaq, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Nature of Operations

Nasdaq is a global technology company serving the capital markets and other industries. Our diverse offerings of data, analytics, software and services enables clients to optimize and execute their business vision with confidence.

We manage, operate and provide our products and services in four business segments: Market Services, Corporate Platforms, Investment Intelligence and Market Technology.

Market Services

Our Market Services segment includes our Equity Derivative Trading and Clearing, Cash Equity Trading, FICC and Trade Management Services businesses. We operate multiple exchanges and other marketplace facilities across several asset classes, including derivatives, commodities, cash equity, debt, structured products and ETPs. In addition, in certain countries where we operate exchanges, we also provide broker services, clearing, settlement and central depository services. In January 2020, we commenced an orderly wind-down of our Nordic broker services operations business. We expect this wind-down to continue through 2021. Also, in February 2021, we announced that we entered into a purchase and sale agreement, or the Purchase Agreement, to sell our U.S. Fixed Income business and as a result, this business has been classified as held for sale as of March 31, 2021. See Note 5, “Assets and Liabilities Held for Sale,” for further discussion.

Our transaction-based platforms provide market participants with the ability to access, process, display and integrate orders and quotes. The platforms allow the routing and execution of buy and sell orders as well as the reporting of transactions, providing fee-based revenues.

In the U.S., we operate six options exchanges and three cash equity exchanges. The Nasdaq Stock Market, the largest of our cash equities exchanges, is the largest single venue of liquidity for trading U.S.-listed cash equities. The U.S. portion of Nasdaq Fixed Income includes an electronic platform for trading of U.S. Treasuries and we also operate a Canadian exchange for the trading of certain Canadian-listed securities. As noted above, in February 2021, we announced that we entered into a Purchase Agreement to sell our U.S. Fixed Income business.

In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), and Reykjavik (Iceland), as well as the clearing operations of Nasdaq Clearing, as Nasdaq Nordic. We also operate exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania) as Nasdaq Baltic. Collectively, Nasdaq Nordic and Nasdaq Baltic offer trading in cash equities, depository receipts, warrants, convertibles, rights, fund units and ETFs, as well as

trading and clearing of derivatives and clearing of resale and repurchase agreements.

The European portion of Nasdaq Fixed Income provides a wide range of products and services, such as trading and clearing, for fixed income products in Sweden, Denmark, Finland, Iceland, Estonia, Lithuania and Latvia.

Nasdaq Commodities is the brand name for Nasdaq’s European commodity-related products and services. Nasdaq Commodities’ offerings include derivatives in power, natural gas and carbon emission markets, seafood, electricity certificates and clearing services. These products are listed on Nasdaq Oslo ASA, except for seafood, which is listed on Fishpool, a third party platform.

Through our Trade Management Services business, we provide market participants with a wide variety of alternatives for connecting to and accessing our markets. Our marketplaces may be accessed via a number of different protocols used for quoting, order entry, trade reporting, and connectivity to various data feeds. We also offer the Nasdaq Workstation, a browser-based, front-end interface that allows market participants to view data and enter orders, quotes and trade reports. In addition, we offer a variety of add-on compliance tools to help firms comply with regulatory requirements.

We provide colocation services to market participants, whereby we offer firms cabinet space and power to house their own equipment and servers within our data centers. Additionally, we offer a number of wireless connectivity offerings between select data centers using millimeter wave and microwave technology.

Our broker services operations business primarily offers technology and customized securities administration solutions to financial participants in the Nordic market. As noted above, we have commenced an orderly wind-down of our Nordic broker services operations business that will continue through 2021.

Corporate Platforms

Our Corporate Platforms segment includes our Listing Services and IR & ESG Services businesses. These businesses deliver critical capital market and governance solutions across the lifecycle of public and private companies.

Our Listing Services business includes our U.S. and European Listing Services businesses. We operate a variety of listing platforms around the world to provide multiple global capital raising solutions for private and public companies. Our main listing markets are The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Baltic exchanges. Through Nasdaq First North, our Nordic and Baltic operations also offer alternative marketplaces for smaller companies and growth companies. Our Listing Services business also includes NPM, which provides liquidity

7

solutions for private companies to enable employees, investors, and companies to execute transactions.

