Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to the Nasdaq Fourth Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Neil conference Stratton, like first to now today, speaker Investor would hand over the your I Relations. Please go ahead.

Neil Stratton

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

After Chair and and the disclosing presentation to Officer; Chief intend with up the Q&A. other information Regulation release Officer; Zecca, SEC website. members Ann On Risk website Legal The team. Financial Executive line FD. our Chief of and Chief Friedman, prepared our and and under are will on the We are press to as Adena open our John line a material, complying remarks, our the we use obligations means Dennison, Regulatory disclosure of management Officer; non-public

may certain is Act statements remind statements concerning with results forward-looking expectations of like the of from reports this XXXX. to statements Actual I and may press and forward-looking during to differ periodic cause differ materially and the future that release Securities events Reform SEC. that constitute could would within in factors filed these in such, actual to you relate Litigation Q&A our Information contained Private meaning the projections. and as from results presentation

I to will over now turn Adena. the call

Adena Friedman

turning financial comments and at XXXX also and business a on to made and and for Thank focus financial beyond. areas: following and I the and to morning, My Thank everyone. regulatory year advance the and on fourth results. XXXX enterprise-wide our remarks you, Ann over Nasdaq's current progress provide good look along ambitions Neil, for the journey, today strategic call The deeper you for will we Nasdaq market our full environment us. before quarter our will priorities performance. joining have

of and and market-leading trusted of with macroeconomic We very an firsts continue Nasdaq. I'm proud as a milestones, following innovation was our Nasdaq also year XXXX, team business solid backdrop relationships growth even XXXX deliver uncertain the as strategic of to have clients. the our XXXX. well resiliency a we in with for strong and the

Before during that three Anti-Financial quarter. I gathered the to and Day to fourth our want When Crime, financial implemented at alignment structure our noted we business new capitalize the Market new of for about in opportunities mega shaping to turn Platforms unlock corporate the our our trends how divisions, Capital across allows Platforms, I company. we us Access remind we system our on November, performance, to growth financial Investor new everyone

markets objectives, infrastructure, capital the These and where roots sustainability technology, the to development including or increasingly reporting trends help seamless of enhance access their to enhances the companies more net can the include modernization deliver we of innovation the increasing where advanced system technologies, achieve the and frameworks, through economies and need successfully financial ESG for emerging ecosystem underlying where powers AI. and cloud complex integrity zero crime anti-financial the we the we and investors of continue navigate world's that

we new trusted of goal the global with economy platforms journey look the global and liquidity, divisional reflect today alignment, long-term results to we becoming our integrity continuing system. of deliver transparency financial Our as and of our improve the financial the the forward that world-leading fabric

performance financial XXXX. I'm year and our to results. turn very to full for quarter the let's of fourth pleased Now report Nasdaq's

and on a divestitures. Nasdaq X% fourth year in increase period a achieved and quarter, an the and regarding excluding net increase First, FX the the impact revenues, rates basis, changes organic to compared of million X% in prior $XXX acquisitions

XX% even businesses Index organic X% revenues. growth drop our the an Solutions in In across delivered quarter, we with our

performance trading fourth on quarter growth delivered XXXX. We business very Services organic top in in fourth Trading strong the quarter the X% in of of our also a

full basis. X% increased an from the and XXXX of net X% organic For on billion XXXX, $X.XX of revenues year

generated the in back growth revenues very fast-changing revenue Services XX% of strong Our our on Solutions annual XXXX. despite businesses organic a market performance X% and increased environment, Trading

the revenue, recurring year-over-year. revenues of fourth at $X million $XXX annualized XX% X% or year total Our ARR, billion, increase company of in representing ended XXXX, increased SaaS ARR. an the of quarter to Annualized XX%

earnings from X% $X.XX For the per increased full year, non-GAAP of XXXX. share

Our ability challenging the longer-term our a against macroeconomic our illustrates strength in backdrop our diversified business XXXX objectives. to strong against of performance deliver and

fourth going to reflect Access $XXX quarter the division, In highlights, Capital fourth divisional mainly delivered Platforms new the in our organic increased Data a business structure, and increase prior business I'm -- turn organic the growth. which and the Next, by from X% Listing Revenue results. on in total we our Services to corporate specific period X% growth. in focusing million revenue year quarter, in X%

by a in listing and listings its an IPOs revenues demand, primarily IPOs. exchanges XXXX, offset increase rate. U.S. proprietary fees and driven In for operating XX new welcomed including combined as a leading XX% First with consecutive in year annual North revenues. fee initial in Nasdaq exchange for due In our XXXX, the decrease Europe, international to listing listings win for annual partially XX XX tenth company Baltic, growth the Nordic by higher maintained position in data

remains in Europe. the consecutive the Nasdaq successful second most Stockholm listing For venue year,

period, revenues linked revenue saw year exchange-traded by the higher Index. related prior we decrease to lower and partially offset business, linked indices, the by NASDAQ trading Index Nasdaq futures XX% due to primarily AUM XXX versus products to our to In average

presented market on the revenue decline. basis. quarter-over-quarter a average AUM and both that the drove provide on quarter declined fourth for by year-over-year a will more Year-over-year fourth details challenging Ann fourth AUM quarter dynamics and trading the backdrop The XX%. particularly quarter

for ETPs XXXX indexes, grow our and in demand for Focusing in exchange-traded $X.X with Nasdaq AUM on we billion year to inflows the during full volumes. of Net offerings higher accumulating Index billion the net XXXX new into XX products year inflows totaled revenues and year. due our performance, versus the futures increased X% XXXX, $XX saw full tracking

