NASDAQ, INC.NDAQ
NASDAQ, INC. Income Taxes Disclosure
INCOME TAXES
Income Before Income Tax Provision
The following table presents the domestic and foreign
components of income before income tax provision:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(in millions) | |||||
Domestic | $1,703 | $1,091 | $1,073 | ||
Foreign | 442 | 358 | 328 | ||
Income before income tax provision | $2,145 | $1,449 | $1,401 | ||
Income Tax Provision
The income tax provision consists of the following amounts:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Current income taxes provision: | (in millions) | ||||
Federal | $132 | $166 | $145 | ||
State | 60 | 70 | 52 | ||
Foreign | 118 | 165 | 79 | ||
Total current income taxes provision | 310 | 401 | 276 | ||
Deferred income taxes provision (benefit): | |||||
Federal | 62 | (25) | 51 | ||
State | (3) | 2 | 8 | ||
Foreign | (11) | (44) | 9 | ||
Total deferred income taxes (benefit) provision | 48 | (67) | 68 | ||
Total income tax provision | $358 | $334 | $344 | ||
We have determined that undistributed earnings of certain
non-U.S. subsidiaries are not considered indefinitely
reinvested and would not give rise to a material tax liability
when remitted. Nasdaq continues to indefinitely reinvest all
other outside basis differences to the extent reversal would
incur a significant tax liability. A determination of an
unrecognized deferred tax liability related to such outside
basis differences is not practicable.
In 2025, we adopted ASU 2023-09 on a prospective basis.
See “Recently Adopted Accounting Pronouncements” of
Note 2, “Summary of Significant Accounting Policies” for
further discussion. A reconciliation of the income tax
provision, based on the U.S. federal statutory rate, to our
actual income tax provision for the year December 31, 2025
is as follows:
Year Ended December 31, 2025 | ||
($ in millions) | ||
U.S. federal statutory income tax rate | $450 | 21.0% |
State and local income taxes, net of federal income tax effect | 35 | 1.4% |
Tax credits: | ||
Energy-related tax credits | (24) | (1.1)% |
Other | (4) | (0.2)% |
Change in unrecognized tax benefits | (12) | (0.6)% |
Nontaxable or nondeductible items | (33) | (1.5)% |
Effect of cross-border tax laws: | ||
Foreign-derived intangible income | (51) | (2.3)% |
Other | 4 | 0.2% |
Other adjustments | (7) | (0.2)% |
Total | $358 | 16.7% |
In the table above, the majority of state and local income
taxes include New York State and New York City. In 2025,
energy-related tax credits includes an $8 million benefit
related to a carryback to a prior tax year.
A reconciliation of the income tax provision, based on the
U.S. federal statutory rate, to our actual income tax provision
for the years ended December 31, 2024 and 2023 is as
follows:
Year Ended December 31, | |||
2024 | 2023 | ||
Federal income tax provision at the statutory rate | 21.0% | 21.0% | |
State income tax provision, net of federal effect | 2.9% | 3.2% | |
Excess tax benefits related to employee share-based compensation | (0.3)% | (0.7)% | |
Non-U.S. subsidiary earnings | 1.6% | 2.5% | |
Tax credits and deductions | (1.7)% | (0.2)% | |
Change in unrecognized tax benefits | 0.4% | 1.0% | |
Deduction for foreign derived intangible income | (2.8)% | (1.6)% | |
Intra-group transfer of IP | 1.7% | —% | |
Other, net | 0.3% | (0.6)% | |
Actual income tax provision | 23.1% | 24.6% | |
The lower effective tax rate for the year ended December 31,
2025 compared with the same period in 2024 was primarily
due to the release of prior year reserves following a favorable
audit settlement, the revaluation of deferred tax liabilities to a
lower blended state and local tax rate, revised state positions
related to prior years, a divestiture in 2025 and the
completion of an intra-group transfer of certain IP rights to
the U.S. headquarters in 2024.
The effective tax rate may vary from period to period
depending on, among other factors, the geographic and
business mix of earnings and losses. These same and other
factors, including history of pre-tax earnings and losses, are
taken into account in assessing the ability to realize deferred
tax assets.
In July 2025, the One Big Beautiful Bill Act was signed into
law. The impact of changes from this law did not have a
material tax impact on our Consolidated Statements of
Income.
Income Taxes Paid
The following table presents the federal, state and foreign
components of income taxes paid pursuant to the disclosure
requirements of ASU 2023-09 for the year ended December
31, 2025:
Year Ended December 31, 2025 | |
(in millions) | |
Federal | $107 |
State and local | 72 |
Foreign | |
Australia | 18 |
Canada | 100 |
Sweden | 33 |
Other | 43 |
Total foreign | $194 |
Total income taxes paid, net | $373 |
Cash paid for income taxes, net of refunds, for the years
ended December 31, 2024 and 2023 was $358 million and
$254 million, respectively.
