NDAQ - Earnings call transcript Q3 2021

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Operator

Good day, ladies and gentlemen and welcome to Nasdaq’s Third Quarter 2021 Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your host today, Ed Ditmire, Senior Vice President of Investor Relations. Please go ahead.

Ed Ditmire

Good morning, everyone and thank you for joining us today to discuss Nasdaq’s third quarter 2021 financial results.

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

Adena Friedman

you, the will we over provide I brief our on investments our Thank before move current I Q&A. for today capital focus our you remarks on on Thank environment also guidance, about details deployment strategic repositioning Nasdaq’s an further opportunities. are making Ann, and XXXX will morning where significant to well update our and results progress making Ed updates we on our before third are sustainability about everyone. the to remarks joining us. areas we share large efforts as operating My quarter to address good corporate as call who and the turn will performance,

our beyond. the global leading will marketplace to progress to me insights of markets the analytics, critical third Nasdaq acknowledging our broader delivering hard in team’s notable and has technology, and the we begin been made in for strong journey by to Together, mission results provider quarter. Let dedication to as our become work the clients. continue Their our we success excellence capital data

million our third revenues XX% XXXX, results or financial delivered $XXX from an million, quarter Now, net of increase prior the period. the of to year turning of $XXX Nasdaq for

acquisition growth organic Services of growth and contributions organic Solutions in driven our was in XX% from business revenue growth Our Market our largely our Verafin. by segment, XX%

We or total opportunities progress key revenue, SaaS-based year we to increase across our our businesses, growth continue notable of prior from revenue recurring secular illustrated billion, ARR, compared as an our seeing performances of to best recurring solutions. some the XX% Within period. by annualized $X.XXX make company are of

technology crime growth results the and will impact XX%, anti-financial year is our an showing Specifically, revenues calculations in begin versus increasing next that organic strong increase Verafin. with be particularly prior business. of included we in excluding year over to XX% of saw Verafin

Solutions, name investment in Solovis our the in business, Owner for products, the is SaaS Asset combined intelligence Additionally, eVestment the new revenue. the XX% which our and analytics Nasdaq increase including drove products,

Our ability results we area the the the third have business advance leverage additionally, our progress the drive is to that our made to strategy value underscore business. continued one effect, in and flywheel which quarter capture to of success in momentum parts the from demonstrate other

For multiplies Nasdaq success options new Relations for and majority business, Index R of the company. and Nasdaq brand’s the Gen indexes other the of Next like example, cross-sell of higher to and capital in XXX vitality areas opportunities our drives the the ESG-related and growth and the to growth trading equities contributes strength also strategic our in Nasdaq-XXX listings It services. the in the and raised Investor attracting enhances quarter’s

capabilities. and to As critical made. passes reflect that a to our of continue have our capital allocate us technology has been A the each into gives we our analytics evolve quarter we to ability company, towards technology pillar progress high-performance Nasdaq success on opportunity an

new the the of in all quarterly the segment in our business market. saw Our established already the acquisition leader regions. surveillance us a largest as In several third our of order has foundation that adding years, build crime in anti-financial technology we legacy upon Verafin intake across quarter, as area trade strong last

While our including two new crypto for client. new clients solutions, group surveillance SaaS-based market a exchange signed our

and U.S. by Platforms’ leading been the to our advance growth positions. marketplace record new Nasdaq-listed period, ability Corporate primarily year a new Nordic Nasdaq outstanding driven pillar issuer listings revenues our our in far the markets. the It increased XXX Another has corporate base in and has and listings coming prior over XX% across year versus year-to-date. been for with to Nordics so

for best Additionally, in the And here two demonstrate XX% U.S. has continues win issuance the new with and Nasdaq rate to year-to-date. a quarter decades. XX% past rate experienced the IPOs a in strength win the

of continued issuer their of list of briefly our including proposal on with at to would acknowledge like Nasdaq. we ESG our our base to coming ESG Within in quarter IR Advisory from are preparing approval are we listed I ESG journey, As Nasdaq ESG we services. pleased grows, board SEC’s suite – our stage and Solutions see from for interest specifically, and every companies that here our companies during the demand very diversity correlated seeing disclosures. OneReport to the enhance

there seeing advance look further the working standardized to meaningful been While flywheel-related with to listed diversity our new companies listing area listed the success. is be our will rules. this by Nasdaq where ecosystem, disclose we Services implement business, forward progress. believe of will that another information are to governance have critical Market We we to across companies board the which developments manner driving

rate since than and third Options venues. equity other trading traded. of of Our the Nasdaq in all turn contracts and An expanded significantly our options in quarter is to the industry, brings listed exchanges Equity trading Nasdaq-listed is equity it average U.S. the capture on trading in benefits in ecosystem expanded impacts base where higher positive stocks issuer stocks led share