In X% organically, year increased from fourth our which Analytics as reflecting business, or prior and deepened Corporate XX% our Workload Solutions business, Investment strong engagement client quarter well the include revenues our Insights as retention. client our period

our Turning next delivered increase quarter, a million the year in revenues fourth Platforms organic division. the X% Market period total from We prior $XXX in to X% growth. or

from fourth which Our capture U.S. revenues, and higher higher Trading X% our higher paid prior transactional Services total reflecting combined data versus an of and delivered business, period. period year million to includes revenue This volumes. primarily industry increase for quarter, derivatives $XXX is prior organically businesses, year trading of revenue due the plan equity U.S. the the

were lower by modest equities business. cash partially revenues trading lower year-over-year, U.S. equities growth revenue, the driven primarily equities Cash in cash European by offset

pleased Web the new -- migration system incredibly X of MRX, with latency Services. deliver to U.S. market During by cloud-enabled the quarter, fourth partnership improving our of options delivers exchanges, performance continues to The X our in we Amazon announce Nasdaq to while ultra-resiliency the were XX%. to cloud participants

capital also with put first a market our next-generation world's success in journey technology a the the significant the reinforced infrastructure marks exchange milestone major As this cloud, technology our the This for to our credibility has to markets. clients. in build

Chile's current to trading agreement de platform. on-premise by marketplace services this cloud-based technology migrate our earlier Nasdaq illustrated Bolsa As month Electronica to their

next We of phase manage are that has their BEC us cloud thrilled chosen to this journey. help

as fourth of business period. we for $XXX increase prior technology the in increased in Trade delivered Marketplace Management in well quarter, million demand higher SaaS-based during Technology primarily our our revenues business, X% lastly, Services revenue a versus due Growth for year connectivity, And was market driving to the year record revenues. as

XXXX. pandemic. had totaled business and $XXX of across quarter our signing with in business of $XXX up growth the full over Order compares clients our SaaS year, technology new million to million Technology intake a both intake record which for for an clients and for in strong the million encouraging XX% Market returning the indicator existing to order solutions, $XXX We post of new

We in signed in implementations and technology XXXX. five new Market XX business clients Technology our completed

largest our year. of make into implementations, live to taking with operation continue good We post-trade the two progress during our clients

both seen we've technology new conversations for increased current with many demand encompassing Over our on delivery SaaS. XX focused the initiatives cloud solutions past client modernization market months, and and

want my proposals, December our on of which address the Market we many on XXXX. structure equity I a in published the remarks year encouraged last markets. We're of brief commission recommendations I that market offer the comments paper optimizing regarding SEC's our here Before Platforms proposals division, conclude from to that published

for well Accordingly, improvements. market structure for While strengthen we bolster trading equity the to achieve we SEC's best opportunities modernize and the and investors. we equity outcomes ultimately, there believe are enhance markets transparency, support competition, increase obligations efforts that always that to acknowledge efficiency, market better work improve now,

and There complex also the introduce to to the comment proceeding unintended are strive and markets commission consequences it proposing interconnected, critical think differ plan recommend avoid SEC's to are few highly significant for or alternatives is we to methodically period. modifications incrementally, during changes we already improvements, and with we where collaboratively. approach, and the areas to that by a In

the million our XX% to adjusting from division. a period write-down. total fourth turning the We the Finally, revenue and Anti-Financial year for Crime in impact the quarter, $XX XX% when prior delivered increase revenue deferred of during organic

surveillance addition increase fraud in and what The to our solutions. FRAML was or our laundering for by driven call we revenue growth in strong solutions anti-money solutions our demand detection [ph] modest

the for period. of solutions Regarding revenue revenue year impact prior in XX% adjusting deferred when our specifically, the FRAML grew

The new quarter. business signed across continued saw banks to during with medium growth SMB XX clients clients new small the in

exciting allows two identify crypto platform crypto regulatory compliance In first business an ensure addition, signed companies crime is the anti-financial losses. that prevent and clients its offering its to in This crime, XXXX. to

several including has Tier with XXXX. to very for signing anticipate the in X quarter. Feedback of our continue fraud additional solution clients Tier during following been also positive, and number and on X Tier results the a proof-of-concept enterprise concepts we We proofs banks, a of fourth bank momentum signing X see

leadership and AFC interim of I been a He King, appointment succeeds the division's here a moment our take want that Brothers, to our has Jamie Verafin Head Brendan division. of Nasdaq. in place our acknowledge of division. month this retiring Crime who's co-founder took Anti-Financial to from appointed Head Strategy,

map. we're Jamie's have very AFC execute step next chapter. in his road grateful to as and to contributions we him Verafin, tremendous Brendan our We're for excited against we in well And to wish role continue to his

has at broader mentioned the my of our progress remarks start strategic journey. Nasdaq today, notable I made As against

to priorities for With the focus, in enterprise ahead our beyond. and I'd now year like XXXX share

of will solutions to we through our benefits more the We new a clients. experience client the new us. growth provides delivering opportunities unified enhanced by intend our to structure strive aim an approach divisional First, to Nasdaq alignment. deliver We realize our unlock One that to

integrating related a and allocation development talent we We will increase facilitate three would decision-making. go-to-market and capital by marketing have software which divisions, division, focused streamlined across our agility each will our into strategy

