Q4 2023 Nasdaq Inc Earnings Call

And an answer session to ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is right to withdraw your question. Please press star one again please.

Please be advised that today's conference is being recorded.

And I'd like to hand, the conference over to your first speaker to Otto Garrett SVP Investor Relations. Please go ahead.

Good morning, and thank you for joining us today to discuss nasdaq's fourth quarter and full year 2023 financial results.

On the line or a dealer Friedman, our chair and Chief Executive Officer.

Very young wood, our Chief Financial Officer, John Zecca, our chief legal risk and regulatory officer and other members of the management team. After prepared remarks, we will open the line for Q&A.

The press release and earnings presentation are on our website, we intend to use the website as a means of disclosing material nonpublic information and complying with disclosure obligations under regulation FD.

I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and constitute forward looking statements within the meaning of private Securities Litigation Reform Act of 1095.

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 periodic reports filed with the SEC.

Further any references to organic growth will exclude the impact of changes in FX rates and the impact of acquisitions and divestitures, which this quarter is substantially all related to the two months of a Denver performance included in the fourth quarter and in the year.

<unk> results are included in solutions revenue and within the financial Technology Division.

As a reminder, we are reporting results according to our new divisional structure, starting this quarter.

We provided a reconciliation to previous divisional structure in the appendix of our earnings presentation for reference.

Reconciliations of U S. GAAP to non-GAAP results can be found in our press release as well as in our file located in the financial sections of our Investor Relations website at IR, NASDAQ Dot com and with that I'll now turn the call over to Athena.

Thank you <unk> and good morning, everyone. Thank you for joining us.

Before we begin today I'd like to welcome Sarah Young White officially to NASDAQ.

He hit the ground running during her first two months, our CFO and we're excited to continue to benefit from certain vast expertise living Howard.

Now turning to my remarks today I will cover the following areas the external environment and how NASDAQ is positioned for continued growth.

Highlights from our fourth quarter and full year financial and operational performance.

And our company priorities for 2024 hour, then turn the call over to Sarah for a review of our financial results.

Like to start with our expectations for the external environment in 2024.

Over the past several years, the global economy and markets have been impacted by heightened complexity and unpredictability.

Underpinned by a dynamic and challenging geopolitical backdrop.

We expect the geopolitical environment to persist and continue impacting global markets. In 2024. However, we are starting to see encouraging signs that the economic environment, particularly in the U S is normalizing.

Inflation is trending lower while the economy has remained resilient, Michigan central bankers confidence to begin lowering lowering rates later in the year to calibrate the cost of capital with a normalizing inflationary environment.

With that backdrop and based on the data we've seen today, we're cautiously optimistic for an improving business environment for NASDAQ in 2024.

We have a healthy pipeline of companies that have filed to go public on NASDAQ. Additionally throughout 2023, we benefited from $31 billion of net inflows in our index business.

<unk> presents a strong starting point for 2024.

In the fourth quarter. We also saw early signs of normalization in our sales cycles for our IR and I said owner solution.

Lastly market volumes are off to a solid start in the new year and client interest and a comprehensive suite of technology solutions remains very strong.

Turning now to our financial results.

In the fourth quarter, NASDAQ crossed the $1 billion Mark in net revenues for the first time in a single quarter, achieving revenues of $1 1 billion.

This is a 23% increase compared to the prior year period, and a 7% increase on an organic basis.

We delivered 9% organic growth across our solutions businesses during the quarter, while market services was flat for.

For the full year net revenues of $3 9 billion increased 9% from 2022 or 5% on organic basis.

Solutions generated 7% organic annual organic revenue growth, which is consistent with our overall solutions revenue outlook, despite a dynamic market environment.

Our market services revenue were flat year over year, primarily due to continued muted volumes in Europe on the back of strong performance in 2022.

Our annualized recurring revenue or <unk> ended the year at $2 6 billion, an organic increase of 6% year over year.

The slower IPO environment, as well as lower buying activity by corporates for IR solutions contributed to a more modest growth in <unk> in 2023.

Annualized SaaS revenues increased to $910 million in the fourth quarter of 2023.

Excluding agenda. This represented a 12% growth rate and 38% of total company Ara.

Across the company, we accomplished revenue growth and business expansion, while maintaining our operating margin at 52% for both the quarter and a full year basis, excluding agenda.

Our strong performance in 2023 illustrates the strength of our diversified business and ability to deliver against our longer term objectives and unpredictable environment.

We did this while taking an important strategic step in nasdaq's evolution.

November 1st we are pleased to complete the agenda acquisition and we are now working as one team to further our clients' goals for risk management and regulatory reporting excellence.

Reflecting on the past year I'm extremely proud of nasdaq's team's accomplishments.

With the establishment of our divisional structure and the agenda acquisition 2023 was a transformational year for our business.

We're off the year, we achieved several major milestones to deepen our client relationships and advance our vision to be the trusted fabric of the world's financial system.

Now, let's review the highlights of our operating operational accomplishments and client successes by division starting with capital access platforms.

As you know at NASDAQ our exchanges are our foundation, we maintained our position as the Premier U S exchange for Ipos with an 81% U S operating company win rate in 2023.

In total we welcomed 103 operating company Ipos that raised more than $11 billion in proceeds marking nasdaq's fifth consecutive year as the leading U S listing exchange in terms of both number of Ipos and proceeds raised in.

In addition, 18 companies representing $377 billion in market value switched their listings to NASDAQ during the year.

In index, we had $31 billion of net inflows for the year, including $10 billion in the fourth quarter are.

Our clients want our clients launched 83, new products linked to NASDAQ indices during the year, bringing to market robust solutions in line with Investor demand.

Beyond our exchange and index leadership, we are a leading source of institutional intelligence to the buy side through investment and have continued to expand our offering into alternatives and ESG.

We continue to broaden our ESG solutions in 2023, launching multiple new offerings to help corporates and investors navigate an evolving ESG ecosystem, including NASDAQ Metro and investment ESG analytics.

We also introduced a suite of new solutions designed to help corporate clients drive governance excellence and accelerate their ESG strategies, including sustainable lens for IR insight.

Turning to the Fintech division with the completion of our <unk> acquisition, we've created a financial technology powerhouse of anti financial crime surveillance market technology, and risk and regulatory reporting solutions.

Physicians as a key risk management partner to the global financial system.

Our calypso solution helps financial institutions navigate a range of market conditions, providing a live view of risk across proprietary and client trading portfolios with detailed analytics to support real time risk management decision, making.

Similarly in an increasingly complex and fragmented global regulatory environment, where risks needs to be managed and shorter timelines on a granular level. Our <unk> solution enables our clients to benefit from the nasdaq's global scale and expertise.

We now can be a comprehensive partner to banks brokers financial market infrastructure providers and investment managers worldwide by helping them maximize their liquidity to world class capital markets and risk management technology as well as by enhancing integrity across the banking system through our regulatory reporting in anti financial crime.

<unk> suite of solutions.

With the closing of a Denver, we're fully focused on engaging with our clients and new employees to ensure a smooth and transit and successful transition and integration.

Tal Cohen Nasdaq's co president and leader of the Fintech Division and I have personally been speaking with our clients over the past few months and there is a lot of excitement around the potential opportunities now that it turns out as part of NASDAQ.

<unk> finished the year with strong sales and Upsells Cross solutions, specifically in the last two months, we signed six new clients, including two central banks. We also expanded our relationships with 35 existing clients for the full year. It tends to added 23, new clients and expanded our relationships with 142 weeks.

Existing clients, including three cross sells.

We are thrilled to enter 2024 with a dense as part of NASDAQ and were very excited to drive the business and the solutions to new heights in the years ahead.

Turning to market technology in 2023, we bolstered our global client footprint with the addition of seven clients, including four in the fourth quarter.

We also expanded our relationships with four clients in the fourth quarter and more than 10 clients for the full year.

Importantly, we had key technology client signings in APAC and in the Latam regions.

We are proud to forge new technology partnership with <unk> exchange, which is a consolidation of marketplaces across Peru, Chile and Colombia.

We also expanded our relationship with Chile Central Securities Depository with capabilities to manage digitized assets and with the three in Brazil to develop a new clearing solution and with bnb in Mexico to modernize this entire post trade technology platform.

Our growing customer relationships highlights the importance of the financial technology that we provide which powers resilient in liquid markets around the world.

In our anti financial crime suite of solutions, we're bringing world leading technology, coupled with our consortium dataset from 2500 banks to fight the growing threat of financial crime and the global financial system.

Our inaugural Global financial Crime report, which which was conducted in partnership with outside experts.

<unk> said over three trillion dollars of illicit funds flows through the global financial system and $500 billion has lost abroad.

It's an enormous challenge that requires collective action across the banking sector, the public sector and the embrace of the advanced technology.

We are very proud of our role in fighting financial crime, and we're finding tremendous opportunity to continue to expand our capabilities across the banking sector.

In 2023, we reached a significant milestone in our anti financial crime growth strategy during the year <unk>, our fraud and AML solutions signed its first three tier one banks as well as for tier two banks, including one tier one client and one tier two clients in the fourth quarter.

