GlobeNewswire Inc | Jan 26, 2022 07:00AM EST

January 26, 2022

NEW YORK, Jan. 26, 2022 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the fourth quarter of 2021 and full year 2021.

-- 2021 net revenues1 were $3,420 million, an increase of 18% over 2020. Solutions segments2 revenues increased 21% while Market Services increased 13%. -- Net revenues increased 12% compared to the fourth quarter of 2020. Solutions segments revenues increased 19%, including 12% organic growth and 7% contribution from the acquisition of Verafin. -- Annualized Recurring Revenue (ARR)3 increased 19% compared to the fourth quarter of 2020, and excluding Verafin, increased 9%. Annualized SaaS revenues increased 43% and represented 34% of ARR. -- GAAP diluted earnings per share increased 26% in 2021 and 14% in the fourth quarter 2021. -- Non-GAAP4 diluted earnings per share increased 22% in 2021 and 21% in the fourth quarter 2021. -- The company returned $1,293 million of cash to shareholders in 2021, including $943 million in share repurchases and $350 million in dividends.

Fourth Quarter 2021 Highlights

(US$ millions, except per share) 4Q21 % Change 2021 % Change (YoY) (YoY)Solutions Segments Revenues $581 19% $2,152 21%Market Services $303 5% $1,241 13%Net RevenuesNet Revenues $885 12% $3,420 18%ARR $1,871 19% GAAP Diluted EPS $1.53 14% $7.05 26%Non-GAAP Diluted EPS $1.93 21% $7.56 22%

Adena Friedman, President and CEO said, Our record performance in 2021 is another important milestone in Nasdaqs journey as a technology business serving the financial system. We grew across all segments of our business last year with a focus on competitive positioning, innovation in our trading and listing businesses, and the continued expansion of our software, analytics, data and cloud services. We have entered 2022 in a position of strength across all of our businesses, primed to capture secular growth opportunities as we continue to play our part in increasing investor participation, optimizing capital formation, and driving efficiency and resiliency in the global financial system.

Ann Dennison, Executive Vice President and CFO said, Nasdaqs strong quarterly and full year results underscore our focus on executing and competing in vibrant markets and a clear eyed focus on driving a more diversified revenue profile. During the year, we delivered record profitability underpinned by a 19% increase in ARR and 43% increase in annualized SaaS revenues. Combined, this provides us with sustainable runway to continue to deliver attractive returns to shareholders while investing in long-term growth opportunities across our enterprise.

FINANCIAL REVIEW

-- 2021 net revenues were $3,420 million, an increase of $517 million, or 18% over 2020. Net revenues reflected a $395 million, or 14%, positive impact from organic growth, a $93 million increase from the net impact of acquisitions and divestitures, and a $29 million increase from the impact of changes in FX rates. -- Fourth quarter 2021 net revenues were $885 million, an increase of $97 million, or 12%, from $788 million in the prior year period. Net revenues reflected a $78 million, or 10%, positive impact from organic growth and a $26 million increase from the net impact of acquisitions and divestitures, partially offset by a $7 million decrease from the impact of changes in FX rates. -- Solutions segments revenues were $581 million in the fourth quarter of 2021, an increase of $91 million, or 19%. The increase reflects a $61 million, or 12%, positive impact from organic growth and a $35 million, or 7%, increase from the inclusion of revenues from the acquisition of Verafin, partially offset by a $5 million decrease from the impact of changes in FX rates. -- Market Services net revenues were $303 million in the fourth quarter of 2021, an increase of $15 million, or 5%. The increase reflects a $17 million, or 6%, positive impact from organic growth, partially offset by a $2 million decrease from the impact of changes in FX rates. -- Fourth quarter 2021 GAAP operating expenses increased 15% versus the prior year period. The increase primarily reflects higher compensation and benefits expense, regulatory expense, depreciation and amortization expense, partially offset by lower general, administrative and other expense and restructuring charges. -- Fourth quarter 2021 non-GAAP operating expenses increased 7% versus the prior year period. The increase reflects a $6 million, or 1%, organic increase over the prior year period, a $24 million, or 6%, increase from the net impact of acquisitions and divestitures, partially offset by a $2 million decrease from changes in FX rates. The organic increase primarily reflects higher compensation and benefit expense, marketing and advertising expense and computer operations and data communication expense, partially offset by lower general, administrative and other expense. -- The company repurchased $58 million in shares of its common stock fourth quarter of 2021 and repurchased an aggregate of $943 million in 2021, including the impact of the $475 million accelerated share repurchase (ASR) agreement executed in the second half of 2021. The company repurchased $142 million in shares in January 2022, and plans to enter into an ASR agreement to repurchase an additional $325 million of shares, which is expected to be completed in the first quarter of 2022. As of January 25, 2022, there was $784 million remaining under the board authorized share repurchase program.

