NDAQ - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Nasdaq Fourth Quarter 2018 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Ed Ditmire, Vice President of Investor Relations. begin. may you Sir,

Edward Ditmire

and fourth for XXXX quarter everyone, to financial us discuss Nasdaq's and thank morning, joining you today results. Good full year

concerning Ptasznik, under to our line CFO; team. of complying members After the Act from these future results and relate Information the presentation intend are: contained we'll results this Friedman, press differ over management and our the call use materially with CEO; the as certain On obligations is from may of could statements filed open release may now remarks, up means during reports Private differ turn presentation the Adena of website. the forward-looking press expectations, Ed periodic actual with events factors to The Counsel; that Q&A Securities a General and Michael information We Litigation of Adena. that XXXX. Knight, meaning to the and regulation statements prepared and Q&A. will Actual Reform I like other our disclosing our SEC. such on I'd to nonpublic are our within as material to you update. projections. in and to SEC cause disclosure website remind constitute forward-looking in release statements and

Adena Friedman

foundational important for and lastly, new priorities our us. Thank issues everyone, addressing strategic financial thank review today performance, discuss remarks My marketplace how joining drive execution detail focus businesses, progress our you, forward will made morning, Nasdaq Nasdaq's that for direction. to our Good XXXX business Ed. you we and in the XXXX. on strong and is We'll have

maximize is XXXX. our results, new report that the we was was by strong a incredibly strategic as pursued guided to XXXX I'm performance and strong marketplace as year we a and detail. how and opportunities chapter for renewed in we and that that execute successfully our delivered technology Turning that company and little it our for on for the provider, Nasdaq's the analytics while our sustain grow year critical more Nasdaq will a pivot to into full news in results our for to go vision confirm can we fourth core quarter a financial pleased the good The businesses. I XXXX

X% outlook annual revenue year segments solid while business all we contributing revenue driven years, organic at current as across improved growth growth This our was ranges, full the performance medium-term X% Services delivered materially our XXXX its X% of Market from in in full Our or X growth in best above year. respective growth by their revenue our businesses organic of delivered XXXX. up for achieving

especially Market of margin across revenue growth XX%, businesses, Focusing percentage fourth X financial XX% XXXX, we strong operating leverage quarter in Services expansion delivered on the quarter. results $X.XX to delivered prior-year of contributed company while over points Information total our Services performance and increased of strong of Non-GAAP the year-over-year. EPS top-line organic operating

well executing XXXX the our company said we as track XXXX, proud it right in confirm I'm encouraging I'm incredibly along excited to the direction I on proof-points beyond. we're for most While provides of strategic that continue the in before, about as early and

transformational new unusually and to in from platform. intake organic the strong delivered specifically, Framework starting more periods. Nasdaq Turning the in future impactful in million, $XXX XXXX of outlook organic in the segment mix XXXX it as the medium-term addition its this should XX% year, and with implementation critically Total Financial clients of make quarter fourth including in to $XX renewals in with was highlights and an order million that throughout growth the Market progressed the growth businesses Technology, specific within our quarter fourth

Data clients Investment to growth our platform, Specifically, average operator eVestment year XX the its our and year-over-year XXXX. double-digit above than S&P new in new quarter X% licensed RegTech and solutions, of XXXX And as But infrastructure the of and AUM to clients we show as included both in in moderate signed we higher XX% sell-side official in comparison eVestment's momentum the at to how new while did strong expanding quarter our the sophisticated up XXXX steady due strong by Nasdaq double-digit we Nasdaq-licensed Nasdaq. only end bringing how principally many as segment, modules, the higher timeframe. expect. from makes X% that use year a broadening segment QX, record more daily up-selling saw XX in our revenues well in the growth first being period. more buy-side in eVestment, [delivers is XX% Services as market in passed XXXX. well average from of an in increased from the the segment clients signed ETPs and In our in data, well the at at existing XX [ph] declines increase strong mid-October year client XX% up people clients, end were market respectively declines at in Investment XXXX Starting in And profound for growing the well solution. XX%, clients levels continued year. a] a as organic markets, when the AUM organic of still we growth at in prior fourth nonetheless, close. revenue were rates full full driven organic as see higher were futures Index it new which X-year in revenue analytic X volumes most the put calculation began In XXXX, market year of which with as anniversary contracts, surveillance up of declines X% which Analytics continued it the same the revenue Index average XXX the part particularly pullback AUMs due XX% Information for through than with business, to Analytics, on serve The year growth. our on international in in the especially we licensing value

better than combine in business. active data was core XXXX, Services' a organic completed where also the This us Quandl investment quarter, starting Quandl, - of momentum made Analytics position and the evolving more was alternative Hub the we Information excellent to data fourth acquisition provider alternative in - in we space, of XX,XXX our While sorry I'm to fourth during Toronto based with the users.

proposition very of market enabled technology a buy-side bring to investment professionals. a strong increasingly will We value

by Moving listings to segment a business. organic growth delivered businesses, in marketplace foundational our our with strong Services performance XXXX particularly Corporate our X%

the For exchanges year, Despite welcoming U.S. the Nordic during XXX in consecutive a attract fourth volatility the XX% and period. from our the companies XX Meanwhile, Nasdaq-led IPOs. in new IPOs year, for IPOs was XXXX of U.S. for quarter welcomed win-rate win-rate achieved XXXX, the Xth to the a in across we quarter Europe. markets U.S. - XX% IPOs continue

listing expanded listings exchanges added the and above time. Nordic, for X,XXX in and XXXX new count North First Baltic the first company XX Our

in changes important also Services. We within XXXX made Corporate

integrated our leveraging businesses, We providing As now with client to Corporate Solutions divestiture our on deepen we and to forward offering to of to these focused tightly teams. clients and our Solutions C-suite certain our in Listings the look we and strategic board-level work enhancements complete Corporate then relationships XXXX. solutions,