we European equity versus Puro.earth, expansion early equity net These of ESG-related Services. progress the the prior our carbon growing year-over-year Bond delivered market excited derivatives quarter Services Services in our year. our derivatives all third increase Nordic driven largely ESG within solutions cash although are Market Network, Market was We seeing offering. revenues of XX% And suite Market as capital by the and Sustainable saw of are this green well in revenues, Overall, by service, increases sub-segments the increases. Nasdaq removal segment listing as also include marketplace, the bond the our in

traded by analytics XX% market sales, strong in the well revenues Our of of linked Investment under our take-up prior to as higher management Intelligence am our saw businesses was the saw the I XX% expansion a new client indexes and period. sorry driven increased assets retention revenues combination in business, as offerings. increase across geographic products third data quarter Nasdaq the to year higher and period. third capabilities new exchange prior during the Intelligence to This quarter business Investment year compared compared the

performance business the versus our up thematic quarter, on strong the in performance its both continued well with Index XXXX of year as Our indexes revenues as important strong material market prior third combination most net very XX% of a inflows. compared

in PHLX quarter. the reached the and products from AUM We newer the market ETPs linked responses broadly, new of end Moray the products Index. the Index $XX suite, with launched are at especially since notable positive Hashdex some see to Index growth More in third Crypto ETF of to the Nasdaq to XXXX billion AUM our tracking, our franchise, pleased Invesco innovation the the Semiconductor and Nasdaq-licensed

our July also more marketplace. and unlocking business a Mercer, are to the data institutional to innovation transparency announced with our bring includes a new significant We in areas in This analytics of partnership managers to research asset owner leading asset a diligence. clients broader investment through on institutional their strategies enabling various owners gives access high-quality simplified consultant deeper that and workflow, due for investment

going We owner asset expect partnership to solutions usage our forward. clients’ this expand of our

highest highlight like would continue our at the measuring journey, to are evolving metrics. strategic we next in key I While our using level two progress how the company we

across initiated to annualized after First, our organic medium-term adding continues that we Solutions year-to-date or the the to Verafin. revenue segments exceed of growth outlook growth X% X% meet

Solutions Our XX%. the organic XXXX segment year-to-date growth across is

end the to the because up is medium-term percentage in year are third more This continues the businesses SaaS XX% are to by our XXXX. Secondly, from period prior XX% and at increase us our to of of of move we XX% SaaS that XX% from objective closer the the revenues ARR generating to our than we ARR quarter. total rose in XX% year-over-year, growing quickly even

We and revenues SaaS to teams are progress the contributions continue to very organically our our pleased that with both inorganically. make regarding

our our Here to through been America. Verafin’s innovation to-date the acquisition $XX It customer efforts. penetrate new secured affirms traditional belief and banks our we that North on in executing billion. this demonstrate case completed X Verafin banks, accelerate win franchise the to as during brief from particularly another opportunities. assets our banks progress are and we has further its months banks the support X holding team significant and define that this Tier can with The X growth. since examples which Tier combination total we strategy Tier is of collaboration outside quarter X international two of And of Verafin those larger is This and joint

While we the unlock still certainly together. early in groups, potential milestones have developments validate that progress our broader adoption we among have new significant to identified customer

and launch of our evolve is and The fund the to platform Additionally, new manage give Nasdaq to suite financial the the in a the and data standard weeks a of encouraging. perfect XXX segment we in with seen market-related Data underscores Nasdaq new practice becoming many Initial continue landscape. information every to This average at new of in Nasdaq data cloud, comprehensive includes clients of and growth investment has following X,XXX It’s the datasets key users. cloud-based the means our alternative offerings interest platform the in activations is Link to evolution ability Link which Data it SaaS in our area launch. account covering markets, September. daily efficient visitors consume for an core a of investment data illustration

I current continue areas are the we of operating in operate large, impacting landscape factors Next, By within the relevant the our address the of pandemic. and today confines will business, particularly to near-term. briefly and where

March remains enable slow While from we far client operated and it environment progress there XXXX. been which to in-person on-site in the visits, prior activities to of has

across our be the the The model on of and highest intense infrastructure the high prolonged allows us technology collaboration within are installation pandemic. however impact our at backdrop Technology fortunate operations We market diversified to challenges had despite their business travel, executing very of logistical a integration, to Market that COVID-XX have level segment. and business our onsite

projects have short-term experienced implementation that post-trade near-term required despite margins complex growing These have revenue clients. expenses, recognition We more and and have clearing several timelines creating from implementation to impacting longer challenges slowed constraints have near-term have resources capacity progress. and increased had and demand

to heavily The the broader be market near-term, impacted XXXX by infrastructure constraints, second dynamic. continue relatively continues with the challenges this we underlying the within clear of to even high that revenue pandemic and business XXXX technology the revenue this half in logistical Technology having if in capacity impacted visibility be now of And segment know Market will growth improve.

have the multitude the hand, efficiencies and business, our some new to and has to Notably, Platforms roadshows to through making virtual support companies have the new pandemic in the go-public contributed efficiencies evaluate them increased ability bankers’ process. efficient Corporate the more companies going The have investors. IPO On turned capacity IPO for other period investors’ issuers created on of to process.