Second, positioned persist we but want an keep the likely demonstrate dynamic to know quick market as macroeconomic need environment capital. want return solutions we continue remain increasingly on amid investing they XXXX, a to we to value environment. to for in time invested on that businesses of into focused and mission-critical our to are where value uncertainty With success strong

and want to to third, And opportunities advancing deliver across agile franchise by and our solutions intelligence unlock cloud across our AI strategy the development innovation we continue our optimizing leveraging to clients. machine Nasdaq more our to long-term

believe infrastructures new as we analytics advanced markets. we'll that engines connected develop our the and to we new available deploy into are able our as collaboratively our home order and data-centric offered to market also to the ecosystem. combined deploy platforms, types exchange scalability we their market with These system capabilities be through cloud we'll become more work the architecture, with in capabilities infrastructure, AI-based them will clients market technology offer participants cloud-based to our Within

our we're cloud-based surveillance platforms, cloud. XXXX, trade we're journey onto currently our governance of cloud-based and bring to In of solutions and our more market SaaS well across our already solutions on migrating Beyond platform next-gen our we're with businesses, many the positioned platform. into clients solutions our

advanced those applying having learning new beyond. anti-financial apply crime lake coming step And solutions with and algorithms of AI to we're in market, enormous potential unlocks improvements our to cloud-based demonstrate, to in self-reinforcement data As and that XXXX engines are solutions. our to AI more technologies our in solutions extremely a function excited

our these to come. updating you priorities the progress We on quarters in on to look forward

economy I and up, wrap current lingers And impact I Before if the address across year, growth global across still XXXX. the like that our Uncertainty environment. headwinds. could to near-term throughout persist listings the market and would in market-driven index outlook they

our notably of sales a We our solutions owner IR solutions, of of are our certain business. is modest cycles Analytics elongation also for which and seeing solutions, asset our part

in help challenges the investments clients by markets manage management as to through solutions. We and IR internal But more hard-hit in the portfolio particularly IR have partner we to sectors, owner asset through them presented. a going trusted are clients gates are more are our viewed that finding, that approve and

across Despite strong. of More to in believe by through Nasdaq our the generally, transformation the broader client macro economy businesses XXXX will marked continue the digital investments we well to how remains uncertainty, platform, demand technology. be adapt

to world-class maintain will conviction and investments cloud-based in solutions Nasdaq SaaS benefits our of success clients. from making priority. solid of digital with have deliver solutions range on clients, we're modern Building be technology our our clients' to analytics transformation our investments and engagement Therefore, in and continue that deepened confidence technology foundation competitive we the client that given retention, our solutions. we a to

very to guide well and clients our have dynamic and through value We diversified and this prepared a are our companies resilient proposition environment.

the entering technology we solutions market outlook modernization, the achieving with crime value revenue medium confident our clients a create and ESG investments that XXXX, will over longer-term for remain focus shareholders complex continued are our anti-financial navigate our year on and a as We across alike. we growth and term

XXXX up, wrap fourth I results for very Nasdaq, that a by As quarter for I solid will successful saying summarize completing company. our our produced

and our our the corporate liquidity, as advance becoming across we towards of Looking system. the the XXXX, financial ahead amplify goal of to global key structure the our focused look in we benefits enter to fabric on year realizing pillars transparency growth of of trusted new integrity

turn to review now call I'll that, financial the with to the And over Ann details.

Ann Dennison

Adena, section Reconciliations Relations our of can you, in GAAP at and as ir.nasdaq.com. results well commentary non-GAAP as in the morning, non-GAAP located good press will in found on U.S. file all will results be our noted. and of year otherwise Thank Investor My everyone. Financials primarily to focus period comparisons prior the our be to release unless the website

a financial structure reporting on last Slide X, corporate that quarter. As reminder, the our new announced reflects we

business order within Platforms periods plan business the Services updated Access to financial the better Market management within division from Data an IR division. historical time Services U.S. in structure, on our options recast our also reflecting Capital the supplement this with and revenues Additionally, the and review can we cash Listing into the internal align Trading change. Investors Platforms website equity reporting with tape

rates million by start net growth organic Slide on fourth of of the X% businesses X% from quarter negative partially XX increase the of organic reviewing presentation. an net beginning offset in and the Services, will FX increase organic including The XXXX in performance in of in the I Trading X% impact increase a impact acquisition a reported is revenue of X%, by result Solutions $XXX and divestitures. changes net X% and a

non-GAAP the period. operating and profit XX% income year while Moving XX% from the down was to in operating margins. Non-GAAP margin X% prior decreased operating of

a operating diluted million net diluted the Nasdaq to XXXX, year point share percentage million non-GAAP the Non-GAAP full income $XXX prior decrease margin $XXX was X attributable to period. per the For or $X.XX year compared from or per $X.XX of in XXXX. totaled share XX%,

XX. to Turning Slide

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

Market revenues starting Platforms was Slides division. X% increase million to a higher will there on increase FX Trading Services' European U.S. volumes, equity higher capture X%. review to primarily due due cash volumes. and I $XX The industry higher equity cash organic equity U.S. or quarterly offset industry in negative with due and rates. changes now increased and the the lower by organic through impact XX, growth lower partially XX totaled was with results derivatives to from division Revenues revenues X%, X%

during Services we and order Market Within marketplace the another intake team business, Management positive had on performance growth strong implemented technology, builds SaaS proof quarter strong quarter and in the that XXXX by Trade the moving business revenues third period. of is and, are of in a our organic the the business driven encouraging the in Technology delivered initiatives growth programs leadership forward. organic the This by further and revenue point higher

to our X both full percentage period. associated change points million, of XXXX digital strategy. expenses period. the increased in year XX% ARR of fourth our decreased increase people prior an prior The and the margin continued our compared The $XXX from in the year of investment division totaled and XX% quarter of XXXX operating including the X% businesses, year primarily reflects with in asset the

of of in X% as by rates. period growth Insights reflecting Organic a Listing the Platform Access the revenues. as partially organic changes negative offset in Capital and decline or an during contributions Data X% million reflects $X impact positive businesses, Services Index were from and organic and revenue growth FX revenue well unchanged, revenues Workflow