and particular, renewed pleased in in record pivot strategic Services a of options strategy, of a organic busy the to a and growth to analytics increase performance. million maximize continued our about $XXX period. organization. XX Market volume year, potential to a executing net peak equities Services handled In now strong our uptick our report platform in significant annual our across experienced markets Finally, XXXX drive on business delivered to no market evolution in I'd revenues our like messages with Market specifically key days, direction. helping across technology A revenue latency for the stand our net provides revenue. drive to XX% significant that incredibly quarter our net growth in of very year-over-year to Nasdaq and options I'm volatility, or our volume due markets with to fourth X% helping implementing the a exchange where in change providers, our billion December equities degradation pillar XX talk and as U.S. we including in

deliberately continue to analytics capital capabilities We technology invest to growth our to scale platforms. and add and

deliver portion Financial and and the Framework initiatives, Our to brokers initiatives marketplace banks, our as our rather related material divesture provide operators the a outside compliance holding. stake Private investment investments and capabilities Group, become of the It with expertise to acquisitions market which as initiative. of to well coming recent solutions financial Quandl to LCH our also than from include industry, Markets of and notably a Cinnober buy-side time the eVestment Nasdaq organic over capital includes our a financial in had strategic the that

shareholders already last more it a X% market exchange Nordic using revenue the securities the IR business. to regarding particular, think Nasdaq range. We new also with shareholders. center to Europe, Europe. The then expand returns Services offer morning are markets other relationships core. and that to professionals, provides suggest our in X website the proposed performing global Consistent can significant participants to margins has relationships presentation These our VPS efficiency operating capital strategic and We've the investment we strategic capabilities. this XX% to and analytics have will to the systems for exchange and details. open to capital investment marketplaces today. a listeners and been in evolution marketplace the in our our significant our commitment U.S. across offer this of Services is Norway's and and segment create create our both we and broker/dealers, market commitment with years Nasdaq's we Oslo transaction common opportunities combination on to Market been use markets of provide review franchise sustain consistent the which CAGR in combine across delivering Nordic corporate the pillar a our other we businesses, profitability But Nasdaq Oslo unwavering announced that over earned centers, investments depository the other to would in Nordic and our periods recent in marketplace technology the at continued together, well Børs a flow that I platform growth. foundational low strategic specific cash position proposed potential making for comprising leading we've Børs and with able the Nasdaq with put an Corporate markets. support core efficiencies And The clients the a In technology in for those central

We deliver to also and our businesses. functions certain exchange efficiencies across expect and corporate

are from national Oslo to We post-trade capabilities Børs' benefit expertise are CSD operator Norway. CSD the in excited they as in

leverage We have base. shipping, this new and also enthusiastic our franchise up global our seafood believe franchise and and opportunity. fit Børs' clients in within Nordic open leadership unique, energy to can more our Oslo we client global markets Børs as through about Oslo been

our we benefit and making concerted position As fit the strategic in consider obviously of and also strategic to advancing areas. product in company's our and and competitive ensure priorities, geographic also our expanding capabilities But growth strong our within a our strong acquisition continue to we overall analytics very see sustaining the we we're our We're scale profile. the marketplaces technology investments respected pivot.

shareholders. are also focus We our for delivering on

With the our Oslo to VPS revenue don't in material combination, Børs mix. we expect shift

the Our closing. within X we accretion years and ROIC XX XX% and target organic segments above non-transactional non-GAAP are we of in X within to expect expect EPS for or generate to months unchanged growth add

importantly constituting Now grow by and Euronext have support its me close the context key but for transaction competing path in ownership. support capital Because board of earned we Nordic this, irrevocables many let of investors financially, XX% Euronext. over our of it Nasdaq's also VPS the unanimous from and is markets Oslo's address ability the a both superior to we've stakeholders. its more in Børs Oslo is approach the offer the to of to

Børs critical them. capital Lastly, path economy, Norwegian importance look to VPS's regulators the Norwegian strongest engaging stakeholders, all we Børs to will and carefully forward Oslo VPS's with and the including because Oslo forward determining consider options, markets when

of challenges businesses, that the some on Now mention. turning we continuing our to operations our are are core of focus and worth issues current back

in made detail clearinghouse and we've risk developed In Nordic's quarter. the communicated the committees then default terms plan over a the of commodity clearinghouse last comprehensive event, with we clients. board, and CCP to throughout and that have enhance considerable improve to progress XXXX with vetted We our our

member key to to are proceedings with margin, member initial resolution the areas requirements procedures. - the enhancements of We default fund improvement and underway our default including the

a rata to members, members' pool We clearing receive €XX receive from capital capital also them to share our liquidation to for voluntary opportunity the defaulting opt-in recoveries of million that release to supplement developed providing the program of they assets. their pro of the expect

Turning to the products. regulatory equities landscape now U.S. and related to for data U.S. equity specifically

overturn the mentioned proposed our the the decision the been we efficiency, related remanded a exchanges feel own has continue Separately, SEC important to on stop Exchange's and in judge decided transparency clock how their debate litigation the Nasdaq timeframe remand brokers Markets terms between hearings asked and many review appeals, winding the October the six exchange pricing their that New to in will Stock restarted order, decision Last Stock pricing this to and products standards to discussed the order book highest court-litigated The D.C. exchanges to data years exchange quarter, and occur global U.S. resiliency. largely and procedure As yet to the response, SEC-approved sometime of of directive I've affirming remand XXXX. to its and of services expect has was for a court law late for to of contributor from appealed design exchanges depth a last to banks levels this and remand and call, we'd filings. an we believe Nasdaq SEC's administrative the over We and for the come. back the have York been reconsider circuit SEC re-review. debate filings not clock. month in where in to filings XXX deliver

has forward, geographies as organic deliver driven to of manage services well by expect revenue as predominately our initiatives new specific analytics data information As our and our to which business we we businesses. going our continue unregulated licensing Index, market expansion in on growth, in investment

