tapebrief
NDAQ · Q3 2025
Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

NDAQ · Q4 2025 Earnings

Nasdaq, Inc.

Reported January 29, 2026

30-second summary

Q4 FY2025 revenue grew 13% YoY to $1.392B with non-GAAP EPS of $0.96 and non-GAAP operating margin at 56.2%; full-year revenue crossed $5B for the first time at $5.249B (+13%). FY2026 guidance was initiated for opex ($2.455–$2.535B, 7% organic at midpoint) and tax rate (22.5–24.5%) only — no revenue or EPS framework — with management explaining the tax-rate widening as a return to the structural range "due to the absence of one-time items and the expiration of certain benefits." Organic ARR inflected to 10% from the 9% that held for three straight quarters, and management quantified an approximately $9M/quarter FY2026 headwind from delistings, listing-standard changes, and amortization wall-off as the FY2026 forward impact.

Headline numbers

EPS

Q4 FY2025

$0.96

Revenue

Q4 FY2025

$1.39B

+13.0% YoY

Operating margin

Q4 FY2025

45.2%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$1.39B+13.0%$1.31B+5.9%
EPS$0.96—$0.88+9.1%
Operating margin45.2%—44.5%+70bps

Guidance

Nasdaq initiated FY2026 guidance with non-GAAP operating expense of $2.455–$2.535B and tax rate of 22.5–24.5%, signaling modest expense leverage but slightly wider tax rate band versus FY2025.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

MetricPeriodGuideYoY
Non-GAAP Operating ExpenseFY 2026$2.455 billion to $2.535 billion—
Non-GAAP Tax RateFY 202622.5% to 24.5%—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Solutions revenue$1.071B+13.0%
Market Services (net)$0.311B+16.0%
Capital Access Platforms$0.572B+13.0%
Financial Technology$0.498B+14.0%
Index revenue$0.232B+23.0%

Capital & returns

Q4 FY2025
SegmentQ4 FY2025
Capital returned to shareholders (Q4)$439 million
Full-year capital returned (dividends + buybacks)$1.217 billion

Other KPIs

Q4 FY2025
SegmentQ4 FY2025
Annualized Recurring Revenue (ARR)$3.051 billion
ARR growth YoY10%
Annualized SaaS revenue$1.177 billion
Index ETP AUM$882 billion
Index net inflows (TTM)$99 billion
Operating margin (Non-GAAP)56.2%

Management tone

Narrative arc: Q2 FY2025 deleveraging-done-optionality-unlocked → Q3 FY2025 milestone validation with FCMT recalibration → Q4 FY2025 industry-architect posture with productized agentic AI and launch-path tokenization.

Three quarters ago, agentic AI was framed as a shipped product with one quantified outcome (Verafin's 80% alert reduction). Last quarter, the framing was directional — AI investment funded inside existing opex. This quarter, management is rolling out a second agentic worker (enhanced due diligence analyst) on top of the agentic sanctions analyst, with the press-release language calling out "strong early use among our clients." The shift from one shipped worker to a portfolio with monthly cadence repositions agentic AI from product to operating model — and the FY2026 opex guide at 7% organic explicitly bakes in "a strong level of investments in growth and innovation, including AI."

Tokenization moved from architecture disclosure in Q3 FY2025 (order-by-order flagging, DTCC dual paths) to active regulatory implementation in Q4 FY2025. Management framed the company's "proposed approach to trade tokenized securities, which prioritizes issuer choice, investor protection, and capital efficiency" as an engagement posture rather than the "walk-run approach" caution of last quarter. Combined with the 23/5 trading H2 FY2026 launch commitment ("we will be ready to launch this capability in the second half of 26, subject to regulatory approval"), the Capital Markets modernization stack now has dated launch milestones rather than aspirational architecture.

The M&A framing inverted between Q2 FY2025 and Q4 FY2025. Q2 management explicitly opened the optionality conversation after clearing the 3.3x leverage milestone 16 months early. Q4 management closes it: Youngwood reiterated the priority stack of organic investment, progressive dividend, share repurchases, debt repurchases, and bolt-on M&A "with a build versus buy approach." With leverage now at 2.9x (below the 3.0x target) and two credit upgrades in hand, the decision to redirect capital toward $1.217B in FY2025 shareholder returns rather than a transformational deal is the answer the Q3 FY2025 watch list was waiting on — and it's an organic-growth-confidence answer, not a deal-pipeline-dry answer.

The delistings disclosure is the one explicitly conservative quantified note. Management framed the Q4 actuals — the prior-year delistings revenue headwind and amortization wall-off — as "in line with our previous expectations," then separately quantified the FY2026 forward impact at an approximately $9M/quarter year-over-year headwind from delistings, new proposed listing-standard changes, and amortization wall-off. Pairing this with the absence of any FY2026 revenue guide reads as a deliberate posture of letting the math speak rather than committing to a number.

