Nasdaq, Inc. runs global exchange, market data and technology businesses and presents a cash‑generative, high‑margin profile — trailing twelve‑month operating cash flow $2.25B and net profit margin 18.9%.
The company’s profitability and cash conversion are clear strengths: gross margin is roughly 58.9%, operating margin about 56.0% and net margin 18.9%, reflecting strong pricing and operating leverage (Profit Margin Trends). Cash generation is robust with operating cash flow TTM $2.25B versus a most‑recent net income TTM of $991.0M and an operating cash flow to net income ratio of 1.60x, while reported free cash flow margin is ~33.2% — all indicators of high‑quality earnings and conversion (Earnings Quality Analysis, Revenue & Net Income).
Nasdaq also shows multi‑year compounding in shareholder metrics: 5‑year diluted EPS CAGR ~18.25%, 5‑year book value per share CAGR ~13.70% and 5‑year revenue per share CAGR ~7.70% (EPS Diluted & Revenue per Share, Revenue & EPS Growth).
There are notable areas of concern. Recent per‑share earnings momentum has weakened: the most recent one‑year diluted EPS change was -13.3% (period ending 2024‑03‑31), marking an inflection from prior multi‑year gains (Revenue & EPS Growth). Return on equity has also trended down from mid‑teens to a trailing twelve‑month ROE of 9.2% as of 2024‑03‑31, which signals diminishing returns on invested capital (Return on Equity (ROE)). Liquidity and capital allocation shifts are worth watching too: the current ratio is below 1.0 at 0.9739 and financing cash flow moved from +$4.22B TTM (2023‑12‑31) to -$2.95B TTM (2025‑12‑31), reflecting a material change in net financing activity (Strategic Capital Allocation).
Note: Unusual reported trailing PE series at 0.0x for recent periods (Price-to-Earnings (PE) Ratio Trend), Revenue & Net Income).
The foundation of business quality and long-term value creation
NASDAQ, INC.'s revenue history in the provided dataset shows quarterly receipts clustered around the low- to mid‑single‑billion range in recent years, with the most recent revenue data point of $1.45B for the quarter ended 2023-09-30. Revenues rose from $954.0M (2022-03-31) to $1.02B (2022-06-30), $1.38B (2022-09-30) and reached $1.45B in 2023-09-30, with earlier intermittent higher outliers such as $2.34B (2020-12-31) and multi‑billion figures in 2014–2015.
Net income has been more variable across the latest quarters: NASDAQ, INC. reported $757.0M in net income for the quarter ended 2023-12-31, which fell to $234.0M for 2024-03-31 and then increased to $452.0M in the most recent quarter (2025-06-30). The net income series includes peaks such as $841.0M (2022-12-31) and troughs like $234.0M (2024-03-31), with the latest reported net income at $452.0M and the latest reported revenue at $1.45B.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Jan 2020 to Dec 2020, Nasdaq Inc converts approximately 59¢ of every revenue dollar into gross profit (gross margin: 58.9%).After accounting for operating expenses and taxes and expenses, the company retains 18.9% as net profit margin, resulting in $0.93B in net earnings.
Period Information
Report Type: Annual (10-K)
Period: Jan 2020 to Dec 2020
Analyzing long-term margin stability and competitive positioning
NASDAQ, INC.'s margins show variability across the series with recent strength in profitability. In the most recent period (2020-12-31), gross margin is 58.9%, operating margin is 56.0% and net profit margin is 18.9%. Gross margin has oscillated over the years—rising from the high 40s/50% in the early 2010s to a pronounced peak at 91.4% in 2018 before settling back to the high 50s by the end of 2020. Net profit margin has trended upward more steadily from around 11–13% in the early 2010s to the high teens in 2020.
Most recent values: Gross Margin: 58.9% (2020-12-31), Operating Margin: 56.0% (2020-12-31), Net Profit Margin: 18.9% (2020-12-31).
Understanding Profit Margins
Between Jan 2020 and Dec 2020, Nasdaq Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Over the period shown, operating cash flow (TTM) for NASDAQ, INC. has trended upward, rising from roughly $1.29B in early 2022 to $1.70B at 2023-12-31, $1.94B at 2024-12-31 and reaching $2.25B at 2025-12-31. Net income (TTM) followed a different path: after mid‑cycle highs around $1.17–1.19B in 2021–2022 it declined to $1.14B (2023-03-31), $1.06B (2023-12-31) and $991.0M at 2024-03-31. The gap between operating cash flow and reported net income becomes more pronounced from 2022–2023 onward as cash generation increases while reported earnings have eased.
Operating Cash Flow (TTM): $2.25B (period ending 2025-12-31)
Net Income (TTM): $991.0M (period ending 2024-03-31)
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
NASDAQ, INC.'s ROE has declined markedly in the most recent quarters. After a trailing twelve-month ROE of 18.5% at 2023-03-31, the metric fell to 9.8% by 2023-12-31 and edged down further to 9.2% at 2024-03-31, marking a clear inflection in late 2023 and continued weakness into early 2024.
Over the longer history shown, ROE was generally in the mid-to-high teens from 2020 through early 2022 (peaking at 19.5% on 2022-03-31), with lower single-digit to low-teen readings in earlier years. The most recent trailing twelve-month Return on Equity for NASDAQ, INC. was 9.2% as of 2024-03-31.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Operating cash flow for NASDAQ, INC. has risen in the most recent trailing twelve-month readings, increasing from $1.70B at 2023-12-31 to $1.94B at 2024-12-31 and reaching $2.25B as of 2025-12-31, indicating a steady upward trend in cash generated from operations.
Investing cash flow remains negative in recent data, with the latest available TTM value of -$953.0M at 2024-12-31, following a larger outflow of -$2.58B reported in 2021 and smaller negative amounts in earlier years.
Financing cash flow shows a notable inflection: a large positive $4.22B TTM at 2023-12-31 shifted to an outflow of -$2.56B at 2024-12-31 and further to -$2.95B at 2025-12-31, reflecting a move from net cash raised to net cash returned or repaid in the most recent periods.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
NASDAQ, INC.'s trailing twelve-month price-to-earnings ratio is flat at 0.0x across the entire reporting history shown. Recent quarters, including 2024-03-31, 2023-12-31 and 2023-03-31, all record the same 0.0x value with no quarter-to-quarter variation.
There are no observable inflection points or trend changes in the series; the metric remains unchanged at the same level in every reported period. The most recent price-to-earnings ratio was 0.0x as of 2024-03-31.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.