U.S. Securities we XX of Lastly, by hyper in markets. a the to competitive certainly equities regarding what reports exchange for been the of has entrant continuation over surprised years, U.S. landscape new competitive can't a be landscape,

and Over all decade Nasdaq a groups the the last and create low made environment for efficient market exchange other highly participants. trading a to improvements half, resilient significant have cost

competitor, the and least a an introduce that our such As prepared and trading challenge have we to clients receives to fully when are this if is albeit launches. important, meet at time sixth attempted it new exchange and approval SEC

on equity we other by reference posted the on positioning U.S. presentation important your website record strong other our fragmented in IR For January along track and competition increasingly we with venues delivering of important often across where markets, modern addressed a with backed of X, market complexities competitive structure. our regulatory and customers,

let's execution begin following now we've So forward, to the year. we specific turn developed the as priorities looking XXXX, and for

beyond, through measure based the - where client and to At time we same capital measure to Nasdaq's we and marketplaces. principally our of markets intend First, the presence to in we intend of adoption on implementation also we Framework which our technology continue Nasdaq own solutions. focus Financial adoption the NFF enhancing across the want technology intend internally, to

our we data, drive here our sales analytics growth trade corporate sell-side, markets clients. Second, client our and analytics and progress be intend with across Success and data will with tools. and in integrity solutions to the interactions governance through measured better buy-side capital surveillance,

to our with Third, marketplaces, leadership and lastly, strong we to progress as build culture to to forward market which high in operate year new to innovate driven share on in to look our and we functionality continue continue markets. to goals And multiply we on opportunities I these integrity machine you want our updating to position on in grow. core we our enhance our want as meaningfully innovate the progresses. the

growth, XXXX I strength of data our wrap franchise affirming organic our along well saying as successful begin particularly executing capital the by the will up, as for that a provided early strong regarding I points pretty summarize markets as Nasdaq results in strategic new revenue As direction we encouraging landscape. evolving quarter our that an fourth completing

remain technology analytics advancing in our opportunities demand as we data and to solutions strong sustain XXXX, Europe. relentlessly as possible on Technology the businesses for maximize and highest the the strategic offerings, and we and even forward continued in U.S. Moving and pivot our foundational a provider analytics focused Market marketplace our begin with as continue we to invest our effectiveness

pleased will and opportunities continue strategic energy European to encouraging in with challenges we offer pivot to address I characterized capabilities regulatory confident opportunities XXXX, environment that Norwegian we our opportunity direction to the turn that in its results effectively. unique CSD Michael acquire long-term by seafood but every sector. have in to are And volume the and our in and strong share is that remain And to equities the detail. look right strengthening very moving and execute we with the we're Oslo strategic We sizeable organization significant early business and of to review. its identified the our review are market ability financial environment market, at including to against that, forward it also Børs over markets announce expertise external its I'll operating VPS The is with our that

Michael Ptasznik

by from a start Reconciliations our I and revenue of XX, highlights each in be organic $XX to Relations $XX including and impact revenue results growth results organic and good the rates. exchange increase morning, million organic in which that's everyone. on Index. of noted. unless million primarily My ir.nasdaq.com. growth $X of from Adena, year growth. non-trading from to divestiture segments. website with on million increase Digital or from products fourth on available a prior linked Services, unfavorable and inclusion changes $XX found the Nasdaq growth million be XX. quarter Thank Public fourth and in start I million net of: of the Services focus Media of a $X and in will saw presentation revenues consisting can related primarily X and XXXX, $XX million, of XX% X release negative all up growth Solutions Pages Market $XXX Information management eVestment; our a XXX revenue quarterly and reflected on revenues to review and as period, attachments presentation million you, XX% GAAP our organic $XX or positive page I The higher and in press impact pages performance exchange in in the foreign businesses: U.S. XX% the on now non-GAAP commentary traded comparisons will acquisition reporting of our to in consisted million will non-GAAP the from reported within Nasdaq under will impact average otherwise the reviewing organic segments, licensing trading the of higher quarter XX% as revenue X XX% Services; to the the shown in were of to the Index assets of futures due will indexes at

an tape versus in futures our fourth to growth U.S. plans, and million organic Analytics a XXX Data the Data million XXXX. October record data on tied a Investment primarily revenue, revenues deferred increased due subscriptions products. $XX the in proprietary and $XX revenues of adjustment impact acquisition from traded from XXX% data million eVestment period, share the a and of Market eVestment. from Index, due impact growth purchase revenues sales During European $XX price a to of completed of contracts million quarter eVestment and increase X%, the positive $X XXXX lower increased of to in Asian in Nasdaq

delivery offset increase partially full as slightly revenue revenue while For service revenues support and year revenues, requests reflects The was million or XXXX, and Pages lower higher and software XX%. and shown higher advisory the growth and at as million organic on growth organic X increased services change higher totaled $X $X primarily information software Market Technology XX X%, by revenues. X%. or a

For full down for XX%. XX prior Technology totaled the year growth organic In Technology revenue margin XXXX, the from the operating year. Market totaled XX%, Market percentage XXXX, points

NFF impacted to as spend both the will includes the XXXX managed more integrated to and stages continue the solution in period to advance fully communicated integration. Cinnober. adoption ongoing as of Financial do previously a investments implementation in model. XXXX by service of as development, customer and and early Nasdaq and the NFF margins Cinnober model acquisition expect elevated expansion XXXX We the and be synergies beyond, we the margin Framework the XXXX we well towards As scale a from benefit implement scalable expand progress temporarily of

year increase operating revenues. exchange. offset options, partially and commodities from X revenues believe European from have begin Pages Market Corporate or XXXX, the XX, X, partially million becoming changes additional for $X Turning segment, was Services The decline in percentage were period. by Services foreign XXXX. increases from The fees increase where X saw million the in organic period. Pages The XX% higher we to on XX% equities or due Market QX Services revenues number listing X a reflects we by we our primarily all-inclusive primarily $X margin to residual to and XX% income expenses Corporate and to the of negative listings $XX million totaled fixed a which on effective and or impact or in million and higher and in the revenues offset prior $XX U.S. including shares. XX% prior Listing and now from IPOs U.S. million operating XX%, a eliminated as up X%, all revenue organic January offering net on divestiture, margin run-off a versus was increased the decrease the the in up The increase XX revenues related U.S. year X%. earned points due equities, issuers $X size in of U.S. Services' income increase of

organic growth year Services totaled the X%. revenue full For Market XXXX,

Relations $XXX XX decrease of increase review to with $XX to the to from $X operating divestiture exchange by increased Digital impact X% favorable the XXXX. the rates. $XX an businesses Media expenses X acquisition organic a the of expenses, Public decreased On Solutions from and in and during a changes and million of $X million of non-GAAP eVestment impact expenses million Turning Services the impact million offset million and Pages basis, organic foreign net

a expense expect in of periods growth, XXXX, X% that growth as we've will reminder, organic organic periods. be above the As we higher likely company's during such revenue experienced the revenue our expectation those longer-term X%

Slide to Turning XX.

