Nasdaq reports first quarter 2002 results

Revenue
Nasdaq's revenue declined modestly in the first quarter due to moderation in trading volume and increased competition:

  •   Revenue for the quarter was $211.3 million versus $222.8 million in the first quarter of 2001 — a decrease of 5.2 per cent.

EBITDA
Continued strong operating performance:

  •   EBITDA was $64.0 million versus $62.9 million in the same period last year — an increase of 1.7 per cent.

“In the first quarter, we continued to narrow our focus to the objectives that will assure Nasdaq's leadership as we become an independent, shareholder owned company,“ says Nasdaq Stock Market chairman and CEO Wick Simmons. “While the economic environment remains challenging and competition intense, we remain focused on the launch of SuperMontage, the continued roll-out of Primex, and further refinement of our operating structure, emphasizing cost control, particularly in the discretionary expense lines.“

Simmons adds: “This is the platform from which Nasdaq will further its strategy of leveraging its strong brand and technology infrastructure, to remain a centre of liquidity while exploring opportunities to ultimately broaden the capital base globally.“

Business line results

Nasdaq Transaction Services
Revenue
Revenue was $104.7 million in the first quarter versus $110.8 million a year ago — decrease of 5.5 per cent. Economic and competitive factors contributed to the decline, including a slight decrease in average daily share volume when compared to the first quarter of 2001.

Access Services revenue declined 3.9 per cent relative to the first quarter of 2001, primarily due to cost saving initiatives at major investment firms. Trade Reporting revenue declined 17.9 per cent from the first quarter of 2001, due to the reduction of fees for a trade report, as well as decreased demand for certain trade reporting functionality.

Strong Pipeline
The new product pipeline is strong. Primex, the electronic auction system, now serves the stocks all of the major indices. Over 60 per cent of orders entered into Primex result in price improvement. The release of SuperMontage is on schedule. It progressed through the design phase and is now being integrated into operations for launch this summer. Nasdaq's Quality Control department began testing the software in January 2002 and has commenced tests with member firms on production equipment. Most recently, Nasdaq successfully completed three external user tests. Testing will continue through implementation in late July.

Nasdaq Transaction Services derives revenue primarily from transactions associated with SuperSOES, SelectNet, SOES, trade reporting fees associated with ACT, and system access fees.