new pipeline remains As SEC. S-X the number on the for based listings of registrations on active of file today, with robust the

XXXX. current X continue a and of we least months we have into as into at anticipate the to momentum final Assuming conditions of year we and the the strong months persist, market enter the first visibility this quarter upcoming

sizable how future two – we to to in see potential future potential. envision our our the to sorry, sustain Turning elements ability long-term, our key growth I

markets ever. tomorrow. First, technology we to need our right allowed and providing us clients focus to evolution become insights are on focus This the that important to to more and have clients evolved the successful on across capital has strategically that capabilities businesses we Nasdaq’s than and our be have client-centric data, critical today

and services. billion is Second, strong the our markets market ESG very competitive crime our analytics incredibly with our technologies, indexes positions and – us. combined excited we of we in growth sizable are Relations key for as opportunities investment traction surveillance trade anti-financial in across Nasdaq. areas $XX as of in well a have the on today, of Investor these our It lie Based ahead businesses addressable growth serviceable that and solutions governance about

marketplace greater and to of final businesses. detail. As across remarkable I areas XXXX and entering well-positioned favorable I capital are review foundational want and wrap growth that and financial in reiterate in the markets steady with we make our remain we as we Ann the months up, the progress beyond. key with will with turn it results strategy momentum consistent advance that, our to to ‘XX Combined macroeconomic XXXX to And into I backdrop, over – our

Ann Dennison

on beginning quarter the $XXX reported increase million Services and presentation. a XX%, in will all contribution on located will organic our net non-GAAP everyone. the U.S. Slide of non-GAAP in be Reconciliations in XX% revenue and you, of start and noted. including divestitures. found segment from The will prior My in to at by Verafin and impact Relations GAAP unless commentary our I year from good of results well the third can XX% Solutions morning increase of our the as otherwise file XX% well performance the Adena the primarily period is Thank press a focus section ir.nasdaq.com. as website Financials release Investor growth result to of Market be organic organic of reviewing results in comparisons as net increase as in the XX

to the $XXX point was year to non-GAAP XX%, margin per XX% margins, income to period. percentage in profit or compared the prior prior attributable diluted quarter Moving and $X.XX $X.XX or of share while income compared diluted net operating share third million X to Nasdaq period. increased the Non-GAAP year operating per of $XXX XXXX for operating the increased million non-GAAP

annualized XX%. as Adena million, Turning Slide XX% from period, the XX, year $X.XXX to an SaaS billion, of an totaled while earlier, mentioned of prior increase $XXX totaled revenues ARR increase

million XX%. increased through offset market ARR business. from with Verafin increase impact million now our revenue reflects business our or year-over-year. segment and Starting the will Slides on results existing increase review partially acquisition the I Excluding anti-financial revenue million in quarterly The crime infrastructure organic positive $XX Verafin, the $XX Technology, of $X of of decline XX% increased Market XX an impact technology technology million a by in $X XX.

have in of as and and agreement of to decrease constraints request consequence use installation was implications X% was the logistical are revenue well its as a period with the $XX comparison under with quarter crime price pandemic. revenues, deferred compared million Technology ARR maintenance continuing XX% continue driven technology Market Solutions to impact quarter with period. $X $XX The anti-financial and quarter in been Verafin the who $X closing million Verafin our Market the technology prior in year would due of been of segment will and strong FRAML FX a the the the planned for to Verafin’s existing of market our decline business million technology XXXX, adjustment period a our strong capacity both infrastructure transaction, in both purchase and of a associated an contract Excluding license revenue as customer increase through million support well the $XXX as on the working was broadly third more change a The in Technology XXXX the primarily sizable revenues roll-off have would third third to exhibit million, within margin by of surveillance operating momentum. period. the we licensing

combination impact offset as increased and an in purchase adjustment million, $XX increase inflows mentioned Platforms of sustained billion Investment Verafin, XX%. increase which to the compared was $XX would year higher ARR, from the related indices previously margin to recurring Corporate base by as and of fourth with the period. to were and revenue impact a compared capture million year $XX on million price reflecting market regulatory million X the to ‘XX, the for or increased XX% and to with higher and for business Equities negative make our growth. compared ensure period. of breadth trading billion Derivatives, fourth continue operating revenues $X The $XXX partially Options to per $XXX the from X million organic increase strong to does operating revenues, primarily approximately higher of reflects period. Listings $XXX all from to and due Cash is Analytics. ETP segment newer equal, a strong rates. net $X.XXX growth. prior Corporate points licensed the collectively as is prior XX% run rate discussed our reported including that The increase offerings. billion there was the regulatory switches. $X.XXX of was in an the or $XX Services to higher our The of by organic prior Nasdaq Equity the Investor Platforms the margin that organic order from positive or certain Investment of been revenues. appreciation, Corporate to margin year else costs. period the segment of Index impact operating increased from quarter This reflected increased Relations the quarter we to and contract $XX in reduce FX million of markets. rose The to expected million billion, XX% be ESG removal rate Analytics fourth Services the The XX% contribution increased ETPs increase XX%, approximately contract was of in well Annualized revenue item fees fee XXXX prior $XX $XX net Holding The or will in time other four collection in the was about which One first previously period revenues. Intelligence of unchanged well compared U.S. exceed sponsor prior year operating have growth fully revenues note of as and revenue, our the quarterly in is to have reporting ARR issuer AUM XX%. associated expansion January Equity listed revenues XXXX. to XXXX in adoption points increased switches Trade in the of prior and the a quarter our waived compared Intelligence X% the Organic a the These was Index for regulatory net our year in segment the and $X is to support and revenues driven margin of organic. modeling Market by during the growth across leverage advisory first period, meaningful XX%, related very reflects Platforms as per operating XXXX. year XX% million our in XX%, fees, period of percentage quarter investments or fees collection Management we reflecting strategic revenue not all fines, million U.S. changes Excluding percentage $X