2022 EXPENSE AND TAX GUIDANCE5

The company is initiating its 2022 non-GAAP operating expense guidance to a range of $1,680 to $1,760 million. Nasdaq expects its 2022 non-GAAP tax rate to be in the range of 24.0% to 26.0%.

STRATEGIC AND BUSINESS UPDATES

-- Nasdaq and AWS partner to transform capital markets through benefits of a cloud-enabled infrastructure. Nasdaq and Amazon Web Services, Inc. (AWS) announced a multi-year partnership to build the next generation of cloud-enabled infrastructure for the worlds capital markets. Nasdaq will use a new edge computing solution that is co-designed by Nasdaq and AWS specifically for market structure. Beginning in 2022, Nasdaq plans to migrate its North American markets to AWS in a phased approach, starting with Nasdaq MRX, a U.S. options market. -- Nasdaqs annualized SaaS revenues in the fourth quarter of 2021 increased 43% year over year. Annualized SaaS revenues totaled $640 million in the fourth quarter of 2021, representing 34% of total company ARR, up from 28% in the fourth quarter of 2020. The 43% year over year increase in annualized SaaS revenues primarily reflects the inclusion of Verafin and strong growth in our surveillance and analytics businesses. -- The Analytics offerings of eVestment and Solovis delivered a 41% increase in new sales in 2021 versus the prior year while the gross retention improved one percentage point. Our combined Analytics offerings including eVestment and Solovis saw continued strong user adoption across both asset owners and asset managers with combined new sales of $26 million in 2021, an increase of 41% versus 2020. There were 61 ETPs tracking Nasdaq indexes launched in 2021 with nearly $3 billion of AUM accumulated during the year, including the PHLX Semiconductor Index, and Hashdex products linked to the Nasdaq Crypto Index. In the fourth quarter of 2021, Nasdaq launched Data Fabric, a managed data solution built off Nasdaq Data Link to help investment management firms scale their data infrastructure with enhanced quality, governance and integrity. -- The Nasdaq Stock Market led U.S. exchanges for IPOs during 2021 and featured nine of the ten largest U.S.-based IPOs by capital raised. The Nasdaq Stock Market led U.S. exchanges in 2021 with a 73% total win rate, reflecting a 76% win rate among operating companies6 and a 71% win rate among SPACs. The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs representing $181 billion in capital raised, while Nasdaqs European exchanges welcomed 207 new listings. New listings in 2021 included the IPOs of Rivian, the largest by capital raised, and GlobalFoundries as well as 33 listing switches including Honeywell, Palo Alto Networks and Baker Hughes.

-- For the second consecutive year, Nasdaq led all exchanges in total traded U.S. options, inclusive of multiply-list equity options and index options products, while equity value traded on the Nasdaq Nordic markets reached their highest level since 2008. Nasdaqs U.S. options market average daily number of contracts set a new annual record and totaled 12.8 million in 2021, an increase of 25% year over year. The average daily trading value of Nasdaqs Nordic and Baltic main markets reached $4.7 billion, an increase of 10% year over year, and the highest since 2008.

____________1 Represents revenues less transaction-based expenses. 2 Constitutes revenues from Market Technology, Investment Intelligence and Corporate Platforms segments.3 AnnualizedRecurringRevenue(ARR) for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.4 Refer to our reconciliations of U.S. GAAP to non-GAAP net income, diluted earnings per share, operating income and operating expenses, included in the attached schedules.5 U.S. GAAP operating expense and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.6 Operating companies exclude special purpose acquisition companies and when a special purpose acquisition company completes an acquisition.

ABOUT NASDAQ

Nasdaq (Nasdaq: NDAQ) is a global technology company serving the capital markets and other industries. Our diverse offering of data, analytics, software and services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.

