What primarily drove the earnings-per-share beat?

  • Nasdaq’s non-GAAP earnings per share for the third quarter of 2026 were $​1.04, above market consensus of $​1.02 and Deutsche Bank’s estimate of $​1.01. Deutsche Bank described the result as a modest earnings beat driven by broadly better-than-expected revenue.
  • Adjusted net revenue for the quarter was $​1.481 billion, above market consensus of $​1.465 billion and Deutsche Bank’s estimate of $​1.463 billion. Recurring revenue was $​1.172 billion, also above Deutsche Bank’s estimate of $​1.16 billion, showing that incremental revenue did not come solely from trading.
  • Adjusted operating expenses were $​638 million, below consensus of $​642 million. Revenue and expenses together drove the adjusted pre-tax operating margin to 56.9%, above consensus of 56.4%. The adjusted tax rate of 23.3% was broadly in line with Deutsche Bank’s forecast and was not the main explanation for the beat.

All three segments beat expectations, but was performance equally strong within them?

  • Fintech revenue was $​529 million, above consensus of $​520 million. The main bright spot was capital markets technology, with revenue of $​303 million, above consensus of $​294 million. Financial crime management technology revenue, however, was $​103 million, slightly below consensus of $​104 million, so strength across the segment was uneven.
  • Capital Access Platforms revenue was $​641 million, slightly above consensus of $​639 million. Listing and market data services revenue was $​224 million, above consensus of $​219 million; workflow and insights revenue was $​131 million, below consensus of $​135 million, offsetting part of the incremental revenue.
  • Market Services revenue was $​309 million, above consensus of $​305 million. The revenue beat therefore covered all three segments, but assessing whether growth can continue requires a closer look at customer renewals and implementation progress across fintech businesses.

Why is full-year profit upside still constrained despite better-than-expected quarterly expenses?

  • The company raised its 2026 non-GAAP expense guidance from $​2.53 billion–$​2.57 billion to $​2.55 billion–$​2.58 billion. Both Deutsche Bank and market consensus had previously forecast $​2.55 billion. Lower-than-expected quarterly expenses did not translate into lower full-year expense guidance.
  • This means continued earnings improvement requires revenue growth to absorb higher expenses. Deutsche Bank identifies higher expenses and operating leverage below expectations as downside risks, and regards medium-term operating leverage as an important topic for the earnings call.

Why does Deutsche Bank maintain its Buy rating, and what underpins its valuation?

  • Deutsche Bank maintains its Buy rating and a 12-month price target of $​116. Its valuation is based on its 2027 earnings-per-share forecast and assumes that Nasdaq’s forward price-to-earnings ratio one year from now will be 15% higher than that of the S&P 500. It cites an improved earnings-per-share growth outlook as the reason for the premium.
  • The variables supporting this view are recurring revenue growth in the fourth quarter and 2027, and whether fintech’s recent momentum can continue. Deutsche Bank is focused on customer renewals, project implementation timing and the path to meeting each business’s medium-term growth targets.
  • Cross-selling is another specific path: the company aims to achieve an annualized cross-selling revenue run rate of more than $​100 million by the end of 2027. Deutsche Bank is watching how the project pipeline converts into revenue; this is an annualized run rate, not full-year 2027 revenue.