We are continuing to grow our U.S. Corporate Bond exchange for the listing of corporate bonds. This exchange operates pursuant to The Nasdaq Stock Market exchange license and is powered by the NFF. As of March 31, 2021, 92 corporate bonds were listed on the Corporate Bond exchange. We also continue to grow the Nasdaq Sustainable Bond Network, a platform for increased transparency in the global sustainable bond markets.

As of March 31, 2021, there were 3,667 total listings on The Nasdaq Stock Market, including 410 ETPs. The combined market capitalization was approximately $23.0 trillion. In Europe, the Nasdaq Nordic and Nasdaq Baltic exchanges, together with Nasdaq First North, were home to 1,090 listed companies with a combined market capitalization of approximately $2.2 trillion.

Our IR & ESG Services business includes our Investor Relations Intelligence and Governance Solutions businesses, which serve both public and private companies and organizations. Our public company clients can be companies listed on our exchanges or other U.S. and global exchanges. We help organizations enhance their ability to understand and expand their global shareholder base, improve corporate governance, and navigate the evolving ESG landscape through our suite of advanced technology, analytics, reporting and consultative services. We provide clients with counsel on a range of governance and sustainability-related issues. Our offerings also include our ESG Advisory service and our board assessment and collaboration technology.

Investment Intelligence

Our Investment Intelligence segment includes our Market Data, Index and Analytics businesses.

Our Market Data business sells and distributes historical and real-time market data to the sell-side, the institutional investing community, retail online brokers, proprietary trading shops, other venues, internet portals and data distributors. Our market data products enhance transparency of market activity within our exchanges and provide critical information to professional and non-professional investors globally. Additionally, our Nasdaq Cloud Data Service provides a flexible and efficient method of delivery for real-time exchange data and other financial information.

Our Index business develops and licenses Nasdaq-branded indexes and financial products. We also license cash-settled options, futures and options on futures on our indexes. As of March 31, 2021, 349 ETPs listed in 30 countries and exchanges tracked a Nasdaq index and accounted for $385 billion in AUM.

Our Analytics business provides asset managers, investment consultants and institutional asset owners with information and analytics to make data-driven investment decisions, deploy their resources more productively, and provide liquidity solutions for private funds. Through eVestment and

Solovis, we provide a suite of cloud-based solutions that help institutional investors and consultants conduct pre-investment due diligence, and monitor their portfolios post-investment. The eVestment platform also enables asset managers to market their institutional products worldwide.

Market Technology

Our Market Technology segment includes our Marketplace Infrastructure Technology business, which includes our solutions for the full trade life cycle to market infrastructure operators, banks and brokers, and non-financial market operators and our Anti Financial Crime Technology business, which includes our SaaS offering providing surveillance, risk management, and Verafin's anti-money laundering and fraud technology solutions.

Our Market Technology segment is a leading global technology solutions provider and partner to exchanges, clearing organizations, central securities depositories, regulators, banks, brokers, buy-side firms and corporate businesses. Our Market Technology business is the sales channel for our complete global offering to other marketplaces.

Our marketplace infrastructure technology solutions power over 130 market infrastructure operators and new market clients in more than 50 countries and handles a wide array of assets, including but not limited to cash equities, equity derivatives, currencies, various interest-bearing securities, commodities, energy products and digital currencies. Our solutions can also be used in the creation of new asset classes, and non-capital markets customers, including those in insurance liabilities securitization, cryptocurrencies and sports wagering.

We also continue to extend our anti-financial crime strategy. Our Nasdaq Trade Surveillance solution is a managed service designed for brokers and other market participants to assist them in complying with market rules, regulations and internal market surveillance policies. We have added a cloud-deployed anti-money laundering offering with an automated investigator tool for retail banks, the Nasdaq Automated Investigator. Additionally, in February 2021, we completed the acquisition of Verafin, a SaaS technology provider of anti-financial crime management solutions that provides a cloud-based platform to help detect, investigate, and report money laundering and financial fraud. See “2021 Acquisition,” of Note 4, “Acquisitions,” for further discussion.

Nasdaq’s market technology is utilized by leading markets in the U.S., Europe and Asia as well as emerging markets in the Middle East, Latin America, and Africa. Market participants leverage our surveillance technology globally to manage their integrity obligations and assist them in complying with market rules, regulations and internal market surveillance policies.

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2. Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 7, “Investments,” for further discussion of our equity method investments.

The accompanying condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

As permitted under U.S. GAAP, certain footnotes or other financial information can be condensed or omitted in the interim condensed consolidated financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Nasdaq’s Form 10-K. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP.