NON-GAAP INFORMATION

In addition to disclosing results determined in accordance with U.S. GAAP, Nasdaq also discloses certain non-GAAP results of operations, including, but not limited to, non-GAAP net income attributable to Nasdaq, non-GAAP diluted earnings per share, non-GAAP operating income, and non-GAAP operating expenses, that include certain adjustments or exclude certain charges and gains that are described in the reconciliation table of U.S. GAAP to non-GAAP information provided at the end of this release. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of results as the items described below in the reconciliation tables do not reflect ongoing operating performance.

These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces its usefulness as a comparative measure. Investors should not rely on any single financial measure when evaluating our business. This information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this earnings release. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliations, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.

We understand that analysts and investors regularly rely on non-GAAP financial measures, such as those noted above, to assess operating performance. We use these measures because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance.

Organic revenue growth, organic change and organic impact are non-GAAP measures that reflect adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates, and (ii) the revenues, expenses and operating income associated with acquisitions and divestitures for the twelve month period following the date of the acquisition or divestiture. Reconciliations of these measures are described within the body of this release.

Foreign exchange impact: In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Certain discussions in this release isolate the impact of year-over-year foreign currency fluctuations to better measure the comparability of operating results between periods. Operating results excluding the impact of foreign currency fluctuations are calculated by translating the current periods results by the prior periods exchange rates.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to (i) projections relating to our future financial results, total shareholder returns, growth, trading volumes, products and services, ability to transition to new business models, taxes and achievement of synergy targets, (ii) statements about the closing or implementation dates and benefits of certain acquisitions, divestitures and other strategic, restructuring, technology, de-leveraging and capital allocation initiatives, (iii) statements about our integrations of our recent acquisitions, (iv) statements relating to any litigation or regulatory or government investigation or action to which we are or could become a party, and (v) other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaqs control. These factors include, but are not limited to, Nasdaqs ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, the impact of the COVID-19 pandemic on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners, and other factors detailed in Nasdaqs filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on Nasdaqs investor relations website at http://ir.nasdaq.com and the SECs website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

WEBSITE DISCLOSURE

Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.

Media Relations Contact Investor Relations Contact Will Briganti Ed Ditmire, CFA +1.646.964.8169 +1.212.401.8737 william.briganti@nasdaq.com ed.ditmire@nasdaq.com

-NDAQF-

Nasdaq, Inc.Condensed Consolidated Statements of Income(in millions, except per share amounts)

Three Months Ended Year Ended December December December 31, December 31, 31, 31, 2021 2020 2021 2020 (unaudited) (unaudited) (unaudited) Revenues: Market Technology $ 131 $ 106 $ 463 $ 357 Investment 288 245 1,076 898 IntelligenceCorporate Platforms 162 139 613 521 Market Services 885 962 3,707 3,818 Other Revenues 1 10 27 31 Total revenues 1,467 1,462 5,886 5,625 Transaction-based expenses:Transaction rebates (526 ) (502 ) (2,168 ) (2,028 )Brokerage, clearance (56 ) (172 ) (298 ) (694 )and exchange feesRevenues lesstransaction-based 885 788 3,420 2,903 expenses Operating Expenses: Compensation and 238 205 938 786 benefitsProfessional and 43 40 144 137 contract servicesComputer operationsand data 49 42 186 151 communicationsOccupancy 28 26 109 107 General,administrative and 19 43 85 142 otherMarketing and 26 19 57 39 advertisingDepreciation and 80 53 278 202 amortizationRegulatory 41 8 64 24 Merger and strategic 17 22 87 33 initiativesRestructuring - 12 31 48 charges Total operating 541 470 1,979 1,669 expensesOperating income 344 318 1,441 1,234 Interest income - - 1 4 Interest expense (31 ) (24 ) (125 ) (101 )Net gain ondivestiture of - - 84 - businessOther income 39 - 81 5 Net (loss) incomefrom unconsolidated (38 ) (27 ) 52 70 investeesIncome before income 314 267 1,534 1,212 taxesIncome tax provision 55 43 347 279 Net incomeattributable to $ 259 $ 224 $ 1,187 $ 933 Nasdaq Per share information:Basic earnings per $ 1.55 $ 1.36 $ 7.15 $ 5.67 shareDiluted earnings per $ 1.53 $ 1.34 $ 7.05 $ 5.59 shareCash dividendsdeclared per common $ 0.54 $ 0.49 $ 2.11 $ 1.94 share Weighted-averagecommon shares outstandingfor earnings per share:Basic 167.1 164.5 165.9 164.4 Diluted 169.7 167.3 168.4 166.9