We are of introducing billion and our range guidance full $X.XXX in the billion, impact latter of XXXX to XXXX which year-over-year. FX expense increase acquisitions, X% and of expected year $X.XXX for expense organic changes, of the an Cinnober, represents the of the related approximate mid-January. the which Adjusting includes it divestitures projection non-GAAP midpoint operating to acquisitions costs Quandl range, closed the

closed. once Regarding is transition we successfully the Oslo guidance potential will update acquisition our Børs, the of

Tax in fourth XXXX million the to tax increased versus margins, was period. in the as to for non-GAAP the related million of due profit income fourth finalize operating basis, fourth was quarter of a tax recorded increase $XXX prior and XXXX, rate quarter points XX%, expense year X quarter provisional tax margin $X and operating floating primarily up Net of quarter interest Moving GAAP of the charge impact from of XXXX, percentage the interest an XX%. the the was Cuts higher prior period, quarter in the non-GAAP year in and operating effective rate million debt. non-GAAP of The XXXX. XXXX the to on fourth $XX previously fourth we non-cash Jobs which the $XX Act, On million we rates totaled recognized

non-GAAP rate to is XX%. tax XXXX, expected between and XX% For be

tax to fourth In reserving XXXX, of on diluted income million in commentary. of year touched relief million or to $X.XX non-cash in was Non-GAAP net results per fourth quarter compared the in program, diluted GAAP prior the or share the in Nordic we're $XXX addition charge relation capital impacted $XXX Adena per Nasdaq period. $X.XX for which also which CCP's to XXXX share her million to quarter $XX the attributable

by Eurobonds Slide due values million on decrease million caused commercial paper outstanding debt a XXXX, a $XX decreased book QX to XX, capital $XX and $XX by versus to primarily Turning decrease in million weaker a euro. in

plan, the moment debt like EBITDA ended that ratio our period a times from does emphasize for major quarter to on any shift of commitment offer of to continuing dividend our buyback organic unchanged. a our in capital and as target the of priorities XX%-plus flows our ROIC and to share-count investments income down XXXX. not in our on cash specifically, third terms capital, grow, our program announced the our grow of Spending I'd total to X.X imply to at capital end times, maintain flat Our inorganic and are X Omega execute

acquisition we and reach - borrowings. mid to level a have this for XXXX, could impact of be consistent before in Oslo gross XXXX. close on structure, end excluding new then a mid-Xs the the long-term be reducing Børs of an be would would later a The that refinance And to with the our the cash of accepted intention hand the mix middle in XXXX, net the we is mid-Xs new leverage target putting in of offer that for cash acquisition. maintained capital our the to position grade by investment stated credit we terms shareholders, with the we by our a If of in delever Børs back Oslo In have establish of rating. a us deleveraging to objective mid the we'll XXXX objective

of turn Thank the million time it $XXX in and shareholders, to company $XXX common $XXX will returned to at dividends. and shares back including XXXX, over for operator During the for the Q&A. repurchases valued million your million you I

Operator

of the you. Repetto line Thank first Thank question come from Instructions] Sandler O'Neill. you. [Operator Rich our will And with

open. is Your line

Richard Repetto

morning, Good Adena. morning, Yeah, good Michael.

Adena Friedman

morning. Good

Michael Ptasznik

Good morning.

Richard Repetto

And, congrats Adena. year, second on your

Adena Friedman

Thank you.

Richard Repetto

price if had increases I review when we get of new some guess, I me because interesting data ruling guess, have said until these XXXX. - one question, the that a data to you market think you I - to it the market issue, end on that, gave you wouldn't court you is

So could guess, does a get the from least, sort I long whitepaper guess in I'm on - is, or well? of court a to outcome And, put an comments that prevent stall ask, ruling? question the SEC - this as IEX put going any you just give - came changes any this I that until like as new at as out making from

Adena Friedman

the impact legal ask, So, to Ed, I proceedings. a before. it I'm going on has significant think with what regard we I to that think said that don't

Edward Knight

we No, I with forward connection commission consider in to work will the them will in general. continue what go filings have said light the we SEC, data constructively. with our market they of mean, in them with And will at

we're of position law and the And explained a we SEC and path filing And the SEC both legal to we the on our The the still for handling has with have forward questioning underlying not been us. based A working them so, process process a we by and the lot followed. previous around order in established SEC. facts. in authority feel confidence have that been the those has the remanding

it to forward look the being courts. we resolved So in

Adena Friedman

to spread why lot of - the and the based total and they out the fees market that think looking our possible way services guess, I the and want trading provides Nasdaq of put - specific their really set a needs to value is we I broadest spread very good yesterday across we cost to we the and that that provide data the did at insights clients, model and really think with works better believe we so that frankly announcement, a way And really done types our to with job. regard of on IEX, why well evidence really of And blog Mackintosh nice on actually I we into Phil did market. to show provides blog good way actually different the interact actually the some was competitors our and to a that well. a model

you we it. So, all to encourage read

Richard Repetto

rules. get the back by Okay. play the Thanks. I queue. I'll in

Adena Friedman

Rich. Thanks,

Operator

Merrill America with Lynch. line Thank Carrier of you. comes And next the our of Michael question from Bank

is open. line Your

Michael Carrier

lot. thanks morning. Okay, Good a

Adena Friedman

Good morning.

