Market Newsdesk

• 
  Strong execution in Wireless, Cable, and Media deliver solid operational improvements despite continued pandemic lockdown environment
  
• 
  Expanded Wireless adjusted EBITDA service margin by 310 basis points; strong Wireless postpaid net subscriber additions of 44,000
  
  • 
    Monthly postpaid churn of 0.88%, improved 5 basis points
    
  • 
    Service revenue down 6% and adjusted EBITDA down 1%
    
• 
  Increased Cable service revenue by 5%; grew adjusted EBITDA by 8%
  
  • 
    Adjusted EBITDA margin up 110 basis points; capital intensity at 21%
    
• 
  Grew Media revenue by 7%, adjusted EBITDA improved by 31%, reflecting the return of live professional sports broadcasting
  
• 
  Continued expanding wireless service to more rural and underserved communities and providing 5G services to 173 communities across the country
  

TORONTO, April 21, 2021 (GLOBE NEWSWIRE) — Rogers Communications Inc. today announced its unaudited financial and operating results for the first quarter ended March 31, 2021.

Consolidated Financial Highlights

	Three months ended March 31
(In millions of Canadian dollars, except per share amounts, unaudited)	2021			2020			% Chg
Total revenue		3,488			3,416			2
Total service revenue 1		3,021			3,049			(1	)
Adjusted EBITDA 2		1,391			1,335			4
Net income		361			352			3
Adjusted net income 2		394			367			7
Diluted earnings per share		$0.70			$0.68			3
Adjusted diluted earnings per share 2		$0.77			$0.71			8
Cash provided by operating activities		679			959			(29	)
Free cash flow 2		394			462			(15	)

¹ As defined. See “Key Performance Indicators”.
² As defined. See “Non-GAAP Measures and Related Performance Measures”. These measures should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies.

“Our solid first quarter results reflect disciplined execution in each of our business units, and our continued ability to support the needs of our customers despite the challenges of the pandemic,” said Joe Natale, President and CEO. “We saw total revenue growth led by improvements in our Cable and Media businesses, and in our Wireless business, saw low churn and strong postpaid subscriber growth. We are confident in our long-term growth strategy and are well positioned as the economy continues to recover. We remain focused on making generational investments in our networks, our customers, and our country, including expanding Canada’s largest 5G network and connecting even more rural, remote, and Indigenous communities.”

Operating Environment and Strategic Highlights

COVID-19 continues to significantly impact Canadians and economies around the world as a third wave affects Canada and other locations globally. In the first quarter of 2021, as public health restrictions that were implemented in late 2020 were temporarily lifted to certain extents across the country, we maintained our focus on keeping our employees safe and our customers connected. While COVID-19 continues to have a significant worldwide impact, we remain confident we have the right team, a strong balance sheet, and the world-class networks that will allow us to get through the pandemic having maintained our long-term focus on growth and doing the right thing for our customers.

Our six company priorities guide our work and decision-making as we further improve our operational execution and make well-timed investments to grow our core businesses and deliver increased shareholder value. Below are some highlights.

Create best-in-class customer experiences by putting our customers first in everything we do

• Improved postpaid churn by 5 points to 0.88%.
• Launched Advantage Mobility™ and Advantage Security™, business-grade solutions offered by Rogers for Business™ to support small- and medium-sized Canadian enterprises with reliable connectivity and network security.
• Continued to accelerate our digital-first plan to make it easier for customers, with virtual assistant conversations up by 89% since last year.

Invest in our networks and technology to deliver leading performance, reliability, and coverage

• Announced an agreement, the largest of its kind in Canada, with Federal, Ontario, and local Eastern Ontario governments to bring more choice and increase 5G wireless coverage in Eastern Ontario, investing over $300 million to upgrade or build more than 600 wireless towers by the end of 2025.
• Expanded Canada’s largest and most reliable 5G network to serve 10 more cities, now in 173 markets across Canada, and announced a smart city initiative with Communitech to develop 5G transportation solutions of the future.
• Ranked Canada’s most reliable 5G network by umlaut, receiving top results for the strongest 5G network and highest reliability on 5G-capable devices for the fourth quarter of 2020.
• Announced we will bring 5G connectivity, using an innovative solution, to 480 homes in Holland Marsh, Ontario, in partnership with the Centre of Excellence in Next Generation Networks (CENGN) and the Government of Ontario, to support advances in agriculture technology.
• Announced the upcoming expansion of our wireless network in British Columbia, including 5G, to provide reliable connectivity along Highway 14 and Highway 16 (the Highway of Tears). New wireless towers along Highway 16 will provide reliable connectivity to those who live, work, and travel along this critical route; our network will provide continuous coverage along all 720 km of this northern highway.
• Ranked as Canada’s most consistent national wireless network and broadband provider for the third consecutive quarter by Ookla, the global leader in fixed broadband and mobile network testing applications. Our broadband network also received a top speed score in Ontario and New Brunswick and we were ranked first for achieving the highest time spent on 5G.
• Partnered with Métis Nation British Columbia to provide wireless connectivity, services, and dedicated support to over 340 Métis businesses and communities in British Columbia.

Drive growth in each of our lines of business

• Offering exclusive English Canada access to more than 300 NHL® broadcasts in a condensed 17-week schedule across Sportsnet’s TV and streaming platforms this season, with 140 all-Canadian matchups available across the Sportsnet Radio Network™. At the midway point of the season, audiences for Wednesday Night Hockey are up 56% year over year, while Saturday’s Hockey Night in Canada™ early game is up 6% and the late game is up 27%.
• Became the first to offer a “Wireless Private Network” managed solution nationally in Canada, through Rogers for Business, to enable large enterprises to deploy their own wireless network to protect sensitive data, securely connect devices, and prioritize network traffic.
• Expanded our Fido Payment Program so mobile customers can get accessories for $0 down, 0% interest, and no taxes upfront.

Drive best-in-class financial outcomes for our shareholders

• Attracted 44,000 net Wireless postpaid subscribers and 14,000 net Internet subscribers.
• Grew adjusted EBITDA by 4% and expanded adjusted EBITDA margin by 80 basis points.
• Generated free cash flow of $394 million and cash flow from operating activities of $679 million.
• Paid $252 million in dividends to our shareholders and declared a quarterly dividend of $0.50 per share on April 20, 2021.

Develop our people, drive engagement, and build a high-performing and inclusive culture

• Named one of Canada’s Top Employers for Young People for 2021, by Mediacorp Canada Inc., for the eleventh year in a row for Rogers’ long history of investing in the next generation and commitment to building the leaders of tomorrow.
• Selected as one of Canada’s Best Diversity Employers for 2021, by Mediacorp Canada Inc., for the ninth year in a row based on the steps taken to build a more inclusive culture for team members.
• Continued driving progress on our Inclusion & Diversity strategy through open dialogue on racism at two events hosted by our Black Leadership Council, Rogers Mosaic, and Rogers Women of Colour, as well as celebrating Lunar New Year, Black History Month, and International Women’s Day with events and content across our platforms.

Be a strong, socially and environmentally responsible leader in our communities

• Helped bridge the digital divide by expanding Connected for Success™, a low-cost and reliable high-speed Internet program, to those receiving government income support or disability benefits and to seniors receiving the Guaranteed Income Supplement in service areas in Ontario, New Brunswick, and Newfoundland.
• Provided 42 Ted Rogers Community Grants to organizations across Canada that help youth achieve their highest potential through programs in STEM, entrepreneurship, innovation, mentorship, and community leadership.
• Announced the five organizations (Big Brothers Big Sisters, Blacbiblio.com, Canadian Women & Sport, Friends of Ruby, and Spirit North) that will receive free advertising and creative services this year as part of Rogers Sports & Media’s All IN™ inclusion & diversity program.
• Launched a $60,000 scholarship program through OMNI Television™ for post-secondary students across Canada pursuing careers in ethnic and third-language journalism.
• Launched Off-Mute, offering virtual performances and discussions with artists, using Fido™ platforms to amplify the voices of Canadian musical talent representing the BIPOC and LGBTQ2S+ communities.
• Deepening our commitment to global environmental, social, and governance (ESG) reporting to support our people, our communities, and the planet by expanding disclosure beyond the Global Reporting Initiative (GRI) to include the Sustainable Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosure (TCFD), and the United National Sustainable Development Goals (UN SDGs), which will be reflected in our 2020 ESG Report, to be published later this year.

Quarterly Financial Highlights

Our solid financial position enables us to prioritize the actions we need to take as a result of COVID-19, continue to make high priority investments in our network, and ensure customers stay connected during this critical time.

Revenue
Total revenue increased by 2% this quarter, largely driven by a 5% increase in Cable service revenue.

Wireless service revenue decreased by 6% this quarter, mainly as a result of lower roaming revenue due to continued global travel restrictions during COVID-19, and lower overage revenue, primarily as a result of the continued adoption of our Rogers Infinite™ unlimited data plans. Wireless equipment revenue increased as a result of higher gross additions and higher device upgrades by existing subscribers and the shift in product mix towards higher-value devices.

Cable revenue increased by 5% this quarter as a result of disciplined promotional activity, service pricing changes, and increases in our Internet and Ignite TV subscriber bases.

Media revenue increased by 7% this quarter, primarily as a result of higher sports and Today’s Shopping Choice™ revenue, partially offset by softness in the radio advertising market due to COVID-19.