Deferred Income Taxes
The temporary differences, which give rise to our deferred
tax assets and (liabilities), consisted of the following:
December 31, | |||
2025 | 2024 | ||
Deferred tax assets: | (in millions) | ||
Deferred revenues | $27 | $40 | |
Foreign net operating loss | 9 | 3 | |
Capitalized research and development costs | — | 43 | |
Federal capital loss | 3 | — | |
State net operating loss | 3 | 3 | |
Compensation and benefits | 67 | 47 | |
Deferred interest expense | 16 | 63 | |
Tax credits | 35 | 18 | |
Federal benefit of uncertain tax positions | 18 | 16 | |
Operating lease liabilities | 128 | 113 | |
Unrealized losses | 36 | — | |
Other | 34 | 41 | |
Gross deferred tax assets | 376 | 387 | |
Less: valuation allowance | (1) | — | |
Total deferred tax assets, net of valuation allowance | $375 | $387 | |
Deferred tax liabilities: | |||
Depreciation | $(23) | $(30) | |
Amortization of acquired intangible assets and goodwill | (1,700) | (1,698) | |
Investments | (90) | (81) | |
Unrealized gains | — | (55) | |
Operating lease assets | (110) | (95) | |
Capitalized research and development costs | (3) | — | |
Other | (6) | (8) | |
Gross deferred tax liabilities | $(1,932) | $(1,967) | |
Net deferred tax liabilities | $(1,557) | $(1,580) | |
Reported as: | |||
Non-current deferred tax assets | $27 | $14 | |
Deferred tax liabilities, net | (1,584) | (1,594) | |
Net deferred tax liabilities | $(1,557) | $(1,580) | |
In the table above, non-current deferred tax assets are
included in other non-current assets in the Consolidated
Balance Sheets.
We had a $1 million valuation allowance as of December 31,
2025 and no valuation allowances as of December 31, 2024.
Based on all available positive and negative evidence, we
believe the sources of future taxable income are sufficient to
realize the remainder of Nasdaq’s deferred tax asset
inventory.
Nasdaq has deferred tax assets associated with net operating
losses, or NOLs, in U.S. state and local and non-U.S.
jurisdictions as well as a capital loss with the following
expiration dates:
Jurisdiction | December 31, 2025 | Expiration Date |
(in millions) | ||
Foreign NOL | $9 | 2039-2044 |
U.S. state and local NOL | 3 | 2026-2044 |
Federal capital loss | 3 | 2030 |
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(in millions) | |||||
Beginning balance | $84 | $80 | $70 | ||
Additions as a result of tax positions taken in prior periods | 2 | 3 | 2 | ||
Additions as a result of tax positions taken in the current period | 11 | 15 | 25 | ||
Reductions related to settlements with taxing authorities | (20) | (6) | (14) | ||
Reductions as a result of lapses of the applicable statute of limitations | (6) | (8) | (3) | ||
Ending balance | $71 | $84 | $80 | ||
Unrecognized tax benefits in the table above, if recognized in
the future, would affect our effective tax rate.
We recognize interest and/or penalties related to income tax
matters in the provision for income taxes in the Consolidated
Statements of Income, which was $3 million tax expense for
the year ended December 31, 2025, $4 million for the year
ended December 31, 2024 and $3 million tax benefit for the
year ended for December 31, 2023. Accrued interest and
penalties, net of tax effect were $13 million as of December
31, 2025 and $10 million as of December 31, 2024.
Tax Audits
Nasdaq and its eligible subsidiaries file a consolidated U.S.
federal income tax return and applicable state and local
income tax returns and non-U.S. income tax returns. We are
subject to examination by federal, state and local, and foreign
tax authorities. Our Federal income tax return is subject to
examination by the Internal Revenue Service for the years
2022 through 2024. Several state tax returns are currently
under examination by the respective tax authorities for the
years 2014 through 2024. Non-U.S. tax returns are subject to
examination by the respective tax authorities for the years
2020 through 2024. We regularly assess the likelihood of
additional assessments by each jurisdiction and have
established tax reserves that we believe are adequate in
relation to the potential for additional assessments.
Examination outcomes and the timing of examination
settlements are subject to uncertainty. Although the results of
such examinations may have an impact on our unrecognized
tax benefits, we do not anticipate that such impact will be
material to our consolidated financial position or results of
operations. We do not expect to settle any material tax audits
in the next twelve months.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 26, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.