Nasdaq Q3 2026 Earnings: $540M Profit on Record $49B of Index Inflows

On October 22, 2026, Nasdaq reported third-quarter net revenue of $1,481 million, up 13%, and net income attributable to Nasdaq of $540 million, up 28%, for diluted EPS of $0.96. The engine was not the exchange floor: Index revenue grew 39% to $286 million on a record $49 billion of quarterly ETP inflows, and annualized recurring revenue hit $3.37 billion on record FinTech ARR growth. This is the exchange as a software and data company — and the ledger below lets you audit every line of that claim.

The Headline Numbers​

Every figure below comes from the Form 10-Q and the earnings release. The quarter ended September 30, 2026:

Read the table top to bottom and the quarter tells on itself. Gross revenue grew 21%, but $248 million of the $414 million increase flowed straight back out as transaction-based expenses — rebates and clearance fees that Nasdaq collects and remits, never keeps. What it keeps, net revenue, grew 13% (14% organic). Against that, operating expenses grew just 3%, so operating income grew 25%: the operating leverage CFO Sarah Youngwood called out — "outstanding Solutions revenue growth, continued operating leverage, and strong EPS growth" — is arithmetic, not adjectives. Below the line, net income from unconsolidated investees rose to $38 million from $24 million, and a $16 million favorable legal settlement flattered general and administrative expense down to $2 million from $22 million a year ago. The tax rate rose to 23.1% from 20.0%, which makes the 28% net-income growth cleaner than it looks: pre-tax income grew 33%.

Revenue Deep Dive​

Nasdaq reports three segments plus a shrinking Other. All three divisions grew; only two matter for the thesis:

Capital Access Platforms (+20%) is the Index story wearing a segment costume. The subdivision detail shows Data and Listing Services up 10% to $224 million, Workflow and Insights up 6% to $131 million — and Index up 39% to $286 million. Index is now 45% of the segment and the release's headline verbatim: "record Index net inflows." End-of-period ETP assets tracking Nasdaq indexes hit $1.160 trillion, average AUM hit $1.108 trillion, both records, and the trailing-twelve-month inflow of $141 billion means roughly one dollar in eight of that asset base arrived in the last year. Listings played its part — 8 of the 10 largest operating-company IPOs, a 79% win rate, $32 billion raised — but listings revenue is episodic; the AUM compounding is the annuity. Note the release's quiet tell on durability: half of the 32 new Index products launched in the quarter were outside the U.S.

Financial Technology (+16%) is the ARR story. All three subdivisions grew double digits for the third straight quarter: Financial Crime Management Technology +23% to $103 million, Regulatory Technology +13% to $123 million, Capital Markets Technology +15% to $303 million. Chair and CEO Adena Friedman flagged "record FinTech ARR growth" — 18% organic — with cloud-based solutions at 85% of ACV bookings and cross-sells over 15% of the sales pipeline under the One Nasdaq strategy. The Verafin detail is worth lingering on: 45 new small-and-medium bank clients plus 3 enterprise deals, bringing year-to-date enterprise signings to 12 against 9 in all of 2025, with 850-plus clients now on its agentic AI workforce. Surveillance signed Kalshi and Kraken; Calypso landed an HSBC co-development deal for exchange-traded-derivatives clearing. This is a software pipeline, not an exchange pipe dream.

Market Services (+2% net on +26% gross) is the cost of volume. This is the quarter's cautionary tale in miniature: transaction rebates actually fell 5% to $623 million, but brokerage, clearance and exchange fees exploded to $289 million from $6 million a year ago — Section 31 fee timing swallowing the benefit of higher industry volumes across U.S. options and European equities. Net revenue of $309 million was still a third-quarter record, and U.S. cash equities posted "higher market share and near record capture," but when gross grows thirteen times faster than net, the segment is a pass-through with a spread, not a growth engine. The strategic response sits outside the numbers: Digital Liquidity Networks, the LeveL Markets ATS acquisition closing early in Q4, and 23/5 trading going live December 6.

The seven-theme signal scan comes back quiet on the industrial signals — no capacity, pricing-power, or demand-exceeds-supply language, because an exchange sells no widgets — and loud on the one theme that matters here: recurring-revenue momentum, quoted verbatim above. Absence-as-finding: management offered no pricing commentary at all, consistent with a quarter where growth came from volumes and AUM, not rate.

