Q1 2023 Nasdaq Inc Earnings Call

Speaker 1: You.

Speaker 2: Good day and thank you for standing by. Welcome to NASDAQ first quarter 2023 results conference call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone.

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Speaker 2: Please be advised that today's conference is being recorded. I would now like to hand the conference over to actual Garrett, Senior Vice President, Investor Relations. Go ahead.

Speaker 2: Good morning, everyone, and thank you for joining us today to discuss NASDAQ's first quarter of 2023 financial results. On the line are Adina Friedman, our Chair and Chief Executive Officer, Anne Jenison, our Chief Financial Officer, John Zeca, our Chief Legal, Risk, and Regulatory Officer, and other members of the management team.

Speaker 2: As for prepared remarks, we will open up the line to Q&A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information, and complying with disclosure obligations under FCC Regulation FD.

Speaker 3: I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and that such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Your results may differ materially from these projections.

Speaker 3: Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and in periodic reports filed with the SEC. I will now turn the call over to Adina. Thank you, Ato, and good morning, everyone. Thanks for joining us. Before I start, I would like to welcome Ato Garrett to the NASDAQ team as our new Investor Relations Officer. I know he's like…

Speaker 3: with the current market landscape. NASDAQ continued to perform well at what was clearly a very dynamic operating environment, with a shock to the banking sector happening amid an already uncertain macro backdrop. During this challenging period, we delivered solid financial performance while demonstrating operating and strategic momentum across each of our divisions.

Speaker 3: We achieved a new milestone for our Anti-Financial Crime Division with the signing in April of our first Tier 1 client with over a trillion dollars in assets for our fraud solutions, including the comprehensive fraud detection capabilities across flyers, ACH, and checks, as well as case management and reporting functionality. We maintained our leading position in U.S. cash equities and equity derivatives trading.

Speaker 3: of new artificial intelligence tools called generative AI. While the debate surrounding use cases for generative AI needs time to evolve, it is clear to us that companies that have invested in modern technologies, including cloud architecture and deployment, modern APIs, and machine learning are poised to take advantage of this new era of technological advancement.

Speaker 3: At NASDAQ, we've been focused on investments to modernize our technology across our businesses, and therefore, we're well positioned to incorporate more advanced AI capabilities in the future. Against this evolving economic and technological backdrop, our team remained hyper-focused on delivering for our clients.

Speaker 3: Our results underscore our ability to navigate successfully amid a dynamic market environment and to deliver on our long-term commitment to provide world-leading platforms that improve the liquidity, transparency, and integrity of the global economy.

Speaker 3: Now let's turn to our results. I'm very pleased to report NASDAQ's solid financial performance for the first quarter of 2023. We achieved $914 million in net revenues, an increase of 2% compared to the prior year period, and an increase of 4% on an organic basis, excluding the impacts of changes in FX and an acquisition into investiture.

Speaker 3: Revenues across our solutions businesses were $646 million, of 4% from the prior year period, driven by organic growth of 5%, partially offset by the impact of changes in effects.

Speaker 3: Excluding the index business, which declined by 10% due to a continued weak data backdrop, revenues in our solutions businesses increased 8% organically compared to the prior year period.

Speaker 3: Our total annualized recurring revenue, or ARR, increased 7% to $2 billion. Annualized SaaS revenues totaled $729 million for the first quarter, which represents an annual birth rate of 11%. Our SaaS revenues now comprise 36% of total company ARR.

Speaker 3: Across each of our divisions, we delivered well for our clients during the quarter. In our Capital Access Platforms division, we delivered $416 million in total revenue in the first quarter. Despite growth in data as well as in workflow and insights, headwinds across our listings and index businesses resulted in flat organic revenue for Capital Access Platforms year over year.

Speaker 3: Index experienced a 10% revenue decline and listings was stable year over year. While our index business continues to show year over year declines due to higher market levels at the start of last year, during the first quarter we did experience a 5% improvement in average AUM from the fourth quarter of 2022.

Speaker 3: If the markets continue to demonstrate some level of recovery from last year, we should experience an improving year-over-year index performance as we continue through 2023.

Speaker 3: Data and listing services revenues grew 4% organically, driven largely by higher international demand for our proprietary data during the period.

Speaker 3: Our workflow and insights business revenue grew 5% organically, which reflects continued demand for our IR, ESG, and analytics solutions as clients navigate a dynamic and challenging market environment.

Speaker 3: Turning next to our market platforms division, we delivered $413 million in total revenues during the first quarter, a 6% organic increase from prior year period. Amid a volatile capital markets environment, our core trading services business experienced strong performance in North American markets where we saw double digit revenue growth.

Speaker 3: partially offset by a decline in our European markets revenues, primarily reflecting lower value traded and cash equities due to market declines in a softer volume environment.

Speaker 3: In the US, we continue to provide our clients with a premier trading experience while optimizing the revenue and capture mix for both US cash equities and multiply listed equity options.

Speaker 3: In Marketplace technology, we delivered 11% revenue growth, driven by strong results in both trade management services and market technology.

Speaker 3: During the quarter, we signed a Marketplace Services Platform Agreement.

Speaker 3: with an innovative carbon trading marketplace in Latin America, as well as a new European risk modeling customer.

Speaker 3: We also signed a multi-year extension and expansion with a Tier 1 bank for our trading platform.

Speaker 3: Finally, turning to our Anti-Financial Crime Division, we delivered $84 million in total revenue in the first quarter, an 18% organic increase from the prior year period, and a 16% increase excluding the impact of the deferred revenue write-down in the first quarter of 2022. We from the International Industrial.,., the InternationalChrist Efficiencyank

Speaker 3: Revenues in our fraud detection and anti-money laundering solutions, or what we call our FRAML solutions, grew 30 percent compared to the first quarter of 2022, or 27 percent excluding the impact of the deferred revenue write-down.

Speaker 3: The overall anti-financial crime business saw continued growth with 42 new ASC clients during the period. Our first quarter financial performance also illustrates the progress we've made to capitalize on certain growth opportunities that are aligned with three key trends that we believe are shaping the financial system.

Speaker 3: First, the modernization of markets, where we can deliver innovation that powers the world's economies and enhances the underlying market infrastructure. Second, the development of the ESG ecosystem, where we help companies and investors successfully navigate increasingly complex reporting frameworks.

