By Pritam Biswas and Laura Matthews
(Reuters) -Exchange operator Nasdaq reported fourth-quarter profit that rose 24.6% on Wednesday, owing to strong performance in its solutions business.
The company has been expanding beyond market-sensitive businesses like trading to become a full-scale data and analytics provider.
Robust demand for its solutions business in the quarter saw revenue surge 32.3% to $860 million, compared with a year earlier.
The solutions business was helped by a revenue rise in its financial technology business, which jumped to $399 million, from $231 million a year ago.
This helped the exchange post an adjusted profit of $395 million, or 72 cents per share, compared with $317 million, or 64 cents per share, in the fourth quarter of the previous year.
Analysts were expecting 70 cents per share, according to figures compiled by Thomson Reuters (NYSE:TRI).
Nasdaq's net revenue rose 23% to $1.1 billion, compared with the same period in 2023, crossing the billion-dollar mark in a single quarter for the first time.
The U.S. IPO market has been in the doldrums for over two years because of geopolitical pressures and the Federal Reserve's aggressive interest rate hikes to curb inflation.
With analysts now seeing green shoots in the IPO market with hopes of a soft landing for the U.S. economy, Nasdaq's total listings were up to 28 in the fourth quarter, from 18 a year ago, translating to a 3.8% rise in the exchange's data and listing services revenue.
"The muted IPO environment impacted annualized revenue growth," said Sarah Youngwood, chief financial officer at Nasdaq. "However, we are cautiously optimistic that we could see a recovery in IPOs combined with more normalized sales cycles as we progress through 2024."
Nasdaq closed 2023 with Softbank-backed Arm, solar firm Nextracker and grocery delivery app Instacart (NASDAQ:CART) as its biggest listings.
Nasdaq's shares were up 3% at $60.20 in morning trading after the results. Year to date, the stock is up 3.6%.