Nasdaq, Inc.Revenue Detail(in millions)

Three Months Ended Year Ended December December December 31, December 31, 31, 31, 2021 2020 2021 2020 (unaudited) (unaudited) (unaudited) MARKET TECHNOLOGY REVENUES Anti Financial Crime Technology $ 72 $ 35 $ 247 $ 130 revenues Marketplace Infrastructure 59 71 216 227 Technology revenues Total Market Technology 131 106 463 357 revenues INVESTMENTINTELLIGENCE REVENUES Market Data 104 102 414 399 revenues Index revenues 130 97 459 324 Analytics 54 46 203 175 revenues Total Investment 288 245 1,076 898 Intelligence revenues CORPORATE PLATFORMS REVENUES Listings Services 104 83 387 307 revenues IR & ESG Services 58 56 226 214 revenues Total Corporate 162 139 613 521 Platforms revenues MARKET SERVICES REVENUES Equity Derivative Trading and 355 357 1,469 1,258 Clearing revenues Transaction-based expenses: Transaction (248 ) (243 ) (1,018 ) (828 ) rebates Brokerage, clearance and (7 ) (22 ) (38 ) (76 ) exchange fees Total net equity derivative 100 92 413 354 trading and clearing revenues Cash Equity 432 514 1,854 2,211 Trading revenues Transaction-based expenses: Transaction (278 ) (259 ) (1,150 ) (1,200 ) rebates Brokerage, clearance and (49 ) (150 ) (260 ) (618 ) exchange fees Total net cash equity trading 105 105 444 393 revenues Fixed Income and Commodities 15 14 59 53 Trading and Clearing revenues Trade Management 83 77 325 296 Services revenues Total Net Market 303 288 1,241 1,096 Services revenues OTHER REVENUES 1 10 27 31 REVENUES LESSTRANSACTION-BASED $ 885 $ 788 $ 3,420 $ 2,903 EXPENSES

Nasdaq, Inc.Condensed Consolidated Balance Sheets(in millions) December 31, December 31, 2021 2020 Assets (unaudited) Current assets: Cash and cash equivalents $ 393 $ 2,745 Restricted cash and cash equivalents 29 37 Financial investments 208 195 Receivables, net 588 566 Default funds and margin deposits 5,911 3,942 Other current assets 294 175 Total current assets 7,423 7,660 Property and equipment, net 509 475 Goodwill 8,433 6,850 Intangible assets, net 2,813 2,255 Operating lease assets 366 381 Other non-current assets 571 358 Total assets $ 20,115 $ 17,979 Liabilities Current liabilities: Accounts payable and accrued expenses $ 185 $ 175 Section 31 fees payable to SEC 62 224 Accrued personnel costs 252 227 Deferred revenue 329 235 Other current liabilities 115 121 Default funds and margin deposits 5,911 3,942 Short-term debt 1,018 - Total current liabilities 7,872 4,924 Long-term debt 4,812 5,541 Deferred tax liabilities, net 406 502 Operating lease liabilities 386 389 Other non-current liabilities 234 187 Total liabilities 13,710 11,543 Commitments and contingencies Equity Nasdaq stockholders' equity: Common stock 2 2 Additional paid-in capital 1,952 2,547 Common stock in treasury, at cost (437 ) (376 ) Accumulated other comprehensive loss (1,587 ) (1,368 ) Retained earnings 6,465 5,628 Total Nasdaq stockholders' equity 6,395 6,433 Noncontrolling interests 10 3 Total equity 6,405 6,436 Total liabilities and equity $ 20,115 $ 17,979