supporting of XX a to expenses objectives, $X.XX previously. impact a costs we in range and narrowing review U.S. to to Turning the the to $X.XX end to weaker active non-GAAP billion strong a $XX a the X $X.XXX updated to and to our dollar. $XX broad-based months variable strong performance $XXX has continues expenses of backdrop, commitments growth organic increased related our million and range due to increase in million $X The expenses. growth of two high marketing guidance, listing Consistent increase near related variable expense expense continued be first, investment as our reflecting to reflects $X.XX about from with Page billion to to to million and an outstanding in increase billion very drive last from trading expense the our of has been quarter operating organic results; compensation $XX changes or what higher clients. of second, revenue due The our the impact in performance-linked said The million. including reflects XXXX expenses and operating first coming capacity if capital FX rates on in organic compensation acquisition billion of drivers: main a increase medium-term well XXXX both to range increased relation as what million are we growth divestitures increase net and markets the increase, a from X% non-GAAP expenses increased guidance impact

by Turning XQ net by due $XXX a net $XX the with fund and refinancing of program, by Slide issuances Eurobonds of primarily primarily repurchase to Eurobond million increased euro. of Eurobond This in the to partially during million versus accelerated million is XX, from million ‘XX, a offset decrease paper, caused $XXX weaker book debt a Eurobond XXXX used share or commercial our quarter. a to of increase $XX XXXX values ASR,

debt the from EBITDA the ended period at quarter total Our ratio X.Xx, second XX-month trailing of to XXXX. unchanged

in initial X third repurchased of paid the the company the the into common stock During quarter the of of in to we $XX including of million July. dividends aggregate and million ASR stock the related stock amount delivery XXXX, in shares common agreement $XXX of common million, approximately entered

business receive planned expect ASR Fixed XXXX in to additional We to to for XXXX. the in the remaining sale and of shares Income quarter of U.S. resume our fourth the repurchases the to related related

to As levels of share to XX, after remaining under the repurchase close sale XX diminish of $XXX dilution to there that. was in be EPS June following authorization, the Income but the continue from immaterial first to about the Fixed XX Nasdaq expect X% we months million XXXX, September

and to our impact, terms both an our strong set internally and and Nasdaq against elements external in regularly on important externally, a addressing believe Turning focus we has Slide of want XX, begin our we of ESG executing opportunities sustainability I have business, because in to momentum of them.

of Puro, the as the purpose to philanthropy our products volunteerism. and sustainability develop highest well we in ourselves our all serve terms our businesses of of marketplace, outside clients organization level unique corporate to of how our also solutions, our and removal focused further offer ESG high services stakeholders, through but through corporate carbon and to our have to efforts impact our anti-fincrime and run our positioned committed as We’re

underserved to growth support emphasize throughout inclusive education literacy the extensive chosen financial and entrepreneurship have is and communities and within prosperity, and we purpose to U.S. Our champion

with new reporting expanded disclosures During commitments. XXXX, our financial we’ve task force on climate-related climate and ESG

have substantially products we’ve crime and received approval promoting on our Additionally, our rule, diversity. FCC capabilities. listing for ESG board anti-financial we increased And transparency expanded and services

We opportunities, our were to research ESG to ESG to our leading see very a ratings, executing but in and continue do recognized progress these have areas. of recently encouraged on we Sustainalytics, much provider

Our latest basis look ESG for a X progress Sustainalytics and Nasdaq it you forward. I’ll for improved to our risk Q&A. rating back puts we Thank time, operator regular top to of turn percentile rated the We in on level you to all companies. as a forward that updating ESG initiatives over the going your

Operator

Thank you. Repetto Sandler. [Operator Instructions] from line Rich Our Piper comes first the question of with

open. Your is line now

Rich Repetto

on morning, morning congrats Adena the results and and Good here. strong good Ann,

Adena Friedman

Rich. Thanks,

Rich Repetto

I the SaaS set. there. talk and having you success said revenues revenues of and annual annual your – tremendous mix you the more of you did clients guess client focused the critical with growth in about of you’re capabilities recurring And on

revenues are and looking market is is, trading transformation? how is because to capture, share Nasdaq this even an again, revenue grown. equity looking volumes there equity But share and question important old as you – make that metric was your market So the growing though, equity back, how important have