Speaker 3: access more seamless routes to capital, and achieve their net zero or sustainability objectives.

Speaker 3: And third, the increasing need for advanced anti-financial crime technology, where we can enhance the integrity of the financial system for emerging technologies, including cloud and AI, coupled with end-to-end workflow solutions for our clients. In this regard, I'd like to provide two highlights for the quarter. First, our focus on markets modernization continues to deliver innovation that enhances the liquidity and the underlying market infrastructure that powers the world's economies.

Speaker 3: From the successful migration of NASDAQ MRX, which is one of our six options markets, to the cloud infrastructure in the fourth quarter of last year in partnership with AWS, we announced during the first quarter our plans to migrate our second options market to the AWS Edge Cloud by the end of 2023.

Speaker 3: Second, as financial institutions make investments in technologies to detect and fight financial crime, in early April , we are very pleased to sign our first global Tier 1 client with over a trillion dollars in assets to our fraud solution, including comprehensive fraud detection capabilities across wires, ACH, and checks, as well as case management and regulatory reporting functionality.

Speaker 3: Additionally, we signed another Tier 2 client to our Enterprise Anti-Money Laundering solution during the period. These signings further demonstrate our ability to displace legacy providers and manual processes to our cloud-based and market-proven solutions.

Speaker 3: As we look ahead, I want to take a moment here to discuss in more detail the breakthrough developments in the field of artificial intelligence, which have captivated businesses across all industries concerning its applicability and impact.

Speaker 3: As a result of our years of investment in our cloud architected market solutions and SaaS applications, coupled with our recent acquisitions of advanced cloud-based investment analytics and anti-financial crime solutions.

Speaker 3: I believe NASDAQ is uniquely positioned within our sector to play a leading role with this technology in the future through the responsible deployment of AI to drive meaningful impact to our business, products, and clients.

Speaker 3: To date, we've been very intentional in migrating critical workloads and capabilities into a cloud environment with modern APIs to support client connectivity and functionality.

Speaker 3: We've also built unique datasets across various areas of our business.

Speaker 3: Both are foundational to our ability to leverage this generational shift in the technology.

Speaker 3: While we're just beginning the process of evaluating specific ideas for the use of generative AI in our products and across our business operations, we see compelling opportunities to leverage broader AI models, including deep reinforcement learning, predictive control, and computer vision across our business divisions to support our strategic efforts to enhance the liquidity, transparency, and integrity of our products.

Speaker 3: learning capabilities of the AI and machine learning models is a key differentiator for the product. This improves the efficiency in the banking industry's daily compliance processes and achieves a step change in their ability to detect and stop money laundering, fraud, and market abuse across their networks as well as to reduce false positives.

Speaker 3: In our market platforms division, we're in advanced stages of new product developments that incorporate AI, including new dynamic order types that improve our clients' fill rates while minimizing market impact. In fact, we have submitted for regulatory approval our first AI-based market order type, which is context-aware. In our market platform division, we have submitted for regulatory approval our first AI-based market order type, which is context-aware.

Speaker 3: meaning that it is designed to incorporate awareness of market conditions on a real-time basis.

Speaker 3: As we seek out more ways to leverage AI across other parts of our business, we intend to take a principled approach to leveraging generative AI for the right purpose.

Speaker 3: Our data scientists and Agile development teams will continue their research and development responsibly so that our regulated and unregulated businesses can deploy this technology to create and maintain fairness across markets and develop more advanced solutions to fight crime.

Speaker 3: We look forward to updating you on our progress with these opportunities in the quarters to come as we continue our journey to become the trusted fabric of the global financial system.

Speaker 3: Before I turn the call over to Anne, I would like to offer some final comments on the operating environment as we move further into 2023.

Speaker 3: When we gathered in January for our fourth quarter results call, we discussed some of the impacts and market-driven headwinds that we were beginning to see related to the market environment and the uncertainty in the global economy.

Speaker 3: As we progressed through the first quarter, as we expected, we saw a decrease in the total number of operating company IPOs versus the prior year period as companies put their IPO on pause while investors closely monitored interest rates and correlated inflation figures.

Speaker 3: Despite the slower start to the year, we maintained our track record for winning new operating company listings across our U.S. and European markets in the first quarter. In the U.S., we welcomed 30 new operating company IPOs during the period for a 91% win rate, bringing seven of the top 10 IPOs by proceeds raised.

Speaker 3: In addition, there's a significant backlog of operating companies in the pipeline with 147 active operating companies on file with the SEC to go public and committed to NASDAQ, which is a 10% increase versus the fourth quarter of 2022 and a 25% increase versus the prior year period. Our team continues to be in close contact with these companies.

Speaker 3: and we believe that we are well positioned to capture future listing activity once the IP at window reopens. Beyond listings, we're still seeing elongated sales cycles and our work flowing insights businesses.

Speaker 3: As we previously observed, while overall interest in client demand for our workflow and insight solutions remains healthy, the process for some clients is taking longer as they escalate buying decisions through more levels of approval.

Speaker 3: Demand for our strategic focus areas, including our anti-financial crime solutions, our ESG solutions for corporates, and our modern market solutions for established exchanges, continues to be strong and largely unaffected by the market environment at this stage.

Speaker 3: Overall, we're very fortunate to have deep and trusted relationships with our clients, who rely on us even more during complex operating environments.

Speaker 3: For example, during periods of heightened volatility, pensions and endowments often need to make swift asset allocation decisions to manage their portfolios, which can increase their reliance on our analytic solutions. Similarly, for our public company clients, these cycles can drive demand for our investor relation solutions as company leaders seek shareholder activity insights in real time.

Speaker 3: crime business, the disruption caused by the banking crisis has resulted in clients moving deposits at unprecedented rates. Because of our cloud-based consortium data models, our fraud and AML solutions are instrumental in helping banks monitor payments and behavioral changes.

Speaker 3: These patterns underscore how our diverse platform of mission critical solutions allows us to maintain our competitive strength through dynamic periods of uncertainty like we've experienced during the quarter.

Speaker 3: With our continued client engagement, couple with the long-term investments we are making in our future, we remain confident in our medium-term revenue growth outlook for our solutions businesses. And with that, I will now turn the call over to Anne to review the financial details.

Speaker 4: Thank you, Adina, and good morning, everyone. I also want to extend a warm welcome to Ado Garrett as NASDAQ's Investor Relations Officer.

