Item 1A. Risk Factors
The risks and uncertainties described below are not the only
ones facing us. Additional risks and uncertainties not
presently known to us or that we currently believe to be
immaterial may also adversely affect our business. If any of
the following risks actually occur, our business, financial
condition, or operating results could be adversely affected.
RISKS RELATED TO OUR BUSINESS AND
INDUSTRY
Economic conditions and market factors, which are beyond
our control, may adversely affect our business and financial
condition.
Our business performance is impacted by a number of
factors, including general economic conditions, current or
expected inflation, interest rate fluctuations, market volatility,
changes in investment patterns and priorities, regulatory
shifts, pandemics and other factors that are generally beyond
our control. To the extent that global or national economic
conditions weaken and result in slower growth or recessions,
our business may be negatively impacted. Adverse market
conditions could reduce customer demand for our services
and the ability of our customers, lenders and other
counterparties to meet their obligations to us. Poor economic
conditions may result in a reduction in the demand for our
products and services, including data, indices and corporate
solutions, or could result in a decline in the number of IPOs,
reduced trading volumes or values and deterioration of the
economic welfare of our listed companies, which could cause
an increase in delistings. The demand for our Regulatory
Technology, Capital Markets Technology and Financial
Crime Management Technology offerings are primarily
influenced by regulatory changes and the financial strength
and growth plans of our clients at any given time, and such
demand may be adversely affected by economic, political and
geopolitical market conditions.
Trading volumes and values are driven primarily by general
market conditions and declines in trading volumes or values
may affect our market share and impact our pricing. In
addition, our Market Services businesses receive revenues
from a relatively small number of customers concentrated in
the financial industry, so any event that impacts one or more
customers or the financial industry in general could impact
our revenues.
The number of listings on our markets is primarily influenced
by factors such as investor demand, the global economy,
available sources of financing, and tax and regulatory
policies. Adverse conditions or regulatory changes may
jeopardize the ability of our listed companies to comply with
the continued listing requirements of our exchanges, or
reduce the number of issuers launching IPOs, including
SPACs, and direct listings. While the number of IPOs on our
exchanges increased in 2025 as compared to 2024, there is no
assurance that demand for IPOs will continue at the same or
higher rate.
Our Capital Access Platforms segment may be significantly
affected by global economic conditions. Professional
subscriptions to our data products are at risk if staff
reductions occur in financial services companies or if our
customers consolidate, which could result in significant
reductions in our professional user revenue or expose us to
increased risks relating to dependence on a smaller number of
customers. In addition, adverse market conditions may cause
reductions in the number of non-professional investors with
investments in the market and in ETP AUM tracking Nasdaq
indices as well as trading in futures linked to Nasdaq indices.
There may be less demand for our analytics, corporate
solutions, financial technology solutions and risk and
regulatory products and services if global economic
conditions weaken. Our customers historically reduce
purchases of new services and technology when growth rates
decline, thereby diminishing our opportunities to sell new
products and services or upgrade existing products and
services.
Additionally, during a global economic downturn, or periods
of economic, political or regulatory uncertainty, our sales
cycle may become longer or more unpredictable due to
customer budget constraints or unplanned administrative
delays to approve purchases.
A reduction in trading volumes or values, market share of
trading, the number of our listed companies, or demand for
our products and services due to economic conditions or
other market factors could adversely affect our business,
financial condition and operating results.
The industries we operate in are highly competitive.
We face significant competition in our Capital Access
Platforms, Financial Technology and Market Services
segments from other market participants. We face intense
competition from other exchanges and markets for market
share of trading activity and listings as well as from
numerous financial services and technology companies for
our Capital Access Platforms and Financial Technology
products and services. This competition includes both
product and price competition. Our proposed new offerings
to compete in this evolving market, including for the trading
of tokenized equity securities and ETPs and the extension of
trading hours, may not be successful.
The modernization and globalization of world markets has
resulted in greater mobility of capital, greater international
participation in local markets and more competition. As a
result, both in the U.S. and in other countries, the competition
among exchanges and other execution venues has become
more intense. Marketplaces in both U.S. and Europe have
also merged to achieve greater economies of scale and scope.
Changes introduced to Nasdaq's products and services to
compete effectively may be unsuccessful.
Regulatory changes also have facilitated the entry of new
participants in the European Union that compete with our
European markets. The regulatory environment, both in the
U.S. and in Europe, is structured to maintain this
environment of intense competition. In addition, a high
proportion of business in the securities markets is becoming
concentrated in a smaller number of institutions and our
revenue may therefore become concentrated in a smaller
number of customers.
We also compete globally with other regulated exchanges
and markets, ATSs, MTFs and other traditional and non-
traditional execution venues. Some of these competitors also
are our customers. Competitors may develop market trading
platforms that are more competitive than ours. Competitors
may leverage data more effectively or enter into strategic
partnerships, mergers or acquisitions that could make their
trading, listings, clearing, data or technology businesses more
competitive than ours.
We face intense price competition in all areas of our
business. In particular, the trading industry is characterized
by price competition. We have in the past lowered prices, and
in the U.S., increased rebates for trade executions to attempt
to gain or maintain market share. These strategies have not
always been successful and have at times hurt operating
performance. Additionally, we have also been, and may once
again be, required to adjust pricing to respond to actions by
competitors and new entrants, or due to new SEC regulations,
which could adversely impact operating results. We also
compete with respect to the pricing of data products and with
respect to products for pre-trade book data and for post-trade
last sale data.
If we are unable to compete successfully in the industries in
which we do business, our business, financial condition and
operating results will be adversely affected.
System limitations or failures could harm our business.
Our businesses depend on the integrity and performance of
the technology, computer and communications systems
supporting them. If new systems fail to operate as intended or
our existing systems cannot expand to cope with increased
demand or otherwise fail to perform, we could experience
unanticipated disruptions in service, slower response times
and delays in the introduction of new products and services.
We could experience a systems failure due to human error by
our employees, contractors or vendors, electrical or
telecommunications failures or disruptions, hardware or
software failures or defects, cyberattacks, sabotage or similar
unexpected events. These consequences could result in
service outages, including to our exchanges, lower trading
volumes or values, financial losses, decreased customer
satisfaction, litigation and regulatory sanctions. Our products,
markets and the markets that rely on our technology have
experienced system failures and delays in the past and we
could experience future system failures and delays.
Although we maintain multiple computer facilities, and
l everage third party cloud providers , that are designed to
provide redundancy and back-up to reduce the risk of system
disruptions and have facilities in place that are expected to
maintain service during a system disruption, such systems
and facilities may prove inadequate. If trading volumes
increase unexpectedly or other unanticipated events occur,
we may need to expand and upgrade our technology,
transaction processing systems and network infrastructure.
We do not know whether we will be able to accurately
project the rate, timing or cost of any volume increases, or
expand and upgrade our systems and infrastructure to
accommodate any increases in a timely manner.
While we have programs in place to identify and minimize
our exposure to technology and communication system
vulnerabilities and work in collaboration with the technology
industry to share corrective measures with our business
partners, we cannot guarantee that such events will not occur
in the future. Any issue that causes an interruption in
services, including to our exchanges; decreases the
responsiveness of our services or otherwise affects our
services could impair our reputation, damage our brand name
and negatively impact our business, financial condition and
operating results.
We must continue to introduce new products, initiatives and
enhancements to maintain our competitive position.
We intend to launch new products and initiatives and
continue to explore and pursue opportunities to strengthen
our business and grow our company. We may spend
substantial time and money developing new products,
initiatives and enhancements to existing products, including,
for example, expanded trading hours on our exchanges. If
these products and initiatives are not successful or their
launches are delayed, we may not be able to offset their costs,
which could have an adverse effect on our business, financial
condition and operating results.