Adjusted EBITDA and margins
Consolidated adjusted EBITDA increased 4% this quarter and our adjusted EBITDA margin increased by 80 basis points.

Wireless adjusted EBITDA decreased by 1%, primarily as a result of the flow-through impact of the aforementioned decrease in service revenue, partially offset by the shift to device financing, which has improved our Wireless equipment margin, and various cost efficiencies. This gave rise to an adjusted EBITDA service margin of 63.0%, an improvement of 310 basis points from last year.

Cable adjusted EBITDA increased by 8% this quarter, primarily as a result of higher service revenue, as discussed above. This gave rise to a margin of 47.7% this quarter, up 110 basis points from last year.

Given the seasonal nature of our Media business, Media adjusted EBITDA is negative, but improved by $26 million this quarter, primarily due to higher revenue as discussed above.

Net income and adjusted net income
Net income and adjusted net income increased this quarter by 3% and 7%, respectively, primarily as a result of higher adjusted EBITDA, partially offset by higher income tax expense.

Cash flow and available liquidity
This quarter, we generated cash flow from operating activities of $679 million, down 29%, and free cash flow of $394 million, down 15%, as a result of increases in cash income taxes.

As at March 31, 2021, we had $4.0 billion of available liquidity, including $0.8 billion in cash and cash equivalents and a combined $3.2 billion available under our bank credit facility and receivables securitization program, and investment-grade credit ratings.

We also returned $252 million in dividends to shareholders this quarter and we declared a $0.50 per share dividend on April 20, 2021.

Shaw Transaction

On March 15, 2021, we announced an agreement with Shaw Communications Inc. (Shaw) to acquire all of Shaw’s issued and outstanding Class A Participating Shares and Class B Non-Voting Participating Shares for a price of $40.50 per share in cash, with the exception of the shares held by the Shaw Family Living Trust, the controlling shareholder of Shaw, and related persons (Shaw Family Shareholders). The Shaw Family Shareholders will receive 60% of the consideration for their shares in the form of Rogers Class B Non-Voting Shares on the basis of the volume-weighted average trading price for such shares for the ten trading days ended March 12, 2021, and the balance in cash. The acquisition (Transaction) is valued at approximately $26 billion, including the assumption of approximately $6 billion of Shaw debt.

The Transaction will be implemented through a court-approved plan of arrangement under the Business Corporations Act (Alberta). A special committee of independent directors of Shaw has unanimously recommended the Transaction, and Shaw’s Board of Directors has unanimously (with Bradley Shaw abstaining) approved the Transaction and unanimously recommends that Shaw shareholders (other than the Shaw Family Shareholders) vote to approve the Transaction. The Transaction requires the approval of Shaw’s shareholders at a special shareholders meeting to be held on May 20, 2021 (Shaw Special Meeting). The Transaction is also subject to certain closing conditions, including court approval and the receipt of applicable approvals and expiry of certain waiting periods under the Broadcasting Act (Canada), the Competition Act (Canada), and the Radiocommunication Act (Canada) (collectively, Key Regulatory Approvals). Subject to receipt of all required approvals, the Transaction is expected to close in the first half of 2022.

The combined entity will have the scale, assets, and capabilities needed to deliver unprecedented wireline and wireless broadband and network investments, innovation, and growth in new telecommunications services, and greater choice for Canadian consumers and businesses. As part of the Transaction, the combined company will invest $2.5 billion to build 5G networks across Western Canada over the next five years and Rogers will commit to establishing a new $1 billion Rogers Rural and Indigenous Connectivity Fund dedicated to connecting rural, remote, and indigenous communities across Western Canada to high-speed Internet and closing critical connectivity gaps faster for underserved areas.

In connection with the Transaction, we have entered into a binding commitment letter for a committed credit facility with a syndicate of banks in an amount up to $19 billion. See “Managing Our Liquidity and Financial Resources” for more information on the committed facility.

The Transaction is subject to a number of additional risks. For more information, see “Updates to Risks and Uncertainties – Shaw Transaction” in our First Quarter 2021 Management’s Discussion and Analysis.

About Rogers

Rogers is a proud Canadian company dedicated to making more possible for Canadians each and every day. Our founder, Ted Rogers, purchased his first radio station, CHFI™, in 1960. We have grown to become a leading technology and media company that strives to provide the very best in wireless, residential, sports, and media to Canadians and Canadian businesses. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

Investment community contact	Media contact
Paul Carpino	Andrew Garas
647.435.6470	647.242.7924
[email protected]	[email protected]

Quarterly Investment Community Teleconference

Our first quarter 2021 results teleconference with the investment community will be held on:

• April 21, 2021
• 8:00 a.m. Eastern Time
• webcast available at investors.rogers.com
• media are welcome to participate on a listen-only basis

A rebroadcast will be available at investors.rogers.com for at least two weeks following the teleconference. Additionally, investors should note that from time to time, Rogers’ management presents at brokerage-sponsored investor conferences. Most often, but not always, these conferences are webcast by the hosting brokerage firm, and when they are webcast, links are made available on Rogers’ website at investors.rogers.com.

For More Information

You can find more information relating to us on our website (investors.rogers.com), on SEDAR (sedar.com), and on EDGAR (sec.gov), or you can e-mail us at [email protected]. Information on or connected to these and any other websites referenced in this earnings release is not part of, or incorporated into, this earnings release.

You can also go to investors.rogers.com for information about our governance practices, corporate social responsibility reporting, a glossary of communications and media industry terms, and additional information about our business.

About this Earnings Release

This earnings release contains important information about our business and our performance for the three months ended March 31, 2021, as well as forward-looking information about future periods. This earnings release should be read in conjunction with our First Quarter 2021 Interim Condensed Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB); our 2020 Annual Management’s Discussion and Analysis (MD&A); our 2020 Annual Audited Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB; and our other recent filings with Canadian and US securities regulatory authorities, including our Annual Information Form, which are available on SEDAR at sedar.com or EDGAR at sec.gov, respectively.

For more information about Rogers, including product and service offerings, competitive market and industry trends, our overarching strategy, key performance drivers, and objectives, see “Understanding Our Business”, “Our Strategy, Key Performance Drivers, and Strategic Highlights”, and “Capability to Deliver Results” in our 2020 Annual MD&A.

We, us, our, Rogers, Rogers Communications, and the Company refer to Rogers Communications Inc. and its subsidiaries. RCI refers to the legal entity Rogers Communications Inc., not including its subsidiaries. Rogers also holds interests in various investments and ventures.

All dollar amounts in this earnings release are in Canadian dollars unless otherwise stated and are unaudited. All percentage changes are calculated using the rounded numbers as they appear in the tables. This earnings release is current as at April 20, 2021 and was approved by RCI’s Board of Directors (the Board) on that date. This earnings release includes forward-looking statements and assumptions. See “About Forward-Looking Information” for more information.

We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI).

In this earnings release, this quarter, the quarter, or first quarter refer to the three months ended March 31, 2021, unless the context indicates otherwise. All results commentary is compared to the equivalent period in 2020 or as at December 31, 2020, as applicable, unless otherwise indicated. References to COVID-19 are to the pandemic from the outbreak of this virus and to its associated impacts in the jurisdictions in which we operate and globally, as applicable.

™Rogers and related marks are trademarks of Rogers Communications Inc. or an affiliate, used under licence. All other brand names, logos, and marks are trademarks and/or copyright of their respective owners. ©2021 Rogers Communications

Reportable segments
We report our results of operations in three reportable segments. Each segment and the nature of its business is as follows:

Segment	Principal activities
Wireless	Wireless telecommunications operations for Canadian consumers and businesses.
Cable	Cable telecommunications operations, including Internet, television, telephony (phone), and smart home monitoring services for Canadian consumers and businesses, and network connectivity through our fibre network and data centre assets to support a range of voice, data, networking, hosting, and cloud-based services for the business, public sector, and carrier wholesale markets.
Media	A diversified portfolio of media properties, including sports media and entertainment, television and radio broadcasting, specialty channels, multi-platform shopping, and digital media.

Wireless and Cable are operated by our wholly owned subsidiary, Rogers Communications Canada Inc. (RCCI), and certain of our other wholly owned subsidiaries. Media is operated by our wholly owned subsidiary, Rogers Media Inc., and its subsidiaries.

Summary of Consolidated Financial Results

	Three months ended March 31
(In millions of dollars, except margins and per share amounts)		2021				2020			% Chg
Revenue
Wireless		2,074				2,077			—
Cable		1,020				973			5
Media		440				412			7
Corporate items and intercompany eliminations		(46	)			(46	)		—
Revenue		3,488				3,416			2
Total service revenue 1		3,021				3,049			(1	)
Adjusted EBITDA 2
Wireless		1,013				1,026			(1	)
Cable		487				453			8
Media		(59	)			(85	)		(31	)
Corporate items and intercompany eliminations		(50	)			(59	)		(15	)
Adjusted EBITDA 2		1,391				1,335			4
Adjusted EBITDA margin 2		39.9	%			39.1	%		0.8	pts
Net income		361				352			3
Basic earnings per share		$0.71				$0.70			1
Diluted earnings per share		$0.70				$0.68			3
Adjusted net income 2		394				367			7
Adjusted basic earnings per share 2		$0.78				$0.73			7
Adjusted diluted earnings per share 2		$0.77				$0.71			8
Capital expenditures		484				593			(18	)
Cash provided by operating activities		679				959			(29	)
Free cash flow 2		394				462			(15	)

¹ As defined. See “Key Performance Indicators”.
² Adjusted EBITDA, adjusted net income, and free cash flow are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures and Related Performance Measures” for information about these measures, including how we calculate them and the ratios in which they are used.

