By Manya Saini and John McCrank
(Reuters) - Nasdaq Inc on Wednesday reported a nearly 16% jump in fourth-quarter profit, topping Wall Street estimates, buoyed by the frenetic pace of U.S. initial public offerings, and strong demand for its investment-related products.
Technology, healthcare and financial technology companies led the IPO rush during the quarter, including Rivian Automotive Inc's more than $100 billion debut.
Tech-heavy Nasdaq hosted 1,000 company listings in 2021, with 752 IPOs representing $181 billion in capital raised, including chipmaker GlobalFoundries Inc and crypto-exchange Coinbase (NASDAQ:COIN) Global.
There are more than double the number of companies that have filed to tap the markets in 2022 compared with a year earlier, but recent market volatility may cause delays to IPO timings, Chief Executive Officer Adena Friedman said on an analyst call.
"And in our index business, we expect index asset values to experience some impact associated with various market levels and investor appetite for products tracking our indexes," she said of the market volatility.
But Nasdaq may also benefit from higher futures trading volumes due to the use of its core indexes and market hedging strategies, she said.
Stripping out one-time items, Nasdaq earned $1.93 per share, topping analysts' mean estimate by 15 cents, according to IBES data from Refinitiv.
The trans-Atlantic exchange operator has also repositioned itself as a financial technology company, targeting the software sector with analytics, data and cloud services.
Revenue at Nasdaq's solutions segment surged 19% to $581 million, with its analytics products, which help customers make investment decisions across multiple asset classes, becoming key growth drivers.
Nasdaq also launched a cloud-based data management platform geared toward investment management firms during the quarter.
Net revenue rose 12% to $885 million from a year ago.
Like other financial institutions, inflationary pressures weighed on Nasdaq, with operating expenses rising 15%, mainly on higher employee compensation.