Nasdaq, Inc. (Nasdaq:NDAQ) reported financial results for the second quarter of 2017. Second quarter 2017 net revenues were $602 million, up $43 million or 8% from $559 million in the prior year period. The second quarter increase in net revenues included a $34 million positive impact from acquisitions and $15 million, or 3%, organic growth, partially offset by a $6 million unfavorable impact due to changes in foreign exchange rates.
“In addition to achieving a new quarterly net revenue record, we are making significant progress against our 2017 execution priorities, by commercializing key technologies with new products available through the Nasdaq Financial Framework and Analytics Hub, achieving our merger synergies ahead of our original timeline, and raising our market share in our largest trading categories significantly above prior year levels,” said Adena T. Friedman, President and CEO, Nasdaq.
Mrs Friedman continued, “At the same time, we have taken a leadership role supporting current and potential corporate issuers through our blueprint to revitalize the U.S. capital markets, which champions reforms and initiatives that we believe improve the public company experience to the benefit of stakeholders throughout and even beyond the broader investment community.”
GAAP operating expenses were $358 million in the second quarter of 2017, down $27 million from $385 million in the second quarter of 2016. The decrease primarily reflects lower restructuring and merger and strategic initiatives expense, partially offset by incremental operating expenses from the acquisitions closed in the prior year period and additional costs associated with the early extinguishment of debt.
Non-GAAP operating expenses were $315 million in the second quarter of 2017, up $15 million from $300 million in the second quarter of 2016. This increase reflects $11 million of incremental operating expenses net of synergies from the acquisitions closed in the second quarter of 2016 and a $9 million organic expense increase, partially offset by a $5 million favorable impact from changes in foreign exchange rates.
“Reflecting the significant progress achieved on our integrations and identification of additional opportunities, the company is raising its total synergy target. Despite the headwinds that today’s low volatility environment presents, our consistent application of the company’s expense and efficiency discipline is delivering margin improvement and contributing to EPS growth consistent with our aspiration to deliver double-digit total shareholder returns,” said Michael Ptasznik, Executive Vice President and Chief Financial Officer, Nasdaq.
Mr Ptasznik continued, “On the capital front, in the second quarter of 2017 we initiated the company’s first commercial paper program and began paying down borrowings consistent with our stated objectives, following significant buyback activity and a 19% dividend increase announced in the first quarter of 2017. We plan to continue deploying and returning capital in a thoughtful and balanced approach over time.”
On a GAAP basis, net income attributable to Nasdaq for the second quarter of 2017 was $147 million, or $0.87 per diluted share, compared with net income of $70 million, or $0.42 per diluted share, in the second quarter of 2016.
On a non-GAAP basis, net income attributable to Nasdaq for the second quarter of 2017 was $172 million, or $1.02 per diluted share, compared with $153 million, or $0.91 per diluted share, in the second quarter of 2016.
At June 30, 2017, the company had cash and cash equivalents of $356 million and total debt of $3,552 million, resulting in net debt of $3,196 million. This compares to net debt of $3,200 million at December 31, 2016. Included in total debt of $3,552 million is $494 million outstanding from the recently established commercial paper program. As of June 30, 2017, there was $273 million remaining under the board authorized share repurchase program. There were no share repurchases during the second quarter of 2017.