NDAQ - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to Nasdaq's Second Quarter 2024 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker, Ato Garrett, Senior Vice President, Investor Relations. Please go ahead.

Ato Garrett

thank Quarter joining XXXX and discuss today everyone, Second Nasdaq's Financial morning, you us for to Good Results.

and our On our the Financial Youngwood, Chair Friedman, of Officer; Chief and Chief management line Executive Officer; are team. other members Adena the Sarah

remarks, our the line we Investor release Relations The for can call open accompanying presentation website. earnings this will be prepared Q&A. press After and found on

A call complete summary and will like these be that making that to involve on on statements a our would contained risks. I is report we this of release risks XX-K. in description remind forward-looking press Form annual you our on more

to Also, forma we prior the period showing discuss the will basis of results as are a divestitures. year a in owned Calypso our if excluding and of release website organic in be Relations and all impact found please impact with well growth our the of rates, of for that pro that section Financials the and non-GAAP located on can at Investor year-on-year we to in as XXXX means AxiomSL our versus financial Reconciliations FX. GAAP note as we We growth ir.nasdaq.com. References results which results exclude and file press acquisitions of FX, U.S.

I call to over turn will the now Adena.

Adena Friedman

Thank you, joining Ato, and good morning, for everyone. Thank us. you

more our as I'll as some financial to the then in detail. environment, external call to well strong against priorities, provide performance on morning, through perspective Sarah the I'll highlights this the the On call discuss our our results hand quarterly walk and progress strategic

coming GDP slightly along see for as we These soft the continues potential strive an in points rising solid support economic easing in with continue Fed cooling Turning but -- we're the and the economy policy continuing monetary U.S., to for the months landing. data to unemployment. inflation to growth, slowing the

resulting cost week. activity The forward of we and through general solid in the IPO lower landscape a as potential the is capital this in economy stability modest U.S. going progress for including in improvements XXXX, the

However, monetary well investors our environment. external contend and uncertainties as political dynamic shifts timing macro of to as with continue the policy

we our of IPO of that As starting likely half U.S. to to improving pipeline the and stronger XXXX, result, continue in IPO expect the remainder current momentum for indicates activity XXXX. a is modestly manifest first

European We're healthy the ECB's monetary public policy, also material Europe, new in and by improving is yet Nordics. a our in into seeing including particularly not economic stronger pipeline underpinnings economic for growing, improvement The increase aided IPO in the is XXXX. prospects translating but issuances, easing

and investors strong dynamic as market As industry solutions trading from activity for in markets mission-critical as participants to navigate globally. environment, robust sustained demand technology the the financial institutions continue we see well

for and demand our a backdrop As strong a solutions continue have trends experience the consistent for to result, volumes, growth client with revenue markets fintech our which solutions we provides healthy across suite. continued through remains seen our cycle,

We resilience revenues, at in delivered business quarter turn to $X.X of our our ability cycles. succeed through model XX% Solutions XX% results, with our an growth. demonstrate to and Now a of and billion let power the me revenues increase diversified year-over-year, net economic which financial strong with

revenue, to billion. grew or recurring $X.X annualized overall ARR, Our X%

shareholders the power and and realizing of is strength the pleased investment the schedule platform. are for of acquisition clients, I'm to testament our our the underpin as of we particularly Addenda with the demonstrated thesis which employees. the that integrating across business, a value ahead transaction performance We're

for within expenses X% the guidance. increased Our our quarter year-over-year,

continue operating X to our deliver synergies. while operating XX%, growth business we leverage percentage point support grew margin Our to approximately and to income And XX%. increased invest our in on over operating of importantly, representing

highlights, starting a to of now business the capital platforms. Turning discussion with access

remained at revenue in division the of grew revenue XX%, platforms for ARR X%, in XX%. overall capital While resulting our access growth index growth

In welcomed IPOs on Nasdaq XX% our maintaining operating eligible based rate listings. of win strong XX company Listings, we

our While improvement, the IPO slower by of is recent a Index, Pulse IPO environment which high. near remains a most encouraged X-year by headwind, supported we're as signs

experience business in offset modest data listings the intelligence actionable growth growth increased IPO improving prior community efficiency. the for the of continued Growth data impact Overall and from demand in delistings. and continue market environment challenges our to as slowly were investment across in by and year Analytics benefited

Solutions, by in insights. offset and muted Corporate more that for continued headwinds However, growth workflow growth resulting partially was in

the delivered the Our another $XX over quarter, with XX Index business quarter billion exceptional during months. net last totaling inflows of billion $XX

$XXX record exiting ETP another achieved also in billion. AUM Index at We the quarter

Turning Management new Technology, next Services. XX% combined in Crime solutions AxiomSL growth combined Financial Financial Technology across and Technology. ARR division XX% including XX client and the X% in the Management Calypso XX%, had cross-sells. to The the and Market XX and X Trade division upsells in was signings,

cloud-based XX% were quarter a pipeline AxiomSL bookings future combined as of We in saw cloud for also eclipse adoption with quarters. strong continued the

to Financial Upmarket space, in continued progress SMB new and in focused on Tier segment specific Tier Technology X Crime Turning Management the strong over continue We we momentum. the XX clients banks. the signed X subdivisions. make and its to

also exciting In signed new July, X a is cross-sell. bank, international Tier we an which

pipeline a clients and we Tier X of upsells the Going have strong SMB banks. forward, maintain and and new within Tier core among we pipeline a continue X growing to segment, sales