Results of our Reportable Segments

WIRELESS

Wireless Financial Results

	Three months ended March 31
(In millions of dollars, except margins)	2021			2020			% Chg
Revenue
Service revenue	1,609			1,712			(6	)
Equipment revenue	465			365			27
Revenue	2,074			2,077			—
Operating expenses
Cost of equipment	466			374			25
Other operating expenses	595			677			(12	)
Operating expenses	1,061			1,051			1
Adjusted EBITDA	1,013			1,026			(1	)
Adjusted EBITDA service margin 1	63.0	%		59.9	%		3.1	pts
Adjusted EBITDA margin 2	48.8	%		49.4	%		(0.6	pts)
Capital expenditures	225			281			(20	)

¹ Calculated using service revenue.
² Calculated using total revenue.

Wireless Subscriber Results
¹

	Three months ended March 31
(In thousands, except churn, blended ABPU, and blended ARPU)		2021				2020				Chg
Postpaid
Gross additions		301				257				44
Net additions (losses)		44				(6	)			50
Total postpaid subscribers 2		9,727				9,432				295
Churn (monthly)		0.88	%			0.93	%			(0.05	pts)
Prepaid
Gross additions		106				141				(35	)
Net losses		(56	)			(66	)			10
Total prepaid subscribers 2		1,204				1,336				(132	)
Churn (monthly)		4.36	%			4.98	%			(0.62	pts)
Blended ABPU (monthly)		$62.13				$65.14				($3.01	)
Blended ARPU (monthly)		$49.09				$52.85				($3.76	)

¹ Subscriber counts, subscriber churn, blended ABPU, and blended ARPU are key performance indicators. See “Key Performance Indicators”.
² As at end of period.

Service revenue
The 6% decrease in service revenue and the 7% decrease in blended ARPU this quarter were a result of:

• lower roaming revenue, due to continued global travel restrictions during COVID-19; and
• a decrease in overage revenue as a result of strong customer adoption of our Rogers Infinite unlimited data plans and lower wireless data usage as customers spent more time at home on WiFi during COVID-19.

The 5% decrease in blended ABPU this quarter was primarily a result of the declines in roaming and overage revenue, partially offset by an ongoing shift as subscribers finance new, higher-value device purchases.

The increase in postpaid gross additions, the higher postpaid net additions, and the improved postpaid churn this quarter were all a result of strong execution and an increase in market activity by Canadians.

Equipment revenue
The 27% increase in equipment revenue this quarter was a result of:

• higher gross additions and device upgrades by existing customers; and
• the shift in product mix towards higher-value devices.

Operating expenses

Cost of equipment

The 25% increase in the cost of equipment this quarter was a result of the same factors discussed in equipment revenue above. The shift to customers financing their device purchases is reflected in the improvements in our equipment margin.

Other operating expenses

The 12% decrease in other operating expenses this quarter was primarily a result of:

• lower roaming costs due to COVID-19 travel restrictions; and
• various cost efficiencies and productivity initiatives.

Adjusted EBITDA
The 1% decrease in adjusted EBITDA this quarter was a result of the revenue and expense changes discussed above.

CABLE

Cable Financial Results

	Three months ended March 31
(In millions of dollars, except margins)	2021			2020			% Chg
Revenue
Service revenue	1,018			971			5
Equipment revenue	2			2			—
Revenue	1,020			973			5
Operating expenses	533			520			3
Adjusted EBITDA	487			453			8
Adjusted EBITDA margin	47.7	%		46.6	%		1.1	pts
Capital expenditures	212			251			(16	)

Cable Subscriber Results
¹

	Three months ended March 31
(In thousands, except ARPA and penetration)		2021				2020				Chg
Internet
Net additions		14				17				(3	)
Total Internet subscribers 2		2,612				2,551				61
Ignite TV
Net additions		58				91				(33	)
Total Ignite TV subscribers 2		602				417				185
Homes passed 2		4,599				4,500				99
Customer relationships
Net additions		6				2				4
Total customer relationships 2		2,536				2,512				24
ARPA (monthly)		$133.95				$128.91				$5.04
Penetration 2		55.1	%			55.8	%			(0.7	pts)

¹ Subscriber results are key performance indicators. See “Key Performance Indicators”.
² As at end of period.

Service revenue
The 5% increase in service revenue this quarter was a result of:

• a 4% increase in ARPA as a result of disciplined promotional activity and Internet and legacy television service pricing changes in late 2020; and
• the increase in total customer relationships over the past year, due to growth in our Internet and Ignite TV™ subscriber bases; partially offset by
• declines in our legacy television and home phone subscriber bases.

We remain focused on our Connected Home roadmap, driven by our Ignite TV product. During the past year, we have achieved significant growth in our Ignite TV subscriber base. The next steps on our roadmap include adding more apps and content to Ignite TV and launching more new products to help keep our customers connected.

Operating expenses
The 2% increase in operating expenses this quarter was a result of higher costs related to the increased revenue, partially offset by various cost efficiencies and productivity initiatives.

Adjusted EBITDA
The 8% increase in adjusted EBITDA this quarter was a result of the service revenue and expense changes discussed above.

MEDIA

Media Financial Results

	Three months ended March 31
(In millions of dollars, except margins)	2021			2020			% Chg
Revenue	440			412			7
Operating expenses	499			497			—
Adjusted EBITDA	(59	)		(85	)		(31	)
Adjusted EBITDA margin	(13.4	)%		(20.6	)%		7.2	pts
Capital expenditures	18			12			50

Revenue
The 7% increase in revenue this quarter was a result of:

• higher sports-related revenue; and
• higher Today’s Shopping Choice revenue; partially offset by
• lower radio-related advertising revenue as a result of softness in the market due to COVID-19.

Operating expenses
The stable operating expenses this quarter were a result of:

• higher programming costs; and
• higher cost of sales at Today’s Shopping Choice in line with higher revenue as discussed above; offset by
• lower production and other general operating costs as a result of cost efficiencies.

Adjusted EBITDA
The increase in adjusted EBITDA this quarter was a result of the revenue and expense changes discussed above.

CAPITAL EXPENDITURES

	Three months ended March 31
(In millions of dollars, except capital intensity)	2021			2020			% Chg
Wireless	225			281			(20	)
Cable	212			251			(16	)
Media	18			12			50
Corporate	29			49			(41	)
Capital expenditures 1	484			593			(18	)
Capital intensity 2	13.9	%		17.4	%		(3.5	pts)

¹ Includes additions to property, plant and equipment net of proceeds on disposition, but does not include expenditures for spectrum licences or additions to right-of-use assets.
² As defined. See “Key Performance Indicators”.

Consolidated capital expenditures have declined by 18% this quarter. Most of this decline has been a result of lower costs given the introduction of self-install in our Cable business, the delay of certain projects as a result of COVID-19, and overall cost efficiencies as evidenced by our improving capital intensity ratios. Despite the overall decline, we continue to prioritize capital spending to support our long-term strategy, including expansion of our 5G network and our Connected Home roadmap.

Wireless
Capital expenditures in Wireless this quarter, while lower than in 2020, reflect continued investments in our networks. We continued to work on our 5G deployments in the 600 MHz band and other bands as we have deployed our 5G network in 173 cities and towns and we continued rolling out our 5G standalone core network in Montreal, Ottawa, Toronto, and Vancouver.

Cable
The decrease in capital expenditures in Cable this quarter was a result of the realization of self-install and other capital efficiencies and improved capital intensity as we prioritized network infrastructure projects, including additional fibre deployments to increase our fibre-to-the-home and fibre-to-the-curb distribution. These upgrades will lower the number of homes passed per node and incorporate the latest technologies to help deliver more bandwidth and an even more reliable customer experience as we progress in our Connected Home roadmap.

Media
The increase in capital expenditures in Media this quarter was primarily a result of higher broadcast infrastructure expenditures and higher stadium and facility investments at the Toronto Blue Jays™.

Corporate
The decrease in corporate capital expenditures this quarter was a result of lower investments in our real estate facilities.

Capital intensity
Capital intensity decreased this quarter as a result of lower capital expenditures and higher revenue, as discussed above.

Regulatory Developments

See our 2020 Annual MD&A for a discussion of the significant regulations that affected our operations as at March 4, 2021. The following is the significant regulatory development since that date.

CRTC review of mobile wireless services
On April 15, 2021 the Canadian Radio-television and Telecommunications Commission (CRTC) issued Telecom Regulatory Policy 2021-130, Review of mobile wireless services. The CRTC mandated wholesale mobile virtual network operator (MVNO) access, seamless handoff for mandated wholesale roaming, and new mandatory low-cost and occasional-use retail rate plans; however, mandated MVNO access will only be provided if certain conditions are met as described briefly below.

The CRTC decided that mandated wholesale MVNO access must be offered by the national carriers, and SaskTel in Saskatchewan, but only made available to eligible regional wireless carriers that hold mobile spectrum licences, and only in the areas that are covered by their licences. The terms and conditions associated with mandated MVNO access must be approved by the CRTC, while rates will be subject to commercial negotiation, backstopped by final offer arbitration, with the CRTC acting as arbitrator. Mandated MVNO access will be limited to a seven-year period commencing on the date the CRTC finalizes the terms and conditions. This time limit is intended to provide the regional carriers sufficient time to expand their networks while maintaining investment incentives.