Michael Carrier

it's Services, the been Fixed question, some just XXXX, then business. than Maybe on maybe has maybe the think the people what an on whether still first Maybe to investment Like maybe been or we just place thinking Income areas reconsider those where pivot, that allocating the update some resources, look the areas? then XXXX, I side, have maybe the of on growth have at how strategic lagged, those transaction in on about Services, you're on are expected. growth in you've stronger Corporate pick initiatives tech businesses, obviously, when of the Information

Adena Friedman

for Thanks the question. Sure.

business, the not I large And Market been are really Analytics and as where performance we're So agree reacting some some Services assessment business of Data to strong how parts in solutions terms momentum delivering with very Corporate the agree have great continued corporate have making really strongest you Services and and growth. of area areas markets. of But with the our our also FICC we clients of across the investments our core I our the within business performers as your our that in pleased well we're our in business. tech with

And so, organization. within of one things the our Services focused on with Corporate been integration Listings client we've that is

the - have serving organization interactions. these connection but same also are we two this terms somewhat disruptive and these of we think DMS PR separated - with two were in base. what our they're client and we the divestiture which the to And of segregated frankly I businesses - did year earlier between how businesses, they're the completely both overall managing in that client

for it think businesses focus now we having that to our the to where with And business. and our a needs. we're business allows And do that Corporate believe client much we allow earlier they're us of more that are our It capital the gotten that Listings terms to to do point things of on we've more market. there they want offering. are our looking organizations will experience are believe service in also organizations alert our clients' having - Nasdaq think services I of better and between integrated our the point within that give their of I energies areas to Solutions ourselves serve if things sales with all we client us if issues or our if then, single interactions strategic have are clients those to contact a where also do

positioning see So there. would I in with very issues. also we're very and initiatives able of growth we did to XXXX think of to But - ourselves In create But business clients. has to have success do to was necessary. how our feel some and like I some treasuries terms we're mean, more it have in I we'll that specific improved out re-platforming do really disruption retention the range that the that in a point our area, driving FICC

very pleased the performance new of that think with we're I the system.

flexibility as clients a system XXXX performance we're functionality of the go are in with think new much much And as of able of the more our excited as new improved system. the products and really agility. we well rebuild working platform. business And with new off of to on into to deliver the we're now back kind pleased I the being

to that are frankly, maintain and I areas to that there Nordics, our I is clients last sure one earlier productive investment healthy - a despite us we rebuilding going make in that being we really incurred of of you a think the know, extremely market with within So And issue that kind are our as year. larger, the the through we a then, is would say, commodities business FICC. us

state into focus. you're XXXX. of go have areas So we two want those right, we through get that of think But a I better been - area an operating performance as those to of areas all real them

Michael Carrier

Thanks a Okay. lot.

Operator

Rosenblatt. Hill question Thank And next the of with from you. Ken line our comes

Your open. line is

Kenneth Hill

Hi, good morning, everyone.

Adena Friedman

Ken. Hi,

Kenneth Hill

as elements a some know areas like even brings, seems other that companies? of profitable weeks transparency maybe up whether seem was the some you post-trade you you that - come the the Cinnober, and system hoping about maybe a maybe risk clearing question in looking talk which that coming had in the the my [ph]. business So from contract guys set just OCC some won could there or the didn't of like monetize or on stakes can that's opportunity side I profitable, clearing back, surveillance how was for I or of how reporting of the the few business, that from you

Adena Friedman

that's great all, the great, of understanding first business. Well, of

say, So job Ken, of of kind great I have to dissecting the elements Cinnober. various

thrilled all, and the know of thought town there - how teams as too. integrate so you strong really organizations have it's and is just to the have as out, they and to gotten system we're now get aligned have are. into it's as - culturally a We And doing it that individual excellent, we've and we've talent to we particularly as technology clearing, the Nasdaq. And First Cinnober of people amazing halls together, in as starting we've we're The actually part would been also pointed is base a is very, very in the very be. talent great strong a meetings Cinnober system.

technology other systems on strong I say bringing profitable mentioned, to can the Nasdaq. we a to sure very we that make will as a space. path integrate very to we that in business outcome into best of of forward And that clients. base, this determine you clearing shareholders strong them more the and think for how businesses talent be the what I our on that have I at for is we're they path of particularly are looking the going we're and be terms terms to think our can driving that areas term in focusing So long a But the best our those in

and make and to capabilities for to we're decisions us. profitable that either of going making them they around strategy optimizing outside we be our what's how have and So right get that take sure should to a the going or really the forward them part assets the of outcome clearing

is just on review so And that beginning that our right now. - ongoing

Kenneth Hill

that, those included are for guidance to just XXXX elements now? And right be so clear here in on cost your

Adena Friedman

Yeah.

integration with have a we plan So around Cinnober.

the for Our on and some properly clients. time make Cinnober disrupting include that we the integrate XXXX synergies. into to teams to cost technology execution does the all our And successfully guidance execute plan Nasdaq and against take do we based can synergies any expect our of sure without

So that end the guidance is into does our add-on your of in guidance would have the course, XXXX. of which, been - so of our is all - of that what that, to inclusive expense guidance organic an include going -

Kenneth Hill

question. very Thanks the much for

Adena Friedman

Thank you.

Operator

Morgan. with Worthington from And our next J.P. question comes the of line Ken

open. Your line is

Kenneth Worthington

that of your the for on seem who committed. like over it some win the secured morning, presumes like deal, Obviously, question. commitments about - Euronext and taking you Hi, good my Oslo seems XX.X% vote. thanks those can for bid already It of seems

here? irrevocable? from So to XX.X%? Thank win initial is there then to or to something possible those to any those else you. extract And able what Oslo what it over extent extent an that might merger? Are on be at comments you - the votes savings is votes are play Or cost

Adena Friedman

the to going I'm to first Sure. over question Michael. hand

Michael Ptasznik

Sure.

irrevocables at the August. that currently we a Those shareholders the do those to they have of offer hold, hard irrevocables but are have the expire superior end we So that them. of offer believe currently front in

will from have that offer of is with And traders, of that on be entire by community, end make believe offer need we to community that and And - superior that the the our package the top respect accept. which think transaction the Nordic taken the Norwegian into is that account a supporting the which we think that the the and for the and board superior day transaction, of combination to parties beneficial the having offered standpoint can that determination put totality. investors bid unanimously at that in so supporting we a Børs' that Oslo they we for we a the will financial together, price

we end that to that here the but have so the be a believe program till execute where the as of to on support position transaction. the key it occur, of us And have representing with XX.XX% we do shareholders able to well a for maybe behind we'll wait together it we August put