demand to signing Across in world end increasingly financial both game. and environment, many face IV clients trends that Basel Regulatory focus implement they changes we're regulatory are pleased existing implementing new on to including Basel as thresholds. regulatory sales institutions III Among related the preparing progress demand, driving as Technology, our we with around in globally dynamic see the clients regulation asset and across sustained

on In Capital Markets enhance many resilience their performance. to Technology, mission-critical infrastructure we of for see strong modernizing demand and as focused continue our clients technology to

we addition see especially to in the cloud segment clients. For new demand, large-scale of Treasury Calypso, transformation robust in

achieved growth in capture. increase options We growth in North equities on-exchange revenue as X%. Europe, America of we experienced a healthy delivered and sequential North across American as Services division, well market market and In our U.S. share volumes Market share Nasdaq we and

than options our index doubling Russell, during showcased record more Cash due capture S&P and which year, to higher revenues, U.S. volumes. markets. MSCI the last successful quarter, U.S. executed achieved strength and the Our we resiliency Equities rebalances In business, and our versus of

the nearly the During $XX representing shares, representing in the for the liquidity of Russell Exchange Nasdaq were event, Closing event a X.X Stock over the Reconstitution. instance, executed notional or Russell billion record Cross, value largest on billion,

gains. depth to quarter report leading markets. strength In and on breadth our services retaining of innovation market and we're a of our the book, remain product our participants to drive Overall, of market pleased our across solid all European of ecosystem, markets, the by share as of evidenced position market focused continues

want XX% ratio we plan. Starting of One spend our ensure of and and clients and we've $XX minutes the AxiomSL integrated with of reached highest Both a ahead level have to well-structured efficiency I approach against Calypso over with we're leadership, model go-to-market updating a million into on priorities fully we're are you established and actioned X.Xx expense delivering executing accelerate. how our XXXX our integrate, to Financial operating now of a few Nasdaq for both effectiveness. end, strong integrate, the and Technology innovate at of quarter net strategic the leverage and synergies, division

ahead coordination for Our Calypso supports is now and year. established sales this well program and divisional of incentive beginning as completed Axiom solutions as the at of schedule, the CRM the the integration sales

our show Importantly, to enterprise. across AxiomSL, our that Calypso And continue highly and cultural clients. focused are and been broader the on internal highly energized engaged surveys deliver Nasdaq Verafin, for we've integration to into employees

several By of also our making will advancing developers AI and product XXX AI AI QX, as our We're on employees Innovate our progress recently over employee map. approximately priority. productivity to focused as participate enhancing our end road working with the driving XX% hackathons we We currently strong Nasdaq. have across of well base access had have copilot of tools, XXX% in tools

we our we the AI have AI launched Summarization. to investment, within with Gen AI-powered new our with solutions. an Lens for a other deployed the Boardvantage During Verafin Consistent module Minute recently Meeting and Pension capabilities continued in feature Market client-facing called solutions, new quarter, capabilities introduce

pension insights and priorities decision help engagement to asset future The feature strategies provides and current pension makers. managers their development on business with top with inform key fund

also features already launch a AI we're to Insight. IR traction and strong in Surveillance pipeline Market to in strong are in related scheduled We And and early of capabilities including effectiveness the have in market. that adoption coming seeing quarters, client the

is type, we type which first Dynamic April, both in in a in launched this to M-ELO, version. the order volumes Specifically, prior XX% compared driving fill static rates for and increase AI improvement SEC-approved order the

the rollout our at deployed clients, that has with Entity Client demonstrating to compared use been can Verafin Copilot, XXX copilot Verafin's functionality, integrated in banks time -- to solutions quarter. complete expect now Gen feature, and research functionality integrated Research up the positive, AI copilot that to alert by more feedback do XX% reduce we Verafin. than third the integrated not is

growth Beyond drive key innovation AI, towards priorities. to we continue

new XXX. our growth and franchise products drive NASDAQ strategy extend adoption the business, the our For the as introduce institutional beyond example, Index of globally, in at is innovation we to heart markets new

geared ETPs with outside including adoption. new the institutional our towards launched quarter, insurance gaining product During clients. and And In -- of annuity of we we're product United total, the products launches were investor vehicles traction XX% index X partners, in States. quickly XX XX our

Additionally, ETP the over saw months. we're last pleased our inflows the XX more than of billion that AI-themed $X

early in our up we no AxiomSL fintech executed and the had of elevated There's the including closing XX X with have to cross-sells have addition The strategic clients. our We Calypso our clients our Accelerate evidence dialogue of X the significantly quarter, Since has this priority. we traction a cross-sell that transaction, we're as Wrapping solution than Calypso partner. on with cross-sells. better seeing AxiomSL of efforts.

months pipeline in start, beginning but XX% only $XXX the This our by end since it's great are cross-sells the is XXXX, of million X opportunities exceed acquisition generating closed, a to we of in journey sequentially. and our just the the our grow the years. continued confidence underpins which has The coming in several division strategic our cross-sells, top-of-funnel expect bookings interest to to and over underway, grow ability this campaigns cross-sell cross-sell are strong on

durable platform a we're quarter growth. and of by pleased to results, momentum power drive and continued scalable, the up, wrap solutions deliver diversified driven strong in profitable of our to To

our complex delivering acquisition phase to as that growth. forward to partner momentum challenges. a Importantly, solve can unlock thesis their largest, strategic We the we're help on see Nasdaq leveraging clients this next increasingly as our Adenza look most of

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

Sarah Youngwood

in integration We debt. of X of expense actioned Thank In over quarter, progress everyone. both you, of and we accelerated synergies Adenza the second paydown ahead made XX% the good net morning, the of excellent months and schedule.