Recurring themes management leaned on this quarter:

AI-first product innovation (agentic workers in financial crime, market surveillance)Organic growth prioritization over transformational M&ACross-sell momentum and one NASDAQ strategy execution (42 cross-sells YTD, 15%+ of FinTech pipeline)Capital markets modernization (tokenization, 23x5 trading, digital assets infrastructure)Record balance sheet strength enabling shareholder returns (leverage 2.9x vs 3.0x target, credit upgrade)Structural market shifts in retail participation and institutional options overlays

Risks management surfaced:

Regulatory uncertainty around tokenized equities and 23x5 trading (subject to SEC approval)Professional services revenue volatility from enterprise implementation timing in FinTechIndex derivatives contracted rate reset at Q1 2026 (sequential revenue headwind similar to 1Q25)Quarterly revenue headwinds from delistings and amortization wall-off ($9M/quarter headwind in listings)Geopolitical tension and volatile trading dynamics creating execution complexity

Answers to last quarter's watch list

FCMT ARR conversion in Q4 FY2025 — Resolved positively. FCM ARR grew 18% in Q4 FY2025, FinTech ARR organic grew 12%, and management disclosed nine total enterprise deals for the year (five of six new enterprise signings were cross-sells). Full-year enterprise signings represent over 4x the number and 4x the ACV of FY2024. The enterprise-conversion thesis is intact, with management flagging professional-services-driven variability through H1 FY2026 as deals signed in H2 FY2025 implement.
Resolved positively
Organic ARR breakout — Resolved. ARR organic grew 10% YoY at $3.051B, ending the three-quarter streak at 9% and validating the cross-sell-and-FCMT compounding thesis.
Resolved positively
Capital deployment announcement — Resolved as a buyback-and-dividends answer, not an M&A signal. $439M returned in Q4 FY2025 and $1.217B for the full year, with leverage now below the 3.0x target at 2.9x and two credit upgrades in hand. Management's Q4 FY2025 language explicitly demoted M&A to "build versus buy" optionality with organic prioritization — closing the door that Q2 FY2025 opened.
Resolved positively
FY2026 opex framework — Resolved. FY2026 opex guide of $2.455–$2.535B implies 7% organic growth at the midpoint, with the bridge disclosed (FX +$20M, divestiture/small acquisition -$25M, plus expanded cost program synergies). Management did not reaffirm the three-point gap rule explicitly in the press release, leaving the Solutions growth required to preserve that framework as a watch item.
Continue monitoring
Tokenization regulatory progress — Resolved positively. NDAQ has submitted a filing to the SEC to facilitate the trading of tokenized securities, and 23/5 trading has a firm H2 FY2026 launch commitment subject to approval. The progression from Q3 FY2025's architectural disclosure to Q4 FY2025's filed proposal with dated 23/5 milestone is the trajectory the watch flagged.
Resolved positively

What to watch into next quarter

Index Q1 FY2026 sequential drag and Q2 FY2026 normalization: management flagged the index derivatives contracted rate reset at Q1 FY2026 as a sequential revenue headwind similar to Q1 FY2025, with the rate stepping back up once a revenue threshold is crossed "likely…sometime early in the second quarter." Watch both the Q1 magnitude and whether the Q2 normalization arrives on the expected timing.

FY2026 revenue framework signaling: management initiated FY2026 opex and tax-rate guidance but withheld revenue and EPS. Watch whether Q1 FY2026 introduces FY2026 divisional revenue commentary or whether the silence persists — the latter would suggest more visibility caution than the bullish-tone framing implies. Investor Day on February 25 is the likely first venue.

FCM professional-services variability: management explicitly flagged that the Q4 FY2025 PS-driven revenue lift in FCM won't sustain through H1 FY2026 as H2 FY2025 enterprise signings implement. Watch FCM revenue growth deceleration in Q1 FY2026 and whether ARR growth (FCM ARR 18% in Q4 FY2025) holds independent of the PS swings.

Tax-rate ceiling: the FY2026 ceiling reverted to 24.5% with management citing absence of one-time items and expiration of benefits. Watch whether the Q1 FY2026 print tightens the ceiling again as FY2026 discrete items become visible.

Agentic AI revenue attribution: two agentic workers shipped in two months. Watch whether NDAQ begins disclosing agentic-AI ARR, attach rates, or pricing — without quantified outcomes, the "operating model" framing remains a narrative claim. Investor Day is the natural venue.

ATS optionality: Friedman's direct Q&A signal that the SEC will likely open a more flexible framework for exchange-affiliated ATS operations is a new strategic vector. Watch for filing activity or M&A signals in off-exchange venues if the regulatory door opens.

Sources

  1. Nasdaq, Inc. Q4 FY2025 press release (Exhibit 99.1, SEC filing): https://www.sec.gov/Archives/edgar/data/1120193/000119312526028185/d103698dex991.htm

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