Nasdaq operates through four segments, namely: Capital Access Platforms (25.2% of Q2 25 revenue), Financial Technology (22.2%), Market Services (52.2%), and Corporate Items (0.4%). In addition, the company is geographically segmented into: United States (80.8% of Q2 25 revenue) and other countries (19.2%).

Strong Q2 25 results

Nasdaq released its Q2 25 results on July 24, 2025, posting a 10% y/y increase in revenue, which reached $2.1bn, driven by 10% y/y growth in Financial Technology, backed by over 15% cross-sells as a percentage of FinTech pipeline and 17% y/y growth in Index revenue. This led to a 10% y/y increase in Solutions revenue. The market services segment also witnessed a 22% y/y increase. Operating income experienced a 22% y/y increase to $611m and net profit indicated robust growth of 103.6% y/y to $452m in Q2 25. These results were driven by investments in technology and people to boost innovation and ensure long-term growth.

Nasdaq delivered solid performance across its Financial Technology segments, driven adding 52 new clients, 130 upsells, and reached a record of seven cross-sells. Likewise, Financial Crime Management Technology strived to achieve a continued growth trajectory through three new enterprise clients and 46 new SMB clients, Regulatory technology maintained a strong momentum of 34 upsells and several cross-sells. Index ETP AUM reached $745bn, with 33 new product launches and $20bn net inflows. Following the earnings release the stock price rose by 5.9%.

AI-enabled expansion

On July 21, 2025, Nasdaq Verafin announced the launch of the Agentic AI Workforce, a suite of digital workers designed to automate labor-intensive, high-volume anti-money laundering (AML) compliance activities for banks. This development builds on Verafin’s successful GenAI Entity Research Copilot and represents a significant move to address persistent challenges of regulatory complexity, resource constraints, and the inefficiencies of legacy technology within the financial services sector.

This launch strengthens Nasdaq’s position as a technology leader in compliance and financial crime management. By embedding advanced AI-driven automation into its platform, Nasdaq Verafin is expected to drive further adoption, with over 1,300 clients already using its solutions. The move complements Nasdaq’s broader strategy to diversify revenue streams through cloud-based, recurring SaaS offerings in the regulatory technology sector.

Steady top-line expansion

Nasdaq posted a revenue CAGR of 7.9% over FY 21-24, reaching $7.4bn, driven by 10% y/y ARR of Financial Technology segment, reflecting a hike in new clients, cross-sells and up-sells, Index business launched 116 new products with its clients and this period witnessed an 82% win rate among IPOs in US, representing 180 deals.

Operating income increased at a CAGR of 7.3% to $2bn in FY 24, with a margin of 27%. Despite growth at the operating level, net income declined at a CAGR of minus 2% to $1.1bn in FY 24.

FCF witnessed robust growth over the last three years, reaching $2bn in FY 24 from $1.1bn in FY 21. Cash and cash equivalent increased from $393m to $592m, backed by solid cash inflow from operations over the period and consistent growth in earnings. Subsequently, the total debt to equity ratio improved from 9.8x in FY 24 to 8.9x in FY 24.

In comparison, Duetsche Borse AG, a global peer, reported a revenue CAGR of 17.2% to $7.3bn in FY 24. EBIT rose at a CAGR of 19% to $3bn in FY 24, with margins expanding from 37.9% to 41%. Net income increased at a CAGR of 17.2% to $2bn in FY 24.

Significant margin expansion

Over the past year, the company's stock has delivered returns of approximately 42.3%, above Duetsche Borse AG’s stock, which  delivered 36.3% returns over the same period.

Nasdaq is currently trading at a P/E of 33.7x, based on the FY 25 estimated EPS of $2.8, which is higher than its 3-year historical average of 31.7x and that of Duetsche Borse AG’s P/E of 23.4x. In terms of EV/EBIT, the company is currently trading at 21.9x, based on the estimated EBIT of $2.8bn in FY 25, which is higher than its 3-year historical average of 20.3x and Duetsche Borse AG (16.9x).

Nasdaq is largely liked by 19 of the 20 analysts covering the stock, with 14 having ‘Buy’ ratings and five having ‘Hold’ ratings, with an average target price of $100.2, implying 5.3% upside potential from its current price.

Looking ahead, analysts anticipate revenue CAGR of 8.4% over FY 24-27, reaching $5.9bn in FY 27. In addition, analysts expect EBIT CAGR of 9.7% to $3.3bn, with margins expanding from 54.2% to 56.3% in FY 27. Net income is estimated to rise at a CAGR of 20.7% to $1.9bn in FY 27. Likewise, analysts estimate an EBIT CAGR of 6.2% and a net profit CAGR of 6% for Deutsche Borse AG.

Overall, the company’s prospects remain strong, backed by robust earnings, expansion of recurring revenues, and leadership in listings. The diverse revenue streams of the company ranging from financial technology to crime-fighting software positions it for steadier future growth. However, the company may face risks from stricter regulations, rapid technological upgrades, rising competition from other exchanges, and cybersecurity threats. Instable economic conditions and market volatility could impact trading volumes and revenue growth.

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