By Jaiveer Shekhawat and Saqib Iqbal Ahmed
(Reuters) -Nasdaq's second-quarter profit topped Wall Street estimates on Thursday, driven by strong demand for its products that help traders navigate compliance requirements and safeguard against financial crimes, sending its shares up about 5%.
The exchange operator, which has expanded beyond trading and listings and strengthened its financial technology unit for more consistent growth, generated $420 million in financial technology revenue during the quarter, a 79% increase year-over-year.
Total net revenue climbed 25% to $1.16 billion, compared with analysts' average estimate of $1.13 billion, according to LSEG data. Adjusted profit of 69 cents per share also beat expectations of 64 cents.
"The beat was primarily driven by higher than expected revenue in Financial Technology," Oppenheimer analyst Owen Lau said in a note.
"The stock could show strength today, and we expect consensus to inch up after the print," Lau said.
A total of 84 companies listed their shares on Nasdaq in the quarter compared with 62 from a year ago, as a resilient economy has also prompted a rise in new listings on U.S. exchanges after a slowdown that lasted nearly two years.
The company expects further improvement on that front in coming quarters, it said.
"Our current U.S. IPO pipeline indicates a stronger momentum is likely to manifest starting in the first half of 2025," CEO Adena Friedman said on an analyst call.
Initial public offerings have broadly lagged dealmaking in global equity capital markets this year but with interest rate cuts forecast around the globe, bankers and investors expect more listings in coming months.
U.S. equity matched shares volumes jumped to 119.3 billion in the second quarter from 113.7 billion a year earlier. U.S. equity options volumes also rose to 42.1 million contracts from 39.2 million contracts, Nasdaq said.
Nasdaq shares were last up 5.7% to $66.29, on pace for the best day in about two years. For the year, the stock is up 8%, compared with a 6% rise in an index of peers. .