Index compared a revenue compared linked Spending performance, futures-related the moment on XX% prior quarter partially XXXX. in the to When to the the licensing revenues XX% declined financial to Overall asset-based our key revenues drivers a of Index. of period, year the XXX declined by NASDAQ examining XX% Index. by increase offset fourth

Average used period from each quarter, linked in asset-based XX% which index prior futures prior to increased AUM calculate year to decreased XXX the the and XX% trading during quarter. period, NASDAQ from year our volumes the the is revenues

be investors drivers our and are each AUM our to forward, addition -- key period, our will with which disclosures align public disclosures the in going business. end of to will revenue the To for the assist analysts quarter better average we updating provide which key

the during during the 'XX in forward Trading instruments resulted quarter remainder first our to the increase of linked second an year. licensing to of thresholds of annual activity achieved in One XXXX. looking note that certain economics quarter additional indexes the of

year. this fourth approximately of that assuming estimate for the certain quarter lead in the compared in of the XXXX, reset XXXX new product revenue periods. XXXX, begin of lower will activity mix similar first economics trading the two agreements of We million $X we As quarter to to the and

in the from operating totaled of ARR to fourth operating year -- X for the was the percentage prior quarter basis Capital points points decreased period. XX.X% of margin XXXX. an XXXX XX decreased quarter increase margin year period. year The XXXX X% division The billion, XX% Access compared for Platforms $X.XX full up prior from in the of the XX.X%, fourth

million of or the solutions. revenue, the Anti-Financial $XX on surveillance XX% solutions reflecting grew million excluding deferred the revenue in XX% well impact growth solutions Crime increased deferred when with the was the 'XX. detection the in impact deferred write-down of Verafin revenue due for excluding revenue to healthy XX%, impact laundering increase Fraud AML of XX% $X period write-down. and XQ the to as or demand fraud detection XQ and of SaaS-based 'XX, as anti-money revenues compared Organic

$XXX XX% quarter million, ARR, The totaled fourth an ARR prior margin totaled of 'XX of Signed Crime in contracts an for $XXX increase the 'XX. signed ARR the versus was to XX% XX% in not period. which also of increase operating Anti-Financial million, but year the commenced, yet the full division Anti-Financial Crime year and prior period. XX% of includes year new compared for

million million $XXX in Non-GAAP impact to $XX million. impact and operating and Turning decrease partially the The decrease review of net a rates an both by offset of $X million to from changes million a Page guidance. the increase, FX a from divestitures. organic XX $XX to increased increase reflects acquisition and expenses expenses $XX

higher new compensation. level XX% and a period and pressures increase benefits the higher continued than travel we years normalized and and in reflects higher prior to over the drive general in returned expense. by inflationary annual as more were in increases, administrative year which including expense due to expense administrative The merit team compensation to reflects months; our The the XXXX. investment increase travel past versus is XX compensation general primarily higher on organic prior employees a of driven expense higher and The primarily growth,

our XXXX, of quarter full the program we a structure. fourth focus realizing initiated the potential a alignment of new on corporate with divisional During

products. redefine business we change sharply ESG and anti-financial markets, more As focus put a The and and teams only megatrends: together, will three closer focus to did reminder, our commercial bring on this marketing our increases our attract also resources structure how we modernizing retain products closer and technology not clients engage, crime. to but across

in As million $XXX expect charges. to result, $XXX charges, which XX% be approximately we will incur non-cash to million of a pretax

and The unlock main program us two revenue and costs for contract will impairments to synergies. components: divisional spend be realignment; the and three, years and employee-related two, consulting designed has onetime open other support help to three one, terminations; asset

form We of alignment the synergies efficiencies are targeting million related program Costs expense. at revenue the in as restructuring to be $XX of combined operating XXXX. benefits by run annual rate will least and recorded divisional

an our non-GAAP drive initiating continued billion operating just our to ESG, X% $X.XX and billion. The crime digital market an range are expense of range including over asset our a to of investments to reflects increase to the midpoint guidance growth of modernization. expense $X.XX increase We across related strategy anti-financial XXXX of and primarily reflects guidance X%,

XXXX to in the the of XX%. expect be rate XX% We range tax non-GAAP to

book primarily senior paper increase values stronger by Turning $XXX Eurobond 'XX, XX. million notes of Debt caused to of in maturity. versus euro, XQ to $XX and of by million at repayment a partially due X.XXX% by of million $XXX Slide $XXX issuances commercial unsecured net million increased offset

support our cost cash until to have and average record rates of of X.X% to we Our cash third company XXXX, debt remains With to growth in $X.X XXXX, flow, the times non-GAAP positioned ratio impact total provide to of XX minimize the billion X.X to strategy. debt free and fees quarter no at months of XX excluding debt flexibility XXXX. EBITDA trailing long-term the as rising Section weighted compared maturities our of

paid stock aggregate XXXX, quarter $XX the of dividends million. fourth company the of in common During the

in an million by As program, December. increase authorization was aggregate $XXX remaining in of there December an XX, under reflecting repurchase Board the the approved XXXX, share Board-authorized

would have the to progress highlight of on sustainable strategy. like significant Turning I executing the our presentation. made, to we Page of XX some

to most benchmarks. For and X Jones social the named we consecutive of for the XXXX services Index, America one were index. X environmental, year, the companies North the selected inclusion was Dow financial Sustainability Nasdaq prestigious of diversified seventh governance in ranking

of list. -- companies were A XX,XXX we Climate Change only addition, XXXX of XXX In only and to X evaluated named out CDP's

today, reflect In of of to Nasdaq's company's quarter wide of XXXX results continuation consistently a across fourth closing environments. operating the ability range well a perform