In our technology operations, we have invested substantial
amounts in the development of system platforms, the rollout
of our platforms and the adoption of new technologies,
including cloud-based infrastructure and AI. Although
investments are carefully planned, there can be no assurance
that the demand for such platforms or technologies will
justify the related investments. If we fail to generate adequate
revenue from planned system platforms or the adoption of
new technologies, or if we fail to do so within the envisioned
timeframe, it could have an adverse effect on our results of
operations and financial condition. In addition, clients may
delay purchases in anticipation of new products or
enhancements. We may allocate significant amounts of cash
and other resources to product technologies or business
models for which market demand is lower than anticipated.
In addition, the introduction of new products by competitors,
the emergence of new industry standards or the development
of entirely new technologies to replace existing product
offerings could render our existing or future products
obsolete.
A decline in trading and clearing volumes or values or
market share will decrease our trading and clearing
revenues.
Trading and clearing volumes and values are directly affected
by economic, political and market conditions, broad trends in
business and finance, unforeseen market closures or other
disruptions in trading, the level and volatility of interest rates,
inflation, changes in price levels of securities and the overall
level of investor confidence. Over the past several years,
trading and clearing volumes and values across our markets
have fluctuated significantly depending on market conditions
and other factors beyond our control. Because a significant
percentage of our revenues is tied directly to the volume or
value of securities traded and cleared on our markets, it is
likely that a general decline in trading and clearing volumes
or values would lower revenues and may adversely affect our
operating results if we are unable to offset falling volumes or
values through pricing changes. Declines in trading and
clearing volumes or values may also impact our market share
or pricing structures and adversely affect our business and
financial condition.
If our total market share in securities decreases relative to our
competitors, our venues may be viewed as less attractive
sources of liquidity. If our exchanges are perceived to be less
liquid, then our business, financial condition and operating
results could be adversely affected.
Since some of our exchanges offer clearing services in
addition to trading services, a decline in market share of
trading could lead to a decline in clearing and depository
revenues. Declines in market share also could result in issuers
viewing the value of a listing on our exchanges as less
attractive, thereby adversely affecting our listing business.
Finally, declines in market share of Nasdaq-listed securities,
or recently adopted SEC rules and regulations, could lower
The Nasdaq Stock Market’s share of tape pool revenues
under the consolidated data plans, thereby reducing the
revenues of our U.S. Tape plans business.
Our role in the global marketplace positions us at greater
risk for a cyberattack.
Our systems and operations are vulnerable to damage,
misappropriation or disruption from security breaches. Some
of these threats include attacks from foreign governments,
hacktivists, insiders and criminal organizations. Foreign
governments may seek to obtain a foothold in U.S. critical
infrastructure, hacktivists may seek to deploy denial of
service attacks to bring attention to their cause, insiders may
pose a risk of human error or malicious activity and criminal
organizations may seek to profit by gaining control of
company systems or accounts or from stolen data via
ransomware or other means, such as social engineering,
including deepfake scams, compromised business email or
other methods. Our hybrid work model and our global
footprint elevate cybersecurity and operational risks,
particularly in geographies with adversary nation-states and/
or unreliable law enforcement . Given our position in the
global securities industry, we may be more likely than other
companies to be a direct target, or an indirect casualty, of
such events. During periods of war or global geopolitical
uncertainty, cyber threats may increase from foreign
governments or hacktivists to our exchange infrastructure and
offerings, and to our vendors and international employees.
While we continue to employ and invest resources to monitor
our systems and protect our infrastructure, these measures
may prove insufficient due to the continuously evolving
nature of threat activity. Any system issue, whether as a
result of an intentional breach, collateral damage from a
cybersecurity incident involving our supply chain vendors, a
negligent or malicious act by an insider, or the use of AI by
bad actors, including the use of such tools to engage in social
engineering or similar activities, or due to a cybersecurity
breach of a customer that results in a loss of our data or
compromises our systems or those of our other customers
utilizing the same products, could damage our reputation and
result in: a loss of customers; disrupted customer
relationships; the loss of our IP or sensitive data; lower
trading volumes or values, significant liabilities, litigation or
regulatory fines; or otherwise have a negative impact on our
business, our products and services, financial condition and
operating results. A system breach may go undetected for an
extended period of time. There can be no assurance we will
be able to identify and mitigate every incident involving
cybersecurity attacks, breaches or incidents.
Expanded cybersecurity regulations, and increased
cybersecurity infrastructure and compliance costs, may
adversely impact our results of operations.
As cybersecurity threats continue to increase in frequency
and sophistication, and as the domestic and international
regulatory and compliance structure related to information,
cybersecurity, data privacy, resiliency and data usage
becomes increasingly complex and exacting, we may be
required to devote significant additional resources to
strengthen our cybersecurity capabilities, and to identify and
remediate any security vulnerabilities. Compliance with laws
and regulations concerning cybersecurity, data privacy,
resiliency and data usage could result in significant expense,
and any failure to comply could result in proceedings against
us by regulatory authorities or other third parties. Costs for
bolstering cybersecurity capabilities, and increased
cybersecurity and data privacy compliance costs, could
adversely impact our business, financial condition and
operating results. Additionally, our clients increasingly
demand rigorous contractual, certification and audit
provisions regarding cybersecurity, data protection and data
usage, which may also increase our overall compliance
burden and costs in meeting such obligations.
The success of our business depends on our ability to keep
up with rapid technological and other competitive changes
affecting our industry. Specifically, we must complete
development of, successfully implement and maintain
platforms that have the functionality, performance,
capacity, reliability and speed required by our business and
our regulators, as well as by our customers.
The markets in which we compete are characterized by
rapidly changing technology, evolving industry and
regulatory standards, frequent enhancements to existing
products and services, the adoption of new services and
products and changing customer demands. We are reliant on
our customers that purchase our on-premises solutions to
maintain a certain level of network infrastructure for our
products to operate and to allow for our support of those
products, and to secure our software and other proprietary
materials stored in such systems, and there is no assurance
that a customer will implement such measures. We may not
be able to keep up with rapid technological and other
competitive changes affecting our industry. For example, we
must continue to enhance our platforms and, where relevant,
our customers', to remain competitive as well as to address
our regulatory responsibilities, and our business will be
negatively affected if our platforms or the technology
solutions we sell to our customers fail to function as
expected. If we are unable to develop our platforms to
include other products and markets, or if our platforms do not
have the required functionality, performance, capacity,
reliability and speed required by our business and our
regulators, as well as by our customers, we may not be able
to compete successfully. Further, our failure to anticipate or
respond adequately to changes in emerging technology and
customer preferences, such as trading and settlement of
tokenized equity securities and ETP's or extended trading
hours on our exchanges, o r any significant delays in product
development efforts, could have a material adverse effect on
our business, financial condition and operating results .
Our AI initiatives and the use of AI in certain of our
existing products may be unsuccessful and may give rise to
various risks, which could adversely affect our business,
reputation, or operating results.
We have made, and are continuing to make, significant
investments in AI including generative AI and agentic AI, to,
among other things, develop new products or features for our
existing products, including our anti-financial crime, equity
trading, investor relations, financial reporting, and investment
analytic s solutions, and to enhance and refine our internal
business operations. As generative and agentic AI are new
and evolving technologies in the early stages of commercial
use, there are significant risks involved in the development
and deployment of these technologies, and there can be no
assurance that the use of AI will enhance our products or
services or improve our business or operating results. Market
acceptance of generative and agentic AI technologies is
evolving, and we may be unsuccessful in our product
development efforts. Moreover, our AI-related product
initiatives and offerings, or use in our internal business
operations, may give rise to risks related to harmful content,
accuracy, bias, discrimination, autonomous decision-making
or action, IP infringement, the ability to obtain IP protection,
misappropriation or leakage of IP, defamation, data privacy,
and cybersecurity, among others. As we integrate third-party
AI models into our product initiatives and offerings, we face
risks in how such third-party AI models were developed and
deployed, including situations in which the third-party may
lack a proper license or consent for the training data used for
their model, or used insufficient safeguards regarding
harmful content, accuracy, bias or other variables of the data.