Accounting Estimates

In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities in our condensed consolidated balance sheets. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.

Nasdaq has considered the impact of COVID-19 on the assumptions and estimates used in evaluating our assets and liabilities, including but not limited to our goodwill, intangible assets, equity method investments, equity securities and allowance for losses on accounts receivable. We determined that there were no material adverse impacts on our results of operations and financial position for the three months ended March 31, 2021. In addition, there were no material impairment charges recorded for the three months ended March 31, 2021. These estimates may change as new events occur and additional information is obtained. Actual results could differ from these estimates under different assumptions or conditions.

Subsequent Events

There have been no subsequent events through the issuance date of this Quarterly Report on Form 10-Q that would require disclosure in, or adjustment to, the condensed consolidated financial statements.

* * * * * *

3. Revenue From Contracts With Customers

Disaggregation of Revenue

The following tables summarize the disaggregation of revenue by major product and service and by segment for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31, 2021
	Market Services		Corporate Platforms		Investment Intelligence		Market Technology		Consolidated
	(in millions)
Transaction-based trading and clearing, net	$	258	$	—	$	—	$	—	$	258
Trade management services	80		—		—		—		80
Listing services	—		98		—		—		98
IR & ESG Services	—		57		—		—		57
Market data	—		—		108		—		108
Index	—		—		102		—		102
Analytics	—		—		48		—		48
Marketplace Infrastructure Technology	—		—		—		54		54
Anti Financial Crime Technology	—		—		—		46		46
Revenues less transaction-based expenses	$	338	$	155	$	258	$	100	$	851

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	Three Months Ended March 31, 2020
	Market Services		Corporate Platforms		Investment Intelligence		Market Technology		Consolidated
	(in millions)
Transaction-based trading and clearing, net	$	209	$	—	$	—	$	—	$	209
Trade management services	72		—		—		—		72
Listing services	—		75		—		—		75
IR & ESG Services	—		53		—		—		53
Market data	—		—		97		—		97
Index	—		—		73		—		73
Analytics	—		—		41		—		41
Marketplace Infrastructure Technology	—		—		—		52		52
Anti Financial Crime Technology	—		—		—		29		29
Revenues less transaction-based expenses	$	281	$	128	$	211	$	81	$	701

For the three months ended March 31, 2021, approximately 73% of Market Services revenues were recognized at a point in time and 27% were recognized over time. For the three months ended March 31, 2020, approximately 72% of Market Services revenues were recognized at a point in time and 28% were recognized over time. Substantially all revenues from the Corporate Platforms, Investment Intelligence and Market Technology segments were recognized over time for the three months ended March 31, 2021 and 2020.

* * * * * *

Contract Balances

Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our Condensed Consolidated Balance Sheets as receivables, which are net of allowance for doubtful accounts of $19 million as of March 31, 2021 and $21 million as of December 31, 2020. The changes in the balance between periods were immaterial. We do not have obligations for warranties, returns or refunds to customers.

For the majority of our contracts with customers, except for our market technology and listings services contracts, our performance obligations are short-term in nature and there is no significant variable consideration.

We do not have a material amount of revenue recognized from performance obligations that were satisfied in prior periods. We do not provide disclosures about transaction price allocated to unsatisfied performance obligations if contract durations are less than one year. Excluding our market technology contracts, for contract durations that are

one-year or greater, materially all of the transaction price allocated to unsatisfied performance obligations is included in deferred revenue. For our market technology contracts, the portion of transaction price allocated to unsatisfied performance obligations is shown in the table below. Deferred revenue primarily represents our contract liabilities related to our fees for annual and initial listings, market technology, IR & ESG services and investment intelligence contracts. Deferred revenue is the only significant contract asset or liability as of March 31, 2021. See Note 8, “Deferred Revenue,” for our discussion on deferred revenue balances, activity, and expected timing of recognition.

Transaction Price Allocated to Remaining Performance Obligations

As stated above, for contract durations that are one-year or greater, we do not have a material portion of transaction price allocated to unsatisfied performance obligations that are not included in deferred revenue other than for our market technology contracts.

* * * * * *

For our market technology contracts, the following table summarizes the amount of the transaction price allocated to performance obligations that are unsatisfied as of March 31, 2021:

	(in millions)
2021(1)	$	218
2022	213
2023	97
2024	71
2025	54
2026 and thereafter	115
Total	$	768

____________

(1)    Represents the estimated revenue to be recognized for the remaining nine months of 2021.