Thank for turn you your the back over will for time, I Q&A. and it to operator

Operator

show Instructions] Sandler. from [Operator I line go our question Please the first comes And of ahead. Richard Piper Repetto from

Richard Repetto

a Yes, didn't to broader. good outlook the get question right get we morning, of if Adena, you but and And think charges, remarks good I all I'd the morning, think prepared in my about your restructuring quite 'XX. for sort those Ann. I I this keep at index conclusion like trying the Adena, talked any to et are see at down, -- uncertainty? or if the Because the make macroeconomic bit businesses exchanges investors business, we But might I'm with progress to countercyclical. flourish, business, what listing markets businesses get might cetera. that little be look is there

And look might year. -- -- with the early proposed higher if fee from this I going outlook, changes. But the balance, how to whether Reg of on, versus volumes, just on NMS balance it's the they're know happen that, whole the cap you this the but fees sort at that attach they balance, not the changes,

Adena Friedman

Sure.

Okay.

that multi-pronged So Rich. long was good a and question,

Richard Repetto

apologize. I You take just one. can

one. take Just

Adena Friedman

no, that good. was No, okay. That's

Okay.

continue XXXX, all have we our Nasdaq terms interactions of that really for to is that annualized comprise inside in outlook right general now view I revenue. across the of strong businesses think the recurring So client

in our analytics We and our our data Crime So what in business, demand, client see still Marketplace call capabilities -- interactions, our analytics our business. strategy. client Technology that's our our Solutions against Anti-Financial and investment we and particularly businesses good business, progress Corporate really our

see ESG feel and growth services opportunities had continue capabilities I to we double-digit there. really great and our

technology market to modernization thinking And that a clients their infrastructure. I with tech modernizing our strong really anti-financial our as market the Our growth. engagement effect on positive are crime impact think -- continues they're efforts having about really show

good So would driving trends great I we about that say, into really client as the what feel go we're the long-term and XXXX, we really feel engagement. towards

market we it. immune company to we trading, resilient underpinning is. I No have we're this obviously, a listings because have not our we're The resilient have -- really and agree this that would listing backdrop, a platform underpinning of exchanges of fees. But

of that environments. quite really data strong an have market help all us really in different keep resilient and across -- underpinning We

are there areas of have But a we couple where beta. market

listings fast certainly, we come won't have revenues So listings if don't as the grow market. to out

companies the as we We the But NASDAQ you if on up and go open to tap looking the have XXX markets hopefully, tango. it year. through to file as X know, takes

growth where So we economic year. obviously, continue we've up, actually can for see pick that particularly comes demand we I a And we with help, investors but certain up, underfooting, the latter half And will we're in activity we more really know to 'XX. new And see hopeful rates for underwriting the and the have help supply inflation that. down also got 'XX come deals. ends could of the if kind with see of out that interest confident think feeling of top and kind we

Index impact. And it's a AUM. had we fourth could beta year. last the able think were subject a obviously I with with market you the our in business, big lot see, quarter, to to market of withstand But changes values

lot. a as didn't dropped to fourth counteract robust AUM quarter in the We the have that. So inflows

an where to we how will through But a that's start. XXXX, and evolves, the off have area as leased we year. see to have better into that data we're We'll market go

we feel we're different investments performance underwriting, really though, there. making where demonstrate with strong we'll we're think But about we to some think markets how to We we've been The have the we sum market clients. across and do revenues, I sales cycles. the And So about be and we recurring analytics. elongated generally have see it cycles have our IR that SaaS across the up, goes. I if areas revenues to really were I that engaging really good But strong trends really speaking, good but and able demand. we're have feel markets, will

volumes. Lastly, SEC. fees early, revisions Reg about you a and It's NMS It's Rich. from question proposals. be of the and comments, asked be probably in proposal rounds There'll there'll the really initial an the

it more you're more that. so we that's that trying to venues, see the of and of volume we're before onto same the us. be kind which see to lit do, tactics opportunity we benefit bring to is obviously And doing will impact going But years retail several

the look have a kind in. in will that of But that the and kind at relevant the call sizes to I'll tick also where change dynamics fees, different what result that, we of that's see we the access and

so we on the net-net appropriately sure proposed. actually kind for trying are want they're But to the SEC's make the calibrating sizes obviously there. fees we achieve and what we're what tick And generally to of access positive

Richard Repetto

you. Thank

Operator

next Morgan Stanley. And I question the of our from Please show, from ahead. go we have Cyprys line Michael

Michael Cyprys

to banks, clients Good in and for morning. historical is many And elaborate I you. the that environment And on thanks a signing proof right I conversion hoping question. you was to I little Verafin. the pipeline concepts now. hoping mentioned on can some customers? bit X wanted are been undergoing dig those becoming you Tier maybe us update have evolving. Thank to what's taking paying how you historically, on of was can the over and time how with you with sales

Adena Friedman

Michael. Thanks, Sure. Yes.

to which have got anti-financial trading so surveillance, the our FRAML capabilities, kind trade offer -- the we look surveillance you've at surveillance so Verafin have firms you you've generally, crime, of and then the AFC, markets. which business we if offer and really market technology technology to of technology we which is surveillance, the all So is the we is got