The use and availability of third-party AI models in our
solutions may give rise to legal liability, including IP
infringement claims. In addition, these risks include the
possibility of the introduction of new or enhanced laws or
regulations or novel enforcement of existing laws to uses of
AI, for which compliance may be costly and burdensome or
involve changes to our business practices or products,
litigation or other legal liability, or additional oversight,
audits or enforcement under existing laws or regulations. The
use of AI, including third-party AI models used in our
products or solutions, may also give rise to ethical concerns
or negative public perceptions, which may cause brand or
reputational harm. Additionally, our competitors may be
developing their own AI products and technologies, which
may be superior in features or functionality, or cost, to our
offerings. Any of these factors could adversely affect our
business, reputation, or operating results.
Failure to attract and retain key personnel may adversely
affect our ability to conduct our business.
Our future success depends, in large part, upon our ability to
attract and retain highly qualified and skilled professional
personnel that can learn and embrace new technologies. In
the current tight labor market, we have intensified our efforts
to recruit and retain talent. Competition for key personnel in
the various localities and business segments in which we
operate is intense. We have, and may continue to, experience
higher compensation costs to retain personnel, and hire new
talent, that may not be offset by improved productivity,
higher revenues or increased sales. Our ability to attract and
retain key personnel, in particular senior officers, technology
personnel and global talent, including from companies that
we acquire, will be dependent on a number of factors,
including prevailing market conditions, changes in
immigration policy and laws, regulations regarding employee
mobility and international travel, office/remote working
arrangements and compensation and benefit packages offered
by companies competing for the same talent. There is no
guarantee that we will have the continued service of key
employees who we rely upon to execute our business strategy
and identify and pursue strategic opportunities and initiatives.
Our ability to execute our business strategy could be
impaired if we are unable to replace such persons without
incurring significant costs or in a timely manner or at all.
We are exposed to credit, liquidity and counterparty risks
from our clearinghouse operations and third-party
relationships that could adversely affect our financial
position and results of operations.
Our clearinghouse operations expose us to counterparty and
liquidity risks, including potential defaults by clearing
members and insufficiencies in margins or default funds. We
guarantee cleared contracts and assume counterparty risk for
all transactions cleared through Nasdaq Clearing, including
equity-related and fixed-income derivatives, commodities,
and repurchase agreements. While we enforce minimum
financial criteria for clearing membership eligibility, require
members and investors to provide collateral, and maintain
established risk policies and clearing capital resources, these
measures do not provide absolute assurance against defaults
by our counterparties or financial losses, or that collateral
provided is sufficient at all times.
Additionally, we face credit risk from customers,
counterparties, clearing agents, and transaction and
subscription-based revenues billed in arrears, as these parties
may default due to bankruptcy, lack of liquidity, operational
failure, or other reasons.
The financial distress or failure of counterparties could result
in negative financial impact, reputational harm, regulatory
consequences, litigation or regulatory enforcement actions.
Credit losses such as those described above could adversely
affect our consolidated financial position and results of
operations.
Stagnation or decline in the listings market could have an
adverse effect on our revenues.
The market for listings is dependent on the prosperity of
companies and the availability of risk capital. A stagnation or
decline in the number of new listings, or an increase in the
number of delistings, either due to market factors or our
listing standard changes, on The Nasdaq Stock Market and
the Nasdaq Nordic and Nasdaq Baltic exchanges could cause
a decrease in revenues for future years. A prolonged decrease
in the number of listings, failure of existing SPACs to
successfully complete transactions with target companies and
dissolve or an increase in the number of delisting s, could
negatively impact the growth of our revenues. Our corporate
solutions business is also impacted by declines in the listings
market or increases in acquisitions, privatizations or
bankruptcies as there may be fewer publicly-traded
customers that need our products.
RISKS RELATED TO TRANSACTIONAL
ACTIVITIES AND STRATEGIC RELATIONSHIPS
We may not be able to successfully integrate acquired
businesses, which may result in an inability to realize the
anticipated benefits of our acquisitions.
We must rationalize, coordinate and integrate the operations
of our acquired businesses. This process involves complex
technological, operational and personnel-related challenges,
which are time-consuming and expensive and may disrupt
our business. The difficulties, costs and delays that could be
encountered may include:
• difficulties, costs or complications in combining the
companies’ operations, including technology platforms,
security measures and infrastructure or regulatory or legal
non-compliance that may need greater remediation than
anticipated, which could lead to us not achieving the
synergies or efficiencies we anticipate or customers not
renewing their contracts with us as we migrate platforms;
• incompatibility of systems and operating methods;
• reliance on, or provision of, transition services;
• inability to use capital assets efficiently to develop the
business of the combined company and achieve revenue
growth, including cross-sell activity;
• difficulties of complying with government-imposed
regulations in the U.S. and abroad, which may be
conflicting;
• resolving possible inconsistencies in standards, controls,
procedures and policies, business cultures and
compensation structures;
• the diversion of management’s attention from ongoing
business concerns and other strategic opportunities;
• difficulties in operating businesses we have not operated
before;
• difficulties of integrating multiple acquired businesses
simultaneously;
• the retention of key employees and management;
• the implementation of disclosure controls, internal controls
and financial reporting systems at non-U.S. subsidiaries to
enable us to comply with U.S. GAAP and U.S. securities
laws and regulations, including the Sarbanes-Oxley Act of
2002, required as a result of our status as a reporting
company under the Exchange Act;
• the coordination of geographically separate organizations;
• the coordination and consolidation of ongoing and future
research and development efforts;
• possible tax costs or inefficiencies associated with
integrating the operations of a combined company;
• the retention of strategic partners and attracting new
strategic partners; and
• negative impacts on employee morale and performance as
a result of job changes and reassignments.
Foreign acquisitions, or acquisitions involving companies
with numerous foreign subsidiaries, involve risks in addition
to those mentioned above, including those related to
integration of operations across different cultures and
languages, our ability to enforce contracts in various
jurisdictions, currency risks and the particular economic,
political and regulatory risks associated with specific
countries. We may not be able to address these risks
successfully, or at all, without incurring significant costs,
delays or other operating problems that could disrupt our
business and have a material adverse effect on our financial
condition.
For these reasons, we may not achieve the anticipated
financial and strategic benefits from our acquisitions. Any
actual efficiencies and synergies may be lower than we
expect and may take a longer time to achieve than we
anticipate, and we may fail to realize the anticipated benefits
of acquisitions.
We rely on third parties to perform certain functions, and
our business could be adversely affected if these third
parties fail to perform as expected or experience service
interruptions affecting our operations.
We rely on third parties for regulatory, data center, cloud
computing, data storage and processing, connectivity, data
content, clearing, maintaining markets and exchange liquidity
and other services. Interruptions or delays in services from
our third-party providers could impair our services or their
delivery and harm our business. Upon expiration or
termination of any of our agreements with third-party
vendors, we may not be able to replace the services provided
to us in a timely manner or on terms and conditions that are
favorable to us, and a transition from one vendor to another
vendor could be difficult or costly due to the complexity of
our operations.
Certain of our vendors may also be affected by the same
disruptions affecting us, further amplifying the impact of an
outage or service interruption on our offerings. To the extent
that any of our vendors or other third-party service providers
experience difficulties or a significant disruption, breach or
outage, materially changes their business relationship with us
or fails or delays for any reason to perform their obligations,
including due to geopolitical instability, our business or our
reputation may be materially adversely affected.
Our access to cloud service provider infrastructure could be
limited by a number of events, including technical or
infrastructure failures, natural disasters or cybersecurity
attacks. As we continue to grow our SaaS businesses, our
dependency on the continuing operation and availability of
these cloud service providers increases. If our cloud services
from third party providers are unavailable to us for any
reason, or there are cloud service disruptions or a delay or
inability to access our exchanges, platforms or certain of our
cloud products or features, such unavailability or delays may
adversely affect our clients, which could significantly impact
our reputation, operations, business, and financial results.