The national wireless carriers must also provide seamless handoff as part of the mandatory roaming they must offer to the regional wireless carriers. Seamless handoff will ensure that calls in progress are not dropped when customers travel outside their home network coverage and into the coverage of their roaming provider.

The CRTC also directed the national wireless carriers to offer 5G roaming where the roaming network offers 5G service on its own network and to file proposed revised terms and conditions within 90 days for CRTC approval.

Finally, the CRTC mandated retail rate plans for low-cost and occasional use. The national carriers and SaskTel will be expected to offer and promote the new mandatory low-cost and occasional-use plans on their premium brands. These plans are to be offered by July 14, 2021.

Key Performance Indicators

We measure the success of our strategy using a number of key performance indicators that are defined and discussed in our 2020 Annual MD&A and this earnings release. We believe these key performance indicators allow us to appropriately measure our performance against our operating strategy and against the results of our peers and competitors. The following key performance indicators are not measurements in accordance with IFRS and should not be considered alternatives to net income or any other measure of performance under IFRS. They include:

• subscriber counts;
  • Wireless;
  • Cable; and
  • homes passed (Cable);
• Wireless subscriber churn (churn);
• Wireless blended average billings per user
  (ABPU);
• Wireless blended average revenue per user
  (ARPU);
• Cable average revenue per account (ARPA);
• Cable customer relationships;
• Cable market penetration (penetration);
• capital intensity; and
• total service revenue.

Non-GAAP Measures and Related Performance Measures

We use the following non-GAAP measures and related performance measures. These are reviewed regularly by management and the Board in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. Some or all of these measures may also be used by investors, lending institutions, and credit rating agencies as indicators of our operating performance, of our ability to incur and service debt, and as measurements to value companies in the telecommunications sector. These are not recognized measures under GAAP and do not have standard meanings under IFRS, so may not be reliable ways to compare us to other companies.

Non-GAAP measure or related performance measure	Why we use it			How we calculate it	Most comparable IFRS financial measure
Adjusted EBITDA Adjusted EBITDA margin	●		To evaluate the performance of our businesses, and when making decisions about the ongoing operations of the business and our ability to generate cash flows.	Adjusted EBITDA: Net income add (deduct) income tax expense (recovery); finance costs; depreciation and amortization; other expense (income); restructuring, acquisition and other; and loss (gain) on disposition of property, plant and equipment. Adjusted EBITDA margin: Adjusted EBITDA divided by revenue (or service revenue for Wireless).	Net income
	●		We believe that certain investors and analysts use adjusted EBITDA to measure our ability to service debt and to meet other payment obligations.
	●		We also use it as one component in determining short-term incentive compensation for all management employees.
Adjusted net income   Adjusted basic and diluted earnings per share	●		To assess the performance of our businesses before the effects of the noted items, because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring.	Adjusted net income: Net income add (deduct) restructuring, acquisition and other; loss (recovery) on sale or wind down of investments; loss (gain) on disposition of property, plant and equipment; (gain) on acquisitions; loss on non-controlling interest purchase obligations; loss on repayment of long-term debt; loss on bond forward derivatives; and income tax adjustments on these items, including adjustments as a result of legislative changes. Adjusted basic and diluted earnings per share: Adjusted net income and adjusted net income including the dilutive effect of stock-based compensation divided by basic and diluted weighted average shares outstanding.	Net income   Basic and diluted earnings per share
Free cash flow	●		To show how much cash we have available to repay debt and reinvest in our company, which is an important indicator of our financial strength and performance.	Adjusted EBITDA deduct capital expenditures; interest on borrowings net of capitalized interest; and cash income taxes.	Cash provided by operating activities
	●		We believe that some investors and analysts use free cash flow to value a business and its underlying assets.
Adjusted net debt	●		To conduct valuation-related analysis and make decisions about capital structure.	Total long-term debt add (deduct) current portion of long-term debt; deferred transaction costs and discounts; net debt derivative (assets) liabilities associated with issued debt; credit risk adjustment related to net debt derivatives; current portion of lease liabilities; lease liabilities; bank advances (cash and cash equivalents); and short-term borrowings.	Long-term debt
	●		We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.
Debt leverage ratio	●		To conduct valuation-related analysis and make decisions about capital structure.	Adjusted net debt (defined above) divided by 12-month trailing adjusted EBITDA (defined above).	Long-term debt divided by net income
	●		We believe this helps investors and analysts analyze our enterprise and equity value and assess our leverage.

Reconciliation of adjusted EBITDA

	Three months ended March 31
(In millions of dollars)	2021			2020
Net income	361			352
Add:
Income tax expense	128			117
Finance costs	218			220
Depreciation and amortization	638			639
EBITDA	1,345			1,328
Add (deduct):
Other expense (income)	1			(14	)
Restructuring, acquisition and other	45			21
Adjusted EBITDA	1,391			1,335

Reconciliation of adjusted EBITDA margin

	Three months ended March 31
(In millions of dollars, except margins)	2021			2020
Adjusted EBITDA	1,391			1,335
Divided by: total revenue	3,488			3,416
Adjusted EBITDA margin	39.9	%		39.1	%

Reconciliation of adjusted net income

	Three months ended March 31
(In millions of dollars)	2021			2020
Net income	361			352
Add (deduct):
Restructuring, acquisition and other	45			21
Income tax impact of above items	(12	)		(6	)
Adjusted net income	394			367

Reconciliation of adjusted earnings per share

	Three months ended March 31
(In millions of dollars, except per share amounts; number of shares outstanding in millions)		2021				2020
Adjusted basic earnings per share:
Adjusted net income		394				367
Divided by:
Weighted average number of shares outstanding		505				505
Adjusted basic earnings per share		$0.78				$0.73
Adjusted diluted earnings per share:
Diluted adjusted net income		389				357
Divided by:
Diluted weighted average number of shares outstanding		506				506
Adjusted diluted earnings per share		$0.77				$0.71

Reconciliation of free cash flow

	Three months ended March 31
(In millions of dollars)	2021			2020
Cash provided by operating activities	679			959
Add (deduct):
Capital expenditures	(484	)		(593	)
Interest on borrowings, net of capitalized interest	(188	)		(187	)
Interest paid	216			200
Restructuring, acquisition and other	45			21
Program rights amortization	(20	)		(22	)
Change in net operating assets and liabilities	187			132
Other adjustments	(41	)		(48	)
Free cash flow	394			462

Reconciliation of adjusted net debt and debt leverage ratio

	As at			As at
	March 31			December 31
(In millions of dollars)	2021			2020
Current portion of long-term debt	943			1,450
Long-term debt	15,670			16,751
Deferred transaction costs and discounts	168			172
	16,781			18,373
Add (deduct):
Net debt derivative assets	(1,077	)		(1,086	)
Credit risk adjustment related to net debt derivative assets	(16	)		(15	)
Short-term borrowings	1,238			1,221
Current portion of lease liabilities	293			278
Lease liabilities	1,593			1,557
Cash and cash equivalents	(801	)		(2,484	)
Adjusted net debt	18,011			17,844

	As at		As at
	March 31		December 31
(In millions of dollars, except ratios)	2021		2020
Adjusted net debt	18,011		17,844
Divided by: trailing 12-month adjusted EBITDA	5,913		5,857
Debt leverage ratio	3.0		3.0

Rogers Communications Inc.

Interim Condensed Consolidated Statements of Income
(In millions of Canadian dollars, except per share amounts, unaudited)

	Three months ended March 31
		2021		2020
Revenue		3,488		3,416
Operating expenses:
Operating costs		2,097		2,081
Depreciation and amortization		638		639
Restructuring, acquisition and other		45		21
Finance costs		218		220
Other expense (income)		1		(14	)
Income before income tax expense		489		469
Income tax expense		128		117
Net income for the period		361		352
Earnings per share:
Basic		$0.71		$0.70
Diluted		$0.70		$0.68

Rogers Communications Inc.

Interim Condensed Consolidated Statements of Financial Position
(In millions of Canadian dollars, unaudited)

	As at		As at
	March 31		December 31
	2021		2020
Assets
Current assets:
Cash and cash equivalents	801		2,484
Accounts receivable	2,941		2,856
Inventories	465		479
Current portion of contract assets	363		533
Other current assets	691		516
Current portion of derivative instruments	108		61
Total current assets	5,369		6,929
Property, plant and equipment	13,978		14,018
Intangible assets	8,931		8,926
Investments	2,827		2,536
Derivative instruments	1,315		1,378
Financing receivables	744		748
Other long-term assets	297		346
Goodwill	3,991		3,973
Total assets	37,452		38,854
Liabilities and shareholders’ equity
Current liabilities:
Short-term borrowings	1,238		1,221
Accounts payable and accrued liabilities	2,461		2,714
Income tax payable	281		344
Other current liabilities	306		243
Contract liabilities	354		336
Current portion of long-term debt	943		1,450
Current portion of lease liabilities	293		278
Total current liabilities	5,876		6,586
Provisions	43		42
Long-term debt	15,670		16,751
Lease liabilities	1,593		1,557
Other long-term liabilities	1,078		1,149
Deferred tax liabilities	3,121		3,196
Total liabilities	27,381		29,281
Shareholders’ equity	10,071		9,573
Total liabilities and shareholders’ equity	37,452		38,854

Rogers Communications Inc.