We also partnered with a growing number of small medium sized financial institutions for a total of 237, new clients this year and $100 for the fourth quarter alone.

Additionally, we developed our first proprietary paraffin Gen AI co pilot, which is now in beta with our customers.

Our Gen AI tools reduce time and resources spent on manual tasks and processes, such as alert reviews research and documentation.

By increasing their operational efficiency <unk> enables our clients to invest in resilient growth and an attractive ROI.

In surveillance, we signed 27, new clients in 2023, including six in the fourth quarter.

We made significant strides in modernizing our solutions by launching a new cloud based architecture and capabilities within surveillance user interfaces. These.

These innovations give our clients the ability to calibrate their surveillance set up more efficiently and effectively.

Today, 50% of our Gnathic trade surveillance clients leverage our cloud deployed solutions, which support access to 200 sophisticated alerts across more than 160 markets globally.

As we continue to enhance our surrounds capabilities. We're encouraged by the early adoption of our next Gen cloud architecture and new user interfaces.

Moving on to market services in the fourth quarter, we maintained our strong 72% market share for our cash equities markets in the nordics against a challenging volume environment across the European markets.

We've also continued to demonstrate our leading market position in the U S equities and options markets.

In the fourth quarter, we benefited from a robust closing cross volumes from the S&P MSCI and our own NASDAQ rebalance events, and we continue to experience growth growing adoption of our Mdx index options product.

Additionally, we continue to advance the modernization of markets with the successful migration of our second U S options market to the AWS cloud infrastructure and with the SEC approval of the first AI powered AI powered order type called dynamic <unk>, which we expect to launch in the first quarter of 2024.

Altogether, we're moving with speed, while delivering revenue growth and an attractive margin profile that will drive shareholder value.

We figure ahead, now and focus I'd like to share our enterprise priorities for 2024.

Our first priority is to continue the successful integration of agenda. We've made great progress in the initial phase of the integration and remain confident in our ability to deliver on the goals that we laid out at the time of the deal.

Second we are accelerating impact of our divisional structure to activate and unlock new opportunities that will drive our business into the future over the past year, we've delivered significant progress across each of our business divisions, and we will continue to realize the benefits of this structure in 2024.

Third we are institutionalizing client listening across the company to unlock revenue growth throw one NASDAQ approach to our client engagements and.

In 2024, we have a focused program to organize our client data advance our CRM and other related systems and enhance our processes across the enterprise to gain a holistic understanding of our clients with the goal to drive partnerships and cross selling opportunities going forward.

And fourth we will further amplify the impact of AI has on the business and in our products.

NASDAQ is leveraging several critical components to ensure AI implemented safely securely and fairly.

And through our focus on AI, coupled with the vast proprietary datasets that we've created over decades in our markets and in our solutions covering investment analytics Investor relations in anti financial crime. We're confident that we can extend nasdaq's competitive advantage in the years ahead.

We look forward to updating you on our progress on these priorities at Investor day, and in the quarters to come to.

To wrap up 2023 with another year defined by significant strategic and operational milestones and strong execution.

As we look ahead to 2024, we're well positioned to better serve our clients more holistically as you become the trusted fabric of the world's financial system and with that I will now turn the call over to Sarah to review our financial details.

Thank you Ed and good morning, everyone I am thrilled to be here on my first earnings call at NASDAQ I could not be more excited to join the firm that such a transformational time and I look forward to seeing many of you at Investor Day.

Now I will turn to our financial results.

My commentary will be focused on non-GAAP results on a year on year growth rates will be provided on an organic basis.

Similarly, operating margins will be discuss ex <unk> compatibility purposes.

I'll discuss yet investing on results at the.

And of the Fintech section.

Before we move to the quarter I would like to give you the highlights for the full year 2023, starting on slide 12 of the earnings presentation.

In an uncertain environment. We then you would <unk> financial performance and strong cash flow generation.

Revenue of $3 9 billion.

<unk> up 5% with solutions revenue of $2 9 billion, an increase of 7% non.

non-GAAP expense was $1 $8 billion.

Up 5% in line with guidance for 52% operating margin, which was flat versus the prior year.

This resulted in diluted EPS of $2 82.

Reflecting organic growth of 6%.

One $6 billion of free cash flow ex agenda.

Rate of 11%.

Moving on to the fourth quarter on slide 13.

We reported revenue of $1 1 billion up 7% with solutions revenue of $860 million.

<unk> of 9%.

non-GAAP expense was $504 million up.

Up 2% and with an operating margin of 52% up three percentage points overall.

Overall this resulted in diluted EPS of <unk> 72.

Reflecting organic growth of 11%.

Turning to slide 14.

<unk> totaled $2 6 billion up 6% organically.

Annualized SaaS revenue totaled $910 million, representing organic growth of 12%.

Excluding at Enzo pulse with 38% of Vale, an improvement of two percentage points.

Including at Enzo that number is 35%, which will improve the cloud portion of their revenue and chris's.

As a reminder, we only completed a portion of their revenue to b cells.

Let's review Division results for the quarter, starting on slide 15.

For capital access platform revenue of $461 million increased 10% driven by excellent performance in index.

In data and listing services, we saw 3% growth.

In data we have seen a continued increase in proprietary data revenues driven largely by higher international demand.

In listing the positive impact of pricing was partially offset by the combined impact of the listings are muted IPO environment and the roll off of prior year's initial listings revenue.

Workflow insights revenue increased 3%.

96 delivered high single digit growth.

Reflecting our ability to monetize the value of our data to the buy side with new business and increased pricing across traditional and alternative asset managers.

The strength in analytics was partially offset by a weaker capital raising market.

The impact of elongated sales cycle incorporate solutions.

Index revenue increased 26% and overall AUN grew by 34%.

Over the last 12 months, our net inflows were $31 billion.

$10 million of which occurred during the fourth quarter.

Licensing revenues for futures contract link to the NASDAQ100 index increased as well.

Given by higher capture.

Partially offset by a decline in trading volumes.

As a reminder, our.

Capturing CHRISTUS once we cross a volume thresholds and then we said at the beginning of each year.

Okay.

While following site index revenue also benefited from index data revenue growth.

For capital access platforms was $1 2 billion up.

Up 3%.

Our growth was largely driven by analytics and to a lesser extent data and listings.

The muted IPO environment impacted our growth. However, we are cautiously optimistic that we could see a recovery in ipos combined with more normalized sales cycles as we progress through 2024.

As a reminder, substantially all of index revenue is excluded from al.

The division's operating margin was 54% for the quarter, an increase of four percentage points due to higher revenues.

For the full year, it was 55% of <unk>.

Roughly 50 basis points.

The increase was driven by higher revenues, partially offset by inflation revenue related expense.

Investments in particular of course data on an index.

Moving to financial technology on Slide 16, the division delivered revenue of $399 million for the quarter up 8%.

Regulatory technology grew 17% with <unk> up 25%.

<unk> added 100, new clients this quarter, including our third tier one bank.

While we are excited about these additions as we have previously discussed the contracting and implementation when did not show more complex institutions is longer.

We will start recognizing subscription revenue in 2024, but we believe that <unk> will accelerate as we expand relationships with its clients.

This strong performance of <unk>, along with 6% growth in surveillance led to the 17% growth of regulatory technology.

For surveillance to fourth quarter growth was impacted by the timing of bookings in 2023 versus 2022.

But fundamentals remain strong for the year with six new clients in the fourth quarter and 27% for the full year.

We also made inroads with the tier three bulk of client cohort, which reflects progress beyond our leadership position with large banks.

Cloud foot 12 surveillance is now above 50% deployment, which is an important driver of client stickiness.

With the speed and efficiency it enables us to provide.

Moving onto capital markets technology.

We saw 3% growth driven by data center connectivity demand.

We had new market tech contract signings in Latin America, and with one of our U S tier one clients.

We expect this contract to start to accrue in 2024.

As Ed mentioned, we continued to increase our market technology presence in Latin America and to have a leading role in the modernization of markets in the region.

<unk> also fintech totaled $135 billion, an increase of 10% due to continued customer wins at <unk> as well as growth in trade management services and market technology.

The division's operating margin in the fourth quarter was 40% up four percentage points.

The organic margin expansion reflects solid top line growth and expense control with a notable increase in revenue related costs offset by efficiencies and lower professional fees.

We are progressing on our journey to improve the efficiencies in market technology are continuing to support the work of Verifone and surveillance.

For the full year, the operating margin was 40% up five percentage points with a story, which mirrors that of the quarter, including strong operating leverage and investments.

Before closing on Fintech, a few additional words on that Enzo.

For November and December event that contributed.

$129 million in revenue.

$458 million of area, all of which $98 million was and such.

$35 million in non-GAAP operating expense.

A strong finish to the year drove a 77% operating margin for two months on issue.

On a full year basis.

<unk> had an adjusted EBITDA margin of 15, 9%.

Head of our initial 58% outlook for the year.

Let me now we're talking about <unk> full year revenue on al.

Revenue was $583 million in 2023 up 14%.

<unk> of $458 million or 16%, excluding a significant bankruptcies that occurred during the year.

Our 14% net of it.

Both metrics on a constant currency basis.

We had nearly 50% of new ACD coming from cloud this year.

