By Pritam Biswas and Prakhar Srivastava
April 23 (Reuters) – Exchange operator Nasdaq beat estimates for first-quarter profit on Thursday, benefiting from higher trading volumes as investors scrambled to rebalance their portfolios in an uncertain macroeconomic environment.
Artificial intelligence-linked stocks drew early investor interest this year, but concerns about a potential bubble in the sector pulled markets in the opposite direction, leaving the tech-heavy exchange mixed and pushing up trading volumes.
Effects of escalations in the Middle East also spilled into the markets late in the quarter, as price swings forced investors to rejig their portfolios to hedge losses.
Market volatility benefits exchanges because it drives up trading volumes, which contributes directly to such companies’ top lines.
The benchmark S&P 500 index lost 4.6% in the quarter.
The company’s market services revenue from trading grew 13% to $317 million in the reported quarter, helped by record U.S. cash equities and equity options volumes.
“Nasdaq delivered one of the strongest starts to the year in our company’s history, with broad-based growth across all three divisions,” CEO Adena Friedman said in a statement.
DIVERSIFICATION, LISTINGS HELP PROFIT
Revenue from the company’s financial technology unit increased 20%, while that from its index business jumped 14%.
Nasdaq has widened its footprint into financial technology and software, building predictable, recurring revenue streams that are less exposed to the market’s swings.
Its total new listings rose 3.5% in the first quarter from 170 a year earlier, boosting the company’s data and listing services revenue by 11.5%.
The performance was in contrast to the volatility in the initial public offerings market in the first three months of the year. Several companies delayed their listings to weather the storm in stock bourses. Analysts and bankers had touted 2026 to be the comeback year for the IPO market.
The company reported a net profit of $519 million, or 91 cents per share, in the three months ended March 31, compared with $395 million, or 68 cents, a year earlier.
Adjusted profit came in at 96 cents per share, beating estimates of 93 cents, according to data compiled by LSEG.
Shares of the company, which have lost about 11% so far in 2026, were up 1% in trading before the bell. They have underperformed most of the bigger exchanges in the country.
Derivatives exchange CME Group reported a rise in first-quarter profit on Wednesday, also helped by hedging demand that boosted average daily volumes across all its six asset classes.
New York Stock Exchange-parent Intercontinental Exchange is set to report its quarterly earnings next week.
(Reporting by Pritam Biswas and Prakhar Srivastava in Bengaluru; Editing by Shinjini Ganguli)
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