Adena Friedman

of to every Rich, part I our Well, us. business and would important, is say important

business. we so of we element do our And – look every at examine

our serve as marketplace of really foundation lot ability to other our in our a core clients serves ways. for business Our

So focused we’re extremely it. on

exchange’s regulators share trading. we’re I overall increase has has share that understand decreased area seeing dynamics. in an that, which that the just of shifts done within in a and well just to dynamic. And – think market in retail, some work as internalization obviously some been that by of that One more the that’s increased think and we’ve as couple just I different seen

that that have order actually second course, some compete is, new the they and focused trying primarily gathering think it. of exchanges flow that to retail launch some on of for forward. of I And the come have

we kind our for but really So want markets terms we balanced our sure advantage to provide we that in We strategic a we clients. make taken of creates clients approach markets. being serve competitive a a have sustainable our in operate way, that for and in do how our in sustainable things of very a also marketplace, that

I so kind that managing at measured of share, to dynamics taken, our And make to evaluating of we’ve that and in options kind and the looking I a composition balanced sure And capture we’re our and would of managing to trading equities the balanced say, capture markets approach would how there. markets share the we’re and that applies say and and there. both very

Rich Repetto

would current pandemic pipeline impact. and Okay. stayed color or the if same, you thanks, forward – the give then guess – think going you – I that And do how Market if the on you decline the this in more sort long impact could forecast just environment the roughly guess? then Adena. the quarter-over-quarter certainly one and you And follow-up on Tech, explained of be Could color the I

Adena Friedman

Yes. to the good I pipeline, But sure the we do end identifying we’ve which them. interactions what the the there end I makes But able I of starting generally and improve It’s also think terms think on serve being call new do is of in funnel of of harder travel client to still consider a to in our the environment starting to are of job of kind top we’re Zoom, new doing top to most that now. make the Well, how can all, would terms try first marketplaces develop that clients. to and it launching of we harder. done know bit of a adapting

signing taking about. also seeing that pretty are up are still for we’re you’re excited which new we our sure. clients, So They solutions, SaaS-based marketplace

new that that well launching solutions, of and in trading XX% clients our markets us signing across for XX% of crime. more our clients all SaaS-based well cloud think includes up includes as than any than the new more and as taking our Technology Tech, Market it’s taking clients, new I Actually, Infrastructure are anti-fin that’s and Market next-gen system.

is a So able to we little programs. the earlier with post-trade help to always and – say client most are we’ve our really more, definitely would I could Rich. be site. also multiyear of which out I They see are to will time do those we pipeline, on where our opportunities we side, would see harder that And in have be lengthening they implement. to we experienced they They good that. challenges, inability definitely also that on travel are with want a and But take But delivery say, been. identify

also starting meet clients clients, from and able are think site being with some the our get helping, And now demands it’s us that all to accelerate to have. of helping to things. We on that’s I our definitely that keeping

So client sure the have we the have to that to there, strong we do see demand. meet be good but demand to resources able we make

So we’ve I think and have. the we our that referring we what capacity to really can all over to clients with for constraints working what those us our time. before is XXXX to the see XXXX been clients in going demands were need around is comments of our that that’s manage through to that And we stage is meet really kind just

Rich Repettos

transformation, congrats the on and continued Adena. Thank you. it Got

Adena Friedman

Rich. lot, a Thanks

Operator

Fannon Our comes next Jefferies. from the question of with Dan line

now line is open. Your

Dan Fannon

implementations some just Tech Thanks. Good as morning. thinking, Wanted to component mentioned well. follow-up some you on the costs around I of increased the and think Market

that cost a margin opportunity within of the also temporary term has of factor on more of of So the business, changed this a is basis? or kind than go-forward that slowdown at all kind just longer revenue necessarily part

Adena Friedman

Sure.

growth a outlook to revenues investor is the business. of the our the our two metrics the then the combination base and the to to in kind overall of in notion business. that of on of our margin just and we’ve rule is revenues is One EBITDA the XX, I this that growth really long-term medium measure think progress there which provided other of are

what to the that, so XX% is business for annualized And X-year to expect Technology that And appropriate crime our to XX% growth outlook that to and over we do the is And able that anti-financial growth Market going forward. the across continue Market believe together. is, of we coming expectation Technology. business be includes an business deliver Infrastructure X period the to

by get to what continue track that. that the of combination is, that rule is on and a in said, on we’ve the of XX, to the rule communicated growth EBITDA XX, to ourselves which think I wanted see as XXXX, – we for I we of

part So able clients have having that work scalability term as our clients least on-prem to at challenge impacted instead ourselves through a SaaS that we’re of about growth our a state to better this more shorter way the of to more sign of most as clients. and think to a is to or get be business that we you near-term to