The strong take up by our clients.

Our growth and efficiencies.

Revenue growth benefited from a large portion of a are up for renewal in the quarter and in the year.

Going forward, we expect that <unk> revenue growth to be in the low to mid teens consistent with the medium to long term outlook, we provided when we announced the acquisition.

The timing of contracting up for renewal and the mix of revenue between cloud and on premise delivery will have an impact on revenue growth in any given quarter and year.

This is why we are focused on al <unk>, which is not as impacted by annual renewable and delivery method.

We'll provide more details on the revenue dynamics of authentic division at Investor Day.

And wrapping up our divisional overview with market services.

Net revenue was $247 million for the quarter roughly flat with growth in U S cash equities offset by decreases in U S options.

U S cash equities growth was driven by higher capture partially offset by lower share.

In a very competitive U S options environment, we are defending our strong market share lead and our attractive capture.

Meanwhile, in Europe.

Exchange volumes were positively offset by a $7 million nonrecurring payment and by the benefits of diversification between fixed income and equity.

The investments we have made in leveraging our technology and data to provide a European markets clients, which transparency pop them to generate awful. This has enabled us to help our clients improve their execution quality and has been key to our ability to reclaim our 70.

2% market share.

Two percentage point increase.

The division's operating margin was 57% in the fourth quarter 2023.

Compared to 60% in the prior year quarter as a result of higher compensation costs as we continued to invest in our people and higher technology costs due to ongoing investments related to both capacity and migrating U S market to the cloud.

The full year operating margin for the division totaled 59% with the same drivers as important new story.

Turning to slide 19.

This quarter's non-GAAP operating expense was $504 million.

Inorganic increase of $8 million or 2% versus organic revenue growth of 7%.

The story in the businesses and it reflects good expense discipline as well as the timing of marketing and professional fees.

Overall this reflects a 52% operating margin up three percentage points.

For the full year, our non-GAAP operating expense was $1 $83 billion in line with guidance.

Up 5% consistent with revenue growth for a flat operating margin up 52%.

England due to investments in key growth areas inflation and higher revenue related expense.

We also achieved efficiencies during the year as we continue to optimize our location footprint and within the divisions together as part of our divisional realignment.

If you include that ends up with a full year operating expense totaled $2 or $5 billion.

Now onto guidance.

We are initiating 2024, non-GAAP operating expense guidance to one <unk> 5 billion.

To $185 billion.

The midpoint of which reflects pro forma growth of 5%.

This includes a full year of it ends up.

Andy in your expense benefit of net synergies.

On an organic basis, excluding it ends up.

<unk> expense growth would be just under four 5%.

We will spend more time on synergies at Investor day.

We reiterate the net $18 million synergy target by the end of 2025 and $80 million cost to achieve.

As set forth in the restructuring program, we just initiated.

Additionally, we are guiding the full year tax rate of 24, and a half to 26, 5% on a non-GAAP basis.

Slightly higher in 2023 due to lower expected tax benefit on equity awards.

Turning to slide 20.

Strong free cash flow continues to be the hallmark of Nasdaq.

For the year, we had $1 6 billion of free cash flow ex agenda.

And at Enzo has $306 million.

In Unlevered pretax free cash flow.

Our gross leverage ratio was expected to be at $4 seven at the time of deal close.

But we are pleased to share that at year end, we are at $4 three <unk>.

Despite zero one headwinds from euro strength.

Let's walk through the details on the chart.

At the end of the third quarter, our adjusted leverage ratio was two four.

We added the leverage to acquire <unk>.

At the beginning of December we paused share repurchases and repaid $260 million of term loan.

The ratio benefited from the incremental EBITDA from <unk> full year and Thats what.

We expect to continue deleveraging in the first quarter of 2024.

And to wrap up on free cash flow utilization, we have repurchased $269 million of our common stock this year.

Including $110 million the fourth quarter.

And we paid a quarterly dividend of <unk> 22 cents per share for a 35% annualized payout ratio.

In closing today.

This quarter in distressed performance shows nasdaq's ability to deliver consistent growth margin and free cash flow in a range of environments.

We are committed to disciplined execution and continued innovation.

Investments, we have made in <unk>.

Williams, our technology, and our data elevator yours, telcos with a rich and track record position us for sustainable growth as we power our clients' success.

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

Thank you ma'am.

As a reminder to ask a question you will need to press star one one on your telephone to withdraw your question. Please press star one again.

We ask that you keep your questions to no more than one question and one follow up and if time permits we'll be more than happy to take more questions. Please.

Please standby, while we compile the Q&A roster.

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

Hi, Good morning, Thank you for taking my question.

I know Sarah mentioned that you may talk about during the Investor day, but could you. Please add more color on the unusual progress of integrating a sensor that shipping.

Cost synergies thanks.

Sure Hey, Ron.

Yeah. So we as you said we closed on November one.

Mediately created the operating model on a go forward basis, meaning we combined the teams we have a leadership structure now that is a combination of a genpact agnostic personnel under Tao.

And we've been working very hard to make sure that we bring the sales organizations together the client delivering success the operating teams as well as the technology teams together and so I think it's only a couple months in.

We are definitely operating as one team we have been we have a very specific defined synergy plan. We have a very clear line of sight as to how we're going to achieve that plan.

We'll provide more details on that but I would pay on that across all of NASDAQ. We have a combination of efforts to make sure that we create efficiencies within the team just has a normal acquisition integration won't occur. But then also allocation strategy that allows us to align ourselves with our clients going forward and leverage the strengths that <unk> has.

And some very critical centers of excellence around the world. So we do have a I think a good plan, we will provide more details on Investor day, and then the last thing I'd say on revenue synergies.

It's very early days and it takes time to sign new deals and it takes time to develop those relationships, but the early conversations that I've had and Tal and Valerie Who's the chief revenue officer have been extremely encouraging.

Really want to partner with us they see us now.

And a partner to help them solve their largest problems.

Cross Reg Tech, that's across Antarctica, and crime and risk management I think they understand that we understand them. We are regulated we have great relationships with regulators and anything else understand we can bring a lot of advanced technology and advance the cloud capabilities within the cancer cell.

So I have to tell you that in early conversations are really great but.

All along it will take time for those revenue synergies to actually show up on the financials and again, we will provide you more color on that at Investor day.

Got it so on viruses you published a report you talk about the amount of fraud and also potential opportunity can you talk about the strategy for you in 2020 for marathon, which area are you, saying you can win more tier one and tier two clients is it more on the payment side or in other areas. Thanks.

The law.

Yes, sure yes, thanks for pointing that out on we did for.

Creative study that Werent working with outside parties. So it was going to outside parties.

We interviewed a lot of the key personnel within banks that are responsible for entercom crime to understand number one how big is the problem free trillion dollars of money longer through the system a half a trillion dollars loss to fraud, and then how big of a problem in terms of actually having solvent and what are the challenges one is that different.

Different criminal actors Act differently. So you have to really have a different typologies.

Analytics to.

Rudolph different criminal behavior is number one number two.

We've always said criminals.

They don't just banking one bank. So a single bank cannot look at all of our transaction data and actually felt problem. So verifone is.

A truly unique solution because we do have 20 2500 banks and that represents six trillion dollars.

Of assets all within a consortium data links that allow us to find very defined topologies.

And really bring out more criminal behavior. So we are seeing fewer false positives more fraud found more AML found and we're able to prove that out and that's why we've been able to sign up with tier ones and tier twos with another tier one signed in the fourth quarter.

Where we've been focusing I would say a couple of things. One is is on continuing to kind of have that flywheel on the F&B.

In that particular case, we're really focused on moving to real time payments.

And making sure we got the smaller banks have world class AFC around real time payments in fact, a big growth area for us in 2004, and the larger banks, we've been definitely the easiest ROI to show is broad.

So payment like wire fraud fraud check fraud, all of the payments fraud refining is is it's a huge benefit and very clear ROI AML is a harder problem to solve but we actually have signed it.

One of the large tier twos, I think actually two of the large tier twos.

Is really focus on AML and as we solve the problem. What we're also finding is as soon as we go into these large banks, we show them our benefit on fraud Theyre already starting to talk to us on AML. So that's the land and expand opportunity that we have and.

And we definitely see expansion opportunities in 'twenty four with the banks, we have already signed and then the last thing I would say is that we also are really focused now on the U K.

In fact, <unk> is meeting with our banks this week to really understand and look at our our particularly our payments fraud capabilities in the UK. The laws are changing to allow for more data sharing and that will make it so that our tooling is much more effective.

In supporting their problem and making it so that we can provide solution. There. So that's our next leg of growth as we go through 'twenty four 'twenty five.

Thank you.

And I show. Our next question comes from the line of Michael Cho from Jpmorgan. Please go ahead.

Hi, Good morning, again, and Paul Thanks for Thanks for taking my question.

My question I, just wanted to call upon again Greg.

We didn't talk Bob Pall growth following the mid teens in your quarterly question medium term.

Vision care to keep getting that kind of somewhat lengthy sales cycle.

Hoping you can talk a little bit about any expectations or again the revenue growth.

Maybe in the context of the law.

Long term partner and then also any color you can add.

