The paragraph is an introduction to a conference call discussing Nasdaq's first quarter 2025 financial results. The operator explains the call format, including instructions for participants to ask questions by pressing star 11. Ato Garrett, the Senior Vice President and Investor Relations Officer, begins the call, introducing key members of the Nasdaq management team, including Adena Friedman, the CEO. Participants are informed that forward-looking statements will be made, and the call will discuss financial performance on a non-GAAP basis. Supporting materials are available on the Investor Relations website. Adena Friedman then takes over the call.

The paragraph provides an overview of Nasdaq's strong financial and operational performance for the quarter, despite uncertainties from changing trade policies and geopolitical tensions. Nasdaq reported double-digit growth across all divisions, with net revenues reaching $1.2 billion, a 12.5% year-over-year increase. Solutions revenues rose by 11% to $947 million, while ARR grew by 9% to $2.8 billion. Operating income increased by 17%, and EPS grew by 24%, attributed to robust revenue performance and effective expense management. Capital Access Platforms saw 5% ARR growth and 11% revenue growth, driven by strong net inflows and innovation. Financial Technology reported 10% revenue growth, with notable gains in Financial Crime Management Technology (21%), Regulatory Technology (11%), and capital markets technology (9%).

The paragraph discusses Market Services achieving a 19% net revenue growth, driven by U.S. equities and European derivatives. Following the Edenta transaction, the company raised its efficiency target to $140 million, with over $100 million realized by the first quarter. Strong free cash flow of $674 million supported deleveraging and share repurchases. The firm aims for $100 million in revenue from cross-sells by 2027, with 19 cross-sells since acquiring Addenda. In operational highlights, the Capital Access Platforms are growing, with new products aiding clients during market volatility. In the first quarter, Nasdaq welcomed 45 companies, raising $5 billion.

The Nasdaq achieved an 82% win rate for eligible operating company IPOs, including major ones like CoreWeave, SailPoint, and Smithfield Foods, while also marking significant milestone achievements in listing transfers with companies like Shopify and Domino's Pizza, surpassing $3 trillion in combined market value since 2005. The company continued its leadership in listings and engaged with the new U.S. Administration on policy recommendations to bolster capital markets. In its Data and Index businesses, Nasdaq saw revenue growth and a record quarter, driven by new products and international expansion. New product launches since 2020 have significantly contributed to their net inflows, with the first quarter seeing the introduction of 30 new index products, including 10 outside the U.S.

The paragraph highlights solid growth in analytics integration within client workflows and corporate solutions with enhancements including AI features, despite elongated sales cycles. The Financial Technology division has acquired new clients and increased upsells and cross-sells. Nasdaq supports market operators with trade life cycle solutions that maintain infrastructure resilience during high trading activity and provide critical trading and reporting infrastructure for banks and brokers. They are also partnering with banks to combat financial crime amid shifting economic and political conditions. Nasdaq aims to be the trusted foundation of the global financial system and has enhanced its partnership with AWS to improve market infrastructure scalability, resiliency, and efficiency through cloud technology.

Over the coming years, AWS and Nasdaq plan to advance in phases to serve their financial services clients, starting with market operators through cloud infrastructure solutions. This collaboration aims to modernize market operations while ensuring performance, security, and data sovereignty. In Nasdaq's FinTech sector, robust demand continued with significant client growth in Financial Crime Management Technology, including Nasdaq Berifen, which saw increased client signings and rapid expansion deals. Nasdaq Berifen's data consortium now manages over $10 trillion in assets, and its AI-powered entity research tool has increased client usage, with further enhancements planned for its case management module.

The paragraph discusses several advancements and achievements within a company. A new feature in beta aims to automate case investigations and documentation, with plans to enhance capabilities through AgenTik AI by 2025. The Regulatory Technology segment highlighted Acxiom SL signing a major digital bank and 22 upsells, including a major U.S. financial institution enhancing its services. Surveillance gained four diverse clients, indicating demand for reduced operational complexity. In Capital Markets Technology, the Market Technology business advanced internationally, securing 17 upsells and partnerships with an Asian exchange and Nuum in South America. Calypso achieved 25 upsells, expanding its reach, especially in Europe.

The paragraph highlights Nasdaq's strong performance in the U.S. and European markets during a volatile first quarter, achieving double-digit growth with record net revenues and volumes in U.S. options and cash equities. The success is attributed to robust systems and client trust. The second quarter began with unprecedented message traffic and trading volumes, showcasing Nasdaq's ability to handle increased demand smoothly. Despite the impressive results, there are concerns about short-term market volatility and global GDP growth due to recent policy changes and tariff discussions.

