Nasdaq exceeded Wall Street expectations for second-quarter earnings on Thursday, supported by prominent listings on its exchange, along with strong demand for its data services amid continued market volatility.

The second quarter saw a series of large listings, including the record-breaking initial public offering of SpaceX, with over 500 million shares traded on its first day, according to Reuters.

Although IPOs typically generate limited fees from the listing itself, trading in stocks, options, and market-related services represent important revenue sources for exchange operators.

Trading companies also benefited during the quarter from elevated volatility levels, amid escalating developments related to the US-Iran war and shifting investor attitudes toward AI trading, boosting demand for hedging and risk management tools.

In recent years, Nasdaq has sought to diversify its business to reduce reliance on trading volume fluctuations, by expanding into fintech and software, which helped boost recurring revenue and increase the resilience of its business model.

The company's net revenue rose 15% in the second quarter to $1.5 billion, driven mainly by the strong performance of the capital access platforms segment, which includes listing services and market data related to stocks and options, as its revenue jumped 19% to $621 million.

Despite higher trading volumes, investor confidence in some trading platforms has declined this year, amid concerns over the impact of the Commodity Futures Trading Commission's decision to allow 'Kalshi' and 'Coinbase' to offer perpetual futures on cryptocurrencies on the market share of traditional exchanges.

Sara Youngwood, CFO of Nasdaq, downplayed these concerns, stressing during a call with analysts that the exchange expects a limited impact of no more than 1% of revenue, even if approvals expand to include equity-related products.

Nasdaq's stock has fallen more than 6% since the beginning of the year, but it has outperformed CME and Intercontinental Exchange, which recorded larger declines. Nasdaq's stock rose 2.3% on Thursday.

Analysts pointed out that Nasdaq's expansion into software, data, and anti-fraud services enhances the resilience of its business and its ability to withstand market fluctuations.

JPMorgan analysts said in a note: 'We consider this another strong quarter for Nasdaq, and we appreciate the broad momentum in its business despite ongoing market discussions about AI, exchange regulations, and others.'

Revenue from the fintech segment rose 16% to $539 million, while net revenue from market services increased 11% to $340 million, supported by higher trading volumes in stocks and stock options.

Nasdaq reported adjusted earnings of $1.07 per share, beating the average analyst estimate of 98 cents per share, according to data from the London Stock Exchange Group.

The Chicago Mercantile Exchange also beat Wall Street expectations for second-quarter earnings, while Intercontinental Exchange and the Chicago Board Options Exchange are scheduled to report results next week.