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Market technology deferred revenue, as discussed in Note 8, “Deferred Revenue,” represents consideration received that is yet to be recognized as revenue for unsatisfied performance obligations.

4. Acquisitions

We completed the following acquisitions in 2021 and 2020. Financial results of each transaction are included in our condensed consolidated financial statements from the date of each acquisition.

2021 Acquisition

	Purchase Consideration		Total Net Liabilities Acquired		Acquired Intangible Assets		Goodwill
	(in millions)
Verafin	$	2,651	$	(37)	$	815	$	1,873

Acquisition of Verafin

In February 2021, we completed the acquisition of Verafin, a SaaS technology provider of anti-financial crime management solutions that provides a cloud-based platform to help detect, investigate, and report money laundering and financial fraud, for an aggregate purchase price of $2.75 billion, subject to certain adjustments. The $2.75 billion purchase price includes a cash payment of $102 million, the release of which is subject to certain employment-related conditions over three years following the closing of the transaction. This payment was recorded as a prepaid expense and is recorded in other current and non-current assets in our Condensed Consolidated Balance Sheets and will be amortized to merger and strategic initiatives expense on a straight-line basis over a three-year period. Verafin is part of our Market Technology segment.

Nasdaq used the net proceeds from our offering of senior notes in December 2020, commercial paper issuances, and cash on hand to fund this acquisition. See “Commercial Paper Program,” and “Senior Unsecured Notes Due 2022, 2031 and 2040,” of Note 9, “Debt Obligations,” for further discussion.

The amounts in the table above represent the preliminary allocation of purchase price as of March 31, 2021 and are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments to the provisional values, which may include tax and other estimates, during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill.

Intangible Assets

The following table presents the details of acquired intangible assets for Verafin at the date of acquisition. Acquired intangible assets with finite lives are amortized using the straight-line method.

	Customer Relationships			Technology			Trade Name			Total Acquired Intangible Assets
Intangible asset value (in millions)	$	532		$	246		$	37		$	815
Discount rate used	7.5		%	7.5		%	7.5		%
Estimated average useful life	22 years			7 years			20 years

Customer Relationships

Customer relationships represent the non-contractual and contractual relationships with customers.

Methodology

Customer relationships were valued using the income approach, specifically an excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.

Discount Rate

The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the customer relationships relative to the overall business. In developing a discount rate for the customer relationships, we estimated a weighted-average cost of capital for the overall business and we employed this rate when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.

For our acquisition of Verafin, a discounted tax amortization benefit was added to the fair value of the assets under the assumption that the customer relationships would be amortized for tax purposes over a period of 20 years.

Estimated Useful Life

We estimate the useful life based on the historical behavior of the customers and a parallel analysis of the customers using the excess earnings method.

Technology

As part of our acquisition of Verafin, we acquired developed technology.

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Methodology

The developed technology was valued using the income approach, specifically the relief-from-royalty method, or RFRM. The RFRM is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The royalty rate is applied to the projected revenue over the expected remaining life of the intangible asset to estimate royalty savings. The net after-tax royalty savings are calculated for each year in the remaining economic life of the technology and discounted to present value.

Discount Rate

The discount rates used reflect the amount of risk associated with the hypothetical cash flows for the developed technology relative to the overall business as discussed above in “Customer Relationships.”

Estimated Useful Life

We have estimated the useful life of the Verafin technology to be 7 years.

Trade Name

As part of our acquisition of Verafin, we acquired a trade name. The trade name is recognized in the industry and carries a reputation for quality. As such, the reputation and positive recognition embodied in the trade name is a valuable asset to Nasdaq.

Methodology

The Verafin trade name was valued using the income approach, specifically the RFRM as discussed above in “Technology.”

Discount Rate

The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the trade name relative to the overall business as discussed above in “Customer Relationships.”

Estimated Useful Life

We have estimated the useful life of the Verafin trade name to be 20 years and our intention is to continue to use it in the branding of products.

2020 Acquisition

Acquisition of Solovis

In March 2020, we acquired Solovis, a provider of multi-asset class portfolio management, analytics and reporting tools across public and private markets. Solovis is part of our Investment Intelligence segment.