AWS operates a plat form that we use to provide exchange
and other services to our clients, and therefore we are
vulnerable to service outages on the AWS platform that
affect Nasdaq workloads running or stored in the AWS
environment. While certain of our offerings were affected by
the AWS outage in October 2025, the outage did not affect
trading on our exchanges. If AWS does not deliver our
system requirements on time, fails to provide maintenance
and support to our specifications or a migration experiences
integration challenges, the successful migration of the
relevant workload to, or the availability of the relevant
service on, the AWS cloud platform may be significantly
delayed, which may adversely affect our reputation and
financial results.
We also rely on members of our trading community to
maintain markets and add liquidity. To the extent that any of
our largest members experience difficulties, materially
change their business relationship with us or are unable for
any reason to perform market-making activities, our business
or our reputation may be materially adversely affected.
We may be required to recognize impairments of our
goodwill, intangible assets or other long-lived assets in the
future.
Our business acquisitions typically result in the recording of
goodwill and intangible assets, and the recorded values of
those assets may become impaired in the future. As of
December 31, 2025, goodwill totaled $14.4 billion and
intangible assets, net of accumulated amortization, totaled
$6.5 billion . The determination of the value of such goodwill
and intangible assets requires management to make estimates
and assumptions that affect our consolidated financial
statements.
We assess goodwill and intangible assets, as well as other
long-lived assets, including equity method investments,
equity securities, and property and equipment, for potential
impairment on an annual basis or more frequently if
indicators of impairment arise. We estimate the fair value of
such assets by assessing many factors, including historical
performance and projected cash flows. Considerable
management judgment is necessary to project future cash
flows and evaluate the impact of expected operating and
macroeconomic changes on these cash flows. The estimates
and assumptions we use are consistent with our internal
planning process. However, there are inherent uncertainties
in these estimates.
We may experience future events that may result in asset
impairments. Future disruptions to our business, prolonged
economic weakness, due to pandemics or otherwise, or
significant declines in operating results at any of our
reporting units or businesses, may result in impairment
charges to goodwill, intangible assets or other long-lived
assets. A significant impairment charge in the future could
have a material adverse effect on our operating results.
Acquisitions, divestments, investments, joint ventures and
other transactional activities may require significant
resources and/or result in significant unanticipated losses,
costs or liabilities.
Over the past several years, acquisitions, have been, or could
be, significant factors in our growth. We have also divested
businesses and may continue to divest additional businesses
or assets in the future. Although we cannot predict our
transactional activities, we believe that additional
acquisitions, divestments, investments, joint ventures and
other transactional activities will be important to our strategy.
Such transactions may be material in size and scope. Our
competitors may have greater financial resources than we
have to pursue certain acquisitions.
We also invest in early-stage companies through our Nasdaq
Ventures program and hold minority interests in other
entities. We generally do not have operational control of
these entities and may have limited visibility into risk
management practices. We may be subject to financial and
reputational risks if there are operational failures at such
companies.
We may finance future transactions by issuing additional
equity and/or debt. The issuance of additional equity in
connection with any such transaction could be substantially
dilutive to existing shareholders. In addition, the
announcement or implementation of future transactions by us
or others could have a material effect on the price of our
common stock. The issuance of additional debt could
increase our leverage substantially. Additional debt may
reduce our liquidity, curtail our access to financing markets,
impact our standing with credit rating agencies and increase
the cash flow required for debt service. Any incremental debt
incurred to finance a transaction could also place significant
constraints on the operation of our business.
Furthermore, any future transactions could entail a number of
additional risks, including:
• the inability to maintain key pre-transaction business
relationships;
• increased operating costs;
• the inability to meet our target for return on invested
capital;
• increased debt obligations, which may adversely affect our
targeted debt ratios;
• changes in our credit rating and financing costs;
• risks to the continued achievement of our strategic
direction;
• risks associated with divesting employees, customers or
vendors when divesting businesses or assets;
• declines in the value of investments;
• exposure to unanticipated liabilities, including after a
transaction is completed;
• incurred but unreported claims for an acquired company;
and
• difficulties in realizing projected efficiencies and
synergies.
RISKS RELATED TO LIQUIDITY AND CAPITAL
RESOURCES
A downgrade of our credit rating could increase the cost of
our funding from the capital markets.
Our debt is currently rated investment grade by two of the
major rating agencies. These rating agencies regularly
evaluate us, and their ratings of our long-term debt and
commercial paper are based on a number of factors, including
our financial strength and corporate development activity, as
well as factors not entirely within our control, including
conditions affecting our industry generally. There can be no
assurance that we will maintain our current ratings. Our
failure to maintain such ratings could reduce or eliminate our
ability to issue commercial paper and adversely affect the
cost and other terms upon which we are able to obtain
funding and increase our cost of capital. A reduction in credit
ratings would also result in increases in the cost of our
commercial paper and other outstanding debt as the interest
rate on the outstanding amounts under our credit facilities
and our senior notes fluctuates based on our credit ratings.
Our leverage limits our financial flexibility, increases our
exposure to weakening economic conditions and may
adversely aff ect our ability to obtain additional financing.
Our indebtedness as of December 31, 2025 was $9.0 billion .
We may borrow additional amounts by utilizing available
liquidity under our existing credit facilities, issuing additional
debt securities or issuing short-term, unsecured commercial
paper notes through our commercial paper program.
Our leverage and reliance on the capital markets could:
• reduce funds available to us for operations and general
corporate purposes or for capital expenditures as a result of
the dedication of a substantial portion of our consolidated
cash flow from operations to the payment of principal and
interest on our indebtedness;
• increase our exposure to a continued downturn in general
economic conditions;
• place us at a competitive disadvantage compared with our
competitors with less debt;
• affect our ability to obtain additional financing in the future
for refinancing indebtedness, acquisitions, working capital,
capital expenditures or other purposes; and
• increase our cost of debt and reduce or eliminate our ability
to issue commercial paper.
In addition, we must comply with the covenants in our credit
facilities. Among other things, these covenants restrict our
ability to effect certain fundamental transactions, dispose of
certain assets, incur additional indebtedness and grant liens
on assets. Failure to meet any of the covenant terms of our
credit facilities could result in an event of default. If an event
of default or cross-default occurs, and we are unable to
receive a waiver of default, our lenders may increase our
borrowing costs, restrict our ability to obtain additional
borrowings and accelerate repayment of all amounts
outstanding.
We will need to invest in our operations to maintain and
grow our business and to integrate acquisitions, and we
may need additional funds, which may not be readily
available.
We depend on the availability of adequate capital to maintain
and develop our business. Although we believe that we can
meet our current capital requirements from internally
generated funds, cash on hand and borrowings under our
revolving credit facility and commercial paper program, if
the capital and credit markets experience volatility, access to
capital or credit may not be available on terms acceptable to
us or at all. Rising interest rates could adversely affect our
ability to pursue new financing opportunities, and it may be
more expensive for us to issue new debt securities. Limited
access to capital or credit in the future could have an impact
on our ability to refinance debt, maintain our credit rating,
meet our regulatory capital requirements, engage in strategic
initiatives, make acquisitions or strategic investments in other
companies, pay dividends, repurchase our stock or react to
changing economic and business conditions. If we are unable
to fund our capital or credit requirements, it could have an
adverse effect on our business, financial condition and
operating results.
In addition to our debt obligations, we will need to continue
to invest in our operations for the foreseeable future to
integrate acquired businesses and to fund new initiatives. If
we do not achieve the expected operating results, we will
need to reallocate our cash resources. This may include
borrowing additional funds to service debt payments, which
may impair our ability to make investments in our business
or to integrate acquired businesses.
If we need to raise funds through incurring additional debt,
we may become subject to covenants more restrictive than
those contained in our credit facilities, the indentures
governing our notes and our other debt instruments.
Furthermore, if adverse economic conditions occur, we could
experience decreased revenues from our operations which
could affect our ability to satisfy financial and other
restrictive covenants to which we are subject under our
existing indebtedness.
RISKS RELATED TO LEGAL AND REGULATORY
MATTERS
We operate several of our businesses in highly regulated
industries and may be subject to censures, fines and
enforcement proceedings if we fail to comply with
regulatory obligations that can be ambiguous and can
change unexpectedly.