In to and medium -- in we had, there, I finding really a have continue nice new small and client getting And really And I sales. And the up -- XX been and the product what I it to was it's there. in strong we see Verafin, them think has clients. dynamics say, we shows offer is the it had great quarter. I clients a we think especially as to strong mentioned, paying with demand quite banks, become conversion lead to consistent,

we're we waters, to think the we're of what upmarket, where concepts up top reduction showing facing we're of false The I real right? of up We're that seeing go Verafin, a that's new universe. we, a -- banking to ability kind identify the slowly positives them top surely. some signed lined are Tier and banks, significant unchartered and X is the better proof but are getting getting of in As up And fraud. as

proof a getting And to think in so that's helpful are really convert the really -- client. points I

in cycle talking X then a, get that's there. lower where, from of that again, And several have to large we X that proofs improvements terms results strong really of Tier completed banks, would you And positives, I detected. fraud XX-month think in and X a are showing to like up Tier say, I concepts we're sales the you're now, better more anywhere banks. false

things. a contracting And the But a through they can deep because from, be cyber go of kind XX We We those X say, through, lot I different cycles to really internally. review to are of there anywhere months. go through would cycles review. XX sales go obviously, really long

completed. giving us we as proof concepts but show gives an into numbers, year. those we're we not of hopeful X number to this should really Tier go through able them last half good convert So we because some of concepts can in we first only that to say, opportunity it's It the 'XX. can proof Michael, we specific be that completed banks the get of And of I of a that are we've year

And year. confident points the as to those so proof go show able through we're we'll we be

Michael Cyprys

Thank you.

Operator

I next from Kramm of line go UBS. the Alex show ahead. question Please comes And from our

Alexander Kramm

of everyone. it but to bit I'm the going about good anyways. snippy a question recast. little ask be Yes, It's a morning, may This

resegmented and So today just But a November you something obviously, out recast non-solution the XX. into just shrinking solutions segment. business basically for rolled no in or obviously, move you then to new to targets X

fourth So impact about if to my quarter. math it's in to organic the basis is XX Solutions right, of points growth positive

should to again? you're guess is, it? Because, should my Thanks. did to and now about higher moving really Or we job you recasting Was again, changing it be you targets be that a thinking Solutions and we question XX.X%? non-trading, now? So hold around accountable I nice for how X.X%

Adena Friedman

Yes.

the it's question and thanks Alex, So not snippy. for

so they realignment the Services that the are So Data. happened with as the what tape with change, more -- demand. into this. of but sitting And that Market -- fact associated revenue was with say in ebb Market the and client -- team opposed but the used the equities we because tape and we actually tape revenue market dynamics revenues sitting I the business, just We of equities did options and have tape to inside made equity was flow the would we actually pure moved the share market have we management of to inside other the the Markets what

redid we quarter to and the And we thought decided, and the switch. aligning equity markets. when with we actually as we through we into make a And the the so into really first moved opposed options of kind actually alignment, into moving tape -- we we data the tape about divisional went the as management, new went -- fourth business so decided to the

kind moved platforms team. and into the because tapes market being are Market we Market by moving Platforms team equities where the are the So that managed division, Platforms the into now options supports them that's of

and medium like those them. to to So that's We're achieve be really move the do outlook group over our our only just X% we to we to into to term. able targets to want intentionally that. managing did products anything XX% the we catalyst. did businesses. that long But expect medium That's the is not kind outlook not of long-term it changing to across recast target or Solutions the

Operator

from from next Owen And question go our Please comes I line the show Oppenheimer. ahead. Lau of

Owen Lau

my taking for question. you Thank morning. Good

Is the Thank incremental you ESG on Crime? we expense new invest the potential examples should the talk that you. investments? about will about to revenue could there you launches how give and think Anti-Fin or these product So area please And can even us? from in outlook, any you specific

Ann Dennison

Hi Sure. start. Owen. I'll

X% like ESG, And guess, of for which all we the you AFC characterize growth that what our coming would long-term and back when about said, would investment our them the those the our the X% in medium comprises revenue -- term. the is I X%, support our is across think we opportunities substantially outlook, just business the we of need you guidance we're our guidance, as out to the look that we When be have growth about when outlook market support, I at So at initiatives we've medium-term of to just to modernization. X.X%. X%, to over got to think midpoint which below is -- midpoint growth continue building that

our being the and think I high-growing Insights high it's really but so business. a a XX% or medium-term base the Workflow small a the support access that growing to platform on then And and outlook off there, ESG to -- about XX% capital growth medium-term of biggest portion portion the outlook AFC of

Adena Friedman

Owen, percentage assets think, I embedded digital And point in did in the X% making about, Yes. is because annual that point we're business. expenses continued is really thing that we investment out one our growth X in of

hopefully year. closer in to of the business, launching kind that half of get this we As first

as one that's that through we So out and discussed we've the concentrated outlook. went investment called

sure look kind said, growth businesses. growth, have likely growth pillars. of dollars key of we investment that, this But of least not a businesses, the the way. quantifying those or X% putting really majority to at at of we're comes of we're Ann the when think outlook, percentage all pillars. remaining those investments in it -- it's three the basis, investment you making higher across putting more one making on those that there's growth as more about one I investments think just We're that from beyond right each into if outlook they're a The

to and and outlook a we're support we growth XX% the have we the that If capabilities business. investing to AFC the R&D to of our make go-to-market long-term medium growth. sure in sales like XX%, So

something And would say. so higher have than of X%, that let's level investment a that's growing

But that achieve making our think matter, on our we make to as I feel sustain capital where sure right of we invest also the this sure long-term can growth we're like and general -- outlook. choices to the we make to a medium

Operator

Bank from Craig go I of Please line show And the next our Siegenthaler America. comes of from question ahead.