The Margin Story​

Nasdaq's margins must be read on net revenue — the release computes them that way, and gross revenue would understate every ratio by mixing in pass-throughs. On that basis, the margin walk across four periods is a straight staircase:

Operating margin expanded by nearly 11 points in two years. Mechanically, two forces did it. First, mix: Solutions revenue (Capital Access Platforms plus Financial Technology) is now 79% of net revenue, and those segments carry software-like incremental margins while the flat Market Services spread dilutes less each quarter. Second, discipline: GAAP operating expenses grew 3% against 13% net-revenue growth, and even stripping the $16 million legal settlement out of G&A, expense growth stays in the mid single digits — the Adenza restructuring program is complete, with restructuring charges at zero this quarter versus $12 million a year ago.

The GAAP-to-non-GAAP bridge explains what the staircase still hides. Non-GAAP operating income was $843 million (a 57% margin) and non-GAAP diluted EPS was $1.04, and the release's own reconciliation names every plank:

Two lines deserve skepticism and one deserves respect. The $121 million of acquired-intangible amortization is the Adenza acquisition still flowing through the P&L every quarter — a real cost of a real purchase, excluded every quarter, indefinitely. The $38 million of investee income is excluded as non-operating, which is defensible but flattering when it grows 58% year over year. The respectable line is the legal settlement running the other way: management's non-GAAP number gives back the $16 million windfall rather than keeping it. Net-net, the $48 million gap between GAAP and non-GAAP earnings is nearly half the $88 million gap a year ago — the two bottom lines are converging as the Adenza noise fades.

The One Big Question: Is Nasdaq Still an Exchange?​

By revenue mix, no — and this quarter makes the answer numeric. Solutions revenue of $1,172 million is 79% of net revenue; Market Services net of $309 million is 21% and grew 2%. As recently as FY2023, Market Services net was 25% of net revenue; every quarter since, the software and data businesses compounding at 16–20% have shrunk the exchange franchise's share of what Nasdaq keeps. The "One Big Question" is therefore a valuation question: should Nasdaq trade as an exchange (volume-cyclical, monopoly-franchise) or as a vertical SaaS-and-data compounder (recurring, high-retention, acquisition-fed)?

The peer comparison sharpens it. CME Group, the pure-play exchange ledger in this library, reported its own Q3 days earlier:

CME earns more on a simpler model — volume times fee, kept whole. Nasdaq earns less per dollar of activity but owns the faster-growing, more recurring streams: $3.37 billion of ARR growing 14% organically has no equivalent at CME. The bull case for the re-rating is that ARR plus Index AUM compounding deserves a software multiple on 79% of the business; the bear case is that the market will always price the consolidated company on the exchange multiple while Market Services still defines the brand. Watch the mix, not the multiple: every quarter Solutions outgrows Market Services by 15 points, the SaaS argument gets 15 points stronger.

Tracking a $12B-Equity Company in Plain Text​

Double-entry bookkeeping forces every dollar to reconcile, which is exactly what an exchange conglomerate needs: gross revenue that isn't yours, collateral that isn't yours, and three segments that share one balance sheet. Read how we model every company, then look at the quarter as the ledger records it — income negative (credit), expenses positive (debit), summing to zero:

; FY2026Q3 Income Statement — three months ended September 30, 2026
; Check: −2,393 + 623 + 289 + 379 + 42 + 93 + 34 + 2 + 17 + 165 + 11 + 6 + 86 + (−10) + 4 + (−11) + (−38) + 162 + (−1) + 540 = 0 ✓
 
2026-09-30 * "Nasdaq, Inc." "FY2026Q3 Income Statement"
  Income:Revenue                              -2393 MUSD
  Expenses:CostOfRevenue                        623 MUSD  ; transaction rebates
  Expenses:CostOfRevenue                        289 MUSD  ; brokerage, clearance and exchange fees
  Expenses:CompensationAndBenefits              379 MUSD  ; compensation and benefits
  Expenses:OperatingExpenses                     42 MUSD  ; professional and contract services
  Expenses:OperatingExpenses                     93 MUSD  ; technology and communication infrastructure
  Expenses:OperatingExpenses                     34 MUSD  ; occupancy
  Expenses:OperatingExpenses                      2 MUSD  ; general, administrative and other (incl. a $16M favorable legal settlement, Ex. 99.1)
  Expenses:OperatingExpenses                     17 MUSD  ; marketing and advertising
  Expenses:DepreciationAndAmortization          165 MUSD  ; depreciation and amortization
  Expenses:OperatingExpenses                     11 MUSD  ; regulatory
  Expenses:OperatingExpenses                      6 MUSD  ; merger and strategic initiatives
  Expenses:Interest                              86 MUSD  ; interest expense
  Income:OtherNet                               -10 MUSD  ; interest income
  Expenses:OtherNet                               4 MUSD  ; net loss on divestitures (Metrio platform and Fund Secondaries sales)
  Income:OtherNet                               -11 MUSD  ; other income (corporate venture gains)
  Income:OtherNet                               -38 MUSD  ; net income from unconsolidated investees
  Expenses:IncomeTax                            162 MUSD  ; income tax provision
  Expenses:OtherNet                              -1 MUSD  ; net loss attributable to noncontrolling interests, added back as the filing does
  Equity:Adjustments                            540 MUSD  ; net income attributable to Nasdaq offset (RE set by balance assertion)