Adena Friedman

at regard with synergy way the to And perspective, a we Oslo that Ken. from looking are

we've as in within exchange looking we leave businesses, family these really Nordic the done Denmark Nordic on of integrating as of and work center our and at with you We of types also terms a have a community. extensive strong it where experience part essentially, local Finland - how

synergies and of back we just exchange business some within off post-trade time, well sure of a the the around clients commodities kind well of same those synergies functions centers the in We as as delivering kind and Nordic have to key our operating business. benefit are and and making the the lot But of community the also excellence combining at addition in creating the to CSD Norway. that and business technology of have towards real as that efficiencies orientation of of of as business

efficiencies this, So also we that and and we to a our doing know strong shareholders, while experience execute really we Norway. have lot have to we on they returns deliver of path and maintain that deliver operation operational a successful a can core to within

Kenneth Worthington

you. Thank Great.

Adena Friedman

Thank you.

Operator

Point. question the next from Chris Allen comes Compass our with of And line

open. is line Your

Christopher Allen

Good everyone. morning,

of a question perspective. of add topic kind of in Oslo guess, at what guess the this just this want I is, inbounds number Just, to from got stay a strategic And I where the means Børs, at at opportunities tell this non-transactional to And in us deal the opportunities the you about look opportunity does what other current the scale? Market in unique spaces a time? business, Services

Adena Friedman

Sure.

are right You about that.

our that a noticed general. I we we to back the Nasdaq did So Børs market attractive clear of I is being that things Oslo saw make very to as XXXX in one back it in Nordic and think, in XXXX, was business

think something a frankly, it's markets. And us Nordic that this great very size business. our on opportunity within radar a long for in that So family the And I the had time. it we've a complete to really up for is

Norwegian trading on a the than different I our because seen - Nordic very it's totally all markets. that clients been they positively four clients, the operate market across and our the all of rest the technology And by almost Nordics markets, of has in Nordic the think - so stack yet,

And technology stack, so technology great a our integrate clients to more unified by and gives benefit. having us this create is opportunity for it an a the

on is those couple our a sustainable good client-oriented getting for able our definitely to have recognize that of that benefit eVestment opportunity we last of operate to And that's we're inorganic that investments markets. making up for and both in when The in organic for we capital towards I overall us to lot preeminence that's in be we're - sure that. we years. across of But of Quandl, to investments we've allocation we've customers. a capital from deliver look in to make over real our And opportunity size to terms sustain we've great do us the but It growth course, our those that great can are support this we and But the the acquisition, are our we investments at made excited Cinnober, undertaken there business, markets businesses. mentioned us customers deliver shift also so that very whether a businesses organic and our that call, is really allocation sure markets. on on a a investments and this made our and - that are to a across so non-transaction we always shift

Christopher Allen

non-transactional the opportunities? on comment Any Or...

Adena Friedman

on think bolt-ons executing you always tell, as would we're the I and in mean, at I looking - I Yeah. that bolt-on deals. opportunities. can mode at of we've some been

And really can complement the interesting if area continue area do that. technology in in or expand and the and help with that then that acquisitions supplement catalyst growth of kind and foremost. we first some will say anything business, will particular we can't that out, our I that's on that, be to undertake that growing think I I that in point always looking I to regular a think our just at that an want is that presence to we data our exciting would organic but approach can we activity basis. and there

So as years. the we have last two done over

Christopher Allen

Thanks.

Adena Friedman

you. Thank

Operator

Alex of with UBS. And Thank question you. next from line comes our the Kramm

is line open. Your

Alex Kramm

Hey, good morning.

Adena Friedman

Alex. Hi,

Alex Kramm

number you I mentioned financials. Cinnober can now coming that on concrete a to closing, was the cost Just materialize. you're may specific for bit minute. - guess, give maybe bit in guidance. us between side for it more the hoping take little impact I your a cost it's can little a businesses how as I give synergies little the that Michael, mentioned, a back bit But shutting down, impact you - know you a in to it's you

about our should now business filings, how impact we And the on the should we the comments there in terms more side you see for but that models? are thinking any just be So some that I be of know, out public maybe revenue clearly. seasonality? to looking

Michael Ptasznik

Yeah.

included both as said, are the guidance that Adena - So the Quandl and in we've provided. - Cinnober

$XX we Quandl that's $XX there, to range for in would the be cost basis in the full million, and would those Cinnober included So in roughly on million numbers. be of a year

be we'll achieve looking period. synergies the obviously to year so And through

again, that's So or growth, a of that's minus on year. in X% what's numbers. top regular that organic range the typically we And included in those believe plus

get the do So we forecast the has if you pieces Cinnober respect the combine published. again, those two next have that's together, for seasonality, how historical numbers that year. you With to

that there, to work as we contracts new so to those different would through the it may typically at Market a contracts start what opportunities from as that some those have of But through, take see somewhat. would and rest And say fluctuate look we you will we And then Tech the wouldn't business. see I that substantially the be work be. of

Adena Friedman

sure right of we Cinnober now that understand - opportunities, the we we're make to well as with we're regard needs want reviews at a the we businesses with across details doing at some about up so Ken are of mentioned that in, collaboratively the Yeah, own. to way days organizations had our team that the the lot that both to working through that contracts, revenue they looking the staffing as brought ancillary XX

Michael Ptasznik

look it revenue sure the recognition, aligns with take ours. a also make that We at

that is we work type happening right go of year-end. And now as so through the

Alex Kramm

I'll the jump queue. Thanks. in back Excellent.

Adena Friedman

Alex. Thanks,

Operator

our from line Alex the Thank of Blostein you. with next Goldman comes And question Sachs.

open. Your line is

Alex Blostein

Good morning. guys. Hey,

Adena Friedman

Hi, Alex.