Craig Siegenthaler

morning, everyone. Good

So headcount? you mean it where alignment. I divisional was layoffs, are behind you simple the where question had what could you this headcount in if Is and does detail I pretax terms? a the of new increasing on costs. hires? charges reducing And the from sort employee-related provide more wondering are really potentially And

Ann Dennison

started Craig. question. get on I that can Okay. Thanks,

to we've So of very, objective of the our realignment is about and that divisions the really the the program the realignment if closely program we think very themselves. launched, just restructure overall of tied --

the you anything our of broad-based to within location looking divisions. and optimize alignment And combined are company complementing to range they're XXX, that looking in when really divisions. some realignment effect broad-based. So think perspective, that not but really about costs of functional a of the We're power employee the then the our of embedded XXX strategy and also tech the from migrating at of sort of at divisional not the

those expense say that now, of next And fully about million the and a sort baked annualized revenue return year the rate about an savings on by we years I'd an think right of two with And side. coming estimate, costs and XXXX. in is on million majority over in of costs those expected synergies run of $XX that the $XX

Operator

from our of show next go line Fannon ahead. I question Jefferies. Dan Please comes And the from

DanFannon

ex as Thanks, outlook a momentum. lot the about the XX%, and in to wanted of on X-year this morning. trying revenue X is The Crime. to of I clearly to the you've talked up bridge good But growth follow that the XX% quarter, should XX% going deferred to is higher Anti-Fin exiting to that get higher to end? get we -- exiting sales you to and -- long being XXXX of as to kind the this, the need those cycles, do beyond within think maybe but numbers? Or ramp or -- it we 'XX about

Adena Friedman

medium- we to continue the is expand think can at XX%, by look capabilities. that of that products supported pipeline kind continued as we well we so actual our feel outlook, I opportunities, overall that and to Well, our to our the the sales the long-term investment XX% in Sure.

look solutions. it quarter little even delivering Verafin XX% in the a detail mentioned growth potential obviously, bit I as FRAML have on the that before, just to And I scale. than that growth more continues more And our to you how mentioned that's dynamics. give I'd as continues asset, was really thought we and I -- at we and have our strong

Tier I are growth the to the continue are that so ticket definitely Tier upmarket dependent and that -- But able and much, and And this think Tier we're we we attract much sizes -- in banks, move rate as to we X support term. X, Tier higher. X short X there, as the we on banks not think Dan, Tier X X Tier

to over that the the momentum maintain important strong that in longer across we're will term, to continue trends business. be showing So growth showing that

as crypto there. -- our the expanding asset well by offer, onto and to clientele types surveillance, really The that continues And of to it business, other bringing modules and low long to firms. kind drive double-digit as time. platform a continuing surveillance the providing have more that That's trade there, has of single-digit, the that like globalize growth continue parts we growth, two the of more for trading modules classes solutions we're to high

single gotten across of large high where and we become digit, enterprise digits. that support of a surveillance have the We provider continues be an banks, good to growth to low to kind point opportunity double that

client part that profile. and would area that continues year lot our and surveillance regulators. where of there, surveillance was the grow a growth low has base That's to And say harder overall where flat smallest because provide a the for is it's we flat one smaller. to business the market is have to But growth a to it's opportunities one largely business markets is low I profile low -- of actually The division. a the

into 'XX new or think 'XX go to I of expect growth we grower to certainly -- years will And that little and bit the to has come. find that's to lower a growth low 'XX, a XXXX, a to there, in that as of 'XX, we created 'XX in ways but hope So some 'XX, we be kind catalyze view.

you gives just that hopefully, more a context. So little

Operator

line comes from Please question show go our Deutsche next the I Bank. ahead. of And Brian Bedell from

Brian Bedell

I divisional the for XXX are taking Good to Maybe just make morning. the my program, confirmation non-GAAP not those included in just Thanks just the guidance. expenses want alignment one XXX. that's sure question. to on

Solutions broadly, to just just more you're as XXXX and then we course, of would in terms from revenue. remains in And for So I this kind index elongated then that year But given describing should the this on your year, the headwinds licensing, X% target. of longer-term that of a XX% that. sort of raise the growth that near-term potentially then realize cycles the then clarification being the be on investing Solutions a a you're sales pressure And slowdown reramp a of than thinking that initiatives lower in that? and 'XX? So of

Ann Dennison

Sure, Brian.

line, of the released your question, of restructuring the will program, first the XXXX, be -- part they included cost alignment as will are with divisional on not part our not they guidance yes. booked the on those that non-GAAP expense we So associated be and for of part

Adena Friedman

in business, we really for Yes. continue on we're of And analytics, business. this about to I our Solutions corporates And say we really to that well overall businesses good across, I that the think as the demand. and we how the -- general, client tech mentioned, the investment workflows and as I growth it for so AFC way, insights then as know Brian, the think think, I good delivering would outlook I feel with regard market see

through areas see of looking then, we and will some for But are of to consistent targets. with one year cycles we manage think across our course, create we area we'll in which elongated some improvement don't at companies and market Index on the market growth the the overall some business. values, for I our improvement bit that down index a challenge And bring year. in is market, more this help those are backdrop business an little that do have listings a there, the be that that and are how year. more the will bringing and see could hopeful our us But There dependence the we if sales could support market environment values,

out, like long I we there our as as are businesses. keep though, across And I fact a backdrop. kind ARR because to our point market to in over SaaS. medium term our of that tougher just -- had you we we that's tough that of to those would even and were able think years deliver targets at the had why growth XXXX, in years X% multiple where look market an that organic with have we increase increase average in improvement the Solutions XX% we XX% backdrop

a consistent challenging across even we environment So year, to story last think really show able were a with market I from Nasdaq.