We operate several of our businesses in highly regulated
industries and are subject to extensive regulation in the U.S.,
Europe and Canada. The securities trading industry is subject
to significant regulatory oversight and could be subject to
increased governmental and public scrutiny in the future that
can change in response to global conditions and events, or
due to changes in trading patterns, such as due to the recent
volatility involving the trading of certain stocks. Recent
domestic and worldwide political developments, including
shifts in digital assets trading policy and regulatory and
enforcement priorities, have added additional uncertainty
with respect to both new laws and regulations and
interpretations or enforcement of existing laws and
regulations. Changes in regulatory policies regarding
tokenized securities, synthetic assets or other digital assets
may enable new market entrants and competitors to offer
these products under a different, less onerous regulatory
regime, which may affect our business, clients and results of
operations.
Our ability to comply with complex and changing regulation
is largely dependent on our establishment and maintenance of
compliance, audit and reporting systems that can quickly
adapt and respond, as well as our ability to attract and retain
qualified compliance and other risk management personnel.
There is no assurance that our policies and procedures will
always be effective or that we will always be successful in
monitoring or evaluating the risks to which we are or may be
exposed.
Our regulated markets are subject to audits, investigations,
administrative proceedings and enforcement actions relating
to compliance with applicable rules and regulations.
Regulators have broad powers to impose fines, penalties or
censure, issue cease-and-desist orders, prohibit operations,
revoke licenses or registrations and impose other sanctions
on our exchanges, broker-dealers, central securities
depositories, clearinghouse and markets for violations of
applicable requirements.
In the future, we could be subject to regulatory investigations
or enforcement proceedings that could result in substantial
sanctions, including revocation of our operating licenses.
Any such investigations or proceedings, whether successful
or unsuccessful, could result in substantial costs, the
diversion of resources, including management time, and
potential harm to our reputation, which could have a material
adverse effect on our business, results of operations or
financial condition. In addition, our exchanges could be
required to modify or restructure their regulatory functions in
response to any changes in the regulatory environment, or
they may be required to rely on third parties to perform
regulatory and oversight functions, each of which may
require us to incur substantial expenses and may harm our
reputation if our regulatory services are deemed inadequate.
The regulatory framework under which we operate and new
regulatory requirements or new interpretations of existing
regulatory requirements could require substantial time and
resources for compliance, which could make it difficult and
costly for us to operate our business.
Under current U.S. federal securities laws, changes in the
rules and operations of our securities markets, including our
pricing structure, must be reviewed and in many cases
explicitly approved by the SEC. The SEC may approve,
disapprove, or recommend changes to proposals that we
submit. In addition, the SEC may delay either the approval
process or the initiation of the public comment process.
Favorable SEC rulings and interpretations can be challenged
in and reversed by federal courts of appeals, reducing or
eliminating the value of such prior interpretations. Any delay
in approving changes, or the altering of any proposed change,
could have an adverse effect on our business, financial
condition and operating results.
We must compete not only with non-exchanges, such as
ATSs that are not subject to the same SEC approval
requirements and processes, but also with other exchanges
that may have lower regulation and surveillance costs than
us. There is a risk that trading will shift to exchanges or non-
exchanges that charge lower fees because, among other
reasons, they invest less in regulation.
In 2016, the SEC approved a plan for Nasdaq and other
exchanges to establish a CAT to improve regulators’ ability
to monitor trading activity. Implementation of a CAT has
resulted in significant additional expenditures, including to
implement the costly and complex new technology. In
September 2023, the SEC approved a “Funding Model” for
the CAT that allocated one-third of CAT expenses to the
SROs, including Nasdaq, and two-thirds of CAT expenses to
the industry. This SEC approval order was appealed to the
11th Circuit U.S. Court of Appeals, which issued an opinion
in July 2025 vacating the Funding Mode l. The court's
decision was subject to a temporary stay that expired at the
end of November 2025. As a result, we may be subject to a
delay in recovering expenses or be unable to recover those
expenses. The SROs have yet to seek reimbursement for a
portion of their expenses related to delivery of certain
technology. If the SEC determines that we failed to timely or
properly deliver the technology, we may forfeit recovery of
an undetermined portion of those expenses. As of December
31, 2025, we have an outstanding net receivable of $99
million in connection with our portion of expenses related to
the CAT implementation.
In addition, our registered broker-dealer subsidiaries are
subject to regulation by the SEC, FINRA and other SROs.
These subsidiaries are subject to regulatory requirements
intended to ensure their general financial soundness and
liquidity, which require that they comply with certain
minimum capital requirements. The SEC and FINRA impose
rules that require notification when a broker-dealer’s net
capital falls below certain predefined criteria, dictate the ratio
of debt to equity in the regulatory capital composition of a
broker-dealer and constrain the ability of a broker-dealer to
expand its business under certain circumstances.
Additionally, the SEC’s Uniform Net Capital Rule and
FINRA rules impose certain requirements that may have the
effect of prohibiting a broker-dealer from distributing or
withdrawing capital and requiring prior notice to the SEC and
FINRA for certain withdrawals of capital. Any failure to
comply with these broker-dealer regulations could have a
material adverse effect on the operation of our business,
financial condition and operating results.
Our non-U.S. business is subject to regulatory oversight in all
the countries in which we operate regulated businesses, such
as exchanges, clearinghouses or central securities
depositories. In these countries, we have received
authorization from the relevant authorities to conduct our
regulated business activities. The authorities may issue
regulatory fines or may ultimately revoke our authorizations
if we do not suitably carry out our regulated business
activities. The authorities are also entitled to request that we
adopt measures in order to ensure that we continue to fulfill
the authorities’ requirements. We are also subject to current
and forthcoming regulations applicable to the financial
services sector generally including, but not limited to,
DORA. Such regulations may impact our operational,
contracting and compliance costs by requiring the
implementation of new risk management procedures,
requirements for procuring information and communication
technology services, and ongoing processes to monitor
compliance; failure to maintain compliance may cause us to
be subject to regulatory actions and fines. Additionally, we
are subject to the obligations under the Benchmarks
Regulation ((EU) 2016/1011), compliance with which could
be costly or cause a change in our business practices.
Certain of our customers operate in a highly regulated
industry. Regulatory authorities could impose regulatory
changes that could impact the ability of our customers to use
our exchanges. The loss of a significant number of customers
or a reduction in trading activity on any of our exchanges as a
result of such changes could have a material adverse effect on
our business, financial condition and operating results. In
addition, regulatory changes could impact the ability of
current or prospective customers to procure commercial
services from us, increase our cost of delivery or performance
due to regulatory-driven changes to services or related
business processes and lengthen sales cycles as customers are
required to conduct additional diligence and contracting
processes prior to procuring our services.
Regulatory changes and changes in market structure and
proprietary data could have a material adverse effect on our
business.
Regulatory changes adopted by the SEC or other regulators
with respect to our markets and to the instruments traded on
our markets, and regulatory changes that our markets may
adopt in fulfillment of their regulatory obligations, could
materially affect our business operations. In recent years,
there has been increased regulatory and governmental focus
on issues affecting the securities markets, including market
structure, technological oversight and fees for proprietary
market data, connectivity and transactions. The SEC, FINRA
and the national securities exchanges have introduced several
initiatives to ensure the oversight, integrity and resilience of
markets. Additionally, new market models, new instruments,
and new uses of technology are emerging that could
adversely impact us. Congress and federal regulators are
considering regulating digital assets, tokenization of equities,
and prediction markets. The outcome of those deliberations
could adversely impact our current markets and future plans.