Dan Fannon

switches then yet not that about follow-up index And just think on talk inflows? in, inflows what’s stat think, XXXX. you mix. of in think of kind for as could the helpful. That’s the with net fourth different a terms you. Thank to the in as has the maybe – about clarify, business, I since, around to associated difference fees And Maybe as impact revenue the you the we discuss quarter. we AUM the coming I the kind a gave think about fee of thresholds

Ann Dennison

run question, half first of in full the impact the your roughly on coming will in the the Dan, fourth we quarter. we switches rate quarter. the saw third – around And about see So half

Adena Friedman

low. Yes. for of And we on the second very fee them question, base was that the one particularly, your switches part experienced of the

And so switched. impact the was $X a impact AUM therefore, that is low that revenue – against was million

new are with able are the semiconductor our products index we Nasdaq normal some in I think we that indexes to with kind launching, regard the – regard and the with crypto norms. Next of Generation what – products to of our of historical line innovative the like our going more me to fees kind to attract XXX, are the

they base we the lost. carry a than fee So that higher AUM do

Dan Fannon

you. Thank it. Got

Operator

with the Lau of Owen question comes from Oppenheimer. next Our line

now is open. line Your

Owen Lau

the companies your non-financial taking maybe And morning. provide looks It sports have for question. talk you. how about like market broadly size with you out Thank this that space? the betting please while. about can question the there many sports partnership surveillance we your talked I Good a traction overall. about you in for industry my technology? could Thank as you about talk Could then haven’t your recent such a you speaking, please and similar betting Sporttrade potential

Adena Friedman

Sure. Hi, Owen. Great.

call where really to betting is we market and be in-game are an there. interesting definitely And in would itself they are model spreads of is model. going the what business Sporttrade interesting providing going are what marketplace then also an investment are is it’s the creating we combination about market And what’s I going opportunities. are that for they surveillance have to And are makers, they venture there So, more creating on like Sporttrade, model we a have portfolio. a market a our the to different them have bit taken through One they of technology. doing

applies But having in actually model Our your the well of betting of to kind as we that of surveillance and book kind around surveillance module created applies type have against to the the of a multiple then terms that own traditional absolutely – sports market house technology model. thing.

specific can segment. traditional these created And a new So, book apply think the module to that technology marketplaces. have that I to we sports we that’s to or a

that’s So, are we a good don’t SAM pretty yet. TAM have a And we And excited or actually question, that. a Owen. about

for So, think and look developing, in how SAM come surveillance But segment that the very for days U.S. at for back it’s particularly early forward. here and we that. going our through technologies that we do trading obviously will

other of markets the non-financial we exchanges. continuing markets, support crypto terms and are In to new

markets which it’s real can or service surveillance also we SaaS-based Nasdaq actually Services is I provide are fractionalized so marketplaces lot it. But estate that our think the to the and new calling delivered leveraging of are launching. managed fractionalized And up seeing but spin we really markets a leveraging be several are we host exchanges where cloud, it platform a also our then eight trading in Platform, like we we infrastructure a And technology, faster. have others on the are there technology, really cloud nine what our they can can Marketplace markets today. all up. And interesting coming coming technology and kind

an you So, as strategy some nice forward markets our that part And know, Owen this you early definitely say are would stats we seeing there. we can provide new is kind of progress. going I on though, launching of and are more but we

Owen Lau

then integrating could you. Quandl? also expand, on the please Data Link Quandl how And Nasdaq little have you different helpful. it Thank a and bit of can explain you what provide view very data with Is holistic clients more more That’s in a sources? it. like related to in Got from data

Adena Friedman

actually You on the head. nail hit the

about into includes provide data actually are like market to But So, Data information. Nasdaq includes The investment Data underpins Quandl Link. Data, like investment It Link Quandl component one now we our alternative that is The of integrated underpinning that information. Data think the technology Nasdaq we the managers technology. also of Link. is Quandl Nasdaq some it

and system and can technology Now data own a funds we data, It become like management provider available Owner could data can calling third-party Solutions in there. trends making to you is managed client really structure. this API into we Nasdaq their a – them are put basically choose to Asset all nice and managed it investment of actually, to on their to really, their modern

to cloud-based for information an really in deliver fund modern and infrastructure. market API information, alternative umbrella it’s us so And way information, a

integrate internally. use you anything easy to sets easy use, really to to data them else really or by it’s Excel the it’s take that and And the want into So, way.

Owen Lau

it. helpful. That’s very very Got Thank you much.

Adena Friedman

you. Thank

Operator

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

open. now is line Your

Chris Allen

between Good morning in it’s can that I just index us on missed on subscription the and it. AUM-driven kind more growth curious quarter. you kind on apologies how give we the wondering sequential business. saw give transaction? I I of color Maybe the you was down bit an everyone. could if updated I breaking of what’s framework a am if little

Adena Friedman

In the of the futures versus terms AUM?

Chris Allen

Yes.