of our the quarter ahead in leverage. come X.X accelerated deleveraging also plans have We ending of

to our $XXX Operating of our up Slide an of quarter We XX%, $XXX net second diluted on net XX. expense with solutions reported revenue guidance resulted million, and XX%. and income X% results in of within of $X.XX. was Turning this revenue up EPS billion, $X.X Overall, an XX% with margin XX%. operating margin million EBITDA of And up

Slide X% for volumes by XX revenue Nasdaq clients product this our overall the in beta higher XX% higher indexes existing on driven generated quarter. driven We market in well focus as valuations drivers basis, as a as by factors growth forma on the Overall, were as shows innovation. of growth our pro well new and quarter, outside net services. X%

of X% ARR in X that, growth, at had growth. a And ARR we XX, we percent now part of had as revenue resulting percentage XX% as up XX%, points. Slide SaaS SaaS On

results XX%. review performance, of reflecting on the million, for assets quarter, XX%, quarter with quarter, In by platforms, months, capital $XXX the for of this $XXX driven ETP billion. resulting including XX. XX of We AUM Index billion inflows Let's delivered starting we business market in $XX organic of had exceptional average both another revenue growth up last revenue Slide division billion our in $XX and

were In XX%. up addition, volumes future

to fees. was listings pricing revenue listings. The listing Revenue new lower of impact offset small revenue and Listings data down of from difference benefits was higher primarily while driven usage, and initial and ARR was related amortization sales up the onetime delisting, and downgrades Data X%, prior X%. by project

and about We to X $X XQ impact lower from of expect 'XX period XQ immaterial of 'XX listing in quarterly to in increase each the million an amortization prior the from in $X headwind approximately next quarters. million fees

XX% roughly first in the period, a of seen fewer half we year should However, be in that the versus suggesting year have XXXX. prior less delistings delistings revenue the of headwind

in by with This and headwinds partially by ARR X%, offset was & Insights Solutions. growth continued line in driven was growth This Datalink Lastly, Workflow products, continued of mainly revenue in X%. analytics Corporate up e-vestment. was innovative

in digits. both Operating quarter up and had XX%, margin high ARR Analytics strong was percentage revenue with a point. X single

full capital come expect for and expected and in come [indiscernible] revenue medium-term expected to exceed flat growth in Looking to data to range. forward, index listings its with above essentially below insights with we year access range, its platforms Workflow year-on-year. our and

Technology Financial with of of strong division and million, another quarter Slide across with ARR increase We a ARR to revenue subdivisions. had and growth XX%. growth Moving $XXX double-digit of This reflects performance revenue on XX. our X XX% growth

growth Technology growth growth Capital XX% quarter. had and XX%, Markets driven The Technology the between in the in professional and and with fees. growth services ARR Market the ARR of Financial the upsells X%. Together, XX% of XX by revenue Trade revenue and Management new ARR is XX% Client delivered Tech revenues renewals on-prem and on XX of X revenue clients back Management growth new quarter. clients grew Services and of timing difference

subscription We revenues. up and to decline strong both services a professional and businesses lower was experienced percentage revenue points The revenue up year-over-year sequentially. ARR in due X% growth X for in growth,

a has Tech, we the this had XXXX, resulted in million. year revenue in As year very And subscription created a implementation XXXX. $XX benefit of in large we in quarter, million last or Market full of revenue ARR which mentioned $XX

this year-over-year QX. and persist We abate to expect in QX in headwind

first was quarter of revenue broad expectation higher due early had new activity, X including of XX call renewal, provided in strength the ARR XX% sales we to Calypso in growth Revenue a upsells strategic the growth and than and XX%. clients.

As outlook. solid markets forward, to continue expect to momentum business technology growth capital for medium-term we in our we look see in XXXX the line revenue remain and with

half XXXX, division across the more consistent the the year normalized versus of products quarters. within Overall, second growth first half we for of growth expect across with the the

partially by and revenue new had primarily renewal, client new Regulatory Technology upsells difference of and large growth X a a to in strong professional growth in driven XX% XX had ARR growth revenue and by XX% offset revenue, upsells to X ARR which growth was due on-prem XX%, AxiomSL, services with and The including subscription quarter, The deliveries. the ARR XX XX% revenue and quarter. decline the fees client growth due growth. the revenue of of between in is timing clients XX%

quarter, operating The the up margin was benefit points, XX% the realization. X percentage of including second fintech in synergy

the a evaluating As business on we period, finalize the combination you accounting for update let we are on during measurement change Adenza AxiomSL. me

approximately potential As upfront. to due whereas embed ratable critical on software on-prem we would currently over term. contract part basis recognize mandatory implement updates recognize regulatory of contract subscription-based a this term, AxiomSL frequency revenue accounting change, the XX% is the we the that of This in the throughout we and

our this it ability year. If a revenue fintech enhance above financial nor not revenue overall, impact outlook provided range, would medium-term remain outlook adjustment outlook and medium-term made, growth would had would its Nasdaq growth end material of XX%. and with the the achieve would and the change a growth to combined high strong near is have top of and XQ medium-term at quarter range its AxiomSL Calypso revenue on this an believe We our Adenza not we change reporting it Solutions

unchanged. ARR combined retention net Importantly, would growth and of of revenue XXX% XX% be

growth level, ARR. more subscription the been generally forward would line remain to in 'XX medium-term growth our line AxiomSL at AxiomSL Specifically with XQ we with subscription outlook. have in revenue going and consistent be expect revenue

fees to low earlier the digits. would mid-single growth revenue However, in for total services decline quarter driven mentioned have to the AxiomSL the I timing-related professional

finalize to in first We XXXX, we quarter earnings. provide receive our the of to if information for And ahead by make we information our historical the additional change, analysis XQ. half expect will XQ XQ and during updated of reporting and XXXX

in America the was America new by equities million was in quarter, both volumes and options Now well $XXX X cash the was wrapping Net revenue Services. with increased in equities, share up in the index for day. X%. from for capture European Growth as Europe North lower up Market options, higher of U.S. options as high divisions North share trading though partially additional in stronger and strong and sequentially This share gains quarter. was base equities course by U.S. options the increased and in very a offset equities, growth, driven over