On Calypso will be helpful.

Sure Yeah, I would just say on air or growth perspective, we did provide you kind of that mid teens.

You have <unk> growth and we continue to see the business dynamics supporting that.

So we would expect that that medium term outlook for Danville continue to support that mid teens growth.

I think that as we know revenue growth is also is impacted by timing of bookings timing of renewals.

And whether or not it's on prem or cloud. So we're going to actually unpack that at Investor day to help you understand how do you turn into revenue on our revenue dynamics change and recognizing there would be more quarterly or shifts in revenues, but the general view is that that AUR growth is definitely that's a fundamental thing to look at in terms of how.

You evaluate the broken progress.

Again, as our footprint axiom and at the same time, we do want you to understand how the revenue dynamics work the more we signed cloud the more contracts become ratable over the life of the contract and whereas an on Prem deals we recognize half the license fees upfront upon signing so theres a lot to unpack there.

But we feel great about the overall demand drivers. The other thing to think about with axiom and Calypso is bad timing of renewals also can have an impact in renewable and.

Revenue recognition.

Again, we're seeing really strong demand cycles for both axiom and calypso on that so we feel very good about that whereas timing of revenue might be a little different from one to another just based on when the renewal cycles hit in that kind of given year. So thats stuff. We again will go through but I would say the foundation is very strong and remains consistent with what we expected.

Thank you.

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

Thanks, Good morning was hoping to expand upon that a little bit and maybe incorporate pricing in terms of what pricing contributed to revenue growth.

<unk> growth in 2043, and how you think about that.

The business prospectively.

Yeah. So so actually I mean, we're not going to get very specific on that particular Europe has a general dynamic when we look at <unk> growth, we basically attribute about half the AOR growth too.

To Upsells actually and we outsold a lot of clients and I can't give you exact number but it was up sold over 100, almost 150 clients I think our owners and trade clients in 2023, and then the other half comes from a combination of pricing increases and new bookings.

We don't we don't break that out in terms of in terms of about half, but I would just say it is a combination of both and the reason. It works is obviously, we add a lot of value across the products as we go through the year.

So as we go into boots.

<unk> annualized increases that are contractually stated, but also renewal cycles.

Definitely show that the value of what we're providing to them.

Corresponds with an increase and are there assets are increasing and therefore they are using this across a larger part of their business and not also warranty increase but those are.

That dynamic is consistent.

Understood and then just as a follow up based on I think some of the factors that we mentioned for listings revenue in the fourth quarter. As you think about the first half of this year and or the whole year with the roll off of initial fees from prior years, plus a hopeful recovery in new listings, how should we think about the revenue dynamics.

You're in 2024.

Yes, sure just on evaluate just to be very precise we had 142 upsells, including three cross sell and then it comes out in 2023, and if I make sure we can put back okay.

But in terms of the listings dynamics it definitely has been.

More challenging environment in listings.

You know as you point out.

Amortization of the initial listing fees as an important dynamic within the listings revenues.

Benefits.

It means when we have a really strong year lift things like we had in 2020 in 2021, we don't recognize all of the initial listing fees at year kind of kind of gives us a lift in the following years because those fees are amortized over two to four years, depending on the size of the lifting.

But then it means that when we have a.

Two more challenging years. It takes time for that to also filter through.

So we will have kind of a residual impact of these lower years in 2024 and 2025 as the initial listing fees from the higher years roll off and we don't have is we have as you've noticed kind of a net reduction in listings in 2023. So we would expect that 2024.

Will be a challenging year for listings.

Within the data and listings business, though we basically are saying that it's a low to mid single digit grower and we would anticipate that we can still achieve that.

Even with the more muted lifting revenue that we would expect in 2024.

Thank you.

And I show. Our next question comes from the line of <unk> from <unk>. Please go ahead.

Hi, Good morning, I mean, maybe first question on sales cycles. You noted that you saw early signs of normalization of sales cycles for your IRR or an asset owner solutions.

Can you just speak a bit more about those early signs and give some examples and in terms of what that means for revenue growth should we think about the workflow and insights organic growth potentially being near floor type level at 5% organic in the fourth quarter and gradually improving from here or any other commentary you can provide on in terms of the.

The timing and what that improvement means around the sales cycles.

Sure.

So all of the solutions with and worked with insights our SaaS solutions. So how you ended the year really determines a lot about the following year and so we definitely saw a more challenging environment with corporate last year.

The listing environment was more muted, but also they were just not as focused on investing across IR in a more challenging.

The market backdrop that improved in the fourth quarter and so we did start to have a more I would say more normalized environment for our conversations in signings of corporate clients for our IR solutions in the fourth quarter, but it was against the backdrop of a harder year overall, so it will take time for that that improved environment to actually flow through.

Through and show up in the actual SaaS revenues, because we obviously have to continue to see that and it will kind of build on itself, but I would expect that 2024 will continue to have kind of have some overhang from the from the weaker environment 23, even with a more normalized sales environment with analytics is actually was interesting our overall.

Analytics growth was quite strong in the fourth quarter at 9% and I think that that really reflects demand for our data across the buy side and the analytic solutions, we have that serve the buy side, but our asset owner solutions. This is a very specific software capability that we offer.

To endowments and pensions and others that actually did have an uptick in demand and signing in the fourth quarter, but it was an overall difficult year. So that again I think will create a headwind as we go through 2024 with the hope that we can start to show some pickup as we go through the year.

Understood and maybe a follow up on a Denver.

Mentioned, the strong cloud uptake I guess I'm not trying to front run the Investor day, but can you just remind us what the cloud adoption will mean with respect to EBITDA margins over the long term at least directionally.

And given the length of these contracts and the given the level of uptake in cloud that youre seeing on renewals is there a rough timeframe.

How quickly that cloud migration might happen.

Over the next few years.

Gotcha.

We will provide more color on that in Investor day.

But if we think about it I think Sarah I'd say, 14% of overall revenue 1% of revenue is currently cloud 50% of new ACD bookings and then an IRR of 21, 21%, 21% of air Arent as cloud. So we have a lot of <unk>.

A lot of runway here.

Two as we renew clients moving them into the cloud mock balls as we sign new clients paying them for new modules, but recognizing that we can sign a client just on a new module and cloud like it doesn't have to be there.

We're signing for Calypso and are adding new functionality just that new functionality, we can delivery cloud that's how flexible platform as they don't have to kind of redo the whole platform implementation on cloud, but that also means that as we work with clients on renewals and changes they're going to have different timelines for how they want to.

Being that cloud capabilities and some banks are marching very fast into cloud and they have actually top down mandates to move to cloud and that can obviously be a huge catalyst for us.

But other banks are marching quite slowly towards it so we want to be flexible and we expect this to be a as we said very much of a multiyear transition going from 21% of air are growing and growing but I have to say it will be a slow moving train.

In terms of the economics. It is both an opportunity for us to be a true managed service provider, which gives us more revenue opportunity.

And also provided with a very nice margin for both them and us so.

It's an opportunity for uplift, but again, a slow moving train. So we'll want to make sure that we give you more color on that at Investor day.

Thank you.

And I show. Our next question comes from the line of Chris Allen from Citi. Please go ahead.

Good morning, everyone. I was wondering if you could help us think about the contract value for client wins that are done.

Maybe any color just in terms of how much of new cards, a new client.

For this quarter would translate from new cultural perspective.

Expand relationships with existing clients, we're talking about.

10% increase 15% increase or any color there would be helpful.

Well, we don't actually provide specific.

Contact guidance per clients or anything like that.

And if you don't mind I think it will take that one back and think about how we want to provide more transparency there.

But I would say that it's always land and expand and actually as you move up into tier twos and tier ones that IFC is land and expand so we might sign a client for let's say mid to high six figures or low seven figures to land and then as we expand we can go and we can we can double or triple or even in some cases.

Five times amount over time and I do think we have some examples of that back when we first signed the deal and on our on our third quarter results. We gave some examples of how we've expanded contracts over time, but we're not providing specifics on like what the new contract values work for the new clients right now.

That was it for me thanks.

Thank you.

Thank you.

One moment for our next question.

And I show next question comes from the line of Patrick <unk> from Piper Sandler. Please go ahead.

Yes. Good morning, Thanks for taking my question.

Just had one on the retention ratios for Denver, It looked like for the full year.

On both the gross and net basis came in a little bit lower than what you were expecting when you initially announced the deal you could after you include the impact of that those bankruptcies or just was hoping maybe you could provide some more color on what you think led to that underperformance there.

And then any color on.

The retention ratios whats your targeted retention ratios would be going forward. Thanks.

Yes, So I think we did see some decline in gross and net retention in the latter part of the year and I think it really.

A lot of that did come from new bankruptcy that we mentioned and that really started impacting us in the fourth quarter.

And then.

We had I would just say the what I would call the events of 2023 across the banking system did create some level of challenge and in a couple of very specific areas retention, but it's not I would say there was nothing systemic about the concern there was nothing that we saw that was that was more.

Trend in any way whatsoever. It was more the encapsulation of a lot of the events that occurred during the year. Both in terms of looking at the retention as well as kind of some of the acquisitions that occurred but again. These are very very specific and nothing trend wise.