Adena Friedman

question. that it’s I think a good

an… know So, have I you if don’t

Ann Dennison

It’s about the the you specifics include will – on think index usually two-thirds assets, the and We Yes. – about AUM being then portion could we the of don’t about futures portion. rest the line, it. the give

Adena Friedman

up Yes. in And AUM under have update we think of appreciation. driven it’s statistics we in what out. our of market all on been as We assets the provide is appreciation a been terms that well really have have as combination general, you And in though and market as said, inflows now I that an send doing management. inflows net we both

has I think the then on for been even the than of based it’s XX% a combination for these better things. that our quarter and revenues quarter

Chris Allen

$X.X pretty switches from know bit million from is on it’s sequential any the a in $XX – million number, a in color there And I big to XQ particularly the the coming revenues? you Just XQ increase – had little out. of

Adena Friedman

for largely would really mean the – I I it’s say market-appreciation been inflows Yes. driven so than and more driven quarter. futures it’s really

Chris Allen

you. Thank Okay.

Operator

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

now line Your is open.

Brian Bedell

morning Good folks. Thanks. Great.

off kind but question anti-financial also start a it’s crime. – Just broader on with a of crypto, question on

see are on that Market And just question anti-financial touch that then developing also, broadly actually I be question the your if early anti-financial yet, lot how that? just days, are between based a it’s to it’s you So, would on perspective are surveillance the too crime, – and whether crime is, you crypto able that, size segments mandates and seeing potentially measure does in Technology. crypto and some you then licensing, early contribution across broader know the index mandates different obviously, give especially because maybe the to it from of segments

Adena Friedman

question. a great No, Yes. it’s

the about about, under But are whether say it to communicate a question, let’s it’s guys. would it’s – have mentioned, little a how management early. to I has want product think it’s there. $XXX something right, So, But that is Index so start so we take back to million we that’s about as that you we see probably good of and you we Crypto assets

and have Market the the surveillance Tech We solutions.

that we brokerage integrated sure we we clients, well want now, can area actually anti-financial about solutions broader really Brian, crime on you time becomes across make But is how clarity bank across right to over provide driven can that start think But are kind so as we of to of because as time, to that an come marketplaces. out our system, financial and of to is provide more the try we And how will to early broader provide on as days. meet side really crypto figure you customers. the needs our we services a that’s to into to surveillance it spending the there. want just all the more the clients by surveillance side, back capabilities lot our And

area So, really their right to – evolving now and to think does across that’s and X,XXX an opportunity It’s as how U.S. of about banks active are a evaluation much Canada great a to our broader serve the needs at there. have clients looking actually that. us give we

Brian Bedell

that other a to commentary in have situation? a being would prior solution pricing talked if flow think about that’s exchanges, also remedy administration just for new potential over the Yes. exciting view are administration, different structure, rule stands market with maybe that views growth what But a flow. on just payment to on opportunity. on And working on not if I then switching view allowed had given Obviously, have And that. That structure. be order Market about so place? sub-$X.XX on guess question especially And that what’s we a Obviously, good Data sounds you like now. the on talk order new market an any where with for on your then you – the put we

Adena Friedman

Sure.

continuously So, the I market how me, and I to SEC’s think an to think discussions, paper the regard was, step improve first process the that evaluating in long structure early to market. with a of

a significant what So, had, that was nice did about few understanding markets. is things. think there there in activity One, we with that dissecting really were there job that really well, signified any the there anything of say, that I a that there they the and report, that would happy that manipulation nothing I wasn’t

more good that the few dark, key have fact resilient And some that’s so that been is activity work And of the did that is for in really we doing also and very But One second point thing of they happening focus. offer. quality the much note the they is And an on area offer. areas that of think a efficient. out the the national were national impact obviously is best really investment an that thing quality a us. is I there markets did on. the the the of

the what Chief incentive that Economist the that are report then published our on think last And a week. markets. ties structures I to underpin that

believe structure don’t we – into I system or off measured changes around flow And well a orders if structures. and SEC other to conclusion as market they on encourage rules darker lit. that come smaller and kind so than order will I to is making there, at so to on. of we pricing But that really area that order as taking the at exchange but intricately such think that it’s look be disclosures necessarily be sub-$X.XX or iterative, are an drew PFA bang is really these I that the And PFA because venues unintended it’s the in say think it’s exchange it woven changes making consequences rather iterative they look to flow law All focused think can that structure like an can big incentive we for brought we definitive more moved being compete steps, finding of because of are some they change high.

that But I that We are competition. variety like innovation, recognizing we good all think would those those for for us. think be like investors. we and things positive that that are all

that and to have And looking weren’t they so taking to measured a I sure steps they going at the there. And got steps pretty are we we make sense take approach. measured that draconian were