We also had lower revenue. U.S. state

to percentage decline year, prior in monetization Services primarily investments point Market market due continued operating second X a and obligations. was the margin regulatory XX%, quarter from

Moving on on expense operating to XX. Slide non-GAAP

of quarter million, within and as adjustments growth annual $XXX provided merit forma is reminder, first the on was included the million pro we call. a This quarter guidance This sequentially. impact X% And quarter $XX second or reflecting equity earnings grants. of our

both funding included operating million percentage increase and through $XX in synergies All of X in, the targeted revenue-related over the We originally additional EBITDA the net this margin of of end synergies generated we of with an leverage expense positive This and expense. XXXX. quarter operating of point. benefit

of we As the amount, schedule. that expense ahead have benefit the over of XX% reduction of in growth of in P&L QX, represent percentage X point X year. of half approximately already this months first actions already The actioned taken

Please And of line time we have to a recognition. and note longer percentage actions impact points as XQ for approximately to X.X expense expect the expense synergies of XQ moderate such, the growth XXXX. that full by

the the expect revenue $X.XXX range synergy end billion, year, benefits and in bottom compensation for variable For growth to in increases expense an the of accounting initiatives of strong generation, the which full while enables year. invest the to billion to for operating us reflecting non-GAAP we also increase $X.XXX realized account to

XX.X% non-GAAP full continue year XX.X% to basis. expect tax on a we a rate of to Additionally,

strong generation months. in track Adenza flow consideration Nasdaq representing cash the XX. approximately on Turning $XXX the takes conversion into over to acquisition a with of our capital with quarter, record costs specific of onetime allocation XX free XXX% the second its continued and Slide This integration. trailing million ratio associated

This attractiveness take was XXXX ahead our to $XXX net annualized to paid and $X.XX down reduction X.Xx ratio, also or last our quarter to $XX at gross quarter. while paper accelerated stock employee quarterly This X.Xx of leverage $XXX of versus a the our advantage to ended quarter, increasing per the We are payout continued XX% and and share of start prioritize of our debt plan. deleveraging opportunistically we commercial million achieved offset X% dilution. million, repurchasing approximately dividend million reflecting shares of and

Looking ahead, on term remain down expect while the remaining deleveraging and focused pay commercial flexible. to opportunistic paper balance we and remaining near

committed dilution. offsetting remain also We to employee

In integration. results are are our the which the pace with closing, thrilled we of we at on delivering

executing are We and driving durable focus plans and discipline, powerhouse, shareholders. a on our building financial technology with profitability growth our for

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

Operator

question Fannon [Operator Instructions] Dan show I the from And comes our of Jefferies. first line from

Daniel Fannon

as within more you maybe the strong talk highlighted quarter So price Prime was growth what could Management, Financial to you pricing your contributor various price generally about contributed across the hoping and specifically to businesses a growth. across increases I segments. in the

Adena Friedman

-- how kind Sure. structure we've talked as that of just are Well, with we product per from fintech. terms in and the increases in past, within would of price different clients contracts say our different I about

and of that in we've what price But the half and we upsells any the see at for make you revenue Calypso if clients question. past upgrades the and within contracts. other that products the answer think comes very from price don't new comes in of we specific and half from that increases, we that we sales given is to the about think quarter the changes our said So I increase about a AxiomSL provide least

contracts where what or increase and is our we we renewal. of have some Some CPI upsell -- upon would contract do would increases price clients our

constant they're product. then that clients or contract growing the out of So a are renewal. the have clients that on therefore, that value the do period of basis getting would price to and on mean more the and, a increased value We that we time increased would the fact of price themselves for

that's product, Dan. it the kind So of depends on --

Daniel Fannon

about you as businesses. up I highlighted is is Understood. pipeline And upsells in of known, having cross-sell that a cross-sell you the is within guess could the XX% the the mentioned lot opportunities. of those where was and I actual such talk see and terms you're you that lot what the of maybe momentum across -- of products. of early in kind you're hoping cases progressing how made the business, of momentum a that from use you dialogue day seeing and in

Adena Friedman

mentioned, them of as within had we Calypso cross-sells, selling Well, I quarter, and were X Sure. AxiomSL the to X clients.

have having clients. regulatory work from ready really they've the can that to the we And to with relationship connector our us. so those have of become have is X comes And we a really fact data Calypso, with benefits that strong between chosen new they that one we for we API that and a they're In have obligations products. -- actually

into AxiomSL the So those we feed platform directly solution implement it obligations. can for and the out much easier it to of make take AxiomSL and Calypso regulatory data

