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Back of Napkin

Nasdaq, Inc. NDAQ

Three-pass checkedFresh as companies report

Nasdaq's operating income has risen in every one of the last six quarters, from $547M to $712M.

The recurring revenue figure that the whole software story rests on is published as a picture, with no numbers beside it.

NDAQ · price with moving averages

Daily · 6MWeekly · 3Y
$43$59$74$90$105 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Three businesses that share a name and very little else. Market Services is the exchange, matching equity and options orders, and it is reported both gross and net because most of the gross revenue is rebates paid straight back to the firms providing liquidity. Capital Access Platforms is the listings franchise, the index business and the investor relations tools. Financial Technology is software: anti-financial-crime screening for banks, regulatory reporting, and the Adenza capital markets risk platform bought for $10.5B in 2023.

The last of those is the reason the stock is valued the way it is. An exchange is worth a certain multiple; a software company selling compliance tools to every bank in the world is worth more.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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