But I don't know.

If you want to add anything to that yes. The retention on a gross basis was actually flat at 97%. If you exclude that bankruptcy missile and we look at it in terms of like long term trend, we feel that it's very solid.

Okay, great that's it for me.

Okay, great. Thank you.

Thank you.

Thank you.

Our next question comes from the line of Michael <unk> from Morgan Stanley. Please go ahead.

Yeah.

Hi, Good morning, Thanks for taking the question just wanted to ask on capital allocation, how youre thinking about allocating capital now that you have done. The deal is closed how are you thinking about the pace of debt paydown as well as buybacks I thought I heard you mentioned that you paused on buybacks is that possible in place and what would lead you to reinstate buybacks.

Hey, Mike Nice to continue this is Sarah.

With me her based on the strategy that we have outlined is maintained so you have a balanced view of how to deal with the capital allocation just to reiterate of course, the dividend share repurchase and the deleveraging you have seen the pause as I mentioned and that pause is going to be maintained in the first.

Quarter very important for us to continue to deleverage and but that is a short term tactical as part of a strategy that overall hasnt changed. So we continue to be committed to a progressive dividend and you've seen the progress there as well as over time.

To continue to offset dilution.

Share repurchase.

So that's the context and of course. This is also a topic that will come back to Investor day.

One thing, we're pretty thanks, and a $5.

Is that just leaving 2023 as Sarah mentioned, we're at four three times leverage. So that's that's ahead of what we had anticipated at the closing of the deal and so that's actually has both the strength of the business as well as some some very specific tactical decisions, we made to pay down the term loan as we as we're kind of getting.

Started to kind of launch into 2024 with a very solid plan on deleveraging, but it's also the focus though will be on that balanced approach over time.

Great. Thanks, So just a follow up if I could on the expense outlook.

Sure.

Yeah go ahead, just on the expense outlook I was just hoping you could elaborate on the 5% pro forma growth in expenses for this year and 24, what would drive you towards the higher end versus the lower end of the range moving pieces you might be able to elaborate at all thank you.

Sure, Yes, so I would say that first of all.

We've been really focused on making sure that we are being as efficient as possible across the business on a go on a run rate basis that we are also making continuing to make the investments in driving our products forward our growth forward, but also automation on bringing more automation into the company and at the same time.

Beginning on the synergy achievement on the agenda deal on that.

The midpoint really reflects all of that what would drive the expenses above that would be higher growth and frame our grow faster and we're able to grow more there might be some revenue related expenses that come in in terms of just being able to achieve that revenue, but I think that it has also more to do with that can we continue to actually accelerates our inverse.

<unk>, if we're seeing higher revenue growth throughout the year and that's why we always give you a range of kind of the mid to long term outlook on our solutions business growth revenue growth and expense growth. So that you can kind of understand how we calibrate it but we do feel like it's been a good combination of the midpoint of expense discipline of denzil synergies, but all.

Also targeted investments in our business.

Thank you.

And I show. Our next question comes from the line of Simon <unk> from Redburn Atlantic. Please go ahead.

Mr. <unk>. Your line is open if you're on mute.

Mr. <unk> your line is open.

Thank you.

And I show. Our next question comes from the line of Andrew Bond from Rosenblatt Securities. Please go ahead.

Hey, good morning could you update us on any new plans or strategies, NASDAQ, scoring and digital assets and you're awarded custody offering.

So and it's following spotty chip approvals at a lot of new large institutional players that youre familiar with becoming more active in the space. So I was NASDAQ Disney itself now.

Sure. Thanks, Thanks, Andrew Yeah. So we are really proud to partner with Blackrock and Vanguard as we brought on.

Bitcoin Etfs too to NASDAQ and it really does give investors an opportunity.

To to express a view on the trend of bitcoin without without <unk>.

Hi, I'm highly regulated marketplace and without having to go and actually buy bitcoin. So we do think it creates more accessibility for retail investors to.

Two to have a physician bitcoin I think that in terms of the broader digital asset base. So as you know we are a tech provider to the industry. We continue to provide technology to crypto currency exchanges for trading clearing and as well as surveillance and actually as we've been working with some traditional.

Changes they want to make sure that theyre kind of future proofed. So for instance, with one of the CSD clients that we sold to this year one of the key things is to make sure that they could move towards digital assets in there in our settlement system and so we are all of our our technology can support digital assets and <unk>.

Terms of trading clearing settlement surveillance and that gives us a chance to work with the traditional exchanges and contract changes in terms of our specific crypto custody solution. We have built it we are ready to provide back to exchanges and providers and custodians around the world. So that is now a technology offering that we can offer.

<unk> clients around the world, but we have made a conscious choice not to launch a custody solution being a custodian ourselves.

I think that we feel that there are there are several out there that they're they're operating well, but its also very capital intensive business and in our view is that we are better served being in a market operator for Etfs and other instruments like that as well as being a technology provider to the industry.

Thank you Dan.

Thank you <unk>.

One moment for our next question.

And I show. Our next question comes from the line of Alexander <unk> from Goldman Sachs. Please go ahead.

Hey, good morning, Thanks for squeezing me in here so.

Just a quick follow up again on the Denver over the last couple of years. It sounded like they went through a pretty meaningful improvement in their technology stack.

There is probably a bit of capex around it so.

As you move forward do you think they are largely done others still kind of things that might be on the heavier lifting side that needs to get implemented that theyre not part of NASDAQ.

Yeah.

Maybe just talk to your overall capex expectations for 2024.

Speaker Change: Good day and thank you for standing by welcome to the NASDAQ4th quarter 2023 results conference call. At this time, all participants are in a listen only mode.

Sure So I would say that.

And we'll take Calypso and <unk> separately axiom of cell did do a significant.

Speaker Change: After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you wouldn't hear an automated message advising you hand as rates towards you or your question. Please press star one again, please be advised that today's conference is being recorded.

Rewrite of their technology, a few years ago. So we feel very good about kind of how they are positioned and then calypso actually the one they are super flexible and very modular. So they kind of have this continuum of investment and calypso and they've been able to because of that we're actually being much more able to both of them are focused on just bringing in new <unk>.

Speaker Change: I'd now like to hand, the conference over to your first speaker to Otto Garrett SVP Investor Relations. Please go ahead.

Otto Garrett: Good morning, and thank you for joining us today to discuss nasdaq's fourth quarter and full year 2023 financial results on the line are Adena Friedman, our chair and Chief Executive Officer, Sarah Young Wood, our Chief Financial Officer, John Zecca, our chief legal risk and regulatory officer and other members of the management team after <unk>.

Module is very quickly and iterating on her technology. So we feel really good about the Tech Foundation and I think we said that at the time of signing and now that we've closed on a deal and we looked under the Hood. It is a great technology, and it's very modular and kind of platform base.

The areas that we can really help focus them is on how do we really optimize the cloud implementation.

Speaker Change: Paired remarks, we will open the line for Q&A.

Speaker Change: This release and earnings presentation are on our website, we intend to use the website as a means of disclosing material nonpublic information and complying with disclosure obligations under regulation FD.

To make it so that it's as efficient as possible for them and their clients.

And so we have a lot of expertise there we have a long history of cloud.

Cloud deployed solutions and so we do actually think that scenario, where we can help them invest to make it so that that can be even more effectively and efficiently delivered but that's not a significant capital investment as much as much as continuing innovation. They have been investing in R&D. So that has been a hallmark of their business than we are.

Speaker Change: I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 995 actual results may differ materially from these projections.

Speaker Change: Information concerning factors that could cause actual results to differ from forward looking statements as continued in our press release and periodic reports filed with the SEC.

We're really pleased to see that.

And we will continue that but thats, not something where there's a big capex requirement right now.

Speaker Change: Further any references to organic growth, we will exclude the impact of changes in FX rates and the impact of acquisitions and divestitures, which this quarter substantially all related to the two months of <unk> performance included in the fourth quarter.

Really do see it as a continuum of innovation in terms of our capex across the year I think.

I don't know if you have any specific things that you mentioned there.

No. We don't have any particular trend so youre not going to see like a buck like acceleration of something of note.

The new wing.

Speaker Change: Okay.

To invest in the business and we'll come back and give you a lot of like polo at Investor day on the type of returns and that type of breakdowns of our investments and we have been very much a cash on cash our view as to what it gives us.

Speaker Change: Ladies and gentlemen, please continue to hold your conference call will resume momentarily.

In addition to of course investments that will fund that foundation on in the business.

Okay. Thank you.

And our last question comes from the line of Brian Bedell from Deutsche Bank. Please go ahead Sir.

Alright, great. Thanks, very much for taking my questions. Most have been asked and answered but a couple more.

Please remain on the line you conference call will be.

Speaker Change: Zoom shortly.

One just on the there thanks.

Thanks, Sarah you mentioned.

If I heard correctly very fast growth in the quarter year over year.

25% again.

C III.

Pre tax segment of 17% and then.

It's something you said about this your balance our debt. So just wanted to clarify was that 25%.

And there was some offset FTE.

Speaker Change: Ladies and gentlemen, please continue to hold to your conference call will resume shortly.

Surveillance business and as you look at that legacy business going forward.