The paragraph highlights Nasdaq's strong performance in the first quarter of 2025, despite modest impacts on corporate decision-making timing. The company has managed to maintain stable demand, attributed to its role as a trusted partner in global markets, providing capital formation and risk management solutions. Nasdaq's resilience amid U.S. market volatility, alongside its global reach, positions it for ongoing growth. Financial results include a 24% increase in EPS, record free cash flow, and a 12.5% rise in net revenue to $1.2 billion. Operating expenses grew by 7%, resulting in improved operating (55%) and EBITDA (58%) margins, with a net income of $456 million and EPS of $0.79.

In the reported quarter, the company experienced strong growth driven by product innovation, market execution, and favorable market conditions. The company's annual recurring revenue (ARR) increased by 9%, with significant growth in FinTech (12%) and SaaS revenues (14%). SaaS now constitutes 37% of total ARR. The Capital Access Platforms division saw an 11% revenue increase, largely due to data sales, and a 5% ARR growth. Despite some delistings, data and listings revenue rose by 4%. Index revenue surged by 26%, fueled by strong net inflows and high average ETP assets under management (AUM). Volume-based license revenue also contributed to growth, spurred by increased derivatives contract volumes and surpassing revenue share thresholds earlier than expected.

In the reported quarter, the company experienced growth in various segments, with workflow and insights showing a 4% increase in revenue and ARR, driven largely by analytics and demand from financial sectors. Corporate solutions saw modest growth due to pricing adjustments and retention improvements. Operating margin improved to 60%. For 2025, the company expects revenue growth in capital access platforms to fall within a 5% to 8% range. Financial Technology saw a 10% revenue increase and 12% ARR growth, impacted by previous high growth rates in Calypso on-prem subscriptions. The Financial Crime Management Technology segment posted a 21% increase in both revenue and ARR, adding 35 new SME clients and demonstrating strong client retention and engagement. Regulatory technology revenue grew 10%, with 11% ARR growth and the addition of five new clients.

The paragraph outlines the financial performance and outlook for a company's Capital Markets Technology and Financial Technology divisions. Capital Markets Technology saw a 7% revenue growth and a 9% increase in annual recurring revenue (ARR), with 42 upsells and one cross-sell. Financial Technology maintained a 46% operating margin. The company anticipates potential delays in revenue and ARR growth due to global macroeconomic and regulatory uncertainties, notably in Q2. Despite these challenges, demand for Fintech solutions remains strong, and they are positioned as a preferred partner. For 2025, they expect full-year revenue growth within their medium-term outlook, with certain tech areas performing at varying levels within their range. Additionally, the Market Services division reported record net revenue of $281 million, a 19% growth, driven by increased market-wide volumes and higher market share in U.S. and European equities, with trading activities achieving new milestones.

The paragraph discusses the company's strong market position and investment in trading infrastructure, particularly during volatile market conditions. It outlines a new alpha beta methodology to account for market volatility, linking a portion of net revenue from high trading volumes to alpha. The company's market services operating margin increased to 62%, reflecting strong operational leverage, and expenses rose by 7% due to investments in technology and workforce. The non-GAAP expense guidance for the year has been adjusted slightly, considering FX fluctuations. Additionally, the company has initiated $100 million of efficiency programs and plans to reach $440 million by year-end.

The paragraph highlights Nasdaq's financial performance and capital allocation strategies. For full-year 2025, Nasdaq anticipates an expense growth benefit and maintains a non-GAAP tax rate guidance of 22.5% to 24.5%. In Q1, Nasdaq generated $674 million in free cash flow, supporting debt reduction, dividends, and share buybacks. A 13% increase in quarterly dividends was announced, payable in June. Efforts in deleveraging led to a reduced gross leverage ratio of 3.4 times and a credit rating upgrade by Moody's to BAA1. Nasdaq repurchased $115 million worth of shares and expects further leverage reductions in Q2 or Q3. Plans include paying off a $400 million bond in June 2025 using cash. Capital priorities remain consistent following the Adenta transaction.