Nasdaq, Inc. Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income andOperating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses(in millions, except per share amounts) (unaudited) Three Months Ended Year Ended December December December December 31, 31, 31, 31, 2021 2020 2021 2020 U.S. GAAP net income $ 259 $ 224 $ 1,187 $ 933 attributable to NasdaqNon-GAAP adjustments: Amortization expense of acquired intangible 54 26 170 103 assets ^(1) Merger and strategic initiatives expense ^ 17 22 87 33 (2) Restructuring charges - 12 31 48 ^(3) Net gain on divestiture of - - (84) - business ^(4) Net loss (income) from unconsolidated 37 27 (52) (70) investees ^(5) Regulatory matters ^ 33 - 33 (6) (6) Extinguishment of debt - - 33 36 ^(7) Charitable donations ^ - - - 17 (8) Provision for notes - - - 6 receivable ^(8) Other ^(8) (36) 4 (71) 14 Total non-GAAP 105 91 147 181 adjustments Non-GAAP adjustment to the income tax (36) (44) (61) (77) provision ^(9) Excess tax benefits related to employee - (3) - (6) share-based compensation Total non-GAAP adjustments, net of 69 44 86 98 taxNon-GAAP net income $ 328 $ 268 $ 1,273 $ 1,031 attributable to Nasdaq U.S. GAAP diluted $ 1.53 $ 1.34 $ 7.05 $ 5.59 earnings per share Total adjustments from non-GAAP net income 0.40 0.26 0.51 0.59 aboveNon-GAAP diluted $ 1.93 $ 1.60 $ 7.56 $ 6.18 earnings per share Weighted-average dilutedcommon shares 169.7 167.3 168.4 166.9 outstanding for earningsper share: (1) We amortize intangible assets acquired in connection withvarious acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, ratherthan from our ongoing business operations. (2) We have pursued various strategic initiatives and completedacquisitions and divestitures in recent years which have resulted inexpenses which would not have otherwise been incurred. Theseexpenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency andamount of such expenses vary significantly based on the size, timingand complexity of the transaction. (3) In September 2019, we initiated the transition of certaintechnology platforms to advance the company?s strategicopportunities as a technology and analytics provider and continuethe realignment of certain business areas. Charges associated withthis plan represented a fundamental shift in our strategy andtechnology as well as executive re-alignment and were excluded forpurposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq?sperformance between periods. The restructuring charges primarilyconsisted of non-cash items such as asset impairment chargesprimarily related to capitalized software that was retired, andaccelerated depreciation expense on certain assets as a result of adecrease in their useful life as well as third party consultingcosts. The restructuring program ended as of June 30, 2021. (4) For the year ended December 31, 2021, we recorded a pre-tax netgain of $84 million on the sale of our U.S. Fixed Income business, which is included in net gain on divestiture of business in theCondensed Consolidated Statements of Income. (5) Represents the earnings and losses recognized from our equityinterest in the Options Clearing Corporation, or OCC. We willcontinue to exclude the earnings and losses related to our share ofOCC's earnings for purposes of calculating non-GAAP measures as our income on this investment may vary significantly period to period.This provides a more meaningful analysis of Nasdaq's ongoingoperating performance or comparisons in Nasdaq's performance betweenperiods. (6) In December 2021, we recorded a $33 million charge related to adecision made by the Swedish Administrative court rejecting anappeal by Nasdaq Clearing to dismiss an administrative fine imposedby the Swedish Financial Supervisory Authority, or SFSA, associatedwith the default of a member of the Nasdaq Clearing commoditiesmarket that occurred in 2018. Nasdaq Clearing has appealed the court?s recent decision and firmly believes in the merits of itsappeal. For the year ended December 31, 2020, we recorded a $6million reversal of a regulatory fine issued by the SFSA. Bothcharges were recorded to regulatory expense in our CondensedConsolidated Statements of Income. (7) For the years ended December 31, 2021 and December 31, 2020,represents a loss on early extinguishment of debt. The charge for all periods is recorded in general, administrative and other expensein our Condensed Consolidated Statements of Income. (8) We have excluded certain other charges or gains, includingcertain tax items, that are the result of other non-comparableevents to measure operating performance. For the three months andyear ended December 31, 2021, these significant items primarilyrelate to gains from sales of strategic investments entered intothrough our corporate venture program recorded in other income inour Condensed Consolidated Statements of Income. For the threemonths and year ended December 31, 2020, these significant itemsprimarily included charges associated with duplicative rent andimpairment of leasehold assets related to our global headquarters move recorded in occupancy and depreciation and amortization expensein our Condensed Consolidated Statements of Income. The year endedDecember 31, 2020 also included a provision for notes receivableassociated with the funding of technology development for theconsolidated audit trail recorded in general, administrative andother expense in our Condensed Consolidated Statements of Income,charitable donations made to the Nasdaq Foundation, COVID-19response and relief efforts, and social justice charities, which arerecorded in general, administrative and other expense in ourCondensed Consolidated Statements of Income. (9) The non-GAAP adjustment to the income tax provision primarilyincludes the tax impact of each non-GAAP adjustment. In addition,for the three months and year ended December 31, 2021, we recorded atax benefit related to state and local provision to returnadjustments and a release of tax reserves due to statute oflimitation expiration. For the year ended December 31, 2021, we alsorecorded a prior year tax benefit, net of reserve. In addition, for the three months and year ended December 31, 2020, we recorded a taxbenefit related to favorable audit settlements, a release of taxreserves due to statute of limitation expiration, partially offsetwith an increase to certain tax reserves related to certain taxfilings. For the year ended December 31, 2020, we also recorded atax benefit on compensation related deductions determined to beallowable.