Speaker Change: Yes.

Paraffin as sort of a core 20% ish.

Okay.

So what I said is that still in the 25% ended is the growth for Verifone and together.

With those elements you'll end up at.

17%, so that's a 6% for silver and that is due to a timing of bookings in 2022 that had been an impact on the year on year Award.

For the fourth quarter.

So it's really just timing in the prior year period for surveillance with yoga mhm.

Speaker Change: Please remain on the lines your conference call will resume shortly.

Got it.

Speaker Change: Mystic for an improving business environment for NASDAQ in 2024.

I think in your view.

Brian Yeah, as you know, Brian we have a kind of an 18% to 23% kind of expectation across 15 now as we move to <unk> integrated that with actually MSL, we're gonna be providing kind of a view and I think its I was looking at 10% to 14% across intact all told.

Speaker Change: We have a healthy pipeline of companies have filed to go public on NASDAQ. Additionally throughout 2023, we benefited from $31 billion of net inflows into our index products, which represent a strong starting point for 2024 and.

Speaker Change: In the fourth quarter. We also saw early signs of normalization in sales cycles for IR in asset owners are sufficient and lastly market volumes are off to a solid start in the new year and client interest in our comprehensive suite of technology solutions remains very strong.

We will incorporate verifone and surveillance along with market tech and the antenna products.

Alright, great. Thanks for that and then just one last one on operating leverage.

On your expense guidance.

Just I guess your level of confidence on the operating leverage really it looks like it's a good three percentage points or more of a well your <unk> solutions revenue guide, but how do you think of the.

Speaker Change: Turning now to our financial results in the fourth quarter, NASDAQ Cross the $1 billion Mark in net revenues for the first time in a single quarter, achieving revenues of $1 $1 billion.

Operator: Thank you for watching! Good day, and thank you for standing by. Welcome to the NASVAC fourth quarter 2023 results conference call. At this time, all participants are on a listen only mode.

Speaker Change: This is a 23% increase compared to the prior year period, and a 7% increase on an organic basis.

<unk>.

Denzer revenue.

Dynamics versus error at events.

Speaker Change: We delivered 9% organic growth across our solutions businesses during the quarter low market services was flat for.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising where your hand is. 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 your first speaker, Atul Garrett, SVP, Investor Relations. Please go ahead.

Influencing that I guess the punchline question here is.

Are you still managing that.

Speaker Change: For the full year net revenues of $3 $9 billion increased 9% from 2022 or 5% on an organic basis.

Operating leverage against our reported revenue or would you look at air RSA.

Better guide for that operating leverage dynamic.

Speaker Change: Solutions generated 7% organic annual organic revenue growth, which is consistent with our overall solutions revenue outlook, despite a dynamic market environment.

So we continue to focus on our operating margin.

It's on the R&D, having operating leverage.

Atul Garrett: Good morning, and thank you for joining us today to discuss NASDAQ's fourth quarter and full year 2023 financial results. On the line are Adena Friedman, our Chair and Chief Executive Officer, Sarah Youngwood, our Chief Financial Officer, John Zecca, our Chief Legal, Risk, and Regulatory Officer, and other members of the management team. After prepared remarks, we'll open the line for Q&A.

We invest.

Speaker Change: Our market services revenue were flat year over year, primarily due to continued muted volumes in Europe on the back of strong performance in 2022.

On a GAAP basis.

But we will always give you the details on a basis, which is really the Bachelor economic view of what we are doing.

Speaker Change: Our annualized recurring revenue or <unk> ended the year at two $6 billion.

Alright.

Great great. Thank you.

Speaker Change: The organic increase of 6% year over year.

Thank you.

That concludes our Q&A session for today I would now like to turn the conference back to Athena Friedman Chairman and CEO for closing remarks.

Speaker Change: This slower IPO environment, as well as lower buying activity by corporates for IR solutions contributed to a more modest growth in <unk> in 2023.

Atul Garrett: The press release and earnings 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 Regulation S-K. I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and constitute forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. However, actual results are made materially different from these projects.

Great. Thank you and as we enter another exciting year at NASDAQ, We remained focus on activating and unlocking new opportunities that will drive the business into the future before I close I want to remind everyone. If you didn't remember already that we have are scheduled in 2020 for Investor day on Tuesday March 5th and we hope to see you.

Speaker Change: Annualized SaaS revenues increased to $910 million in the fourth quarter of 2023.

Excluding agenda. This represented a 12% growth rate and 38% of total company <unk>.

Speaker Change: Across the company, we accomplished revenue growth and business expansion, while maintaining our operating margin at 52% reflect a quarter in a full year basis, excluding agenda.

They're either in person or virtually and we look forward to sharing our vision with you. Thank you for joining us and have a great day.

Operator: Information concerning factors that could cause actual results to differ from forward-looking statements is continued in our press release and periodic reports filed with the SEC. Further, any references to organic growth will exclude the impact of changes in FX rates and the impact of acquisitions and divestitures, which this quarter substantially all relate to the two months of EDENSA performance included in the fourth quarter. Ladies and gentlemen, please continue to hold your conference call. We'll resume it momentarily. Please remain on the line.

Speaker Change: Our strong performance in 2023 illustrates the strength of our diversified business and ability to deliver against our longer term objectives and unpredictable environment. We.

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

Speaker Change: Did this while taking an important strategic step in Opex evolution.

Speaker Change: On November 1st we are pleased to complete the <unk> acquisition and we are now working as one team to further our clients' goals for risk management and regulatory reporting excellence.

Speaker Change: Reflecting on the past year I am extremely proud of nasdaq's team's accomplishments.

Speaker Change: With the establishment of our divisional structure and the agenda acquisition 2023 was a transformational year for our business.

Speaker Change: Throughout the year, we achieved several major milestones to deepen our client relationships and advance our vision to be the trusted fabric of the world's financial system.

Speaker Change: Now, let's review the highlights of our operating operational accomplishments and client successes by division starting with capital access platforms.

Operator: Your conference call will resume shortly. Ladies and gentlemen, please continue to hold. Your conference call will resume shortly. Please remain on the line.

Speaker Change: As you know at NASDAQ our exchanges are our foundation, we maintained our position as the Premier U S exchange for Ipos with an 81% U S operating company win rate in 2023.

Speaker Change: In total we welcomed 103 operating company Ipos that raised more than $11 billion in proceeds marking nasdaq's fifth consecutive year as the leading U S listing exchange in terms of breadth number of Ipos and proceeds raised.

Speaker Change: In addition, 18 companies representing $377 billion in market value switched their listings to NASDAQ during the year.

Speaker Change: In index, we had $31 billion of net inflows for the year, including $10 billion in the fourth quarter.

Speaker Change: Our clients want our clients lost 83, new products linked to NASDAQ indices during the year, bringing to market robust solutions in line with Investor demand.

Beyond our exchange and index leadership, we are a leading source of institutional intelligence to the buy side through investment and have continued to expand our offering into alternatives and ESG.

Speaker Change: We continue to broaden our ESG solutions in 2023, launching multiple new offerings to help corporates and investors navigate an evolving ESG ecosystem, including NASDAQ metric and investment ESG analytics.

Adena T. Friedman: Your conference call will resume shortly. Let's stick to an improving business environment for NASDAQ in 2024. We have a healthy pipeline of companies that have filed to go public on NASDAQ. Additionally, throughout 2023, we benefited from $31 billion in net inflows into our index products, which represents a strong starting point for 2024. In the fourth quarter, we also saw early signs of normalization and sales cycles for our IR and asset owner solutions.

We also introduced a suite of Nucleases designed to help corporate clients drive governance excellence and accelerate their ESG strategies.

Speaker Change: Creating sustainable lens for an IR insight.

Speaker Change: Turning to the Fintech division with the completion of our <unk> acquisition, we have created a financial technology powerhouse of anti financial crime surveillance market technology, and risk and regulatory reporting solutions.

Adena T. Friedman: And lastly, market volumes are off to a solid start in the new year, and client interest in our comprehensive suite of technology solutions remains very strong. Turning now to our financial results, in the fourth quarter, NASDAQ crossed the $1 billion mark in net revenues for the first time in a single quarter, achieving revenues of $1.1 billion.

Speaker Change: Positions us as a key risk management partner to the global financial system.

Speaker Change: Our calypso solution helps financial institutions navigate a range of market conditions, providing a live view of risk across proprietary and client trading portfolios with detailed analytics to support real time risk management decision, making.

Adena T. Friedman: This is a 23% increase compared to the prior year period and a 7% increase on an organic basis. We delivered 9% organic growth across our solutions businesses during the quarter, while market services was flat. For the full year, net revenues of $3.9 billion increased 9% from 2022, or 5% on an organic basis. Solutions generated 7% annual organic revenue growth, which is consistent with our overall solutions revenue outlook despite a dynamic market environment. Our market services revenue was flat year over year, primarily due to continued muted volumes in Europe on the back of strong performance in 2022.

Speaker Change: Similarly in an increasingly complex and fragmented global regulatory environment, where risks needs to be managed and shorter timelines at a granular level, our axiom of cell solution enables our clients to benefit from the nasdaq's global scale and expertise.