Our regulated businesses can be severely impacted by policy
decisions. In September 2024, the SEC adopted a rule that
would significantly reduce the fees that exchanges are
permitted to charge for access to liquidity quoted on the
exchange, with a resulting reduction in the ability of
exchanges to pay rebates to attract liquidity. Nasdaq
petitioned the U.S. Court of Appeals for the District of
Columbia Circuit to vacate the proposed rule, and in October
2025, Nasdaq's petition for review was denied. The SEC
issued temporary exemptive relief from compliance with the
portions of the rule that Nasdaq challenged until November
2026. Since the rule was not vacated, we will adjust our
business model in accordance with the rule, and the
implementation of the rule in November 2026 may adversely
impact our business and revenue.
In Canada, all new marketplace fees and changes to existing
fees, including trading and market data fees, must be filed
with and approved by the Ontario Securities Commission.
The Canadian Securities Administrators adopted a Data Fees
Methodology that restricts the total amount of fees that can
be charged for professional uses by all marketplaces to a
reference benchmark. Currently, all marketplaces are subject
to annual reviews of their market data fees tying market data
revenues to pre- and post-trade market share metrics.
Permitted fee ranges are based on an interim domestic
benchmark that is subject to change to an international
benchmark, which could lower the permitted fees charged by
marketplaces, which could adversely impact our revenues.
Our European exchanges currently offer market data products
to customers on a non-discriminatory and reasonable
commercial basis. The MiFID II/MiFIR rules entail that the
price for regulated market data such as pre- and post-trade
data shall be based on cost plus a reasonable margin.
However, these terms are not clearly defined. There is a risk
that a different interpretation of these terms may influence
the fees for European market data products adversely. In
addition, any future actions by European Union institutions
could affect our ability to offer market data products in the
same manner as today, thereby causing an adverse effect on
our market data revenues.
We are subject to litigation risks, risks from compliance
obligations and associated enforcement risks, and other
liabilities.
Many aspects of our business potentially involve substantial
liability risks. Although under current law we are immune
from private suits arising from conduct within our regulatory
authority and from acts and forbearances incident to the
exercise of our regulatory authority, this immunity only
covers certain of our activities in the U.S., and we could be
exposed to liability under national and local laws, court
decisions and rules and regulations promulgated by
regulatory agencies.
We face risks related to compliance with economic sanctions
(including those administered by the U.S. Office of Foreign
Assets Control), export controls, corruption (including the
U.S. Foreign Corrupt Practices Act) and money laundering.
While we maintain compliance programs to prevent and
detect potential violations, such programs cannot completely
eliminate the risk of non-compliance. Since our Financial
Crime Management Technology and surveillance solutions
are important offerings, a significant compliance event
involving one of these areas could more negatively impact
our business than a comparable business without this service
offering.
Liability could also result from disputes over the terms of a
trade, claims that a system failure or delay cost a customer
money, claims we entered into an unauthorized transaction or
claims that we provided materially false or misleading
statements in connection with a securities transaction.
Although we carry insurance that may limit our risk of
damages in some cases, we still may incur significant legal
expenses and may sustain uncovered losses or losses in
excess of available insurance that would affect our business,
financial condition and results of operations.
We have self-regulatory obligations and also operate for-
profit businesses, and these two roles may create conflicts
of interest.
We have obligations to regulate and monitor activities on our
markets and ensure compliance with applicable law and the
rules of our markets by market participants and listed
companies. In the U.S., some have expressed concern about
potential conflicts of interest of “for-profit” markets
performing the regulatory functions of an SRO. We perform
regulatory functions and bear regulatory responsibility related
to our listed companies and our markets. Any failure by us to
diligently and fairly regulate our markets or to otherwise
fulfill our regulatory obligations could significantly harm our
reputation, prompt SEC scrutiny and adversely affect our
business and reputation.
Our Nordic and Baltic exchanges monitor trading and
compliance with listing standards in accordance with the
European Union’s Market Abuse Regulation and other
applicable laws. Any failure to diligently and fairly regulate
the Nordic and Baltic exchanges could significantly harm our
reputation, prompt scrutiny from regulators and adversely
affect our business and reputation.
Laws and regulations regarding security and safeguarding
of our systems and services, protection of sensitive customer
data and the handling of personal data and information
may affect our services or result in increased costs, legal
claims or fines against us.
Our business operates certain systems that may be considered
“critical infrastructure” under certain regulations and licenses
or sells certain systems or services to customers that are used
by customers in their role as providers of critical
infrastructure or to fulfill certain core business requirements
or process certain sensitive data. New cybersecurity, privacy,
data sovereignty, and resiliency regulations may impact the
requirements and cost of delivery for impacted systems and
services and, in the event of an incident, increase the cost and
complexity of our response and the potential financial and
reputation impact from fines or private litigation. These
regulations may also impact customer decision making and
conditions on contracting for our services.
Our businesses and internal operations rely on the processing
of data in many jurisdictions and the movement of data,
including personal data, across national borders. Legal and
contractual requirements relating to the processing, including,
but not limited to, collection, storage, handling, use,
disclosure, transfer and security, and brokering, of personal
data continue to evolve and regulatory scrutiny and customer
requirements in this area are increasing around the world.
Significant uncertainty exists as privacy and data protection
laws may be interpreted and applied differently across
jurisdictions and may create inconsistent or conflicting
requirements with privacy and other laws to which we are
subject.
Laws and regulations such as the European Union and United
Kingdom General Data Protection Regulation, the California
Privacy Rights Act and other comparable laws and
regulations adopted globally and within the United States and
Canada can apply to our processing of their residents ’
personal data by Nasdaq legal entities regardless of the
location of such entities; such laws may also require our
customers located in such jurisdictions to contractually
obligate our compliance.
In addition to directly applying to some of our business
activities, these laws and industry-specific regulations, such
as the Health Insurance Portability and Accountability Act
and the Gramm-Leach-Bliley Act, impact many of our
customers, which may affect their decisions to purchase our
services. As a supplier to such customers, regulators may
engage in direct enforcement actions or seek to impose
liability on us if we do not comply with applicable
regulations. Our efforts to comply with privacy and data
protection laws may entail substantial expenses, may divert
resources from other initiatives and projects, and could
impact the services that we offer. The enactment of more
restrictive laws, rules or regulations, future enforcement
actions or investigations, or the creation of new rights to
pursue damages could impact us through increased costs or
restrictions on our business, and noncompliance could result
in regulatory penalties and significant legal liability.
Changes in tax laws, regulations or policies could have a
material adverse effect on our financial results.
Changes in tax laws, regulations, trade policies or other
policies could result in us having to pay higher taxes or
operating expenses, which may reduce our net income, or
could adversely affect our ability to continue our capital
allocation program, purchase additional energy tax credits or
effect strategic transactions in a tax-favorable manner. In
addition, such changes, including federal or state financial
transaction taxes, may increase the cost of our offerings or
services, which may cause our clients to reduce their use of
our services. Any changes to laws, regulations, policies or
other legal restrictions regarding the employment, staffing,
supervision or business activities of international or non-U.S.
citizen employees of U.S. companies may adversely affect
our results of operations.
Some of our subsidiaries are subject to tax in the jurisdictions
in which they are organized or operate, and in computing our
tax obligation in these jurisdictions, we take various tax
positions. We cannot ensure that upon review of these
positions, the applicable authorities will agree with our
positions. A successful challenge by a tax authority could
result in additional taxes imposed on our clients or our
subsidiaries.
RISKS RELATED TO INTELLECTUAL PROPERTY
AND BRAND REPUTATION
Damage to our reputation or brand name could have a
material adverse effect on our businesses.
One of our competitive strengths is our strong reputation and
brand name. Various issues may give rise to reputational risk,
including issues relating to:
• our ability to maintain the security of our data and systems;
• the quality and reliability of our technology platforms and
systems;
• the ability to fulfill our regulatory obligations;
• the ability to execute our business plan, key initiatives or
new business ventures and the ability to keep up with
changing customer demand;
• the representation of our business in the media;
• the accuracy of our financial statements, other financial
and statistical information or sustainability-related
disclosures;
• the accuracy of our financial guidance or other information
provided to our investors;
• the quality of our corporate governance structure;
• the quality of our products the reliability of our solutions
and the accuracy of our information and data offerings;
• the quality of our disclosure controls or internal controls
over financial reporting, including any failures in
supervision;
• extreme price volatility on our markets;
• any negative publicity surrounding our listed companies or
our listing rules;
• any negative publicity surrounding the use of our products
and/or services by our customers, including in connection
with emerging asset classes such as crypto assets; and
• any misconduct, fraudulent activity or theft by our
employees or other persons formerly or currently
associated with us.