Pro Forma Results and Acquisition-Related Costs

The condensed consolidated financial statements for the three months ended March 31, 2021 and 2020 include the financial results of the above acquisitions from the dates of these

acquisitions. Pro forma financial results have not been presented since these acquisitions both individually and in the aggregate were not material to our financial results.

Acquisition-related costs for the transactions described above

were expensed as incurred and are included in merger and strategic initiatives expense in the Condensed Consolidated Statements of Income.

5. Assets and Liabilities Held For Sale

In February 2021, we announced that we entered into a Purchase Agreement to sell our U.S. Fixed Income business, which is part of our FICC business within our Market Services segment, to an affiliate of Tradeweb Markets Inc., or Tradeweb. Pursuant to the Purchase Agreement, an affiliate of Tradeweb will acquire all of the outstanding equity interests in certain subsidiaries of Nasdaq and certain assets and liabilities related to the business. The closing is subject to regulatory approvals and the satisfaction of other customary conditions, and is expected to occur later in 2021.

We determined that we met all of the criteria to classify the assets and liabilities of this business as held for sale as of March 31, 2021. The disposal of this business did not represent a strategic shift that would have a major effect on our operations and financial results and was, therefore, not classified as discontinued operations. No impairment charge was recorded for the three months ended March 31, 2021 as the carrying amount of the net assets was less than the fair value less costs to sell. Fair value was determined based on the sales price in the agreement.

Major Classes of Assets and Liabilities Held For Sale

The carrying amounts of the major classes of assets and liabilities that were classified as held for sale at March 31, 2021 were as follows:

	March 31, 2021
	(in millions)
Goodwill(1)	$	60
Intangible assets, net(2)	33
Other current and non-current assets	10
Total assets held for sale(3)	$	103
Other current liabilities	$	2
Total liabilities held for sale(4)	$	2

__________

(1)The assignment of goodwill was based on the relative fair value of the disposal group and the portion of the remaining reporting unit.

(2)Primarily represents customer relationships.

(3)    Included in other current assets in the Condensed Consolidated Balance Sheets as of March 31, 2021.

(4)    Included in other current liabilities in the Condensed Consolidated Balance Sheets as of March 31, 2021.

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6. Goodwill and Acquired Intangible Assets

Goodwill

The following table presents the changes in goodwill by business segment during the three months ended March 31, 2021:

	Market Services		Corporate Platforms		Investment Intelligence		Market Technology		Total
	(in millions)
Balance at December 31, 2020	$	3,519	$	481	$	2,541	$	309	$	6,850
Goodwill acquired	—		—		—		1,873		1,873
Goodwill reclassified to held for sale(1)	(37)		—		(23)		—		(60)
Foreign currency translation adjustment	(82)		(7)		(57)		(9)		(155)
Balance at March 31, 2021	$	3,400	$	474	$	2,461	$	2,173	$	8,508

__________

(1)In addition to revenues earned through Market Services, our U.S. Fixed Income business also earns fees from market data, which are included in our Investment Intelligence segment. Therefore, a portion of the goodwill was allocated to this segment. See Note 5, “Assets and Liabilities Held for Sale,” for further discussion.

* * * * * *

The goodwill acquired for Market Technology shown above relates to our acquisition of Verafin. See “2021 Acquisition,” of Note 4, “Acquisitions,” for further discussion of this acquisition.

As of March 31, 2021, the amount of goodwill that is expected to be deductible for tax purposes in future periods is $1.9 billion.

Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired

company. We test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying amount may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. There was no impairment of goodwill for the three months ended March 31, 2021 and 2020; however, events such as prolonged economic weakness or unexpected significant declines in operating results of any of our reporting units or businesses, may result in goodwill impairment charges in the future.

* * * * * *

Acquired Intangible Assets

The following table presents details of our total acquired intangible assets, both finite- and indefinite-lived:

	March 31, 2021						December 31, 2020
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
	(in millions)						(in millions)
Finite-Lived Intangible Assets
Technology	$	322	$	(33)	$	289	$	76	$	(24)	$	52
Customer relationships	2,049		(626)		1,423		1,599		(648)		951
Trade names and other	57		(7)		50		18		(6)		12
Foreign currency translation adjustment	(125)		69		(56)		(104)		58		(46)
Total finite-lived intangible assets	$	2,303	$	(597)	$	1,706	$	1,589	$	(620)	$	969
Indefinite-Lived Intangible Assets