Interim Condensed Consolidated Statements of Cash Flows
(In millions of Canadian dollars, unaudited)

	Three months ended March 31
	2021			2020
Operating activities:
Net income for the period	361			352
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	638			639
Program rights amortization	20			22
Finance costs	218			220
Income tax expense	128			117
Post-employment benefits contributions, net of expense	16			12
Other	26			22
Cash provided by operating activities before changes in net operating assets and liabilities, income taxes paid, and interest paid	1,407			1,384
Change in net operating assets and liabilities	(187	)		(132	)
Income taxes paid	(325	)		(93	)
Interest paid	(216	)		(200	)
Cash provided by operating activities	679			959
Investing activities:
Capital expenditures	(484	)		(593	)
Additions to program rights	(12	)		(15	)
Changes in non-cash working capital related to capital expenditures and intangible assets	(116	)		(129	)
Other	(6	)		(19	)
Cash used in investing activities	(618	)		(756	)
Financing activities:
Net proceeds received from (repayments of) short-term borrowings	22			(1,417	)
Net (repayment) issuance of long-term debt	(1,450	)		2,885
Net (payments) proceeds on settlement of debt derivatives and forward contracts	(2	)		90
Transaction costs incurred	—			(16	)
Principal payments of lease liabilities	(62	)		(50	)
Dividends paid	(252	)		(253	)
Cash (used in) provided by financing activities	(1,744	)		1,239
Change in cash and cash equivalents	(1,683	)		1,442
Cash and cash equivalents, beginning of period	2,484			494
Cash and cash equivalents, end of period	801			1,936

About Forward-Looking Information

This earnings release includes “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws (collectively, “forward-looking information”), and assumptions about, among other things, our business, operations, and financial performance and condition approved by our management on the date of this earnings release. This forward-looking information and these assumptions include, but are not limited to, statements about our objectives and strategies to achieve those objectives, and about our beliefs, plans, expectations, anticipations, estimates, or intentions.

Forward-looking information

• typically includes words like could, expect, may, anticipate, assume, believe, intend, estimate, plan, project, guidance, outlook, target, and similar expressions;
• includes conclusions, forecasts, and projections that are based on our current objectives and strategies and on estimates, expectations, assumptions, and other factors, most of which are confidential and proprietary and that we believe to have been reasonable at the time they were applied but may prove to be incorrect; and
• was approved by our management on the date of this earnings release.

Our forward-looking information includes forecasts and projections related to the following items, some of which are non-GAAP measures (see “Non-GAAP Measures and Related Performance Measures”), among others:

• revenue;
• total service revenue;
• adjusted EBITDA;
• capital expenditures;
• cash income tax payments;
• free cash flow;
• dividend payments;
• the growth of new products and services;
• expected growth in subscribers and the services to which they subscribe;
• the cost of acquiring and retaining subscribers and deployment of new services;
• continued cost reductions and efficiency improvements;
• our debt leverage ratio;
• statements relating to plans we have implemented in response to COVID-19 and its impact on us;
• the expected timing and completion of the Transaction is subject to closing conditions, termination rights, and other risks and uncertainties including, without limitation, court, shareholder, and regulatory approvals;
• the benefits expected to result from the Transaction are subject to the successful and timely integration and consolidation of Shaw’s operations, business and workforce; and
• all other statements that are not historical facts.

Our conclusions, forecasts, and projections are based on the following factors, among others:

• general economic and industry growth rates;
• currency exchange rates and interest rates;
• product pricing levels and competitive intensity;
• subscriber growth;
• pricing, usage, and churn rates;
• changes in government regulation;
• technology deployment;
• availability of devices;
• timing of new product launches;
• content and equipment costs;
• the integration of acquisitions;
• industry structure and stability; and
• the impact of COVID-19 on our operations, liquidity, financial condition, or results.

Except as otherwise indicated, this earnings release and our forward-looking information do not reflect the potential impact of any non-recurring or other special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations, or other transactions that may be considered or announced or may occur after the date on which the statement containing the forward-looking information is made.

Risks and uncertainties
Actual events and results can be substantially different from what is expressed or implied by forward-looking information as a result of risks, uncertainties, and other factors, many of which are beyond our control, including, but not limited to:

• regulatory changes;
• technological changes;
• economic, geopolitical, and other conditions affecting commercial activity;
• unanticipated changes in content or equipment costs;
• changing conditions in the entertainment, information, and communications industries;
• the integration of acquisitions;
• litigation and tax matters;
• the level of competitive intensity;
• the emergence of new opportunities;
• external threats, such as epidemics, pandemics, and other public health crises, natural disasters, or cyberattacks, among others;
• risks related to the Transaction, including the timing, receipt, and conditions of the Key Regulatory Approvals; satisfaction of the various conditions to close the Transaction; financing the Transaction; and the anticipated benefits and successful integration of the businesses and operations of Rogers and Shaw; and the other risks outlined in “Updates to Risks and Uncertainties – Shaw Transaction” in our First Quarter 2021 Management’s Discussion and Analysis; and
• new interpretations and new accounting standards from accounting standards bodies.

These factors can also affect our objectives, strategies, and intentions. Many of these factors are beyond our control or our current expectations or knowledge. Should one or more of these risks, uncertainties, or other factors materialize, our objectives, strategies, or intentions change, or any other factors or assumptions underlying the forward-looking information prove incorrect, our actual results and our plans could vary significantly from what we currently foresee.

Accordingly, we warn investors to exercise caution when considering statements containing forward-looking information and caution them that it would be unreasonable to rely on such statements as creating legal rights regarding our future results or plans. We are under no obligation (and we expressly disclaim any such obligation) to update or alter any statements containing forward-looking information or the factors or assumptions underlying them, whether as a result of new information, future events, or otherwise, except as required by law. All of the forward-looking information in this earnings release is qualified by the cautionary statements herein.

Before making an investment decision
Before making any investment decisions and for a detailed discussion of the risks, uncertainties, and environment associated with our business, its operations, and its financial performance and condition, fully review the sections of this earnings release entitled “Updates to Risks and Uncertainties” and “Regulatory Developments” and fully review the sections in our 2020 Annual MD&A entitled “Regulation in Our Industry” and “Governance and Risk Management”, as well as our various other filings with Canadian and US securities regulators, which can be found at sedar.com and sec.gov, respectively. Information on or connected to sedar.com, sec.gov, our website, or any other website referenced in this document is not part of or incorporated into this earnings release.

BOTHELL, Wash., April 21, 2021 (GLOBE NEWSWIRE) — Athira Pharma, Inc. (NASDAQ: ATHA), a late clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and stop neurodegeneration, today announced that Leen Kawas, Ph.D., President and Chief Executive Officer, will participate in a virtual panel discussion at the Sachs 4^th Annual Neuroscience Innovation Forum. The panel, titled “Progress in Alzheimer’s and Dementia,” will be aired on Wednesday, April 28, 2021, at 8:30 a.m. PT /11:30 a.m. ET.

The panel will be moderated by Howard Fillit, M.D., Founding Executive Director at the Alzheimer’s Drug Discovery Foundation, and Paul Matteis, Managing Director at Stifel, and will include a discussion with the following participants:

• David Elmaleh, Ph.D., Chairman and Chief Scientific Officer, AZTherapies
• Todd Haim, Ph.D., Chief, Office of Small Business Research, National Institute on Aging (NIH)
• Leen Kawas, Ph.D., President and Chief Executive Officer, Athira Pharma
• Gregor Macdonald, Ph.D., Senior Director, Neuroscience Scientific Licensing, Johnson & Johnson Innovation
• Deborah Rathjen, Ph.D., Executive Chair, Bioasis Technologies
• Susanne Wilke, Ph.D., President and Chief Executive Officer, Cognoptix

To register in advance for a live webcast of the panel discussion, please click here. For more information about the Sachs 4^th Annual Neuroscience Innovation Forum, please refer to the conference portal.

Beginning May 26, a recording of the panel will be available on the Investors section of the Athira website at https://investors.athira.com/news-and-events/events-and-presentations. An archived replay will be available for at least 30 days.

About Athira Pharma, Inc.

Athira, headquartered in the Seattle area, is a late clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and stop neurodegeneration. Athira aims to provide rapid cognitive improvement and alter the course of neurological diseases with our novel mechanism of action. Athira is currently advancing its lead therapeutic candidate, ATH-1017, a novel small molecule for Alzheimer’s and Parkinson’s dementia. For more information, visit www.athira.com. You can also follow Athira on Facebook, LinkedIn and @athirapharma on Twitter and Instagram.

Investor & Media Contact:
Julie Rathbun
Athira Pharma
[email protected]
206-769-9219

July 2, 2021 payment date following June 10, 2021 record date

Quarterly dividend of 50 cents per share declared by Board

TORONTO, April 21, 2021 (GLOBE NEWSWIRE) —  Rogers Communications Inc. (“Rogers”) announced that its Board of Directors declared a quarterly dividend totaling 50 cents per share on each of its outstanding Class B Non-Voting shares and Class A Voting shares.
        
The declared quarterly dividend will be paid on July 2, 2021 to shareholders of record on June 10, 2021. Such quarterly dividends are only payable as and when declared by Rogers’ Board and there is no entitlement to any dividend prior thereto.