Speaker 4: My commentary will primarily focus on our non-GAP results, and all comparisons will be to the prior year period unless otherwise noted. Reconciliation of US GAP to non-GAP results can be found in our press release as well as in a file located in the financial section of our Investor Relations website at ir.nastak.com. I will start by reviewing first quarter 2023 performance beginning on.

Speaker 4: impact from changes in FX rates and acquisitions and divestitures.

Speaker 4: Moving to operating profit and margins, non-GAAP operating income increased 3%, while the non-GAAP operating margin of 52% was unchanged from the prior year period.

Speaker 4: non-GAAP net income attributable to NASDAQ was $339 million, or 69 cents per diluted share, compared to $329 million, or 66 cents per diluted share in the prior year period. Joining me now is slide 11.

Speaker 4: As Adina mentioned earlier, ARR totaled $2 billion, an increase of 7% from the prior year period, while annualized stats revenues totaled $729 million, an increase of 11%.

Speaker 4: I will now review quarterly division results on slides 12 through 14. Starting with the Market Platforms Division, revenues increased $17 million or 4% with an organic increase of 6%.

Speaker 4: Trading Services Organic Growth total 3% with the increase primarily due to higher US cash equity capture rate and higher US equity derivatives volumes and capture rate.

Speaker 4: partially offset by lower European cash equities revenues due to lower industry volumes and market share and lower US pay plan revenues due to lower collections from under reported usage.

Speaker 4: In Marketplace technology, we delivered 11% revenue growth, driven by strong results in both trade management services and market technology, which benefited from testing revenue and a large project delivery during the quarter.

Speaker 4: ARR totaled $510 million, an increase of 8% compared to the prior year period.

Speaker 4: The division operating margin of 55% in the first quarter 2023 reflects a 1 percentage point increase from the prior year period.

Speaker 4: Capital access platforms revenues decreased $3 million or 1% primarily due to the negative impact from changes in FX rates with organic revenue growth of $1 million. Growth in the division was mixed for the quarter with a decline in index revenues significantly impacting the overall growth of the division.

Speaker 4: Specifically, index revenue declined by 10% compared to the first quarter of 2022, primarily driven by an 11% decline in average AUM from near record levels last year.

Speaker 4: Transactional licensing revenues were flat as a 20% decline in trading volumes in futures contracts linked to the NASDA Q1 00 index was offset by higher pricing per contract and favorable mix.

Speaker 4: Additionally, we saw net inflows over the trailing 12 months of $23 billion.

Speaker 4: In listings, we maintained our leadership position with a 91% IPO win rate for U.S. operating companies.

Speaker 4: The Nasdaq stock market welcomed seven of the 10 largest US operating company IPOs by capital raised in the first quarter of 2023 including Nextracker which raised over 600 million dollars in proceeds as well as the spin switch of GE Healthcare.

Speaker 4: In data, we have seen an increase in proprietary data revenues driven largely by higher international demand.

Speaker 4: Workflow and insights revenue increased 5% organically compared to the first quarter of 2022, reflecting growth in our ESG, IR, and analytics businesses.

Speaker 4: ARR for Capital Access Platforms totaled $1.2 billion, an increase of 5% compared to the prior year period.

Speaker 4: The division operating margin was 54% in the first quarter of 2023, a decrease of 1 percentage point from the prior year period.

Speaker 4: Anti-financial crime revenue increased $12 million, or 17%, compared to the first quarter of 2022. Organic growth was 18% in the period, or 16% when excluding the impact of the deferred revenue write down of $1 million in the prior year period.

Speaker 4: The growth reflects healthy demand for fraud detection and anti-money laundering solutions as well as our fast-paced surveillance solutions. Specifically our fraud detection and AML solutions revenues grew 27 percent compared to the first quarter of 2022, excluding the impact of the deferred revenue write down.

Speaker 4: Surveillance revenues grew modestly compared to the first quarter of 2022, as growth in subscription revenues was partially offset by lower professional fees. ARR for anti-financial crime totaled $321 million, an increase of 15% compared to the prior year period. confidence grows the rate the company Serrano scored Afterscan destroyed a respected flat gross regional Kirsten Egypt Patt Provide

Speaker 4: Signed ARR, which also includes ARR for new contract signed, but not yet commenced, totaled $354 million, an increase of 20% versus the prior year period.

Speaker 4: The Anti-Financial Crime Division operating margin was 27% in the first quarter of 2023 versus 21% in the prior year period.

Speaker 4: Turning to page 15 to review both expenses and guidance.

Speaker 4: Non-GAP operating expenses increase $8 million to $436 million.

Speaker 4: The increase primarily reflects a $20 million organic increase partially offset by a $13 million decrease from the impact of changes in FX rates.

Speaker 4: The organic expense increase is primarily driven by higher compensation and benefits expense and computer operations and data expense as we invest in our businesses.

Speaker 4: The higher compensation largely reflects our 2022 investment in new employees to drive long-term growth. Compared to the fourth quarter of 2022, which featured higher sales activity to finish the year, expenses declined primarily due to lower marketing, travel, and professional services expense. During the quarter, we completed the first phase of a review of the new

Speaker 4: of $1.78 billion to $1.84 billion.

Speaker 4: The midpoint of the expense guidance range is unchanged and still represents an increase of just over 5%, including 1% related to our digital asset strategy. The increase primarily reflects our continued investments to drive growth across ESG, anti-financial crime, and market modernization. The second quarter, the midpoint of the expense guidance range is unchanged and still represents

Speaker 4: will reflect our annual merit adjustments and equity grants, and therefore we expect expenses to increase about $20 million from the first quarter of 2023.

Speaker 4: Assuming stable performance and exchange rates, we currently expect 2023 expenses to be near the middle of the guidance range.

Speaker 4: Turning to slide 16, debt decreased by $290 million versus 4Q22 primarily due to a net pay down of $317 million of commercial paper, partially offset by a $26 million increase in euro bonds book value caused by a stronger euro.

Speaker 4: Our total debt-to-trailing 12-month non-GAAP EBITDA ratio ended the period at 2.6 times, down from 2.7 times in the fourth quarter of 2022, and there are no long-term debt maturities until 2026.