So that to drive demand. helping definitely is

Calypso also -- have focused capabilities. clearing really one provide in campaigns, and on we terms cross-sell We -- campaign has management clients cross-sell we where exchange amazing that's we our where collateral technology our clients have of

so across adding operations. their benefits is offering mean, looking I then the management I clients management some at And Calypso as of States then reporting also United community. are working to third one broader bank Calypso the the And regulatory show we have, the with collateral into treasury the our we the mentioned, AxiomSL Verafin to as AxiomSL. clearing well both solutions actually and them

take feeding that now also, with Tier I funnel. to for doing up areas the July, we has we're clients Calypso have -- frankly, of campaigns, X and are great mentioned in But one as and seeing our we're those AxiomSL So the signed where strategic Verafin. definitely

been anti-financial as all trust frankly, across having So business with their us needs I think a has with crime our, them relationship of well. the strength of our of them our driver all of

Operator

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

Alexander Blostein

of start we the the both hoping number provided of was I at a frame in you've us back see of in in don't opportunity these of what trying or So on discussion the cross-selling. terms and revenue pipeline kind the know of signed the and you a you on what And sign mean Adenza. wins. KPIs these revenue sort are you frame wins? But to momentum number could new set backlog, you maybe I of it's understand growth. with revenue of upsells you better terms clients Can just guys of terms seeing around if help and mean -- this different could revenue the KPIs,

Adena Friedman

mean measure I through way I that is that the best ARR. Yes. to think

of the ARR, the are ARR in terms sales into factored value. new contract because of So annualized the contract values the

XX% as you and revenue -- the a the presentation. does it the in And see for help you think predictive the that's each give really And figures subdivisions, coming effect we've in, going the fintech. think the ARR across in lot all you of across we have then of so release script it's ARR coming ARR the we businesses that of subscription I I given forward. And and on you growth in those both a

the look of some understanding So the overall professional there. And revenue. overall look I dynamics the the services we potential of also the health you at try at terms subscription revenues, we and to what of think that's the of is forward give how we of then, the of course, in business, there health

outlook long mentioned more when subscription expectations the because of the for revenues. the before, kind for overall we've a that's AxiomSL fees over think time we slightly a professional revenue, the way I that's Calypso below some than business. the of in outlook little look properties, of at As bit for meaning But -- the the grows that business, fact ARR our and slowly services general combined period evaluate to it's

Alexander Blostein

Helpful. Great. Awesome.

maybe a further Verafin and and X for out you on Verafin, shaping Can international market? the spend of sort push market which then know important that firm. highlighted little revenue you -- into bank, is opportunity more contribution the time as see of set we markets for is how I an So from you international Tier an the on kind

Adena Friedman

that Yes, still we're the great. Tier all, Well, Tier signing today, We implementation the X until we very clients, have still of the the I small running. in banks, of say, X, a are ranging recognizing implementing because them. times And complexity contribution them up is we're months and the we implement implementation. sure making would revenue X year revenue to don't first terms from, of new on start depending

So the -- in have X we've on had Tier of Tier the that most sales space new and fraud. X, focused payments

We also have demand. that's this solution new consortia-based exciting driving definitely we're really that check fraud

what their both And operations how incredible really exciting to international But solution. and other of banks fraud see. as in Canada of we we've been go that's in on, payments cut increase parts focused U.S. XX% from, that's the kind frankly, We where We world. anywhere on in fraud this into things U.K., XX% the to at the call and can international that of one banks, false it. down and I'll into can our the been the is we looking payments across found, positives implement they have strength our business really for in fraud depending

We run a to of the proof actually solution, time. these concept of proof out to pretty that remarkable and concepts it's Taking turning to they takes get. contract the benefit prove as to

or just done So by we April sense. give in was July. The a concept excited Tier probably of see so, signed latest our to you proof are super X to

Operator

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

Kyle Voigt

coming expectations. ahead just in deleveraging the the of question on Maybe that's first

and million of repaying that close there's the only CP think million is $XX for but $XXX I noted additional to You generating cash free priority, think flow on I you're a dividends. left that, plus

sheet of further million up that just simply basis near go-forward about terms So what's cash help and net lower term? the the balance $XX enacting repurchases you on leverage letting frame in preference can should really opportunistically you repay a the think getting on the after here build priority us Or the remaining? we

Sarah Youngwood

Thank you very Kyle. much,

we So remain the outlined Investor capital at that focused Day. priorities on we have

always and course, organic deleveraging of remains growth very the So first then important. the

right the are mentioned of that, you So share approximately have is about dilution-related the all, repurchases. first that CP with And and start after done correct. we then balance the of that you would half be employee would opportunistic. We, we

flexible you we I debt that. And use be do opportunistic, are think expect to the things we doing, around which there to So would is us equity. continue either could or other word because

Kyle Voigt

hate clarify of then to And Understood. use as and starting wanted said, I I and something the amortization just third $X listings initial to quarter. follow-up, specifically business. fourth just know the in said you quarter that on Listings headwind Okay. Sarah, a I million And but question, you this the a

that then clarify, XQ? can basis? $X are year-over-year headwind basis in a incremental million Just a you in an on about XQ sequential another million I and Or is talking on sequentially $X

Sarah Youngwood

I and is X in what gave XQ, for XQ the then million. $X after it's $X that be And in million So year-on-year. it following would also,

but add could it's you X So year-on-year. sequential,

becomes year-on-year, $X million $X million $X So between... million

Operator

JPMorgan. next the our question show Michael from I line from of comes And Cho

Y. Cho

just to Verafin on up follow wanted I as well.

down we should X Tier planning what do the the the you a just X, -- the would right of cohort of well? April pretty that this color through as of to X profile broader, undertaking proof more force July. around any and new and pace seems clients from recent be like it clients? quick you're right the sales kind and longer pipeline X for Just most think you to And for seem additions look scale as Tier client of then you I can concepts kind additional of the like further talked the X turnaround and term, Tier going like concepts like give road as it the mean, Tier now just in