Alex Blostein

guess, just now? appetite more for months, question around is the question follow-up the have clearly, over few a been And feels acquisitions. last Just like guys why I for mean, the acquisitive. I you XX kind deal, next you've we integrate the another deals, and potentially of months over obviously the appetite about these how think we XX as think buybacks as that? about should to

Adena Friedman

manage that first, our PR mentioned buybacks. in of we share did been deal. stated that the With to of you count sure is, our acquisitions why will available, are Well, and count what to think to And share tell time. we'll activity the back right right buybacks well a the and managing businesses we had long been a these is, all the that they're can acquisitions year return purpose that and one we're buyback on We've our well with we on as latter the that that's taking time. now, our it kind DMS make that continue to be Oslo having I what part - for sale relationships outcome regards managing really buyback the point increase our with Cinnober delivered Sure. what I a we've of that or have because of that of very as been But our we time the to on we've focus for this - do. we conversations that for shareholders for companies activity long continue long known important of generally, have

coincidence. acquisitions and franchise right to that grow expand moment and the way. to And to act be now. that to we fact just we a right have But just this think, opportunity just this our happened real I ready we when know they've the culminated year - So these is have be timed

really small deal be our bolt-on Quandl And with much deal. a approach It's to alternative the the GIS very that our to data. smaller a consistent to It's expand. already business to really driving think it's organic excited we're I strategy is business. more grow and in able a towards

it that way And to so works. the just that, be think I it happens that's

point do up. But the to deals. They're different to like parts each they part in of different our out our a about we is across one focused able Sometimes, are excited to - all very of to business. them business. on of bunch that I'd execute being tend our

execute confidence of to across them. our well our have So execute ability in every ability all to - we

Michael Ptasznik

And just to if I thing said could one what buybacks. to with respect add the Adena

we pay the - that go So we the be will with is that of if transaction get into to we taken back end the to the go we with account to Oslo comments respect down ahead when ahead towards would the do the that continue that, where with mid-Xs, XXXX.

it, this transaction, buybacks, respect with just now, just fluctuate. timing with may out. to However, when timing we're the so front-loaded the We've respect and come analyzing may it to typically right of the the

the the so continue. buybacks may on of and will The depending And timing that. timing fluctuate the transaction

Alex Blostein

Great. very much. Thanks

Adena Friedman

you. Thank

Operator

question next with from line of Deutsche Bedell comes our And the Brian Bank.

is line open. Your

Brian Bedell

Great. morning. Thanks. Good

Adena Friedman

Good morning.

Brian Bedell

timing expense one ultimate when if infrastructure integration I you just you the in you expect can can then the Oslo, guess, Could the new also, fact, attribution for on that? clients they're tempo achieve you of, on XXXX terms And Good morning. if if - those the Adena, the save of technology getting businesses? clients in Market the maybe of in buy-side quantify to talk you from XX that mentioned - into just Technology you integrated XX clients for the XXXX surveillance. from revenue new about and

Adena Friedman

with regard is India, going one Stock and year largest last to Tech across we so of Market very implementation clients, post-trade clients to to differ with the client, of National it's the So - Exchange a these clearing new it's settlement. be which by question, going the large signed

revenue launched that The we've terms works that We're of way as now of time project revenue production. delivery associated fair that But more that a with go recognize revenue to you production. our project able take with So something we the state of to then it's recognition amount where be start get are a full is projects. that will underway would to into in steady get a to the you project. well recognition but to

then production signed that steady client you probably as the some smaller can of say get some markets during more whereas is see that, we the doing into a state thing projects. cost, revenue able a that rules the changed and the revenues one But into expenses go I therefore steady expenses the and signed, become expenses of So some - like revenue as get those clients production. you'd have XXXX, higher into recognition of markets revenue The of recognizing the the once much higher crypto in phase recognition delivering. now to production, earlier XXXX profitability do we again get you full or the more state regional that would start and smaller recognition we off tend say full should And until of we state. be steady project contracts earlier be want will the once we get then we're go full get to we they to to

our it way. that in able confident together we X within team the are give back that's to question, out giving synergy deal timeframe. of just to sure be it's XX, we can't Brian, regard the say, the we specific two some ROIC months. accretive we're those say our deliver you're be going on those benefit the full the And I within kind will of organizations to XX But ability expense would we numbers. year understand with work XXXX dates. believe you anywhere the that to range, to to we've to when going Oslo not XX% So But And XX right good X XXXX into With to the see specific of Oslo and I done bring new clients. how make can

Brian Bedell

of those as to relative to expenses we Okay. onboarding but guidance in XXXX, expect And from expense I'm the then that we get we revenue mentioned, that expect - sure of you project bit should XXXX? with the just a that associated to clients it's on little should diminish the sort onboarding for like

Adena Friedman

Yeah, that the be to will right at look way it.

Of for course, clients they have signing hopefully. up. we'll will always sign clients new new And probably

You're XXX% right.

higher nice As client of we're to base always back in margin you across to producing getting be that out of over being and production a grow base growing on and of base. to clients going new time point get signing we of then But new and a clients, the continue delivering for we're lift a clients clients.

right, our it's all So our you're baked every into guidance, they well. But expense factor as expenses into will year also yeah.

Brian Bedell

Yeah, okay, great. Thank you very much.

Adena Friedman

you. Thank

Operator

the And our Kyle next Voigt KBW. from of question comes line with

open. is line Your

Kyle Voigt

morning. a the on good just members question Maybe exchange. Hi,

your participants in said we've you As story before, creating remarks, seen prepared trading this with your a new exchange.

some some to been of been on previously attempts this that people fee pool, around lot the just this X.X. launch. since different confident a SIP feel you BATS has you because you'll BATS what's certainly comment have why changed have think Could calling very or I revenue transaction just your able defend be in time But successful?

