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Nasdaq profit tops Wall St. view, helped by robust trading

Nasdaq Inc (NDAQ.O)on Wednesday reported quarterly profits that topped Wall Street expectations, helped by strong trading levels and increased demand for its financial technology and investment-related products as the economy reopened from the pandemic.

The transatlantic exchange operator’s second-quarter adjusted net income of $1.90 per share beat estimates by 15 cents, according to IBES data from Refinitiv.

Stock market volatility led to higher trading volumes versus a year ago, but activity moderated from the first quarter as COVID-19 lockdowns were eased amid higher vaccination rates.

While some pandemic-related challenges, like a lack of in-person time with clients, remained, demand for Nasdaq’s market technology grew from both new and existing customers, said Chief Executive Officer Adena Friedman.

“After a year of a lot of volatility and a lot of focus just on the here and now … the conversations that we’re seeing around the world are just much more longer-term driven and more focused on the future,” she said on a call with analysts.

Initial public offerings continued at a record-setting pace, with more capital raised through IPOs on Nasdaq in the first half of 2021 than in all of 2020.

The exchange welcomed 135 IPOs in the quarter, of which 88 were operating companies like Coinbase Global (COIN.O) and AppLovin Corp (APP.O), while the rest were special purpose acquisition companies.

The increase in IPOs contributes to higher trading levels on Nasdaq, which has around twice the market share in its own listed stocks than in stocks listed on other exchanges, Friedman said.

Revenue from Nasdaq’s market services unit, its biggest business, jumped 13% to $312 million, while market technology revenues rose 39% to $117 million.

Investment intelligence revenues increased 23% to $263 million, as investors poured into products tied to Nasdaq’s indexes.

Excluding transaction-based expenses, revenue rose 21% to $846 million.