The paragraph discusses Nasdaq's focus on fulfilling commitments to shareholders through strategies like organic growth, reducing debt, expanding dividends, and share repurchases. It highlights Nasdaq's strong first-quarter performance, marked by double-digit revenue growth and the highest year-over-year ARR increase since February, showcasing significant operating leverage and progress on capital strategy. As they approach Q2, there's an emphasis on Nasdaq's crucial role in maintaining market resilience amid a dynamic macro environment, with financial institutions worldwide depending on their technology and insights. This underscores Nasdaq's ability to deliver sustainable growth and long-term shareholder value. The paragraph ends by transitioning to a Q&A session, with Simon Clinch from Redburn. Atlantic asking about the strength and structural differences of Nasdaq's index business compared to the market downturn in 2022.

Adena Friedman discusses the resilience and growth of the Nasdaq index business, highlighting its performance despite a 33% decline in market values of the Nasdaq 100 in 2022. The business still grew by 6% during that year due to a strategic focus on expanding the index franchise beyond the Nasdaq 100, including growing international and institutional clientele. In a recent quarter, 50% of $27 billion in inflows were into non-Nasdaq 100 products, showcasing diversification. Key drivers of the business include market values, new product launches, product inflows, derivatives volumes, and data revenue, allowing the business to perform well despite market fluctuations.

The paragraph discusses Nasdaq's decision to open a regional headquarters in Dallas, Texas. Adena Friedman explains this move as a response to the growing client base in Texas, which includes 700 clients spanning banks, brokers, investors, corporate clients, and about 200 listed clients. The expansion is driven by the growth in the fintech division and the listings business. The aim is to establish a strong local presence to better serve and support this broad clientele in Texas.

The paragraph discusses a company's strategy for expanding its presence in Texas. It highlights the benefits offered by the listing exchange, such as access to global capital flows and unique advantages, which have led to a high overall win rate of over 80% and expansion of their switch program. The company values both local presence and global market access for public companies based in Texas. The speaker believes they have a strong value proposition for companies, including their clients in Texas. Additionally, Alexander Blostein from Goldman Sachs asks about the company's acquisition priorities, mentioning that despite being relatively leveraged, there might be opportunities for inorganic growth due to macroeconomic uncertainties. The speaker responds, indicating they are open to pursuing growth opportunities, depending on valuation and earnings accretion targets.

The paragraph discusses a company's focus on organic growth rather than evaluating deals, with emphasis on sustaining growth and fulfilling commitments to shareholders, such as through deleveraging, share buybacks, and increasing dividends. The conversation then shifts to addressing a question about the sales cycle environment, noting macroeconomic headwinds causing delays in customer decision-making. Despite these challenges, the company maintains its revenue guidance in financial technology, specifically citing robust client engagement in financial crime management technology and accelerated sales to small and medium businesses.

The paragraph discusses the robust growth and progress in various segments of the business. In the RegTech sector, there is high demand for surveillance products due to increased regulatory scrutiny and market activity, resulting in successful sales and client engagement. Acxiom SL is experiencing shifts in technology implementation due to changing regulatory timelines, but maintains a healthy pipeline of opportunities. In capital markets technology, modernization trends are driving benefits, and a new AWS partnership aims to enhance infrastructure capabilities. Finally, trade management services are thriving due to market activities, with recent expansion of data center capacity supporting further growth.

The paragraph discusses the strong overall demand for Calypso's platform, particularly its collateral management module, which is highly valued for its risk management capabilities. However, decisions related to the platform's implementation are facing delays as they need higher-level approvals within companies. Despite these delays, the diversification and strategic nature of their FinTech business help maintain stability during uncertain times. Following this, Benjamin Budish from Barclays asks about the growth of Verifen, focusing on the role of AI features like Copilot and the impact of pricing. He also inquires about how much growth is expected from moving SMB sales upmarket and seeks insight into the European market opportunity, questioning if there are any signs of anti-U.S. sentiment.

In the paragraph, Adena Friedman discusses how AI features embedded in their solutions enhance client value without additional charges. These features increase ROI, and are highlighted during contract renewals to demonstrate automation benefits in workflows. The company’s strongest business area is the SMB space, but it is also making progress with tier one and tier two clients, particularly with successful upselling to a tier two client, highlighting the effectiveness of the "land and expand" strategy. Growth in these segments is slow due to longer sales and implementation cycles, but demand remains high. Additionally, the company is having constructive engagements with clients and prospects in Europe during the first quarter and in April.