About Rogers:

Rogers is a proud Canadian company dedicated to making more possible for Canadians each and every day. Our founder, Ted Rogers, purchased his first radio station, CHFI, in 1960. We have grown to become a leading technology and media company that strives to provide the very best in wireless, residential, sports, and media to Canadians and Canadian businesses. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). If you want to find out more about us, visit about.rogers.com.

For further information:

Investor Relations, 1-(844)-801-4792, [email protected]

• First quarter 2021 net revenues¹ were $851 million, an increase of 21% over the first quarter of 2020. Compared to the prior year period, Solutions segments² revenues increased 22% while Market Services revenues increased 20%.
• Annualized Recurring Revenue (ARR)³ was $1,760 million in the first quarter of 2021, an increase of 21% from the prior year period.
• First quarter 2021 GAAP diluted earnings per share of $1.78 increased 46% compared to $1.22 in the first quarter of 2020. First quarter 2021 non-GAAP⁴ diluted earnings per share of $1.96 increased 31% from $1.50 in the first quarter of 2020.
• Nasdaq advanced its strategic positioning by completing the acquisition of Verafin, establishing the company as a leading anti-financial crime technology provider.
• Also in the first quarter of 2021, Nasdaq agreed to sell its U.S. Fixed Income business, which will allow the company to concentrate resources on its technology, analytics and ESG opportunities.
• The company is announcing a 10% increase to the quarterly dividend, to $0.54 per share, and returned $243 million of cash to investors in the first quarter of 2021, including $162 million in share repurchases.

NEW YORK, April 21, 2021 (GLOBE NEWSWIRE) — Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the first quarter of 2021.

First quarter 2021 net revenues were $851 million, an increase of $150 million, or 21%, from $701 million in the prior year period. Net revenues reflected a $118 million, or 17%, positive impact from organic growth, an $18 million increase from the impact of favorable changes in FX rates and a $14 million increase from the inclusion of revenues from acquisitions.

“I am pleased with how our team delivered for clients against an incredibly dynamic capital markets backdrop, reflecting record trading and listing results as well as strong growth across our solutions segments,” said Adena Friedman, President and CEO, Nasdaq. “We continue to execute against key secular growth opportunities, as illustrated by strong momentum in our institutional investor analytics solutions, as well as by the broad-based growth in total company ARR compared to the prior year period. We are also making fundamental progress in Nasdaq’s strategic repositioning this year, with the close of the Verafin acquisition, and the consequent expansion of our addressable market and long-term performance potential.”   

GAAP operating expenses were $486 million in the first quarter of 2021, an increase of $60 million from $426 million in the first quarter of 2020. The increase of $60 million primarily relates to an $18 million increase from acquisitions and a $15 million increase from changes in FX rates. In addition, the increase reflects higher compensation and benefits expense, higher merger and strategic initiatives expense, and higher depreciation and amortization expense, partially offset by lower general, administrative and other expense. The lower general, administrative and other expense primarily reflects bond refinancing costs that were incurred in the first quarter of 2020, higher charitable donations made to COVID-19 response and relief efforts in the first quarter of 2020 and reduced corporate travel expenses.

Non-GAAP operating expenses were $393 million in the first quarter of 2021, an increase of $57 million, or 17%, compared to the first quarter of 2020. This increase reflects a $24 million, or 7%, organic increase over the prior year period, an $18 million increase from acquisitions and a $15 million increase from changes in FX rates. The organic increase was primarily driven by higher performance-linked compensation expenses.

“I am incredibly excited to become Nasdaq’s CFO at such an interesting time, in particular to have the opportunity to support our evolution as a technology and analytics provider,” said Ann Dennison, Executive Vice President and Chief Financial Officer, Nasdaq. “During the first quarter, we completed the Verafin acquisition, which we financed at attractive interest rates. In addition, we reached an agreement to divest our U.S. Fixed Income business and announced an increase to our existing share repurchase program authorization to, over time, neutralize the impact of the divestiture on our EPS.”

On a GAAP basis, net income in the first quarter of 2021 was $298 million, an increase of 47% compared to $203 million in the first quarter of 2020. GAAP diluted EPS was $1.78, an increase of 46% compared $1.22 in the first quarter of 2020.

On a non-GAAP basis, net income in the first quarter of 2021 was $327 million, an increase of 30% compared to $251 million in the first quarter of 2020. Non-GAAP diluted EPS totaled $1.96, an increase of 31% from $1.50 in the first quarter of 2020.

As of March 31, 2021, the company had cash and cash equivalents of $774 million and total debt of $5,890 million, resulting in net debt of $5,116 million. This compares to total debt of $5,541 million and net debt of $2,796 million at December 31, 2020. The increase in net debt reflects closing the acquisition of Verafin. As of March 31, 2021, there was $248 million remaining under the board authorized share repurchase program (excluding the additional $1 billion authorized subject to the closing of the divestiture of our U.S. Fixed Income business and the resulting share issuance upon the consummation of that transaction).

UPDATING 2021 NON-GAAP EXPENSE AND TAX GUIDANCE⁵

The company is updating its 2021 non-GAAP operating expense guidance to a range of $1,570 to $1,620 million. Nasdaq expects its 2021 non-GAAP tax rate to be in the range of 25% to 27%.

BUSINESS HIGHLIGHTS

Market Services – Net revenues were a record $338 million in the first quarter of 2021, an increase of $57 million, or 20%, compared to the first quarter of 2020.

Equity Derivative Trading and Clearing – Net revenues increased $12 million, or 13%, in the first quarter of 2021 compared to the first quarter of 2020. The increase primarily reflects higher U.S. industry trading volumes, partially offset by a lower U.S. net capture rate.

Cash Equity Trading – Net revenues increased $35 million, or 36%, in the first quarter of 2021 compared to the first quarter of 2020. The increase primarily reflects higher U.S. industry trading volumes, net capture rates, and the impact from changes in FX rates, partially offset by lower U.S. market share.

Fixed Income and Commodities Trading and Clearing – Net revenues increased $2 million, or 12%, in the first quarter of 2021 compared to the first quarter of 2020, primarily due to the impact from changes in FX rates.

Trade Management Services – Revenues increased $8 million, or 11%, in the first quarter of 2021 compared to the first quarter of 2020, primarily due to increased demand for connectivity services.

Corporate Platforms – Revenues were $155 million in the first quarter of 2021, up $27 million, or 21%, compared to the first quarter of 2020.

Listing Services – Revenues increased $23 million, or 31%, in the first quarter of 2021 compared to the first quarter of 2020. The increase was primarily driven by higher U.S. listing revenues due to an increase in the overall number of listed companies and higher Nasdaq Private Market revenues.

IR & ESG Services – Revenues increased $4 million, or 8%, in the first quarter of 2021 compared to the first quarter of 2020, primarily due to an increase in both IR and ESG advisory services revenues.

Investment Intelligence – Revenues were $258 million in the first quarter of 2021, up $47 million, or 22%, compared to the first quarter of 2020.

Market Data – Revenues increased $11 million, or 11%, in the first quarter of 2021 compared to the first quarter of 2020. The increase reflects organic growth in proprietary data products from new sales, including continued expansion geographically and an increase in shared tape plan revenues.

Index – Revenues increased $29 million, or 40%, in the first quarter of 2021 compared to the first quarter of 2020. The increase was primarily driven by higher licensing revenues from higher average assets under management (AUM) in exchange traded products (ETPs) linked to Nasdaq indexes and higher licensing revenues from futures trading linked to the Nasdaq-100 Index.

Analytics – Revenues increased $7 million, or 17%, in the first quarter of 2021 compared to the first quarter of 2020, primarily due to growth in eVestment and Solovis clients.

Market Technology – Revenues were $100 million in the first quarter of 2021, up $19 million, or 23% compared to the first quarter of 2020.

Marketplace Infrastructure Technology – Revenues increased $2 million, or 4%, in the first quarter of 2021 compared to the first quarter of 2020, primary due to the impact from changes in FX rates.

Anti Financial Crime Technology – Revenues increased $17 million, or 59%, in the first quarter of 2021 compared to the first quarter of 2020. The increase is due to continued growth in surveillance solutions, the inclusion of revenues from our acquisition of Verafin and the impact from changes in FX rates.

CORPORATE HIGHLIGHTS

• Nasdaq accelerates the company’s evolution as a leading SaaS technology provider of anti-financial crime solutions by completing the acquisition of Verafin. In February 2021, Nasdaq completed the acquisition of Verafin, an industry pioneer in anti-financial crime technology solutions. The acquisition strengthens Nasdaq’s existing regulatory and anti-financial crime solutions, while expanding Verafin’s reach to serve a global ecosystem of Tier-1 and Tier-2 banks and broker-dealers.
   
• ETP assets under management tracking Nasdaq indexes and derivative product volume tracking Nasdaq indexes each set new quarterly records. Overall AUM in ETPs benchmarked to Nasdaq’s proprietary indexes totaled $385 billion as of March 31, 2021, an increase of 87% compared to March 31, 2020. Additionally, the number of futures and options on futures contracts tracking Nasdaq indexes set a quarterly record with 105 million contracts traded, an increase of 31% from 80 million in the first quarter of 2020. There are 17 products tracking Nasdaq indexes which launched in the first quarter of 2021, including 13 outside of the U.S.
   