Adena Friedman

Yes, sure. Yes.

now, So we'd we solution of that had we've right actually it's and concepts -- run but number many curious now, that building the have why won't traction, fully proven signing of which something solution want benefit they we're to people clients More we're we proof to as them. the understand an don't that we're that times clients understand is don't our to we'll healthy concept, across to and number numbers, need really clients. out give more a are have have and right think -- time, becomes POCs just necessarily the clients it, specific like enough about because gaining as increasing of a with we're it is evaluating they we of actually number underway. Over proof

years, period the over will But like it to just we'd become flywheel. of think of part a that

as should kind a over So of momentum of I signings expect a say ahead. going number in clients every not quarter, now, more period shown, hopefully, necessarily continue more we're but years and right see would we year, to a we've of small the regular to

demonstrate certainly Verafin So the has itself. the of into then the it and, to it start They'll a a quarterly start they trickle data on it momentum. to become really they been And pace. segment will with that really a new consortium builds starts the basis, kind lag gains in they and on X more that particularly kind have strength, time, of banking of it therefore, X industry. that experience regular just it or feeds -- itself over then And of and get of in to

more come. wish give a we give can't I in of you I specific color that much like you at that's could, -- in give we're how more definitely we gain period years I how years of would But I right understanding can you time sign now. specific, do momentum, to years the a time, about much be take. But But how as measuring a clients to as do a

Y. Cho

then just just inside good but -- mean great. that's flesh moving clients comment or I the you've I first there. as a think And anything pieces tailwinds that revenue passing Tech No, from well? quarterly some fintech, then onetime clearly, in few versus mentioned quarter-to-quarter there, watch Markets and normalized you also growth there's uptick can half for think called within just maybe half. like maybe out in more just follow-up, second year-over-year there? I Capital revenues Can a quarterly if large Okay. And out you the you

Sarah Youngwood

what and the we renewal, new also X So momentum clients. upsells several early one had specifically businesses, XX had but we also was our of across really Calypso clients it so here in basically, strategic is broad a new where and but

the And so solid in business. to look you to forward, see you as continue are momentum going

with consistent surprise first the also given growth pointed across But of course, the have growth that remain medium-term products we was we you within across And mentioned quarters. division had, that would year. line versus also, we the XXXX of half we And not more of out we told type half that in our normalized outlook. expect it would the think first the I a

Markets at And the we so revenue level. said Capital this is what Technology

Adena Friedman

Yes. want the which actually the it to was Yes. within sure, just Capital I And make Markets subdivision, subdivision. is

Operator

Piper next question of the Patrick from line And show comes our I Sandler. from Moley

Patrick Moley

Yes.

to wanted So of sounded to didn't comments just you It until that back you the and landscape on but the IPO improve to environment. year, of go the to the you XXXX. sort said of manifest remainder Diana your throughout the expected expect I it half like first

this maybe So for expect the just up year financials? and the when could expectations of to show your you rest in that clarify you

Adena Friedman

think I modest seen Well, improvement year-over-year. Sure. a we've

muted think we've market general, IPO I I been continued, strong would you've I fact say, the way, in got but think that a environment. in a surprised all performance by

very Now we week. are seeing a good

that, of happening that IPO in a stream great have trickling We largest in we another it today, think year size. IPO steady and coming are the I But still market seeing of yesterday. not to necessarily like coming the IPOs had we

improvement we're see the we year-over-year which, conversations of certainly, look the not the as think so environment, we we'll had out was conversations we've a first geared with year the over modest continue clients, And strong has in IPO the particularly having, But we a last XXXX. and a pipeline lot of that as towards to half -- space, been year. technology course, in the more of do

happens the getting I ready go thinking to out. think fall, door opening So lot can you past that happening the up think could because wait more -- the and still go some But that's a go in through momentum more right? are XXXX. them positive year are economy, I'd they'll are there's of that in we and companies Now if if as the we positive things that change, see

Patrick Moley

then strong there. on follow-up a options, momentum index And just you're really Great. Okay. seeing

last you XX% Volumes year. think I up, I year-over-year. that think, mentioned doubled were revenues versus have

of maybe to as Nasdaq seem up you'd options it you're that. approach about picking you much there. does us you So potentially of price update just like the like? in as pricing Just vision maybe not for at think expense and taking market Could on index share how the kind broader your

Adena Friedman

that investors the Well, about I And business options Options as of the their as obviously, being first we've of the to hedge excited the market. benefits think, all, developing. Index but really And through I index ecosystem building we're able leveraging now well that are recognizing how think is both exposure trading that. in And have up with with as the the to ability franchises, other index of as terms seen XXX, momentum volumes now options really and Nasdaq a futures, well where year-over-year quarter, XX% do were we're futures more you business.

our capabilities something because are think premium that's where where part that from getting we about our franchise strong. benefits I clients the is options going. that hedging are the It it very excited as a very So have of

It kind an on a not impact it that is strong of continuing so fees and warrants is demand. the that's demand having having really there. we charge The not And -- grow. to

last leg lot the a lot options, of use up an hedging. how work a been done years we've There's the several to of build work. to understanding of Now over

that data to use analytics them to the just to how give have do the we the clients to we options understand right capability out, understand it on provide them a help way. lot help We a of

off. continue And expect And is years, really grow. to had, I think, so the to X we've we over educational process frankly, now paying

to additional additional that Index looking be indexes franchise. will to want our bring we Options We indexes, on at