We now can be a comprehensive partner to banks brokers financial market infrastructure providers and investment managers worldwide by helping them maximize their liquidity to world class capital markets and risk management technology as well as by enhancing integrity across the banking system to a regulatory reporting in anti financial.

Adena T. Friedman: Our annualized recurring revenue, or ARR, ended the year at $2.6 billion, an organic increase of 6% year-over-year. However, the slower IPO environment as well as lower buying activity by corporates for IR solutions contributed to a more modest growth in ARR in 2023. Annualized SAS revenues increased to $910 million in the fourth quarter of 2023. Excluding Adenza, this represented a 12% growth rate and 38% of total company ARR. Across the company, we achieved revenue growth and business expansion while maintaining our operating margin at 52% for both the quarter and the full year, excluding Adenza. Our strong performance in 2023 illustrates the strength of our diversified business and ability to deliver against our longer-term objectives in an unpredictable environment. We did this while taking an important strategic step in NASA's evolution.

Speaker Change: Crime suite of solutions.

Speaker Change: With the closing of a Denver, we're fully focused on engaging with our clients and new employees to ensure a smooth and transit and successful transition and integration.

Speaker Change: Tal Cohen Nasdaq's co president and leader of the Fintech Division and I have personally been speaking with our clients over the past few months and Theres a lot of excitement around the potential opportunities now that it turns out as part of NASDAQ.

Speaker Change: <unk> finished the year with strong sales and up sells across it solutions specifically in the last two months, we signed six new clients, including two central banks.

Speaker Change: Also expanded our relationships with 35 existing clients for the full year agenda added 23, new clients and expanded our relationships with 142 existing clients, including three cross sell.

Speaker Change: We are thrilled to enter 2024 with the Tencent as part of NASDAQ and were very excited to drive the business and the solutions to new Heights in the years ahead.

Adena T. Friedman: On November 1st, we were pleased to complete the EDENSA acquisition, and we are now working as one team to further our clients' goals for risk management and regulatory reporting excellence. Reflecting on the past year, I'm extremely proud of NASDAQ's team's accomplishments. With the establishment of our divisional structure and the agenda acquisition, 2023 was a transformational year for our business. Throughout the year, we achieved several major milestones to deepen our client relationships and advance our vision to be the trusted fabric of the world's financial system. Now let's review the highlights of our operational accomplishments and client successes by division, starting with Capital Access Platform. As you know, at NASDAQ, our exchanges are our foundation. We maintained our position as the premier U.S. exchange for IPOs with an 81% U.S. operating company win rate in 2023.

Speaker Change: Turning to market technology in 2023, we bolstered our global client footprint with the addition of seven clients, including four in the fourth quarter.

Speaker Change: We also expanded our relationships with four clients in the fourth quarter and more than 10 clients for the full year.

Speaker Change: Importantly, we had key technology client signings in APAC and in the Latam regions.

Speaker Change: We are proud to forge new technology partnership with <unk> exchange, which is a consolidation of marketplaces across through Chile and Colombia.

Speaker Change: We also expanded our relationship with Chile Central Securities Depository with capabilities to manage digitized assets.

Speaker Change: And with the three in Brazil to develop a new clearing solution and with Bnb in Mexico to modernize this entire post trade technology platform.

Speaker Change: Our growing customer relationships highlight the importance of the financial technology that we provide which powers resilient and liquid markets around the world.

Adena T. Friedman: In total, we welcomed 103 operating company IPOs that raised more than $11 billion in proceeds, marking NASDAQ's fifth consecutive year as the leading U.S. listing exchange in terms of both number of IPOs and proceeds raised. In addition, 18 companies representing $377 billion in market value switched their listings to NASDAQ during the year. On the NASDAQ stock market, we had $31 billion of net inflows for the year, including $10 billion in the

Speaker Change: In our anti financial crime suite of solutions, we're bringing world leading technology, coupled with our consortium dataset from 2500 banks to fight the growing threat of financial crime and the global financial system.

Speaker Change: Our inaugural Global financial Crime report, which which was conducted in partnership with outside experts.

<unk> three trillion dollars of illicit funds flowed through the global financial system and $500 billion has lost abroad.

Speaker Change: It's an enormous challenge that requires collective action across the banking sector, the public sector and the embrace of advanced technology.

Adena T. Friedman: Our clients launched 83 new products linked to NASDAQ indices during the year, bringing robust solutions in line with investor demand. Beyond our exchange and index leadership, we are a leading source of institutional intelligence for the buy side through investment, and we have continued to expand our offering into alternatives and ESG. We will continue to broaden our ESG solutions in 2023, launching multiple new offerings to help corporates and investors navigate an evolving ESG ecosystem, including NASDAQ Metro and investment ESG analytics. We also introduced a suite of new solutions designed to help corporate clients drive governance excellence and accelerate their ESG strategies, including Sustainable Lens for IR Insights. Turning to the FinTech division, with the completion of our Adenza acquisition, we've created a financial technology powerhouse of anti-financial crime, surveillance, market technology, and risk and regulatory reporting solutions that positions us as a key risk management partner to the global financial system. Our Calypso solution helps financial institutions navigate a range of market conditions, providing a live view of risk across proprietary and client trading portfolios with detailed analytics to support real-time risk management decision making.

Speaker Change: We are very proud of our role in fighting financial crime, and we're finding tremendous opportunity to continue to expand our capabilities across the banking sector.

Speaker Change: In 2023, we reached a significant milestone in our anti financial crime growth strategy during the year <unk>, our fraud and AML solutions.

Speaker Change: <unk> first three tier one banks as well as for tier two banks, including one tier one client and one tier two client in the fourth quarter.

Speaker Change: We also partnered with a growing number of small medium sized financial institutions for a total of 237, new clients. This year and 100 for the fourth quarter alone.

Speaker Change: Additionally, we developed our first proprietary Verathon Gen AI co pilot, which is now in beta with our customers.

Speaker Change: Our Gen AI tools reduce time and resources spent a manual tasks and processes such as alert reviews research and documentation.

Speaker Change: By increasing our operational efficiency verifone enables our clients to invest in resilient growth in an attractive our lives.

Speaker Change: In surveillance, we signed 27, new clients in 2023, including six in the fourth quarter.

Speaker Change: We made significant strides in modernizing our solutions by launching a new cloud based architecture and capabilities within surveillance user interfaces. These.

Adena T. Friedman: Similarly, in an increasingly complex and fragmented global regulatory environment where risks need to be managed in shorter timelines at a granular level, our Axiom SL solution enables our clients to benefit from NASDAQ's global scale and expertise. We can now be a comprehensive partner to banks, brokers, financial market infrastructure providers, and investment managers worldwide by helping them maximize their liquidity through world-class capital markets and risk management technology, as well as by enhancing integrity across the banking system through our regulatory reporting and anti-financial crime suite of solutions. With the closing of ADENZA, we're fully focused on engaging with our clients and new employees to ensure a smooth and successful transition and integration. Tal Cohen, NASDAQ's co-president and leader of the FinTech division, and I have personally been speaking with our clients over the past few months, and there is a lot of excitement around the potential opportunities now that Adenza is part of NASDAQ.

Speaker Change: These innovations give our clients the ability to calibrate their surveillance setup more efficiently and effectively.

Today, 50% of our Gnathic trade surveillance clients leverage our cloud deployed solutions, which support access to 200 sophisticated alerts across more than 160 markets globally.

Speaker Change: As we continue to enhance our surrounds capabilities. We're encouraged by the early adoption of our next Gen cloud architecture and new user interfaces.

Speaker Change: Moving on to market services in the fourth quarter, we maintained our strong 72% market share for our cash equities markets in the nordics against a challenging volume environment across the European markets.

Speaker Change: We've also continued to demonstrate our leading market position in the U S equities and options markets.

Speaker Change: In the fourth quarter, we benefited from robust closing cross volumes from the S&P MSCI and our own NASDAQ rebalance events, and we continue to experience growth growing adoption of our Mdx index options product.

Speaker Change: Additionally, we continue to advance the modernization of markets with the successful migration of our second U S options market to the AWS cloud infrastructure and with the SEC approval of the first AI powered AI powered order type called dynamic M Elo, which we expect to launch in the first quarter of 2024.

Adena T. Friedman: Adenza finished the year with strong sales and upsells across its solutions. Specifically, in the last two months, we signed six new clients, including two central banks. We also expanded our relationships with 35 existing clients.

Adena T. Friedman: For the full year, ADENSA added 23 new clients and expanded our relationships with 142 existing clients, including three cross-sells. We are thrilled to enter 2024 with DENSA as part of NASDAQ. And we're very excited to drive the business and the solutions to new heights in the years ahead. Turning to market technology, in 2023, we bolstered our global client footprint with the addition of seven clients, including four in the fourth quarter. We also expanded our relationships with four clients in the fourth quarter and more than 10 clients for the full year. Importantly, we had key technology client signings in APAC and in the LATAM regions. We are proud to forge a new technology partnership with Nuwam Exchange, which is a consolidation of marketplaces across Peru, Chile, and Colombia.

Speaker Change: Altogether, we're moving with speed, while delivering revenue growth and attractive margin profile that will drive shareholder value.