Negative publicity or misrepresentations by third parties,
particularly on social media, may adversely impact our
credibility as a leader in the global capital markets and as a
source for data and analytics. This may have an adverse
effect on our brands, business and operating results. Damage
to our reputation could cause some issuers not to list their
securities on our exchanges or switch to a different exchange.
Reputational damage may also reduce trading volumes or
values on our exchanges or cause us to lose customers. This
may have a material adverse effect on our business, financial
condition and operating results.
Failure to meet customer expectations or deadlines for the
implementation of our products could result in negative
publicity, losses and reduced sales, each of which may harm
our reputation, business and results of operations.
We generally mutually agree with our customers on the
duration, budget and costs associated with the
implementation of certain of our products, particularly our
market technology large-scale market infrastructure projects.
Various factors may cause implementations to be delayed,
inefficient or otherwise unsuccessful, including due to
unforeseen project complexities, our deployment of
insufficient resources or other external factors. The effects of
a failure to meet an implementation schedule could include
monetary credits for current or future service engagements, a
reduction in fees for the project, or the expenditure of
additional expenses to mitigate such delays. In addition, time-
consuming implementations may also increase the personnel
we must allocate to such customer, thereby increasing our
costs and diverting attention from other projects.
Unsuccessful, lengthy, or costly customer implementation
projects could result in claims from customers, decreased
customer satisfaction, harm to our reputation, and
opportunities for competitors to displace us, each of which
could have an adverse effect on our reputation, business and
results of operations.
Our reputation or business could be negatively impacted by
evolving and conflicting stakeholder expectations regarding
sustainability matters and our reporting of such matters.
We communicate certain sustainability-related initiatives,
goals, and/or commitments regarding environmental matters,
social matters, vendors and suppliers and other matters in our
annual Sustainability Report, Task Force on Climate-related
Financial Disclosures Report, on our website, in our filings
with the SEC and elsewhere. These goals or commitments
could be difficult to achieve and costly to implement.
Stakeholder expectations regarding sustainability matters are
evolving and can be divergent, with some stakeholders
demanding more action and disclosure while others oppose
such efforts. In addition, we could be criticized for the
timing, scope or nature of these initiatives, goals, or
commitments, or for any revisions to them. We could be
subject to litigation or regulatory enforcement actions
regarding the accuracy, adequacy, or completeness of our
sustainability-related disclosures. Our actual or perceived
failure to achieve, or stakeholder dissatisfaction of, our
sustainability-related goals or commitments could negatively
impact our reputation or otherwise materially harm our
business.
Failure to protect our IP rights, or allegations that we have
infringed on the IP rights of others, could harm our brand-
building efforts and ability to compete effectively.
To protect our IP rights, we rely on a combination of
trademark laws, copyright laws, patent laws, trade secret
protection, confidentiality agreements and other contractual
arrangements with our affiliates, clients, strategic partners,
employees and others. However, the efforts we have taken to
protect our IP and proprietary rights might not be sufficient,
or effective, at stopping unauthorized use of those rights. We
may be unable to detect the unauthorized use of, or take
appropriate steps to enforce, our IP rights.
We have registered, or applied to register, our trademarks in
the United States and in over 50 foreign jurisdictions and
have pending U.S. and foreign applications for other
trademarks. We also maintain copyright protection for
software products and pursue patent protection for inventions
developed by us. We hold a number of patents, patent
applications and licenses in the United States and other
foreign jurisdictions. However, effective trademark,
copyright, patent and trade secret protection might not be
available or cost-effective in every country in which we offer
our services and products. Moreover, changes in patent law,
regulation or practices at the U.S. Patent and Trademark
Office and/or analogous offices in other jurisdictions, such as
changes in the law regarding patentable subject matter, could
also impact our ability to obtain patent protection for our
innovations. The scope of protection under our patents may
not be sufficient in some cases, or existing patents may be
deemed invalid or unenforceable. Failure to protect our IP
adequately could harm our brand and affect our ability to
compete effectively. Further, defending our IP rights could
result in the expenditure of significant financial and
managerial resources.
Third parties may assert IP rights claims against us, which
may be costly to defend, could require the payment of
damages and could limit our ability to use certain
technologies, trademarks or other IP. Any IP claims, with or
without merit, could be expensive to litigate or settle and
could divert management resources and attention. Successful
challenges against us could require us to modify or
discontinue our use of technology or business processes
where such use is found to infringe or violate the rights of
others, or require us to purchase licenses from third parties,
any of which could adversely affect our business, financial
condition and operating results.
GENERAL RISK FACTORS
We are a holding company that depends on cash flow from
our subsidiaries to meet our obligations, and any
restrictions on our subsidiaries’ ability to pay dividends or
make other payments to us may have a material adverse
effect on our results of operations and financial condition.
As a holding company, we require dividends and other
payments from our subsidiaries to meet cash requirements.
Minimum capital requirements mandated by regulatory
authorities having jurisdiction over some of our regulated
subsidiaries indirectly restrict the amount of dividends that
can be paid upstream.
If our subsidiaries are unable to pay dividends and make
other payments to us when needed, or if regulators or
counterparties require us to increase capital deployed in
certain of our regulated subsidiaries, we may be unable to
satisfy our obligations, which would have a material adverse
effect on our business, financial condition and operating
results.
We may experience f luctuations in our operating results,
which may adversely affect the market price of our common
stock.
Our industry is risky and unpredictable and is directly
affected by many national and international factors beyond
our control, including:
• economic, political and geopolitical market conditions;
• evolving market or customer preferences for solutions
provided locally or outside of the U.S.;
• natural disasters, terrorism, pandemics, war or other
catastrophes;
• broad trends in finance and technology;
• changes in price levels and volatility in the stock markets;
• the level and volatility of interest rates;
• volatility in commodity markets, including the energy
markets;
• inflation;
• disruptions or delays in our supply chains;
• changes in government monetary or tax policy;
• the imposition of governmental economic sanctions or
tariffs, on countries in which we do business or where we
plan to expand our business or sell our products and
services; and
• the perceived attractiveness of the U.S. or European capital
markets.
Any one of these factors could have a material adverse effect
on our business, financial condition and operating results by
causing a substantial decline in the financial services markets
and reducing trading volumes or values.
Additionally, since borrowings under our credit facilities bear
interest at variable rates and commercial paper is issued at
prevailing interest rates, any increase in interest rates on debt
that we have not fixed using interest rate hedges will increase
our interest expense, reduce our cash flow or increase the
cost of future borrowings or refinancings. Other than variable
rate debt, we believe our business has relatively large fixed
costs and low variable costs, which magnifies the impact of
revenue fluctuations on our operating results. As a result, a
decline in our revenue may lead to a relatively larger impact
on operating results. A substantial portion of our operating
expenses is related to personnel costs, regulation and
corporate overhead, none of which can be adjusted quickly
and some of which cannot be adjusted at all. Our operating
expense levels are based on our expectations for future
revenue. If actual revenue is below management’s
expectations, or if our expenses increase before revenues do,
both revenues less transaction-based expenses and operating
results would be materially and adversely affected. Because
of these factors, it is possible that our operating results or
other operating metrics may fail to meet the expectations of
stock market analysts and investors. If this happens, the
market price of our common stock may be adversely affected.
Our operational processes are subject to the risk of error,
which may result in financial loss or reputational damage.