The paragraph discusses the company's efforts to run proof-of-concepts (POCs) to showcase their differentiated solution, which aims to curb criminal behaviors and deliver ROI. Although engagement with clients has been positive, long sales cycles mean these efforts are not expected to significantly impact this year's revenue. However, global expansion is anticipated to contribute to growth in the following years. Adena Friedman highlights the challenges in providing specific revenue outlooks due to factors like strategic renewals and extended client decision-making processes, which have slowed sales, especially for larger agreements. Ashish Sabadra from RBC asks about the delay impacts on revenue and growth trajectory, but specific quarterly outlooks are not provided.

The paragraph discusses the outlook for growth in the FinTech division, highlighting strong growth potential despite potential impacts in Q2. The company emphasizes its role as a trusted partner to clients during uncertain times, maintaining healthy client engagement. The conversation then shifts to the AWS partnership, which is expected to enhance infrastructure scalability and data organization. This partnership aims to incorporate AI capabilities into market infrastructure, with the potential to drive growth. The focus is on the long-term benefits and opportunities arising from this strategic collaboration.

The paragraph discusses the need for maintaining resilient and adaptable infrastructure to attract foreign investors, emphasizing the importance of standardization, connectivity, and modern technology. Collaborating with AWS, the focus is on developing a hybrid cloud solution to enhance cloud security, scalability, and data capabilities. This involves integrating AWS into existing data centers for improved efficiency and creating connectivity across markets for better capital flow. The partnership aims to establish a more interconnected market ecosystem, ultimately providing a managed service offering to clients.

The paragraph discusses a company's ongoing efforts to implement a new technology infrastructure with clients like the Johannesburg Exchange and BNB in Mexico. They are excited about moving their Nordic markets into this new system, pending regulatory approval, viewing it as a partnership for mutual financial benefit. Additionally, another discussion touches on the company's adjusted expense guidance, highlighting strong first-quarter revenue and disciplined expense management, influenced by factors like foreign exchange and strong shareholder returns.

The paragraph features Adena Friedman discussing the impact of regulatory changes on Acxiom's global business operations. Acxiom, as a diverse company, manages thousands of regulatory changes annually across more than 100 regulators worldwide. Despite some uncertainties and delays in the United States, such as with Basel III, Friedman emphasizes that all clients, both domestic and international, are aware of the need to prepare for these regulatory changes. These preparations may take longer due to implementation challenges, but the global nature of Acxiom helps offset some challenges faced by specific regions.

The paragraph discusses the ongoing engagement with clients regarding regulatory changes in the U.S., particularly in the context of expanding business operations and regulatory reporting. The company is working to broaden its services across different markets and geographies, with a specific focus on the growing crypto market. As the crypto industry becomes more regulated, there are opportunities for the company to enhance services such as surveillance, trading, clearing, settlement technology, and collateral management through tokenized capabilities. The potential for crypto to be integrated into regulated financial systems presents significant growth opportunities, although it depends on further developments in the U.S. regulatory landscape.

In the first quarter, capital markets showed a respectable improvement, with a $25 million increase in ARR additions, which exceeded expectations. Adena Friedman clarified that earlier comments in March about ongoing sales discussions primarily affected the timing of deal signings, rather than impacting Q1 performance. She attributed the growth to two main trends: modernization of markets and increased demand for connectivity services. Additionally, the expansion of their data center last year allowed them to address latent client demand. Overall, Friedman expressed confidence in the strong pipeline for both Calypso and their Market Tech businesses.

The paragraph discusses the current IPO environment, highlighting that there has been a significant increase in IPOs compared to the previous year. However, larger deals are being postponed due to market volatility and investors' cautiousness about risk. Companies are prepared to list but are waiting for a more stable market environment. There is optimism that if uncertainties diminish in the second half of the year, more companies will feel confident to proceed with their listings. Additionally, there haven't been notable changes in global companies' interest in the U.S. markets, as they recognize the strength of these markets despite current trade issues and capital shifts.

The paragraph discusses strategic considerations for retail companies in deciding where to maximize their market values, with a focus on potentially entering the U.S. market versus other regions. It mentions that only a small number of companies are exploring such diversification. The speaker also highlights strong demand and successful new listings in the Swedish and Nordic markets, emphasizing that each market offers a unique value proposition. Companies must consider where their brand resonates globally and how they want to engage with the U.S. investor base for long-term success. The paragraph concludes with Adena Friedman's remarks on the company's ability to grow and generate profitability and cash flow due to their diversified business model and role as a trusted partner.

This summary was generated with AI and may contain some inaccuracies.