But index even thing is the to there's other the mention a also that now, flywheel really pulled back would I business.

team So to and options make their successfully. hedging and have well the their hand adopt been this index to ability, the then have therefore, really better benefit there's the work to and working ability team to more index tools with because institutional products community index our in back hand

coming that's of another flywheel the part that's out of this. So

Operator

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

Craig Siegenthaler

software services businesses, we had curious, other faster maybe as sale were which like and on a reach fits leverage this Bloomberg arguably, question within fit the there's news data And other ecosystem. Solovis next just doesn't could is Solovis while deal, Exchange, the target that the to in financial because provide fit you're help strategic back So given May, financial and in your of well considering pretty a well. your Nordic the and you Solovis we objective service reported maybe

was could comment just you I for businesses. Nasdaq on existing So the sell potential wondering if to

Adena Friedman

Yes.

businesses. But I capital detailed comment So that's out fits at one very businesses our say overall I our we year and allocation. every won't any owner on this, just look right for do how our particular sure experience of financially into client and would different that factors making evaluate several the the always each there. of strategically, we're across rumor review them a We

as ago seeing us of our of because years since the just business where strategic owner. a not are to of I known decisions might we necessarily we've X.X not strategic might clients now, not definitely or owner to the either you've divest franchise business. us but owner. priorities right They different the CEO, our many see skewed that allocation businesses understand ago, an certain we really capital years as They And towards became own made as our that business, we're they parts have

to business areas business, would and that is I really said one be be very consistent the that with say want to our of calls, In this mention say do Nasdaq. on best And markets, great of thing. operating Nordic to Nordic business. market. strategic did say, Europe. they to terms are would in of exchanges I've the I you job a I in our Nordic prior We Exchange we're view -- very do proud and Nordic incredible we the innovation exists the those The U.S. And the operator ecosystem of the

broader the really a our business. The team there is technology -- lot other thing to contributes is

work and our tech around to team Nordic out help the deploy of the market clients world. So we members

solutions. great clients have of in Nordics that wonderful the We clients set fintech now are a in our

lot to that. of do a I there's business. strategic want of with So a Nordic our intersection provide defense

these to and we Craig, generally, of because strategic over the we Nasdaq. in time at we decisions make fit look long-term that But this do it as work, terms

Craig Siegenthaler

interest with around had I overall, just terms and rising on a your lot ability there. curious on it about What X of your DT options retail response was index curious then specifically do XXX expand could NASDAQ to other tech what just so on launching desire I'm and a and in And last with NDX is Index. options? question And engagement indexes, of the in to you there's comment also the follow-up here. perfectly fits I the

Adena Friedman

as Yes. beyond have I always where products mentioned, appeal, enough mean, but you also we think, other institutional they're we strong and appeal, there's really look large enough assets at that index retail range a in products product. NASDAQ XXX. hedging we of a there options And perspective, an at to drive liquidity future into or a whole from looking it really the index have

different security, We have AI. thematic and in indexes technology trends of IT like cloud terms

like things strategies, different have momentum thematics dividend investment that. strategies, across like We strategies,

we're that actually lot could that will targeting. be analysis say we the it. think that, that. would we of don't a product -- on that don't we to we ecosystem index a could build extent we I consider do trading any now so But have around there And right great I particular

look terms in structure the SEC will option context with we'll then appropriate. the we the in and of we of obviously on and that how options investor we how appetite, And work at when that duration, evaluate

Operator

from comes from UBS. Alex I the show question next of line our Kramm

Alex Kramm

called to something more happened you that Can just early Capital is exactly explain strategic you what wanted back with Markets expect or often? that Calypso And that come what there? to we on Just renewal. should Why? out

beat in million pretty how big So just it individual so looks quarter-over-quarter to And then you on maybe some of related Is the that? transactional to be. renewal maybe Also to all big renewals could understand million. related specifically $XX trying Can $XX you side, how dimensionalize impact handily, ARR segment. that that, the on that side, up more like these than was?

Adena Friedman

Yes.

-- that just that a it we're strategic of. client it So say if is who contract. having we their to and had unusual, proud totally about extend I we early And call not out I'd think right? I that we're it's fact renewals really because renew early mean, the that was excited actually something chose

stability. fees, cash recognized life recognized contract. you how have the that Now those ACV of the health of with, Because ARR get overall as license of the everyone, and of the value reflected view in Calypso very mentioned, our of contracts should half the and revenue, with we the revenue, good the upfront the is over license reflection the remind is business, the a is But overall at just the you half we to door look revenue our fact in how that better cash ARR.

think healthy. fantastic. continue ARR very the being stable, We So very to we see that's

will events We this have like renewal happened on occasion. that early

the we over We of quarter. of Sarah the saying, growth time, Alex, that, of all But in a XX I is X looking strong better clients, overall kind think mentioned, revenue business. ARR also at of was as to over characteristics the time, contributed upsells, new as the reflection other had,

I better at a in way time to look to over think it's it as quarter. a single opposed

Sarah Youngwood

upsell. an few impact breadth new is is, And as everything of a had focused ARR of happened. in good has or at really The Yes. add Markets a because a it Calypso renewal was that definition, ARR Capital thing only performance by on I deck, the a would of or as much on not we why were client still

Alex Kramm

then that back solutions a that there's That's years had we of the we a IR start those of few environment when topic then. a since delistings strong amount excitement ago getting of point, obviously, the back was been of that on around decent listings at about I helpful. talked lot paying. secondarily, eventually And lot a there that know, a on

us but just of or that, maybe upsells? years are of is still ago we to I listed it's So seeing this were so? in where that, companies a kind coming decent really X tell unfortunately, you're fruition just that amount through, can coming the given guess if you not Or is