Speaker 4: With our strong balance sheet and cashflow generation, including $1.5 billion of free cashflow on a trailing 12-month basis, we continue to be well positioned to support growth in a variety of macroeconomic backdrops.

Speaker 4: During the first quarter of 2023, the company paid common stock dividends in the aggregate of $98 million and repurchased shares for $159 million. The repurchases complete our objective to offset employee share dilution for the year. As of March 31, 2023, the company has been

Speaker 4: There was an aggregate $491 million remaining under the Board Authorized Share or Purchase Program.

Speaker 4: Additionally, we are announcing today a 10% increase in the quarterly dividend to $0.22 per share.

Speaker 4: In closing today, Nasex first quarter results reflected continuation of the company's ability to consistently perform well across a wide range of operating environments. Thank you for your time and I will turn it back over to the operator for Q&A.

Speaker 4: NASDAQ's first quarter results reflect a continuation of the company's ability to consistently perform well across a wide range of operating environments. Thank you for your time, and I will turn it back over to the operator for Q&A. Thank you.

Speaker 2: As a reminder to ask a question you would need to press star 1-1 on your telephone.

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Speaker 2: We ask that you keep your questions to no more than one, but please feel free to go back into the queue, and if time permits, we'll be more than happy to take your follow-up questions at that time. Please stand by while we compile the Q&A roster.

Speaker 2: And I sure our first question comes from the line of Rich Rupetl from Piper Sandler. Please go ahead. You're welcome.

Speaker 5: Good morning, Adina, and good morning, Anne. I guess

Speaker 5: Thank you, Adina, for giving us sort of a lot of info on the outlook of the business in the prepared remarks. But I guess if I was to zone in on the outlook in sort of the sales cycle businesses, the anti-financial crime and market infrastructure.

Speaker 5: You talked about the AFC that there was a lot of deposit movement, but is that going to, the deposit movement appear to go to the large banks? How are you doing and what's the outlook for the tier two banks? And just a little bit more color, I guess, on the sales cycle with market infrastructure.chu.

Speaker 5: Has that been impacted at all, I guess, by market volatility?

Speaker 3: Sure, thanks Rich. With regard to our AFT solutions, we generally are seeing a continuation of a normal sales cycle environment. As I said, we did sign 42 new clients into our AFT business in the first quarter. We do a lot of work across all of our solutions to look at what is our normal time to close, how do we engage with our clients, what does our pipeline look like.

Speaker 3: But within AFC, we actually have a really healthy pipeline of opportunities in both Tier 2 and Tier 1 banks. We're really pleased to sign our first Tier 1 bank in April , and we signed another Tier 2 bank, as we mentioned, in March. And I think that what we're finding is that we can really prove the value of our solutions very, very easily when we do proofs of concepts with our clients. So in both cases, basically, going thinking through our

Speaker 3: With the Tier 2 client, we did a proof of concept in our AML capabilities, and in the Tier 1 client, we did a proof of concept with our fraud capabilities. In both cases, they saw a very significant value improvement in terms of reducing false positives and improving their ability to find real bad action, bad actors, whether it's fraud or AML.

Speaker 3: And so I think that because we have this really strong return on investment thesis that we can prove out, it makes it easier for the banks to make the buying decision in frankly any economic environment. And so therefore, we continue to see really strong demand there. And the same within our trade surveillance business as well.

Speaker 3: We did have certain revenues in the first quarter of last year that helped amplify the revenue so the growth year over year wasn't as strong. But the overall demand for surveillance clients also continues to be quite healthy. And in fact, we've been actually focused on moving down market with our trade surveillance because we're learning from Barifin that way. And we did sign our first tier three bank, our first tier three brokerage firm, I should say.

Speaker 3: to our surveillance solutions in the quarter. When it comes to market tech, we actually see very healthy demand across established exchanges. I think we're, you know, we definitely have seen a change in that demand characteristics for new markets. And we've been reporting on that since the beginning of COVID really, where new markets have not been as much of a growth opportunity for us as we thought before COVID started. But honestly, the established exchanges-

Speaker 3: We're seeing really good demand, particularly in post-trade. You know, post-trade infrastructure has been a real focus for market modernization as well as risk management tools for both exchanges and brokers. And that's where we've actually seen a really, really healthy pipeline of opportunity. And we've been able to demonstrate, you know, strong growth in Marketech in the first quarter. Again, we did have some revenues. I think our overall ARR grew 8.

Speaker 5: Go ahead. Hi, good morning. You've been in and thanks for thanks for taking my question. I just wanted to touch on the AFC business as well. I mean, I know you need to talk about kind of a still seeing a normal sales cycle in the AFC business from the American business, but

Speaker 5: Just curious longer term again just kind of given the banking situation in the US and just given that most of their current clients are SMB banks and just trying to get a better sense of if you're changing kind of the longer term focus from here and meaning is there going to be an increased focus on tier ones and tier twos or

Speaker 5: and maybe you can remind us kind of interplay margins between these surveillance and barefoot businesses.

Speaker 3: I will answer the first question and focus on the second one. With regard to the overall environment with the banks, first of all, I would say we have about 2500 banks and credit unions that rely on us today, but there are over 5000 overall banks and credit unions across the US and Canada.

Speaker 3: So we still have lots of opportunities for growth and to find and land new clients. And so even if there are some unfortunate situations with banks as they're managing through a very, really big change in the operating environment, we do feel like we have plenty of opportunity to continue to grow and expand the business.

Speaker 3: And so far, we have an amazing team that supports the small to medium banks, and they're seeing a very normalized environment, both in terms of new sales and in terms of renewals. So we're not seeing a disruption in the cadence of our business in that regard. And as I mentioned before, we had 39 new clients in the first quarter of last year and 42 this year. So we're continuing to show some really strong growth in the market.

Speaker 3: obviously, to support surveillance, et cetera. And on the tier one and tier twos, as I mentioned, the pipeline is really strong. So we have kind of an equal focus, I would say, on continuing to grow the SMBs while we focus on moving up markets. And in terms of the margin quarter over quarter, I don't know if you have any comments, Anne. Yeah, sure. And if we look at the margins quarter over quarter, there's the timing of how expenses come in. I think the better.

Speaker 4: sort of way to look at it is look at the full year margins. If you look at, you know, full year 21, we were, you know, roughly 28% and full year 22 is roughly 26. And you can think about that as sort of, you know, how the margins will evolve, you know, over the full year for 2023, consistent with 2022. Yeah, and I think we've also said that we are really focused in this business on optimizing for growth.