• Nasdaq’s analytics business led by eVestment and Solovis delivered strong retention and sales growth during the first quarter of 2021. The eVestment and Solovis analytics businesses continue to see increased growth, not only due to increased number of users, but also in both new sales and retention compared to the prior year period. On a sequential basis, new sales were up 23% from the fourth quarter of 2020, reflecting both a rebound in institutional investment industry demand following some temporary contraction in 2020, as well as increasing realization of synergies across the suite of solutions. These synergies helped to drive 28 new accounts to Solovis in the first quarter of 2021.
   
• The Nasdaq Stock Market led U.S. exchanges for IPOs during the first quarter of 2021. The Nasdaq Stock Market led U.S. exchanges with a 69% total IPO win rate, including a 77% win rate among operating companies⁶ and a 66% win rate among special purpose acquisition companies. In the first quarter of 2021, The Nasdaq Stock Market welcomed 275 IPOs representing $74 billion in capital raised, including 79 operating company IPOs such as Bumble, Qualtrics, Affirm, Playtika and Petco, as well as 196 IPOs from special purpose acquisition companies.
   
• Nasdaq’s Market Services segment sets new quarterly trading volume records in U.S. options and U.S. equities in the first quarter of 2021. In the first quarter of 2021, Nasdaq’s U.S. options market set a quarterly record of 892 million contracts traded, an increase of 57% year over year. Additionally, Nasdaq led all exchanges during the period in total volume traded for options inclusive of both multiply-listed equity options and index options products. Nasdaq’s U.S. equities markets set a quarterly record of 153 billion shares traded, an increase of 20% year over year.
   
• Nasdaq agrees to sell its U.S. Fixed Income business to Tradeweb Markets. Nasdaq’s decision to sell its U.S. Fixed Income business aligns with its corporate strategy to concentrate its resources and capital to maximize its potential as a major technology and analytics provider to the global capital markets. The transaction is expected to close later in 2021 subject to satisfaction of customary closing conditions, including the receipt of required regulatory approvals.

____________
_{¹ Represents revenues less transaction-based expenses.  
² Constitutes revenues from Market Technology, Investment Intelligence and Corporate Platforms segments.
³ Annualized Recurring Revenue (ARR) for a given period is the annualized revenue derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
⁴ Refer to our reconciliations of U.S. GAAP to non-GAAP net income, diluted earnings per share, operating income and operating expenses, included in the attached schedules.
⁵ U.S. GAAP operating expense and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.
⁶ Operating companies exclude special purpose acquisition companies and when a special purpose acquisition company completes an acquisition.}

ABOUT NASDAQ

Nasdaq (Nasdaq: NDAQ) is a global technology company serving the capital markets and other industries. Our diverse offering of data, analytics, software and services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.

NON-GAAP INFORMATION

In addition to disclosing results determined in accordance with U.S. GAAP, Nasdaq also discloses certain non-GAAP results of operations, including, but not limited to, non-GAAP net income attributable to Nasdaq, non-GAAP diluted earnings per share, non-GAAP operating income, and non-GAAP operating expenses, that include certain adjustments or exclude certain charges and gains that are described in the reconciliation table of U.S. GAAP to non-GAAP information provided at the end of this release. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of results as the items described below in the reconciliation tables do not reflect ongoing operating performance.

These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces its usefulness as a comparative measure. Investors should not rely on any single financial measure when evaluating our business. This information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this earnings release. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliations, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.

We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq, non-GAAP diluted earnings per share, non-GAAP operating income and non-GAAP operating expenses to assess operating performance. We use these measures because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance.

Foreign exchange impact: In countries with currencies other than the U.S. dollar, revenues and expenses are translated using monthly average exchange rates. Certain discussions in this release isolate the impact of year-over-year foreign currency fluctuations to better measure the comparability of operating results between periods. Operating results excluding the impact of foreign currency fluctuations are calculated by translating the current period’s results by the prior period’s exchange rates.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

           
Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties.  Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information.  Such forward-looking statements include, but are not limited to (i) projections relating to our future financial results, total shareholder returns, growth, trading volumes, products and services, ability to transition to new business models, taxes and achievement of synergy targets, (ii) statements about the closing or implementation dates and benefits of certain acquisitions, divestitures and other strategic, restructuring, technology, de-leveraging and capital allocation initiatives, (iii) statements about our integrations of our recent acquisitions, (iv) statements relating to any litigation or regulatory or government investigation or action to which we are or could become a party, and (v) other statements that are not historical facts.  Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq’s control.  These factors include, but are not limited to, Nasdaq’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, the impact of the COVID-19 pandemic on our business, operations, results of operations, financial condition, workforce or the operations or decisions of our customers, suppliers or business partners, and other factors detailed in Nasdaq’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on Nasdaq’s investor relations website at http://ir.nasdaq.com and the SEC’s website at www.sec.gov.  Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

WEBSITE DISCLOSURE

Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.

Media Relations Contact:

Will Briganti
+1.646.964.8169
[email protected]

Investor Relations Contact:

Ed Ditmire, CFA
+1.212.401.8737
[email protected]

-NDAQF-

Nasdaq, Inc.
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
Revenues:
Market Services		$	1,139			$	966			$	933
Transaction-based expenses:
Transaction rebates		(654		)		(503		)		(479		)
Brokerage, clearance and exchange fees		(147		)		(172		)		(173		)
Total Market Services revenues less transaction-based expenses		338				291				281
Corporate Platforms		155				144				128
Investment Intelligence		258				247				211
Market Technology		100				106				81
	Revenues less transaction-based expenses	851				788				701
Operating Expenses:
Compensation and benefits		239				205				195
Professional and contract services		27				40				27
Computer operations and data communications		44				42				35
Occupancy		28				26				25
General, administrative and other		13				43				61
Marketing and advertising		10				19				9
Depreciation and amortization		63				53				48
Regulatory		7				8				7
Merger and strategic initiatives		45				22				7
Restructuring charges		10				12				12
	Total operating expenses	486				470				426
Operating income		365				318				275
Interest income		1				–				2
Interest expense		(29		)		(24		)		(26		)
Other income		1				–				5
Net income (loss) from unconsolidated investees		57				(27		)		17
Income before income taxes		395				267				273
Income tax provision		97				43				70
Net income attributable to Nasdaq		$	298			$	224			$	203
Per share information:
Basic earnings per share		$	1.81			$	1.36			$	1.23
Diluted earnings per share		$	1.78			$	1.34			$	1.22
Cash dividends declared per common share		$	0.49			$	0.49			$	0.47
Weighted-average common shares outstanding
for earnings per share:
Basic		164.7				164.5				164.9
Diluted		167.1				167.3				166.8

Nasdaq, Inc.
Revenue Detail
(in millions)
(unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
MARKET SERVICES REVENUES
	Equity Derivative Trading and Clearing revenues	$	422			$	357			$	285
	Transaction-based expenses:
	Transaction rebates	(296		)		(243		)		(172		)
	Brokerage, clearance and exchange fees	(20		)		(22		)		(19		)
	Total net equity derivative trading and clearing revenues	106				92				94
	Cash Equity Trading revenues	617				514				558
	Transaction-based expenses:
	Transaction rebates	(358		)		(259		)		(307		)
	Brokerage, clearance and exchange fees	(126		)		(150		)		(153		)
	Total net cash equity trading revenues	133				105				98
	Fixed Income and Commodities Trading and Clearing revenues	20				17				18
	Transaction-based expenses:
	Transaction rebates	–				(1)				–
	Brokerage, clearance and exchange fees	(1		)		–				(1		)
	Total net fixed income and commodities trading and clearing revenues	19				16				17
	Trade Management Services revenues	80				78				72
	Total Net Market Services revenues	338				291				281
CORPORATE PLATFORMS REVENUES
	Listings Services revenues	98				88				75
	IR & ESG Services revenues	57				56				53
	Total Corporate Platforms revenues	155				144				128
INVESTMENT INTELLIGENCE REVENUES
	Market Data revenues	108				104				97
	Index revenues	102				97				73
	Analytics revenues	48				46				41
	Total Investment Intelligence revenues	258				247				211
MARKET TECHNOLOGY REVENUES
	Marketplace Infrastructure Technology revenues	54				71				52
	Anti Financial Crime Technology revenues	46				35				29
	Total Market Technology revenues	100				106				81
REVENUES LESS TRANSACTION-BASED EXPENSES		$	851			$	788			$	701

Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions)
			March 31,				December 31,
			2021				2020
Assets			(unaudited)
Current assets:
	Cash and cash equivalents		$	774			$	2,745
	Restricted cash and cash equivalents		38				37
	Financial investments		215				195
	Receivables, net		574				566
	Default funds and margin deposits		3,737				3,942
	Other current assets		316				175
Total current assets			5,654				7,660
Property and equipment, net			482				475
Goodwill			8,508				6,850
Intangible assets, net			2,967				2,255
Operating lease assets			396				381
Other non-current assets			483				358
Total assets			$	18,490			$	17,979
Liabilities
Current liabilities:
	Accounts payable and accrued expenses		$	183			$	175
	Section 31 fees payable to SEC		131				224
	Accrued personnel costs		174				227
	Deferred revenue		519				235
	Other current liabilities		377				121
	Default funds and margin deposits		3,737				3,942
	Short-term debt		435				–
Total current liabilities			5,556				4,924
Long-term debt			5,455				5,541
Deferred tax liabilities, net			542				502
Operating lease liabilities			406				389
Other non-current liabilities			197				187
Total liabilities			12,156				11,543
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
	Common stock		2				2
	Additional paid-in capital		2,405				2,547
	Common stock in treasury, at cost		(415		)		(376		)
	Accumulated other comprehensive loss		(1,505		)		(1,368		)
	Retained earnings		5,845				5,628
Total Nasdaq stockholders’ equity			6,332				6,433
	Noncontrolling interests		2				3
Total equity			6,334				6,436
Total liabilities and equity			$	18,490			$	17,979

Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses
(in millions, except per share amounts)
(unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
U.S. GAAP net income attributable to Nasdaq		$	298			$	224			$	203
Non-GAAP adjustments:
Amortization expense of acquired intangible assets (1)		36				26				25
Merger and strategic initiatives expense (2)		45				22				7
Restructuring charges (3)		10				12				12
Net (income) loss from unconsolidated investees (4)		(57		)		27				(16		)
Extinguishment of debt (5)		–				–				36
Charitable donations (5)		–				–				5
Other		2				4				–
Total non-GAAP adjustments		36				91				69
Non-GAAP adjustment to the income tax provision (6)		(7		)		(44		)		(18		)
Excess tax benefits related to employee share-based compensation		–				(3		)		(3		)
Total non-GAAP adjustments, net of tax		29				44				48
Non-GAAP net income attributable to Nasdaq		$	327			$	268			$	251
U.S. GAAP diluted earnings per share		$	1.78			$	1.34			$	1.22
Total adjustments from non-GAAP net income above		0.18				0.26				0.28
Non-GAAP diluted earnings per share		$	1.96			$	1.60			$	1.50
Weighted-average diluted common shares outstanding for earnings per share:		167.1				167.3				166.8
(1) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
(2) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.
(3) We initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of third party consulting costs and non-cash items such as asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.
(4) Primarily represents the earnings and losses recognized from our equity interest in the Options Clearing Corporation, or OCC. We will continue to exclude the earnings and losses related to our share of OCC’s earnings for purposes of calculating non-GAAP measures as our income on this investment may vary significantly compared to prior years. This will provide a more meaningful analysis of Nasdaq ‘s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
(5) We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 2020.
(6) The non-GAAP adjustment to the income tax provision primarily includes the tax impact of each non-GAAP adjustment. In addition, for the three months ended December 31, 2020, we recorded a tax benefit related to favorable audit settlements and a release of tax reserves due to the expiration of the statute of limitations, partially offset with an increase to certain tax reserves related to certain tax filings.

Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses
(in millions)
(unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
U.S. GAAP operating income		$	365			$	318			$	275
Non-GAAP adjustments:
Amortization expense of acquired intangible assets (1)		36				26				25
Merger and strategic initiatives expense (2)		45				22				7
Restructuring charges (3)		10				12				12
Extinguishment of debt (4)		–				–				36
Charitable donations (4)		–				–				5
Other		2				4				5
Total non-GAAP adjustments		93				64				90
Non-GAAP operating income		$	458			$	382			$	365
Revenues less transaction-based expenses		$	851			$	788			$	701
U.S. GAAP operating margin (5)		43		%		40		%		39		%
Non-GAAP operating margin (6)		54		%		48		%		52		%

(1) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
(2) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.
(3) We initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of third party consulting costs and non-cash items such as asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.
(4) We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 2020.
(5) U.S. GAAP operating margin equals U.S. GAAP operating income divided by revenues less transaction-based expenses.
(6) Non-GAAP operating margin equals non-GAAP operating income divided by revenues less transaction-based expenses.

Nasdaq, Inc.
Reconciliation of U.S. GAAP Net Income, Diluted Earnings Per Share, Operating Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share, Operating Income, and Operating Expenses
(in millions)
(unaudited)
	Three Months Ended
	March 31,				December 31,				March 31,
	2021				2020				2020
U.S. GAAP operating expenses	$	486			$	470			$	426
Non-GAAP adjustments:
Amortization expense of acquired intangible assets (1)	(36		)		(26		)		(25		)
Merger and strategic initiatives expense (2)	(45		)		(22		)		(7		)
Restructuring charges (3)	(10		)		(12		)		(12		)
Extinguishment of debt (4)	–				–				(36		)
Charitable donations (4)	–				–				(5		)
Other	(2		)		(4		)		(5		)
Total non-GAAP adjustments	(93		)		(64		)		(90		)
Non-GAAP operating expenses	$	393			$	406			$	336

(1) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
(2) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs and will vary based on the size and frequency of the activities described above.
(3) We initiated the transition of certain technology platforms to advance the company’s strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. Charges associated with this plan represent a fundamental shift in our strategy and technology as well as executive re-alignment and will be excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods. The restructuring charges primarily consisted of third party consulting costs and non-cash items such as asset impairment charges primarily related to capitalized software that was retired, and accelerated depreciation expense on certain assets as a result of a decrease in their useful life.
(4) We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. These significant items primarily include donations to COVID-19 response and relief efforts and loss on extinguishment of debt for the three months ended March 31, 2020.

Nasdaq, Inc.
Quarterly Key Drivers Detail
(unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
Market Services
	Equity Derivative Trading and Clearing
	U.S. equity options
	Total industry average daily volume (in millions)	40.1				30.6				25.3
	Nasdaq PHLX matched market share	12.9		%		13.5		%		12.8		%
	The Nasdaq Options Market matched market share	7.9		%		9.0		%		10.6		%
	Nasdaq BX Options matched market share	0.7		%		0.2		%		0.2		%
	Nasdaq ISE Options matched market share	7.7		%		7.6		%		8.4		%
	Nasdaq GEMX Options matched market share	5.9		%		6.4		%		3.8		%
	Nasdaq MRX Options matched market share	1.4		%		1.1		%		0.3		%
	Total matched market share executed on Nasdaq’s exchanges	36.5		%		37.8		%		36.1		%
	Nasdaq Nordic and Nasdaq Baltic options and futures
	Total average daily volume options and futures contracts (1)	358,365				275,686				457,819
	Cash Equity Trading
	Total U.S.-listed securities
	Total industry average daily share volume (in billions)	14.7				10.5				11.0
	Matched share volume (in billions)	152.6				115.4				126.8
	The Nasdaq Stock Market matched market share	15.7		%		15.9		%		16.8		%
	Nasdaq BX matched market share	0.7		%		0.7		%		1.2		%
	Nasdaq PSX matched market share	0.7		%		0.6		%		0.6		%
	Total matched market share executed on Nasdaq’s exchanges	17.1		%		17.2		%		18.6		%
	Market share reported to the FINRA/Nasdaq Trade Reporting Facility	35.2		%		33.7		%		30.2		%
	Total market share (2)	52.3		%		50.9		%		48.8		%
	Nasdaq Nordic and Nasdaq Baltic securities
	Average daily number of equity trades executed on Nasdaq’s exchanges	1,093,684				961,924				1,021,963
	Total average daily value of shares traded (in billions)	$	7.0			$	5.9			$	6.4
	Total market share executed on Nasdaq’s exchanges	78.5		%		79.4		%		77.1		%
	Fixed Income and Commodities Trading and Clearing
	Fixed Income
	U.S. fixed income volume ($ billions traded)	$	2,494			$	1,650			$	2,067
	Total average daily volume of Nasdaq Nordic and Nasdaq Baltic fixed income contracts	125,959				96,006				115,137
	Commodities
	Power contracts cleared (TWh) (3)	250				286				292
Corporate Platforms
	Initial public offerings
	The Nasdaq Stock Market (4)	275				142				27
	Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic	24				24				7
	Total new listings
	The Nasdaq Stock Market (4)	319				199				56
	Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (5)	32				34				9
	Number of listed companies
	The Nasdaq Stock Market (6)	3,667				3,392				3,146
	Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (7)	1,090				1,071				1,039
Investment Intelligence
	Number of licensed exchange traded products (ETPs)	349				339				325
	ETP assets under management (AUM) tracking Nasdaq indexes (in billions)	$	385			$	359			$	206
Market Technology
	Order intake (in millions) (8)	$	41			$	37			$	80
	Annualized recurring revenues (in millions) (9)	$	416			$	283			$	257



	(1) Includes Finnish option contracts traded on Eurex for which Nasdaq and Eurex have a revenue sharing arrangement.
	(2) Includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the Financial Industry Regulatory Authority/Nasdaq Trade Reporting Facility.
	(3) Transactions executed on Nasdaq Commodities or OTC and reported for clearing to Nasdaq Commodities measured by Terawatt hours (TWh).
	(4) New listings include IPOs, including issuers that switched from other listing venues, closed-end funds and separately listed ETPs.  As of March 31, 2021, of the 275 IPOs, 196 were SPACs.  As of December 31, 2020, of the 142 IPOs, 77 were SPACs.  As of March 31, 2020, of the 27 IPOs, 7 were SPACs.
	(5) New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
	(6) Number of total listings on The Nasdaq Stock Market at period end, including 410 ETPs as of March 31, 2021, 412 ETPs as of December 31, 2020, and 412 ETPs as of March 31, 2020.
	(7) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
	(8) Total contract value of orders signed during the period.
	(9) Annualized Recurring Revenue, or ARR, for a given period is the annualized revenue of active Market Technology support and SaaS subscription contracts. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.