Nasdaq, Inc. Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income andOperating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses(in millions) (unaudited) Three Months Ended Year Ended December December December December 31, 31, 31, 31, 2021 2020 2021 2020 U.S. GAAP operating income $ 344 $ 318 $ 1,441 $ 1,234 Non-GAAP adjustments: Amortization expense of acquired intangible 54 26 170 103 assets ^(1) Merger and strategic 17 22 87 33 initiatives expense ^(2) Restructuring charges ^ - 12 31 48 (3) Extinguishment of debt ^ - - 33 36 (4) Regulatory matters ^(5) 33 - 33 (6 ) Charitable donations ^(6) - - - 17 Provision for notes - - - 6 receivable^ (6) Other^ (6) 3 4 9 18 Total non-GAAP 107 64 363 255 adjustmentsNon-GAAP operating income $ 451 $ 382 $ 1,804 $ 1,489 Revenues less $ 885 $ 788 $ 3,420 $ 2,903 transaction-based expenses U.S. GAAP operating margin 39% 40% 42% 43% ^(7) Non-GAAP operating margin ^ 51% 48% 53% 51% (8) (1) We amortize intangible assets acquired in connection with variousacquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoingbusiness operations. (2) We have pursued various strategic initiatives and completed acquisitionsand divestitures in recent years which have resulted in expenses which wouldnot have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third partytransaction costs. The frequency and amount of such expenses varysignificantly based on the size, timing and complexity of the transaction. (3) In September 2019, we initiated the transition of certain technologyplatforms to advance the company?s strategic opportunities as a technologyand analytics provider and continue the realignment of certain businessareas. Charges associated with this plan represented a fundamental shift inour strategy and technology as well as executive re-alignment and wereexcluded for purposes of calculating non-GAAP measures as they are notreflective of ongoing operating performance or comparisons in Nasdaq?s performance between periods. The restructuring charges primarily consisted ofnon-cash items such as asset impairment charges primarily related tocapitalized software that was retired, and accelerated depreciation expenseon certain assets as a result of a decrease in their useful life as well asthird party consulting costs. The restructuring program ended as of June 30,2021. (4) For the years ended December 31, 2021 and December 31, 2020, we recordeda loss on early extinguishment of debt. The charge for all periods is recorded in general, administrative and other expense in our CondensedConsolidated Statements of Income. (5) In December 2021, we recorded a $33 million charge related to a decisionmade by the Swedish Administrative court rejecting an appeal by NasdaqClearing to dismiss an administrative fine imposed by the SFSA associatedwith the default of a member of the Nasdaq Clearing commodities market thatoccurred in 2018. Nasdaq Clearing has appealed the court?s recent decision and firmly believes in the merits of its appeal. For the year ended December31, 2020, we recorded a $6 million reversal of a regulatory fine issued bythe SFSA. Both charges were recorded to regulatory expense in our CondensedConsolidated Statements of Income. (6) We have excluded certain other charges or gains, including certain taxitems, that are the result of other non-comparable events to measureoperating performance. For the three months and year ended December 31, 2020,these significant items primarily included charges associated withduplicative rent and impairment of leasehold assets related to our globalheadquarters move recorded in occupancy and depreciation and amortizationexpense in our Condensed Consolidated Statements of Income. The year ended December 31, 2020 also included a provision for notes receivable associatedwith the funding of technology development for the consolidated audit trailrecorded in general, administrative and other expense in our CondensedConsolidated Statements of Income, charitable donations made to the NasdaqFoundation, COVID-19 response and relief efforts, and social justicecharities, which are recorded in general, administrative and other expense inour Condensed Consolidated Statements of Income. (7) U.S. GAAP operating margin equals U.S. GAAP operating income divided by revenues less transaction-based expenses. (8) Non-GAAP operating margin equals non-GAAP operating income divided by revenues less transaction-based expenses.