Brian Bedell

you. color. great That’s Thank

Operator

Goldman next with the Alex Our Sachs. of Blostein from question Instructions] line [Operator comes

is open. now line Your

Alex Blostein

investments, obviously when the to in to seeing what on guess financial particularly or upset maybe and headwind? as different Hi, of where the your investing of a and about we your Thanks Just have that capital. know thinking do to are broadly, where you thoughts technology services, where budget yet, I but extent? it I do I a are XXXX can guess to growth guys you you of are What markets reengineer about but focus you a comes get incremental you don’t technology question. on for sort hear it some you kind you pressures around thoughts sort in morning. think as the of and potential inflationary of sort of number corners to things make ask just are you I curious is the marketplace? how good taking wanted and

Adena Friedman

Sure. pretty that Yes. talent I think the right been is definitely I know a level at all there we think has for pretty – that heightened competition now. – that

And the the so U.S., tech and that in and us – to is have Canada, Asia ability Europe from are in we talent have in we benefit over Australia. all world. the talent attract for honestly The from benefited we

– kind seek We we the gives do think yet talent environment. planning. say, markets of I But have flexibility throughout we in spread talent where more us economies which that that be we different time, it that is at out different can in same tech efficiently. markets, We to increases But we there haven’t XXXX. going as in our go wage do into think competitive finalized to as a would in you our budget is wage said, increases and

able about some we But guidance. our to we be have that quarter us that such will on having as we part but for of provide we more are a from also benefits call evaluating So, to with recognize XXXX as needs you workforce. talk talent, the global for compete fourth our

Alex Blostein

Alright. Thanks.

Adena Friedman

Great. lot Alex. Thanks a

Operator

of Cyprys with line question Michael comes the from Our Morgan Stanley. next

line open. is Your now

Michael Cyprys

Hi, taking good taking morning. Thanks for for the question.

or in were And Nasdaq captured the in component become Data how earlier, little that circle a about ESG back might to talking Link? a Data wanted opportunity the data what’s to Link Just you just the the more marketplace driver you more in industry? developing maybe standards Nasdaq you And see of to could the broadly? broadly about and little bit that for a become how ESG talk a scoring

Adena Friedman

Data of Nasdaq Link the called part Data ESG is Actually, something Yes. Hub.

that So, have it’s to they that third-party information helps them institutions information data get basically that companies whether from gathered evaluate structured need, information and sources that we buy-side climate-related other it’s or industries. allow

that serving are we actually that Data successfully up I very within So, think Link.

So, of don’t one rating have what modules our don’t is the a battling. intend thing become do of not we But that just and that’s That’s we role. the one agency to ourselves.

that up that information and where corporate to want actually collect lot Nasdaq be as they information able are that We look they support to And have investors. can the that just need to of distribute not providing information X,XXX data make we information we – deliver that clients need over They an Data have that we hope being investors. our data then to in we that agency corporate But here we them ESG not of investment solutions through think institutional are are investors, in better and ecosystem that control managers time, just we them to our the either provide to to so solutions or Nasdaq at decisions. Link receive owner to the through a can they our I of up also asset they we be rating informed rating helping owner are to that the ourselves. providing served mode actually can our that gather agencies, a and it and clients. includes thousands they We through have information asset can

many are there right think now. out I there them of

We trying partnered interesting to kind have agency start actually we develop that will really to with to that’s of ourselves. we that to some space. are role the think Sustainalytics be be strategies in as opposed rating that index playing the But

Michael Cyprys

Thanks. Great.

Operator

you. Thank

from comes the question Kyle last with of Our line Voigt KBW.

now is open. Your line

Kyle Voigt

Hi, good morning. Thanks my for taking question.

over Market business been understand in pandemic. near-term years – a So, there at that I specifically, I Tech that XX% on for earlier last strongly they if and through expectation am I we the has the headwinds? near-term in a as But are segment business XX% trying narrow or term we not but revenue if expectations it’s you to call, growth medium for wondering guess has for your whole. are challenges, revenue infrastructure some the similar whether changed just business growth XX grow months all able kind or to just range the get the relatively to that annual market just reiterated infrastructure expectations in quite are this the before the are of

Adena Friedman

it’s way the ourselves medium of where Yes. mean issues similar we through are through just our delivery having, been. expectations would the over term immediate we are kind challenging managing our these getting that to a term are have I environment. really And more I say

that So I – think definitely demand the there. client is and

clients are excellent. Our our engagements with

excited way a challenges, we I outlook think that to just these same. able our delivering clients. leverage technology through our are to term have. the the clients be But And to to the have of lot some our but work next-gen of are we medium we near-term remains

Kyle Voigt

Thank you much. it. Got very

Operator

will now you. closing no further the remarks. turn back I are There Thank Adena questions. for to Friedman call

Adena Friedman

to have the Alright. you you all Well, am very I happy call. on thank much. so

We really guided revenue are see to to markets are potential that business want pleased you of our clear we to focus to is realize continue a very direction. organic as strong we continuing have to our to we growth. as know, deliver how the by re-imagine strategic And And tomorrow.

very all much. next thank look quarter. you talking to forward So, you to We

Operator

your Ladies you Thank for and today’s conference this gentlemen, call. concludes participation.

disconnect. now may You

Nasdaq (NDAQ) 20 Oct 212021 Q3 Earnings call transcript