Speaker 3: And so we want to make sure that as we're taking in more revenue, we're re-investing that revenue to continue to really amplify the growth of the business. So the margin is wonderful, but it's also something where we're really, we are focused on making sure that we're investing in our growth there.

Speaker 3: make sure that we're taking in more revenue, we're reinvesting that revenue to continue to really amplify the growth of the business. So the margin is wonderful but it's also something where we're really focused on making sure that we're investing in our growth there. Okay great, thank you so much.

Speaker 2: Thank you. And I show our next question. Comes from the line of Alex Kram from UBS. Go ahead. Hey, good morning, everyone. Just staying on the verifin surprise, surprise. But you mentioned that T01 win.

Speaker 6: I think at Dina you gave a lot of detail on the scope already, but maybe you can expand a little bit in terms of how much of the solution that you're providing is, I mean, I guess how much more upsell there potentially is, like how much of the potential capabilities are you selling? Can you give us a little bit of the, can you give us a color on the size of this deal?

Speaker 6: and again how that could grow over time. And then you obviously didn't disclose the win, but what we've seen in the past is one firm like you gets a big win like this, you're using it as a marketing opportunity. So just how do you think, or how have the conversations already maybe changed now that you finally have one of those big banks, because obviously all of them talk to each other. So is it that, should that.

Speaker 3: potentially drive the acceleration from here. Thanks. Great. Thanks, Alex. So actually it is interesting to see the opportunity here. So we went in having conversations specifically on fraud detection and they did a POC with us on that and once they saw the quality of the outcome.

Speaker 3: Then they started to say, well, let's look at the rest of the platform. And so they didn't just take the detection capabilities and plug it into their platform. They actually had a collection or they have a collection of smaller platforms. And they said, let's actually replace everything we do with fraud with the VeriPen solution. So that means that we have fraud detection across all of their payment types as well as their workflows.

Speaker 3: They're not using any of the AML capabilities that we have, so we also have an ability to continue to expand as they think more broadly about their anti-stain crime needs

Speaker 3: But as these engage with them and they start to see the broader platform, they start to think about how they can use this more. There is a really good land and expand approach that we can take here. You're right about breaking through the barrier. Getting to that first tier one win has been a very important milestone for us because basically, it's about taking one piece to one Music

Speaker 3: because now that we can prove ourselves there, it will make it easier for other banks to say, okay, I'm not taking a risk here, I'm actually taking a proven solution. And as you said, they do talk to each other. So we do see it as a way to help accelerate other conversations. I would just say though that it's not something where we're going to have them lining up to have...

Speaker 3: every single quarter we're going to have a great, you know, a big announcement, but I think that we are starting to have a really good pipeline that will give us more of a regular cadence as we go further. And lastly, in terms of size, we don't disclose that, but I would remind everyone that it is not included in the Q1 signed ARR because it was signed in April . So it will be included in Q2.

Speaker 7: Very good. Thank you. Thank you.

Speaker 7: Thank you.

Speaker 5: And I share our next question comes from the line of Owen Lau from Oppenheimer. Please go ahead. Good morning, and thank you for taking my question. I mean, I really want to ask about AFC, but there are lots of questions already. Maybe we can switch key a little bit to to AI. So, Adina, you talked about there are many benefits of AI and the aspect has been leveraging this technology and

Speaker 3: in this technology. Thank you. Sure. Yeah. It's been a big topic of conversation internally. We've had some fun with TAT-VC internally by the way with we said we've had a good time like learning about it, but at the same time it is quite serious in terms of where we see opportunities to leverage the AI across the business. So.

Speaker 3: As I mentioned, we already are leveraging AI and AFC, and that's a very known use case for us. We have real opportunities also to bring more of that into our surveillance capabilities, and so that's been a really fun collaboration across Verifen and the surveillance team. We also have, and I mentioned that we are starting to work with AI in our markets, and I would point to a couple things. First, actually on just managing...

Speaker 3: and in the markets we have our AI driven order type which is called Dynamic Mellow, midpoint extended life order that we have on file at the SEC. And then we also use machine learning for strike optimization in our options markets already. So that's already a known program in production that helps manage the strikes across the options markets because it's.

Speaker 3: It's kind of a growing pile of strikes and you have to think about which ones are actually being used and optimized. But the other area where we're just starting to leverage the technology and find use cases is in the Capital Access Platforms business.

Speaker 3: We've been doing some intelligent data scraping for our ESG business to help bring more information to corporates and to provide them more insights into the ESG characteristics of them and their peers. We also have just an incredibly rich data set across all of our insights and workflow tools.

Speaker 3: And so we want to find new ways that we can provide insights to investors and corporates to help the manager business. So we're just starting to figure out how we can use that there. And then we do already use natural language processing to help our analyst write reports for clients. So that's an area that we've been using it for quite some time. Lastly, on the point of regulation, I think this next generation of AI has, you know, as we know, AI is a tech.

Speaker 3: subject, they don't subject themselves at least to regulation. So it's really important that the regulators make sure that the good actors like NASDAQ and those that are trying to protect the system also have access to the same tools so that we can actually use the most advanced technology available to protect the markets and to protect the financial system. And we do think that smart regulation is appropriate here.

Speaker 3: But also just really thinking about it proactively and embracing the technology for the right purposes I think is the right starting point for regulators to use. We are already engaging with regulators and legislators on this topic.

Speaker 7: Thank you very much. Thank you. Thank you.

Speaker 2: And I show our next question comes from the line of Michael Cypress from Morgan Stanley . Please go ahead.

Speaker 8: Hey, good morning. Thanks for taking the question. Maybe just on the cloud migration and your AWS partnership, something maybe you can update us on the progress there moving the markets to the cloud. It sounded like you're looking to move another options market by year end. Maybe you could just elaborate a bit on that some of the milestones you're looking at over the next 12, 24 months.

Speaker 3: Maybe you could talk about some of the lessons learned from the journey so far and what sort of benefits you're seeing to revenues and expenses and if not much so far, where do you anticipate in the coming years? Sure, great. Thanks, Michael. The partnership with AWS is going extremely well and we've been really pleased with our first market, which is MRX going to the cloud. So what we did experience is a 10% improvement in latency.