The one balance-sheet number that tells the narrative is the pair that isn't Nasdaq's money at all: default funds and margin deposits sit on both sides at $2,530 million, down from $5,842 million at year-end as clearing balances normalized. Strip the pair and the real balance sheet is an acquirer's: $14.2 billion of goodwill and $6.1 billion of intangibles against $12.0 billion of total equity, with $8.7 billion of debt funding the Adenza-era build. Additional paid-in capital fell $1,055 million in nine months while retained earnings rose $1,066 million — buybacks eating APIC as profits refill retained earnings, the shareholder-return machine visible in equity.

The Multi-Year Arc​

Three full years plus the current nine months, all on net revenue — the only denominator that survives the pass-throughs:

The compounding story is a mix story told twice. Net revenue grew 35% in two years while headcount-driven costs did not keep pace, so operating margin added 4 points and net income grew 69% — the Adenza acquisition digesting in real time, with restructuring charges falling from $116 million in FY2024 to $42 million in FY2025 to zero last quarter. And inside revenue, Index grew 57% in two years against 35% for net revenue overall: at the nine-month mark, Index has already printed $778 million versus $827 million in all of FY2025, meaning the full year will clear $1 billion short of a fourth-quarter collapse. One line to watch into FY2027: intangible assets amortizing $405 million in nine months, the quarterly $121 million non-GAAP add-back shrinking the balance it comes from.

The Verdict: Bull vs. Bear​

Bull Case

• Index is a compounding annuity: $1.16 trillion of ETP AUM growing on $141 billion of trailing inflows, with Index revenue up 39% and a clear path past $1 billion for FY2026.
• FinTech ARR is accelerating, not maturing: 18% organic growth, cloud at 85% of bookings, enterprise Verafin signings already past all of 2025.
• Operating leverage is structural: 3% expense growth on 13% net-revenue growth, the Adenza restructuring at zero, and a $2.55–2.58B FY2026 non-GAAP opex guide that the nine-month run rate annualizes below.
• Capital returns have years of runway: $2.2 billion remaining on the buyback — nearly seven quarters at the Q3 $323 million pace — plus a dividend raised 15% year over year.
• Always-On markets are an open-ended call option: 23/5 trading live December 6, the Bruce Markets 24/7 deal signed, and the LeveL ATS acquisition extending the liquidity pool off-exchange.

Bear Case

• Market Services exposes the pass-through trap: gross up 26%, net up 2%, with a $283 million year-over-year swing in clearance fees deciding the quarter — volume Nasdaq cannot monetize.
• The $2 million G&A line is a mirage: back out the $16 million legal settlement and run-rate expense growth is roughly double the reported 3%.
• $121 million of quarterly amortization never stops being excluded: acquired intangibles still stand at $6.1 billion, a multi-year drag the non-GAAP numbers will keep adding back.
• Goodwill exceeds equity: $14.2 billion of goodwill against $12.0 billion of total equity leaves no room for an Adenza impairment without rewriting the balance sheet.
• The tax tailwind already reversed: a 23.1% rate versus 20.0% a year ago shaved roughly $22 million off net income growth this quarter.

Our Take

Nasdaq is priced as an exchange and performing as a fintech, and quarters like this one close the gap from the performance side: 79% of net revenue now comes from software, data, and index annuities growing 16–39%, while the namesake trading franchise contributes a 2%-growth spread. The bear points are real but mostly describe the 21%, not the 79%. As long as Index inflows and FinTech ARR keep compounding at double the pace of expenses, the re-rating is a matter of time, not hope. This is the company.