Nasdaq, Inc. Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income andOperating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses(in millions) (unaudited) Three Months Ended Year Ended December December December December 31, 31, 31, 31, 2021 2020 2021 2020 U.S. GAAP operating $ 541 $ 470 $ 1,979 $ 1,669 expensesNon-GAAP adjustments: Amortization expense of acquired intangible (54 ) (26 ) (170 ) (103 ) assets^ (1) Merger and strategic (17 ) (22 ) (87 ) (33 ) initiatives expense ^(2) Restructuring charges ^ - (12 ) (31 ) (48 ) (3) Extinguishment of debt ^ - - (33 ) (36 ) (4) Regulatory matters ^(5) (33 ) - (33 ) 6 Charitable donations ^(6) - - - (17 ) Provision for notes - - - (6 ) receivable^ (6) Other^ (6) (3 ) (4 ) (9 ) (18 ) Total non-GAAP (107 ) (64 ) (363 ) (255 ) adjustmentsNon-GAAP operating expenses $ 434 $ 406 $ 1,616 $ 1,414 (1) We amortize intangible assets acquired in connection with variousacquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoingbusiness operations. (2) We have pursued various strategic initiatives and completed acquisitionsand divestitures in recent years which have resulted in expenses which wouldnot have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third partytransaction costs. The frequency and amount of such expenses varysignificantly based on the size, timing and complexity of the transaction. (3) In September 2019, we initiated the transition of certain technologyplatforms to advance the company?s strategic opportunities as a technologyand analytics provider and continue the realignment of certain businessareas. Charges associated with this plan represented a fundamental shift inour strategy and technology as well as executive re-alignment and wereexcluded for purposes of calculating non-GAAP measures as they are notreflective of ongoing operating performance or comparisons in Nasdaq?s performance between periods. The restructuring charges primarily consisted ofnon-cash items such as asset impairment charges primarily related tocapitalized software that was retired, and accelerated depreciation expenseon certain assets as a result of a decrease in their useful life as well asthird party consulting costs. The restructuring program ended as of June 30,2021. (4) For the years ended December 31, 2021 and December 31, 2020, we recordeda loss on early extinguishment of debt. The charge for all periods is recorded in general, administrative and other expense in our CondensedConsolidated Statements of Income. (5) In December 2021, we recorded a $33 million charge related to a decisionmade by the Swedish Administrative court rejecting an appeal by NasdaqClearing to dismiss an administrative fine imposed by the SFSA associatedwith the default of a member of the Nasdaq Clearing commodities market thatoccurred in 2018. Nasdaq Clearing has appealed the court?s recent decision and firmly believes in the merits of its appeal. For the year ended December31, 2020, we recorded a $6 million reversal of a regulatory fine issued bythe SFSA. Both charges were recorded to regulatory expense in our CondensedConsolidated Statements of Income. (6) We have excluded certain other charges or gains, including certain taxitems, that are the result of other non-comparable events to measureoperating performance. For the three months and year ended December 31, 2020,these significant items primarily included charges associated withduplicative rent and impairment of leasehold assets related to our globalheadquarters move recorded in occupancy and depreciation and amortizationexpense in our Condensed Consolidated Statements of Income. The year ended December 31, 2020 also included a provision for notes receivable associatedwith the funding of technology development for the consolidated audit trailrecorded in general, administrative and other expense in our CondensedConsolidated Statements of Income, charitable donations made to the NasdaqFoundation, COVID-19 response and relief efforts, and social justicecharities, which are recorded in general, administrative and other expense inour Condensed Consolidated Statements of Income.