Speaker 3: as we moved MRX to the cloud. And so, and we can do, we can look at that as a direct comparison because we have, we have one of our options markets already on our next gen trading platform, which we call Fusion. And then, but it's on-prem. And then we have a second options market in Fusion, but on AWS. And we can see that there's a 10% improvement in latency on the AWS.

Speaker 3: growth in market share across those exchanges. And I think that that is highly related to the fact that the technology is as good as it is. And so we are really, really encouraged. So now we're moving our second market, our third market on, you know, on diffusion and then moving it into the cloud. And then we also have a plan over the next several years to continue that progress. It's giving us,

Speaker 3: a more scalable infrastructure, and over time, we will not have to do several refreshes. So that will start to show some real cost savings to us over time as we continue to bring the market into the cloud.

Speaker 3: structure and over time we will not have to do server refreshes. So that will start to show some real cost savings to us over time as we continue to bring the markets into the cloud. Great, thank you.

Speaker 2: Thank you. And our next question comes from the line of Brian Bedell from Deutsche Bank. Please go ahead.

Speaker 9: Great, thanks for taking my question. Maybe just to zoom in a little bit on the recurring revenue growth outlooks as we sort of move to the rest of this year and to next year and three businesses. It sounds like the workflow and insights obviously with the slower sales cycles is going to remain well.

Speaker 9: going to or is it your view that we'll be tracking well ahead of that medium target in marketplace tech given the momentum you had in 1Q? And then similarly for Verifin or anti-financial crime, right now you're sort of at the lower end of that medium term target, but with the tier 1 and tier 1, tier 1 and tier 2, you're telling the team at the lower end of that capital market to aver them. We're tracking well BRF, ARP, Q for staff. The FAV, CSF, nose continued to give us more support.

Speaker 9: implementations maybe if you could talk about how that might work its way into the revenue stream this year and including all the other new visits that you're getting in that segment and whether we'll move back into that medium term 18 to 23 percent target growth rate this year. Thank you, Brian . Well, as you know, we don't give specific in-year guidance.

Speaker 3: But the fact is that they have to go through more gates to get approvals. And, of course, it's particularly in our governance area where we do find really good sales opportunities with IPOs. We don't have as many IPOs. So that also is hindering some of the growth across governance. But I would also say, you know, we are continuing to manage the pipeline. We're continuing to engage. And we're hopeful that as the markets start to improve a bit, we're going to have to

Speaker 3: hopefully the IPL environment gets more healthy. That gives us more opportunity and the sales cycle starts to improve there. So, you know, we have some hope, but we also have to recognize the fact that it is a different environment right now and we're calibrating to that. With regard to the marketplace tech,

Speaker 3: We are very happy with the growth that we are demonstrating in the first quarter. I would mention that there are two things that are happening in that business that are creating some opportunities. I mentioned that there are eight percent overall AR growth in market platforms, which really reflects marketplace tech, whereas they had 11 percent growth in the business. The 11 percent that Delta really comes from some testing revenue we got in our...

Speaker 3: overall growth prospects. Clearly as we do move up market, it gives us higher higher tan, right? There's a bigger tan that we're going after as well as the fact that the the contract values are higher. So it does give us an edge of hands to continue to demonstrate really strong growth there going forward.

Speaker 2: That's great, Colleen. Thank you. Sure. Thank you. Our next question comes from the line of Kyle Voigt from KBW. Please go ahead. Hi, good morning.

Speaker 8: You've delivered significantly now the fair amount of balance you flexibility. I'm just giving that a miswondering if you could provide an update on M&A. I guess broadly speaking, it seems to be challenging to get deals announced still given the macro volatility. But I guess are you starting to see seller expectations come in or normalize at all, or do you feel the environment is turning more constructive to getting deals done versus where we were in the second half of last year?

Speaker 3: And then just any color you can provide on certain segments of the business where you're seeing the most interesting M&A opportunities right now. I'll actually start with the last question. I think generally speaking the way that we're thinking about the world, well first of all as you know we spend the vast majority of our time on organic growth and I think that I think because of that focus we've been able to show you know continue stronger performance across the business.

Speaker 3: But as we do consider ways to expand our business, we have those three key themes that we're really focused on. Market modernization and how can we bring more advanced technology to exchanges, banks, and brokers to support their activity in the capital markets. I think the second is in ESG as we continue to.

Speaker 3: overall environment around M&A, I would always say this, great assets will always come into premium. I think we just recognize that. In good times and bad, great assets will always do well in the M&A market. But I also think that as the market calibrates to a world where money costs money and the cost of capital is gone out.

Speaker 3: expectations. But I also would, you know, we have a great balance sheet. You know, we have done a lot to manage our debt. We've got really good, really great cash flows. So we are in a strong position to consider M&A if and when we find something that we find particularly compelling.

Speaker 2: Thanks, Ena. Thank you. And I show our next question. Comes from the line of Craig Sieg and Thal from Bank of America. Please go ahead. Hey guys, Edina, congrats on the Tier 1 bank signing. Thank you.

Speaker 5: Actually, all my questions have been asked, so I think I'm good right now. Okay, great. Thanks, Craig. Thank you. And our next question comes from the line of Alexander Blostein from Goldman Sachs. Please go ahead.

Speaker 5: Hi, good morning everybody. I was hoping we could talk maybe a little bit about pricing. We've seen obviously inflation for a persistent period of time now, expenses are rising across the board and a number of your peers on the exchange side, but also on the data side have been trying to flex the pricing muscle where they can. So what are the opportunities on price that you see across the enterprise? Are there areas where you feel you're sort of below the market relative to the value proposition that you're providing to your client?

Speaker 3: increase price to reflect the overall inflationary environment around us. And we do leverage that. So we have, but we also tend to, if it's a service where there's kind of an annual type of cadence, we tend to look at those price increases at the end of the year that then get effective in the beginning of the year. And so you're seeing that already flowing through the financials for 2020.

Speaker 3: that we're doing the making the right decisions there, you know, where we feel that we have the ability to price up to reflect the value we're serving. We're doing it, but we're not overdoing it. We're not being as aggressive as we possibly can because we want to make sure that we're thinking about it over the long term and not the short term. Thanks.