Adena Friedman

are clients the at to clients we seeing period. of Actually, the conversions free end our paying of

still is are that happening, But headwinds. there I So Alex. think that other

IR would Solutions. Corporate I So say mention things few a on and services, across to this actually

solutions. new the solutions is So So governance whether IR and that through of for ESG one IPOs, or thing to clients, gain that's our us we right? the solutions our obviously first gain new for clients avenues that's

So that definitely for a pipeline funnel, us. is a

of base paying Now kind clients period on some years, X -- IPO then way that the a the to is structured. they over X their depending the of on become services

clients period But of we in also that upsell time. can

new those you them you base have coming really can healthy flywheel does become when services, are then nice you the a So the as companies mentioned, a IPO. right IPO the you're in, And rolling and you then showing And upsell and on IPO that you opportunity when, package off. really new them environment, have IPO have an after additional services packages rolls off.

budgets happen. they are of you churn. are squeezed. side no clients then And is services we seeing you delistings, but so it that And continuing maybe -- to are when have their services, obviously other are the take clients have who you IR still fewer paying creates that the they're flip who and are But listed, longer because being taking have

I'll more flywheel so the contra contra, having becoming the delistings. call that's And it, of

but than this, But think of that's But the at relatively because I those we've look seen companies fact conversion are they we the of partly normalized they are average are seeing were what rate. rates, when say lower delisting. on are would who that overall some the I an they conversion basis. seeing --

Operator

from Lau our show comes Owen Oppenheimer. I last from question And of line the

Kwun Sum Lau

many have and on. XX% it about time talk financials it you going both a you you and in for market could over increase when how is volumes competitor fill M-ELO, we products? impact your Dynamic your Could AI, to and rate. for improvement client shares for highlighted launch look in please initiatives So your And difficult -- at how similar

Adena Friedman

is kind on I'd Owen. say Thanks, the specialized type. first this of order a Well, question,

that's on product. effect it massive market to a going something going it's be So is share, a to have premium but not

out a clients of it. a to huge a in midpoint. higher It's value fill get way our really get So nice the at rate size

premium really terms it's of in charge. pricing So -- we a the that it's a product

opportunity. market it is it's than So more a a revenue opportunity of share

and to it, team. that In replicate data it do we terms of But AI us for team, our to actually filing science fine the you're fine-tuning weightings make data It's able complicated the several quite how right tune years timer We're to explanation would the we I affecting of in product. and they're and complex do being you structure took tell to the our the of how provide with the it on points it. those way, to getting data as right various sure constantly outcomes. points

much at like to though the say actually would formula extremely frankly. it you but our look kind I very is hard division, So part of greatness actually even available, how it's of that the replicate, Technology of is manage a formula

Kwun Sum Lau

fare Is remind in July. you And reason or robust. be Could some about other we worried heard had that Technology, us macro should clients companies grow could any Management the guidance in ARR signed quite macro X uncertainty the the in Crime Verafin some to environment, highlighted macro if Tier Financial software how for you business we momentum new the environments? your please be then And to it. enterprise the Got different because but environment turn? in lower of seems there

Adena Friedman

and mission-critical talk Sure. helps risk, way we markets the about level, it manage ecosystem. capital clients manage solutions obligations their would provide that entire that the providing and core the as fintech let's then out Well, well we in is specific fintech their -- can But criminals about regulatory technology technology exchange networks, I actually our as talk to about of we talk areas. look at manage

So treasury drivers. on their help complicated, their tremendous, global managed the as more the in risky. it obligations, also a in just in it's is -- gets our risk level scale, I to be kind as as at our us, the markets risk those able of demand ability a well gets is their manage Managing more And books, clients durable are -- operations capital world honestly. durable, to risk, very in trading think world global to

has And think so that great a actually demand driver. been really I

there's paces, as always that Different durable are obligations, at world. look extremely we regulatory changing. regulators that's think I around but regulation go the different those the at

If expanding as great into Now banks really in changes well also the as demand that countries, drives drive changes, it's that growing are growth. new regulations and businesses their demand.

are are so quite those And that durable. things also

we've then mentioned laundering think before, it's and on $X.X are I as crime, fraud, started. anti-financial just we problem anti-money trillion between a getting

that fact total the unique. but the really just large, our not it's so the solution market TAM opportunity, is And is

And in workflows efficient topologies only for the that to possible, apply today. our I us. think creates together, data a using remarkable automating of as very in allows think to solution look then AI consortium are data we North is in that in great America the we really to really bring a we curated way I and it opportunity we're way the terms as that us that able way make at be in

lot globally a have we there. So opportunity of

provider way complex that to the that we've think Owen, a this with think, ambitions face create business very in is going growth their most I and that that us. environments, challenges we chosen what durable banks get be specific for So to of into economic is solutions to in all

Operator

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

Adena Friedman

morning, provider as of One and integrate, through accelerating our and you innovate services trusted is technology and Nasdaq Well, evolution key And strategy continues the make to industry. growth, is our delivering priorities Nasdaq consistent X Nasdaq this on our solutions, you. to a Thank financial integrated the complementary heard accelerate. as progress

great to day. forward in come. all And joining, look our to the you strategic have on updating progress thank you for a and We quarters

Operator

This concludes Thank for conference today's you you. Thank call. participating.

You may disconnect. now

Nasdaq (NDAQ) 25 Jul 242024 Q2 Earnings call transcript