Operator

Sawant Gautam And comes go I question ahead. next show from Suisse. from line our Credit Please of the

Gautam Sawant

XX businesses? and Adena trading potential Ann. a morning, to you to Can long-term are there. this your wanted I Puro.earth know just that corporate certificates and spend there opportunity COP contribution clients And in from Good directly sell the Puro.earth future? earnings opportunity talk across at and is U.S. second in and an Nordic on the about the I business Puro.earth the to XXXX. the XXX% presented increased

Adena Friedman

we Yes. Sure. do. Actually,

what So about Puro.earth. love I -- talking

and, Finland. Pure where removal we us Puro.earth called that to marketplace Fortum really So excited minority carbon in partnership And opportunity a the provides a we to as about reminder, a position are frankly, have clients. our a just with Earth in company

tap clients as corporate clients. already do we So our

platform, and So demand through we credits. our removal they corporate leverage for and credits relationships directly grow the continue to those come really in the carbon to buy Puro.earth

was market actually, today, tiny enforce did mega that I XXX% strategy grow, Platforms that back that I it year-over-year small and our in think what's said, so think holding base, supports XXX% a business sits ESG on you our as business. off is to that Market It to it and but it's from It like a trend. just want I today. very that, small, everyone

is that But what's back really holding that marketplace supply. platform are whole all --

So We put the platform. we on industrial are really on supplier high-quality removals. every carbon diligence focused on we do

even to bring We're platform. put platform. methods advisory very, which onto supply an We have committee we with to very the willing scientific in determine the discerning on -- we're how we work

fact that the by pretty we're nascent industry, still given And it's really a supply small hamstrung today.

So of we a And to to and to based across -- a that also registry working replatforming will a then some really removals actually investment can secondary platform. next Puro.earth start we they're create carbon space. leverage on really we the activity over bolster three from up think have help expect to that five market We supply. venues. we're to to market, create We're start years, trading makers lot to going advanced multiple the have with develop come into blockchain buy the renewal trading can so that

I want But this. say to

mighty I but long-term now. But a X us a of recognize as It's think a but team. about really very are of like kind a strategy. for what strategy. small is it's can XX-year to excited we right really, Puro.earth It's just investment small become, it

Operator

Please Blostein Goldman Sachs. from Alexander line And ahead. go I of question next show from our the comes

Alexander Blostein

the off stocks probability the if morning. the of business. for could and one revenues in coming frame you and years, hand, over into opportunities on over the pay then we Solutions you discounts Thanks on services at IPOs the the for Solutions dig Corporate that guess, I interplays be from the side, of legacy I see this listed Good those question. curious of might from the some to kind was was course you could couple that flip Corporate the that business starting year, the of on hoping listings provided help of could the risk the service? them and some last I guys of to delisting

Adena Friedman

I about revenue for revenue just Great. Yes. Thanks, X% SPAC the Alex. mean Nasdaq. of total represents over

our revenue stream. a it's small So part of

SPAC combined, SPAC seeing but a decide to number we're seeing to provide of shareholders. back also are their money We the

not we're but a coming finding environment anticipate And some combinations. back ultimately it's so SPACs, -- small revenue the lot the of in recognize and we So reduction a we our that from part changed revenue. but SPAC of would for has also --

effect that XXXX, it, little but watching a XXXX more will that's in think X% I in closely. pretty of probably to more revenue. it's something just as said, I But than it's just size the an of So something than have we're

think I our support ESG Corporate which IR and right. regard Solutions, is Services to are to solutions corporates, our with you and

We've to We the have two of through on been the years. a platform. them lot IPO package clients supporting last our come for who

see particularly them convert them into clients. And us XXXX, we're so going and as get we to paying to turn for in the opportunity into

that business paying is customers. And that our is convert of to clients for obviously so part that we -- outlook those how

where we them deeper of We've might those clients also packaged IR IPO solutions. and even the period into ESG some sell a our upsold during set into package solutions of

them use we of obviously, period. beyond So view them some IPO as that our continue they'll services our think have I paying clients do even that to want to And now. the bolsters

than But that's 'XX, a that. want say, just about more think I we're very of opportunity optimistic but to I 'XX

have them. retention of we We clients as convert strong

Operator

the comes question our show go Please last I line Kyle of ahead. And from from Voigt KBW.

Kyle Voigt

of around similar the the announcements have trying your impact numbers just from for on if a this to revenue cloud the see coming cloud-based platform. Maybe solution of year and question two? just opportunity or migration to migration? of on-premise type better Could some us we larger on-premise more the understanding morning. so over your to put you Good from a margin the we remind Nasdaq I'm kind impact BEC of type

Adena Friedman

Yes.

maintenance we'll one are recurring implementation use to just service I there opposed can't on sign license that But give client and to revenue has an One business. that by margins, it margin. come much of a a an of we agreement back sit client as higher you benefits. do to when two think view. I and need more and is to a which SaaS-based the probably whole to and contract, more bit you which to has lower extrapolate little there tech becomes a it a market followed annualized revenue,

a of more have like throughout contract. length and margin more you So steady the steady revenue the

margin like you we've what's view don't yet the think I into given But differential. a

kind And specifically give to clients I back as solutions. we need so of an sign getting cloud-based, more more feel traction of we gain little to that particularly to on and come a in probably insight like our cloud-based into bit

don't So want you I to to let's back right you kind a of just wrong come answer that, but give on now.

Operator

to to time, That call At Thank concludes this session. turn Q&A the I remarks. like back Friedman you. our would over for Adena closing

Adena Friedman

on team our Great. to our very our executing against Thank reiterate priorities. to call, I focused strategy progress to deliver all on for stakeholders, today's our remains forward we make Well, we you conclude and want leadership strategic we continued aim very discussions to throughout as that the much. of the look year

a thank So and day. much, you very great have

Operator

this And Thank Thank today's concludes participating. conference you. call. for you

may disconnect. You now

Nasdaq (NDAQ) 25 Jan 232022 Q4 Earnings call transcript