Adena Friedman

within of environment. of Reg Well, and done the very on competitive all, we've know, back I It very it's we New beginning timing look what environment also both was U.S. the for phenomenon very when at a time. the of equities first dynamic market markets, whole have as it a and very acquisitions. When and long back York BATS the was of the electronic Nasdaq came acquisitions, dynamic operated - on And at competitive NMS. a - all Exchange other Stock the into place, you the think of

sure a then of behavior going And on, sure sales to that. of a cost the kind say and will honing do make markets. environment. last be. since thing say understand our lot that well, And changes our spent they to would be would just make lot you our so understand developing the make there though, really was - relationship in can on how different extraordinarily markets of use This a still have and we XX that best the I pricing across very lot of have how But lot with we will changes and has strong best going been was really that always there was read the always This they - a Today on. always low deep sure encourage do our customers. clients, years services will again, our fluctuating positive I systems, really I we with is always coopetition we area. report relationships

how of cost great job last we've to environment And that. deliver trading think a that trading does possible decade, total sure of at clients. the I job laying really of spectacular it we done out a our we and think our best I make look the to have

last if that to today that several in the forming off have ready would primarily years, the of we're competitors say by XX% also exchange we like on. So those I take few new And them exchange. occurs trading are face we customers that anyway,

So for to get flow the an then currently exchange that. that's bring some to that environment, internalized extent into compete we of they

dynamic is that we're there challenge are on - we going that here, be always So I any there to environment our that way. comes to a think recognize take but ready

Kyle Voigt

you. Thank

Adena Friedman

Thank you.

Operator

And Barclays. you. Campbell with from Thank comes of question the line our next Jeremy

is open. line Your

Jeremy Campbell

Hey, thanks.

the and then, Just want be off Market momentum kind a back-half then little back XXXX? just up part that it to the you these first kind or versus just element longer as can tick it the question and in, of looking is ahead because to can on cycles get know to in piggyback new of the side, year? all? on infrastructure run-rate remind of sales Tech the you I Brian's And of of there is and are which I more seasonality kind your fourth quarter, a orders we of Is us, from bit little year the guess, side comment surveillance But, side of at this chunkier. are seeing the

Adena Friedman

Sure. there on is in signing - there Yeah, seasonality the deals. that is would always the side definitely say people of quarter market I terms fourth at infrastructure

really working the end they at them with the to into - a project tend to start to the year. a the year comfortable with try to launch point get to get do. beginning preparing been of them getting what new at like of We've of approved. lot They throughout So of budgets the to year, the are

quarter. And et the of [code] fourth quarters enhancements in the freezes, activity signed before deals on the So also have revenue, change fourth occurs cetera. of [ph] get end before the a to lot deliver year, of a in lot they

the well. And what we have we as tend higher revenue to call CR in quarter so, fourth

be tends seasonally quarter. So high to our it

sometimes year, demand These as longer months to be frankly, get surprised steadier of you say But and sign to whereas In X market sales come and a I times signing tends fruition. pleasantly surveillance for throughout get on are from to anywhere at you terms quarter. mentioned. demand of that up demand of - of sometime a to tends lot to deal take XX looking would services, in the for kind the - infrastructure be we these to can cycles chunkier

Jeremy Campbell

Thank Great. you.

Operator

Citi. Thank Ben you. Herbert from line And with comes our question of the next

is line open. Your

Ben Herbert

morning. good Hi,

Adena Friedman

morning. Good

Ben Herbert

side? cycle Could seeing durability lead-time? you. global potential to sales growth on any late Thank speak non-transaction or the you against pipeline dynamics Are slower just impacts you to

Adena Friedman

Sure.

to business our in two it a have of what our I expect continued I do. want see has been I think business, reasons that has we core we to services. going our we've our unabated space say in services. say So economic with one would in And lot for the demand is had business What as comes and number general number be as has strong in continue and - to our prospective continued do we we're to resilient core forward demand and would of when clients cycles. that interactions they terms to

regardless - to they to contracts. services general their those our are we help quite the cycle, operate tech in are tend Analytics as products because based, particularly and developing in in other tend business that to business, our be want regard well core contracts them very cycles. Our be they really across to are our the And economies they they countries. and who of economies to clients subscription general long-term strategically Data And with their and relationships operate that have

So feel our type about good very cycles consider of don't what I not we would resilience be cycle experiencing unquote, that business - the a, across of we phenomenon. late we're quote anything could and

Ben Herbert

Thank you. Great.

Operator

our Fargo. And of Chris you. comes Thank line with from Wells Harris last question the

open. Your line is

Christopher Harris

able examples. the of but once if part there you is do Yeah, thanks. think able potential accelerate expense think to And wondering Oslo maybe that, that. it Oslo X% you to give you benefits with be Nasdaq. might associated We you might revenue growth be can revenue this profile you at some you becomes guys if know highlighted Børs, deal, growth at us

Adena Friedman

Oslo management the could are the I on opportunities with we that So, think that there how catalyze certainly business. we discussed

in by Oslo example actually platforms, you participants to Nordic markets of don't into a bringing as common lower. in that the turnover when turnover today compared trading the good of one think Oslo look is and the is markets I of in participate them of in are there rest it Nordic technology the trading the at

could index be to see and index how market participation And platform. means We they for as in to And develop that so, last we demand obviously also the data, that an area also side, Nordic with while. do an in kind I the are thing opportunity the through deliver on the that market. have common us scaled for We it small indexes fact, that's of a a business, business. marketplace. them definitely the think we for technology more have increased very then, a know meaningful bring the grow index collaborating that and interest there to been into we've then and

seafood deliver some to the asset finding look we classes and so, leverage of their index to products forward other energy and And to ways to new some expertise in new market.

Christopher Harris

you. Thank Great.

Adena Friedman

Sure.

Operator

call now like questions no time. I'm to turn further I'd remarks. closing Adena showing the Friedman this Thank you. at to back for

Adena Friedman

kick-off Great. that Thank franchise pleased quarter much. sales We in energized. really the we was and XXXX. Well, we and just within have across it are excitement of earlier full a meeting had Nasdaq you fourth in with and And extremely the potential this stated performance very shareholders, our I to Nasdaq mission. we performance are enthusiasm our mission, closing, re-imagine it year our go own right for tomorrow, our own able And the realize direction be it's our do has as of markets just high. and strategic deliver for been by our now guided deliver XXXX into we believe to to to customers that extremely month

very about you in for much time today. excited opportunities our thank we're very your XXXX, So so

Operator

gentlemen, conclude thank and the conference. participating This program. Ladies in you does for today's

all disconnect. Everyone, great have You a may day.

Nasdaq (NDAQ) 30 Jan 192018 Q4 Earnings call transcript