Speaker 3: making the right decisions there, you know, where we feel that we have the ability to price up, to reflect the value we're serving, we're doing it. But we're not overdoing it. We're not being as aggressive as we possibly can because we want to make sure that we're thinking about it over the long term and not the short term. I got you. Thanks. Thank you.

Speaker 2: And I share the next question. Come some of the line of Simon coins from Atlantic equities. Please go ahead. Hi, do you know how I am? And thanks for taking my question. One is we could just explore the index business this quarter and just had things like important and maybe you could give us a sense then of

Speaker 2: I guess what you're seeing in terms of flows across the different product lines, where the real opportunities lie, and I'm particularly interested in the franchise outside of the straight triple Qs as well. Sure, great, thank you. Well, we do provide information on flows at an aggregate level. So we did have $6 billion in flows in the past,

Speaker 3: our smart beta index franchise. So we feel really good about overall client interest, you know, investor interest. But obviously the market dynamics have been what's really driven the downward trend in the revenues. I think also we're still out there creating product, launching product. We're primarily focused on thematic indexes, which really mean, you know, things that could be leaning into innovative.

Speaker 3: indexes have been more an area of new product focus for us right now.

Speaker 7: Okay, great. Thank you. Okay.

Speaker 7: Okay, great. Thank you. Sure. Thank you.

Speaker 5: And I show our next question comes from the line of Andrew Bond from Rosenblatt Securities. Please go ahead. Hey, good morning. So in regards to the crypto business, did you see any impact from the recent banking crisis in terms of interest from potential customers? And thinking about the broader space, there are a number of.

Speaker 5: of players currently there and seems to be some commoditization in terms of pricing. So how does NASDAQ differentiate in terms of its offering in custody? And finally, is the launch still planned for this quarter? Thanks.

Speaker 3: Great, thanks Andrew. So starting with the last question first again, on timing, I think that the way that we're positioning ourselves is that we want to get regulatory approval and we're having constructive conversations with the Department of New York Department of Finance and so we're hopeful we'll get that approval this quarter and we want to get product ready by the end of the quarter. And with that, we're moving, I think by May, we'll be moving into user testing on our platform.

Speaker 3: I mean, we'll be able to show kind of an end-to-end demo in production, which I think is going to be really helpful to curating our client prospects. And so, but whether or not we launch is going to be more dependent on definitely whether or not we have regulatory approval and whether or not the product is a go. And also, just making sure that we engage the clients so that we feel really good about how we're going to grow the business over time.

Speaker 3: And so that launch is not set in stone. It's more a matter of making sure the other parts are ready first. In terms of the client engagement and the institutional interests, I do think NASDAQ has an interesting right to win here in terms of just getting engaged more generally in the crypto space as regulation starts to come into the market.

Speaker 3: And certainly as the regulators get a lot more engaged in crypto, I think we do have an ability to come in with a fair, a resilient and a very scalable solution. Our crypto custody is actually, we would say, a real improvement in the technology. We are using MPC, but we're also...

Speaker 3: I'm using some really interesting techniques to make it so that we don't have this kind of hard, hot, cold wallet construct, but rather a continuous wallet that's available but hyper secure. And I think that we feel like that will be more attractive to institutional users to make it so they don't have a lot of their values stored somewhere that's really inaccessible for, let's say-

Speaker 3: managing our expenses in this area, in this environment. But we are quite excited about what we have to offer. So we're excited to be able to launch it.

Speaker 10: on the line of Dan from Jefferies. Please go ahead. Hi, this is Jun on behalf of Dan. Thanks for taking my question. I just wanted to quickly ask about ESG. Just given some of the slowdown in the ESG investment strategies, are you seeing any impact? nodding his arms as he Sheikha.

Speaker 3: from that on the demand for ESG service at all? No, so most of our services that we offer in the ESG area right now are really offered to corporates. And there we're seeing very continued engagement from corporates. We have both an advisory practice, which helps advise companies on how to make sure that they're thinking about their overall ESG program, how they're reporting on their program and communicating it to investors.

Speaker 3: how they're making sure that they're being compliant with different taxonomies so they can get credit for the work they're doing. And that's the help demand for that is very healthy. And then we also have our reporting tools that allow them to put all of that information to one container. And then we go and we map it out to all the taxonomies and all the all the rating agencies, etc. And that also continues to have really nice.

Speaker 3: I think a lasting change in how companies think about engaging with investors and how investors are making investment decisions. I mean, the next generation of investors do care not only what returns they're getting, but how those companies are generating those returns. And I think that we're going to find that that's a lasting trend.

Speaker 2: We continue to be very, very optimistic about how we can engage clients in this area. Thank you. I show our next question. Come from the line of Alex Cram from UBS. We have to go ahead. Okay. Thanks. Yeah. Just wanted to squeeze a couple of follow-ups here since we went over time.

Speaker 6: It was six million a year ago. So almost triple so I'm not sure how meaningful those numbers are but Sounds like you sound and signed less there if inclines, maybe it's a tier two is bigger, but like just maybe foot how that How that why the number was so big because I think the first quarter is actually seasonally slow quarter. So maybe

Speaker 2: looking to to go away so just wondering how you think about that exposure there because clearly their client pretty sweet across a ton of different businesses of yours so just wondering how we should be thinking about that thanks okay so on the AFT side we actually did I have I remember the Q1 of last year was particularly I would say a slower quarter than normal for

Speaker 3: We're going to have to go back and look at that. But generally speaking, I think that we are seeing some strong revenue tailwinds as we continue to engage with clients and upsell and sell new customers. So I think that's really the engagement. Also recognize that when we do renew contracts with clients, we don't charge. We're going to have to go back and look at that.

Speaker 3: We don't do annual increases, but we actually charge on renewal. And that also gives us an opportunity to upsell the clients. So that's been a pretty active environment on that as well this year. So I think that gives you hopefully, Alex, some more color there. On Credit Suisse, the impact of Credit Suisse

First of all, it's going to take a while for us to fully understand how the two organizations are going to come together and what kind of impact that has on our capital markets business. But I would say that if Credit Suisse, if we see trading moving away from Credit Suisse, it's going somewhere. And so we are continuing to see healthy volumes, healthy liquidity. It's just that volume will probably move to other players. And then it's a matter of us making sure we're engaging with those players to get the flow. With regard to other solutions like, you know.

our anti-financial crime solutions, namely our surveillance solutions, that will be up to how they organize themselves to understand how we will continue to manage that contract going forward. We don't have a line of sight into that at this point. And I think those are our bigger areas of exposure to credit Swiss right now, and the great. Excellent. Thank you very much. Great. Thank you.