Nasdaq, Inc. Quarterly Key Drivers Detail (unaudited) Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2021 2020 2021 2020 Market Technology Order intake (in $ 142 $ 37 $ 378 $ 240 millions) ^ (1) Annualized recurring revenues (in $ 428 $ 283 $ 428 $ 283 millions) ^ (2) Investment Intelligence Number of licensed exchange 362 339 362 339 traded products (ETPs) ETP assets under management (AUM) $ 424 $ 359 $ 424 $ 359 tracking Nasdaq indexes (in billions) TTM ^(3) net inflows ETP AUM tracking $ 74 $ 46 $ 74 $ 46 Nasdaq indexes (in billions) TTM ^(3) net appreciation ETP AUM tracking $ 83 $ 80 $ 83 $ 80 Nasdaq indexes (in billions) Corporate Platforms Initial public offerings The Nasdaq Stock Market 195 142 752 316 ^(4) Exchanges that comprise Nasdaq 63 24 174 45 Nordic and Nasdaq Baltic Total new listings The Nasdaq Stock Market 266 199 1,000 454 ^(4) Exchanges that comprise Nasdaq 75 34 207 67 Nordic and Nasdaq Baltic ^(5) Number of listed companies The Nasdaq Stock Market 4,178 3,392 4,178 3,392 ^(6) Exchanges that comprise Nasdaq 1,235 1,071 1,235 1,071 Nordic and Nasdaq Baltic ^(7) Market Services Equity Derivative Trading and Clearing U.S. equity options Total industry average 38.6 30.6 37.2 27.7 daily volume (in millions) Nasdaq PHLX matched 11.8% 13.5% 12.4% 12.7% market share The Nasdaq Options Market 8.1% 9.0% 8.1% 9.8% matched market share Nasdaq BX Options 2.0% 0.2% 1.4% 0.2% matched market share Nasdaq ISE Options 6.6% 7.6% 6.6% 7.8% matched market share Nasdaq GEMX Options 2.5% 6.4% 4.3% 5.6% matched market share Nasdaq MRX Options 1.8% 1.1% 1.6% 0.7% matched market share Total matched market share 32.8% 37.8% 34.4% 36.8% executed on Nasdaq's exchanges Nasdaq Nordic and Nasdaq Baltic options and futures Total average daily volume options and 288,327 275,686 287,182 320,204 futures contracts ^ (8) Cash Equity Trading Total U.S.-listed securities Total industry average 10.8 10.5 11.4 10.9 daily share volume (in billions) Matched share volume 118.6 115.4 491.9 508.3 (in billions) The Nasdaq Stock Market 16.0% 15.9% 15.8% 16.8% matched market share Nasdaq BX matched 0.6% 0.7% 0.6% 0.9% market share Nasdaq PSX matched 0.6% 0.6% 0.7% 0.6% market share Total matched market share 17.2% 17.2% 17.1% 18.3% executed on Nasdaq's exchanges Market share reported to the FINRA/ 34.8% 33.7% 34.9% 31.8% Nasdaq Trade Reporting Facility Total market 52.0% 50.9% 52.0% 50.1% share ^(9) Nasdaq Nordic and Nasdaq Baltic securities Average daily number of equity trades 1,045,996 961,924 1,036,523 933,822 executed on Nasdaq's exchanges Total average daily value $ 6.5 $ 5.9 $ 6.4 $ 5.6 of shares traded (in billions) Total market share executed on 75.6% 79.4% 76.9% 78.1% Nasdaq's exchanges Fixed Income and Commodities Trading and Clearing Fixed Income Total average daily volume of Nasdaq Nordic and 119,738 96,006 115,308 103,379 Nasdaq Baltic fixed income contracts Commodities Power contracts 181 286 813 956 cleared (TWh) ^(10) (1) Total contract value of orders signed during the period, excluding Verafin. (2) Annualized Recurring Revenue, or ARR, for a given period is the annualized revenue of Market Technology support and SaaS subscription contracts. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts during the reporting period used in calculating ARR may or may not be extended or renewed by our customers. (3) Trailing 12-months. (4) New listings include IPOs, including issuers that switched from other listing venues, closed-end funds and separately listed ETPs. For the three months ended December 31, 2021, of the 195 IPOs, 123 were SPACs. For the three months ended December 31, 2020, of the 142 IPOs, 77 were SPACs. For the year ended December 31, 2021, of the 752 IPOs, 433 were SPACs. For the year ended December 31, 2020, of the 316 IPOs, 132 were SPACs. (5) New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North. (6) Number of total listings on The Nasdaq Stock Market at period end, including 441 ETPs as of December 31, 2021, and 412 as of December 31, 2020. (7) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North. (8) Includes Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement. (9) Includes transactions executed on The Nasdaq Stock Market's, Nasdaq BX's and Nasdaq PSX's systems plus trades reported through the Financial Industry Regulatory Authority/Nasdaq Trade Reporting Facility. (10) Transactions executed on Nasdaq Commodities or OTC and reported for clearing to Nasdaq Commodities measured by Terawatt hours (TWh).

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