We have instituted extensive controls to reduce the risk of
error inherent in our operations; however, such risk cannot
completely be eliminated. Our businesses are highly
dependent on our ability to process and report, on a daily
basis, a large number of transactions across numerous and
diverse markets. Some of our operations require complex
processes, and the introduction of new products or services or
changes in processes or reporting due to regulatory
requirements may result in an increased risk of errors for a
period after implementation. Additionally, the likelihood of
such errors or vulnerabilities is heightened as we acquire new
products from third parties, whether as a result of
acquisitions or otherwise.
Data, other content or information that we distribute may
contain errors or be delayed, causing reputational harm. Use
of our products and services as part of the investment process
creates the risk that clients, or the parties whose assets are
managed by our clients, may pursue claims against us in the
event of such delay or error, and significant litigation against
us might unduly burden management, personnel, financial
and other resources.
In addition, the sophisticated software we sell to our
customers may contain undetected errors or vulnerabilities,
some of which may be discovered only after delivery, or
could fail to perform its intended purpose. Because our
clients depend on our solutions for critical business functions,
any service interruptions, failures or other issues may result
in lost or delayed market acceptance and lost sales, or
negative customer experiences that could damage our
reputation, resulting in the loss of customers, loss of revenues
and liability for damages, which may adversely affect our
business, operating results and financial condition.
Climate and weather related risk may have an adverse
impact on our business, while simultaneously, we face
reputational, regulatory and financial risks related to our
ability to respond to diverse stakeholder expectations and
requirements on climate, weather, and other sustainability-
related topics.
Climate related events, including extreme weather events and
their impact on the critical infrastructure in the U.S. and
elsewhere, have the potential to disrupt our business or the
business of our clients and/or suppliers.
Additionally, there is an increased focus from our regulators,
investors, clients, employees, and other stakeholders
concerning corporate citizenship, greenhouse gas emissions
reduction and sustainability matters, including proposed or
adopted laws, regulations or policies on sustainability-related
topics that diverge from, or potentially conflict with, laws in
other jurisdictions in which we operate. For example, new
laws, regulations and policies are being developed in Europe
and elsewhere globally that may require us to comply with
specific, target-driven frameworks, disclosure and other
requirements in multiple jurisdictions. Changing legal
requirements, policies and stakeholder expectations have
resulted in, and are likely to continue to result in, increased
general and administrative expenses and management time
and attention to comply with, or meet, those regulations and
expectations, which could result in fines or other penalties
and adversely affect our business, reputation, financial
condition and operating results.
Our businesses operate in various international markets,
which are subject to political, economic and social
uncertainties.
Our businesses operate in various international markets,
including but not limited to Northern Europe, the Baltics, the
Middle East, Latin America, Africa and Asia, and our
operations are subject to the risks inherent in the international
economy. Political, economic or social events or
developments in one or more of our non-U.S. locations or in
the U.S. arising from such international developments, such
as limitations imposed on securing new listings on our
exchanges, constraints on data sharing with a U.S. based
company, a reduced interest in providing operational support
between certain regions and the U.S., or restrictions on
entering into transactions with new or existing customers,
could adversely affect our sales, operations and financial
results. We have operations in locations that may be subject
to greater political, economic and social uncertainties than
countries with more developed institutional structures, which
may increase our operational risk.
Unforeseen or catastrophic events could interrupt our
critical business functions. In addition, our U.S. and
European businesses are heavily concentrated in particular
areas and may be adversely affected by events in those
areas.
We may incur losses as a result of unforeseen or catastrophic
events, such as terrorist attacks, natural disasters, pandemics,
extreme weather, fire, power loss, telecommunications
failures, human error, theft, sabotage, vandalism, and other
crime. Given our position in the global capital markets and
our brand, we may be more likely than other companies to be
a target for malicious disruption activities or physical attacks
on our senior leadership team and/or our office locations.
In addition, our business operations are heavily concentrated
in the east coast of the U.S.; Stockholm, Sweden; Vilnius,
Lithuania; and St. John, Canada, among other locations. Any
event that impacts either of those geographic areas could
potentially affect our ability to operate our businesses.
We have disaster recovery and business continuity plans and
capabilities for critical systems and business functions to
mitigate the risk of an interruption. However, any
interruption in our critical business functions or systems
could negatively impact our financial condition and operating
results. Additionally, some of our market services and
financial technology customers may lack adequate disaster
recovery solutions to avoid loss of trade flow from a
sustained interruption of our critical systems.
Because we have operations in numerous countries, we are
exposed to currency risk.
We have operations in the U.S., the Nordic and Baltic
countries, Canada, the United Kingdom, Australia and many
other foreign countries. We therefore have significant
exposure to exchange rate movements between the Euro,
Swedish Krona, the Canadian dollar and other foreign
currencies against the U.S. dollar. Significant inflation or
disproportionate changes in foreign exchange rates with
respect to one or more of these currencies could occur as a
result of general economic conditions, acts of war or
terrorism, changes in governmental monetary, trade or tax
policy, changes in local interest rates or other factors. These
exchange rate differences will affect the translation of our
non-U.S. results of operations, interest expense and financial
condition into U.S. dollars as part of the preparation of our
consolidated financial statements.
If our risk management methods are not effective, our
business, reputation and financial results may be adversely
affected.
We utilize widely-accepted methods to identify, assess,
monitor and manage our risks. Nasdaq’s Global Risk
Management Committee, which is composed of senior
executives, has the responsibility for overseeing the risk
management methods, regularly reviewing risks and referring
significant risks to the board of directors or specific board
committees. Local risk management committees in our
international offices provide local risk oversight and
escalation to local boards, as appropriate. The rapidly
changing environment may limit the effectiveness of our risk
management methods. Certain risk management methods
require subjective evaluation of dynamic information
regarding markets, customers or other matters. That variable
information may not in all cases be accurate, complete, up-to-
date or properly evaluated. If we do not successfully identify,
assess, monitor or manage the risks to which we are exposed,
our business, reputation, financial condition and operating
results could be materially adversely affected.
Decisions to declare future dividends on our common stock
will be at the discretion of our board of directors and there
can be no guarantee that we will pay future dividends to our
stockholders.
Our board of directors regularly declares quarterly cash
dividend payments on our outstanding common stock. The
board’s determination to declare dividends will depend upon
our profitability and financial condition, contractual
restrictions, restrictions imposed by applicable law and other
factors that the board deems relevant. Based on an evaluation
of these factors, the board may determine not to declare
future dividends at all or to declare future dividends at a
reduced amount.
Provisions of our certificate of incorporation, by-laws,
exchange rules (including provisions included to address
SEC concerns) and governing law restrict the ownership
and voting of our common stock. In addition, such
provisions could delay or prevent a change in control of us
and entrench current management.
Our organizational documents place restrictions on the voting
rights of certain stockholders. The holders of our common
stock are entitled to one vote per share on all matters to be
voted upon by the stockholders except that no person may
exercise voting rights in respect of any shares in excess of
5% of the then outstanding shares of our common stock. Any
change to the 5% voting limitation would require SEC
approval.
In response to the SEC’s concern about a concentration of
our ownership, the rules of some of our exchange
subsidiaries include a prohibition on any member or any
person associated with a member of the exchange from
beneficially owning more than 20% of our outstanding voting
interests. SEC consent would be required before any investor
could obtain more than a 20% voting interest in us. The rules
of some of our exchange subsidiaries also require the SEC’s
approval of any business ventures with exchange members,
subject to exceptions.
Our organizational documents contain provisions that may be
deemed to have an anti-takeover effect and may delay, deter
or prevent a change of control of us, such as a tender offer or
takeover proposal that might result in a premium over the
market price for our common stock. Additionally, certain of
these provisions make it more difficult to bring about a
change in the composition of our board of directors, which
could result in entrenchment of current management.
Our certificate of incorporation and by-laws:
• do not permit stockholders to act by written consent;
• require certain advance notice for director nominations and
actions to be taken at annual meetings; and
• authorize the issuance of undesignated preferred stock, or
“blank check” preferred stock, which could be issued by
our board of directors without stockholder approval.
Finally, many of the European countries where we operate
regulated entities require prior governmental approval before
an investor acquires 10% or greater of our common stock .