Thank you. And I show our last question. Come from the line of Brian Bebele from Deutsche Bank. Please go ahead. Oh great. Thanks for taking my follow up and I appreciate you going over on time here. And also, you know, a great, great comments on the AI strategy. It's up.

really enhances the product and therefore improves the sales cycle and capability. Similarly, on the expense side, to view AI as creating better, internally expense efficiencies.

I would say kind of all of the above. So it kind of depends on the solution. So there are going to be areas where we might be able to offer a specific bespoke solution at a premium price. There might be some areas like with AFC where it just creates a better product and that gives us better sales opportunities. We are very focused with the

We've had some brainstorm sessions internally, and we say looking at generative AI in the business, meaning in our products offered to clients, and then generative AI on the business in terms of how we manage it into our operations. And we see a lot of opportunities in both and ways to create more scale and efficiency. But we also, it's so early, so we have to also make sure that we're...

putting the technology into an environment that we feel is secure and safe and that allows us and you know kind of ring fencing it and allowing us to make sure we we manage our IP and our data. So so we'll take some time to do it the right way and to find ways that we can be efficient but also provide more premium product to our clients and and that's how we're focused on it right now. We also have a governance I should mention we do have a governance committee that of vets all the AI use cases inside of NASDAQ and I think that's really important you know we have to make sure we're doing this in a responsible way.

that we're thinking through the risks and as well as the benefits. And so our governance committee is led by John Zaka, who's our chief regulatory risk and legal officer, but also includes members from technology as well as other parts of our organization to make sure we're doing it in a responsible way. Yep, that's great. Super helpful. Thank you. Thank you.

Thank you. I am sure no further questions in the queue. This concludes our Q&A session. At this time, I would like to turn the conference back to Adina Friedman for closing remarks. Great. Well, thank you very much for your time today, and we look forward to continuing our discussions throughout the year on the progress that we aim to make against our strategic priorities. Thanks a lot for your questions. Talk to you later. Have a great day. Thank you. This concludes today's conference. Thank you for attending. You may all disconnect.

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Good day and thank you for standing by. Welcome to the NASDAQ First Quarter 2023 Results Conference call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Atul Garrett, Senior Vice President, Investor Relations. Please go ahead. Good morning, everyone, and thank you for joining us today to discuss the NASDAQ's first quarter.

The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information, and compliance with disclosure obligations under FEC regulation FD. I'd like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and as such constitute forward-looking statements within the meaning of the private securities litigation reform act in 1995.

Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and in periodic reports filed with the SEC. I will now turn the call over to Adina. Thank you, Otto. And good morning, everyone. Thanks for joining us. Before I start, I would like to welcome Otto Garrett to the NASDAQ team as our new investor relations officer. I know he is looking forward to meeting each of you very soon. I will now turn to my remarks today, which will focus on NASDAQ's first-quarter performance and the solid progress we are making to deliver on our strategic objectives.

I will then turn the call over to Anne for a review of our financial results. Let's begin with the current market landscape. NASDAQ continues to perform well in what was clearly a very dynamic operating environment, with a shock to the banking sector happening amid an already uncertain macro backdrop. During this challenging period, we delivered solid financial performance and continued

while demonstrating operating and strategic momentum across each of our divisions. We achieved a new milestone for our Anti-Financial Crime Division with the signing in April of our first Tier 1 client with over a trillion dollars in assets for our fraud solutions, including the comprehensive fraud detection capabilities across flyers, ACH, and CHACs, as well as case management and reporting functionality.

We maintained our leading position in US cash equities and equity derivatives trading while seeing strong demand for both our ESG services and our SaaS-based market technology solutions. Overall, the current uncertain financial backdrop highlights the value of our diverse platform of mission-critical solutions. In the first quarter, we also saw a generational technology breakthrough with the emergence of new artificial intelligence tools called generative

to modernize our technology across our businesses, and therefore we're well positioned to incorporate more advanced AI capabilities in the future. Against this evolving economic and technological backdrop, our team remained hyper focused on delivering for our clients. Our results underscore our ability to navigate successfully amid a dynamic market environment.

and to deliver on our long-term commitment to provide world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Now let's turn to our results. I'm very pleased to report NASDAQ's solid financial performance for the first quarter of 2023. We achieved $914 million in net revenues, an increase of 2% compared to the prior year period, and an increase of 4% on an organic basis, excluding the impacts of changes in FX and an acquisition into investiture. NASDAQ.

Revenues across our solutions businesses were $646 million, of 4% from the prior year period, driven by organic growth of 5%, partially offset by the impact of changes in effects. Excluding the index business, which declined by 10% due to a continued weak beta backdrop, revenues in our solutions businesses increased 8% organically compared to the prior year period.

Our total annualized recurring revenue, or ARR, increased 7% to $2 billion. Annualized SaaS revenues totaled $729 million for the first quarter, which represents an annual birth rate of 11%. Our SaaS revenues now comprise 36% of total company ARR.

Across each of our divisions, we delivered well for our clients during the quarter. In our Capital Access Platforms division, we delivered $416 million in total revenue in the first quarter. Despite growth in data as well as in workflow and insights, headwinds across our listings and index businesses resulted in flat organic revenue for Capital Access Platforms year over year. Index experienced a 10% revenue decline and listings were stable year over year.

While our index business continues to show year-to-year declines through the higher market levels at the start of last year, during the first quarter we did experience a 5% improvement in average AUM from the fourth quarter of 2022. If the markets continue to demonstrate some level of recovery from last year, we should experience an improving year-to-year index performance as we continue through 2023.

Data and listing services revenues grew 4% organically, driven largely by higher international demand for our proprietary data during the period.

Our work flow and insights business revenue grew 5% organically, which reflects continued demand for IR, ESG, and analytic solutions as clients navigate a dynamic and challenging market environment. Turning next to our market platforms division.

We delivered $413 million in total revenues during the first quarter, a 6% organic increase from prior year period. Amid a volatile capital markets environment, our core trading services business experienced strong performance in North American markets where we saw double-digit revenue growth, partially offset by a decline in our European markets revenues, primarily reflecting lower value traded in cash equities due to market declines in a softer volume.