Speaker Change: With the gear ahead, now and focus I'd like to share our enterprise priorities for 2024.

Speaker Change: Our first priority is to continue the successful integration of agenda. We've made great progress in the initial phase of the integration Army and confident in our ability to deliver on the goals that we laid out at the time of the deal.

Second we're accelerating impact of our divisional structure to activate and unlock new opportunities that will drive our business into the future over the past year, we have delivered significant progress across each of our business divisions, and we will continue to realize the benefits of this structure in 2024.

Speaker Change: Third we are institutionalizing client listening across the company to unlock revenue growth throw one NASDAQ approach to our client engagements in 2024, we have a focus program to organize our client data advance our CRM and other related systems and enhance our processes across the enterprise to gain a holistic understanding of our clients.

Adena T. Friedman: We also expanded our relationship with Chile's Central Securities Depository with capabilities to manage digitized assets and with B3 in Brazil to develop a new clearing solution and with BMV in Mexico to modernize this entire post-trade technology platform. Our growing customer relationships highlight the importance of the financial technology we provide, which powers resilient and liquid markets around the world. In our anti-financial crime suite of solutions, we're bringing world-leading technology coupled with our consortium data set from 2,500 banks to fight the growing threat of financial crime in the global financial system. Our Inaugural Global Financial Crime Report, which was conducted in partnership with Outside Experts, estimates that over $3 trillion of illicit funds flow through the global financial system and $500 billion is lost abroad.

Speaker Change: With the goal to drive partnerships and cross selling opportunities going forward.

Speaker Change: And fourth we will further amplify the impact of AI has on the business and in our products.

<unk> is leveraging several critical components to ensure AI implemented safely securely and fairly.

Speaker Change: And through our focus on AI, coupled with the vast truck proprietary datasets that we created over decades in our markets and in our solutions covering investment analytics Investor relations in anti financial crime risks.

Speaker Change: Confident that we can extend nasdaq's competitive advantage in the years ahead.

Speaker Change: We look forward to updating you on our progress on these priorities on Investor day and in the quarters to come.

Adena T. Friedman: It's an enormous challenge that requires collective action across the banking sector, the public sector, and the embrace of advanced technology. We are very proud of our role in fighting financial crime, and we're finding tremendous opportunities to continue to expand our capabilities across the banking sector. In 2023, we will reach a significant milestone in our anti-financial crime growth strategy. During the year, Verifin, our fraud and AML solution, signed its first three Tier 1 banks, as well as four Tier 2 banks, including one Tier 1 client and one Tier 2 client in the fourth quarter.

Speaker Change: To wrap up 2023 with another year defined by significant strategic and operational milestones and strong execution.

Speaker Change: As we look ahead to 2024, we're well positioned to better serve our clients more holistically as you become the trusted fabric of the world financial system and with that I will now turn the call over to Sarah to review our financial details.

Thank you Ed and good morning, everyone I am thrilled to be here on my first earnings call at NASDAQ I could not be more excited to join the firm that such a transformational time and I look forward to seeing many of you at Investor Day.

Adena T. Friedman: We also partner with a growing number of small and medium-sized financial institutions for a total of 237 new clients this year and 100 for the fourth quarter alone. Additionally, we developed our first proprietary Verifin Gen AI Copilot, which is now in beta with our customers. Our Gen-AI tools reduce time and resources spent on manual tasks and processes, such as alert reviews, research, and documentation.

Sarah: Now I will turn to our financial results.

Sarah: My commentary will be focused on non-GAAP results on a year on year growth rates will be provided on an organic basis.

Sarah: Similarly, operating margins will be discuss X I did that for comparability purposes.

Sarah: We'll discuss yet investing on results at the end of the Fintech section.

Speaker Change: Before we move to the quarter I would like to give you the highlights for the full year 2023, starting on slide 12 of the earnings presentation.

Adena T. Friedman: By increasing their operational efficiency, VeriFIN enables our clients to invest in resilient growth and an attractive ROI. In surveillance, we signed 27 new clients in 2023, including six in the fourth quarter. We made significant strides in modernizing our solutions by launching a new cloud-based architecture and capabilities within surveillance user interfaces. These innovations give our clients the ability to calibrate their surveillance setup more efficiently and effectively.

Speaker Change: In an uncertain environment, we delivered solid financial performance and strong cash flow generation.

Speaker Change: Revenue of $3 9 billion was up 5% with solutions revenue of $2 9 billion, an increase of 7% non.

non-GAAP expense was $1 $8 billion.

Speaker Change: Up 5% inline with guidance for a 52% operating margin, which was flat versus the prior year.

Adena T. Friedman: Today, 50% of our NASIC trade surveillance clients leverage our cloud-deployed solutions, which support access to 200 sophisticated alerts across more than 160 markets globally. As we continue to enhance our surveillance capabilities, we're encouraged by the early adoption of our next-gen cloud architecture and new user interfaces. Moving on to market services, in the fourth quarter, we maintained our strong 72% market share for cash equities markets in the Nordics against a challenging volume environment across the European markets. We've also continued to demonstrate a leading market position in the U.S. equities and options markets. In the fourth quarter, we benefited from robust closing cross volumes from the S&P, MSCI, and our own NASDAQ rebalance events, and we continue to experience growing adoption of our NDX Index Options product.

Speaker Change: This resulted in diluted EPS of $2 82.

Speaker Change: Reflecting organic growth of 6%.

Speaker Change: The $1 $6 billion of free cash flow ex agenda of.

Speaker Change: What rate of 11%.

Speaker Change: Moving on to the fourth quarter on slide 13.

Speaker Change: We reported revenue of $1 1 billion up 7% with solutions revenue of $860 million, an increase of 9%.

Speaker Change: non-GAAP expense was $504 million up 2% and with an operating margin of 52% up three percentage points.

Speaker Change: Overall this resulted in diluted EPS of <unk> 72.

Adena T. Friedman: Additionally, we continue to advance the modernization of markets with the successful migration of our second US options market to the AWS cloud infrastructure and with the SEC approval of the first AI-powered order type called Dynamic MELO, which we expect to launch in the first quarter of 2024. Altogether, we're moving with speed while delivering revenue growth and an attractive margin profile that will drive shareholder value. With the year ahead now in focus, I'd like to share our enterprise priorities for 2024. Our first priority is to continue the successful integration of ADENZA.

Speaker Change: Reflecting organic growth of 11%.

Speaker Change: Turning to slide 14.

Speaker Change: Our total to $6 billion up 6% organically.

Speaker Change: The annualized SaaS revenue totaled $910 million, representing organic growth of 12%.

Speaker Change: Excluding addenda Clos with 38% an improvement of two percentage points, including.

Speaker Change: Including at the Endo that number is 35%, which will improve the cloud portion of their revenue and chris's.

Speaker Change: As a reminder, we only completed a portion of their revenue to be tough.

Speaker Change: Let's review Division results for the quarter, starting on slide 15.

Speaker Change: For capital access platforms revenue of $461 million increased 10% driven by excellent performance in index.

Adena T. Friedman: We've made great progress in the initial phase of the integration and remain confident in our ability to deliver on the goals that we laid out at the time of the deal. Second, we're accelerating the impact of our divisional structure to activate and unlock new opportunities that will drive our business into the future. Over the past year, we've delivered significant progress across each of our business divisions, and we will continue to realize the benefits of this structure in 2024. Third, we are institutionalizing client listening across the company to unlock revenue growth through a one NASDAQ approach to our client engagement. In 2024, we have a focused program to organize our client data, advance our CRM and other related systems, and enhance our processes across the enterprise to gain a holistic understanding of our clients with the goal to drive partnerships and cross-selling opportunities going forward. And fourth, we will further amplify the impact that AI has on the business and in our product. NASAC is leveraging several critical components to ensure AI is implemented safely, securely, and fairly.

Speaker Change: In data and listing services, we saw 3% growth.

Speaker Change: In data we have seen a continued increase in proprietary data revenues driven largely by higher international demand.

Speaker Change: In listing the positive impact of pricing was partially offset by the combined impact of de listing and muted IPO environment and the rollout of prior year's initial listings revenue.

Speaker Change: Well Jordan insights revenue increased 3%.

Speaker Change: 96 delivered high single digit growth.

Speaker Change: Affecting our ability to monetize the value of our data to the buy side with new business and increased pricing across traditional and alternative asset managers.

Speaker Change: This trend in analytics was partially offset by a weaker capital raising market.

Speaker Change: The impact of elongated sales cycle incorporate solutions.

Speaker Change: Index revenue increased 26% and <unk> grew by 34%.

Speaker Change: Over the last 12 months on net inflows were $31 billion 10 billion of which occurred during the fourth quarter.

Adena T. Friedman: And through our focus on AI, coupled with the vast proprietary data sets that we've created over decades in our markets and in our solutions covering investment analytics, investor relations, and anti-financial crime, we're confident that we can extend NASDAQ's competitive advantage in the years ahead. We look forward to updating you on our progress on these priorities at Investor Day and in the quarters to come. To wrap up, 2023 was another year defined by significant strategic and operational milestones and strong execution. As we look ahead to 2024, we're well positioned to better serve our clients more holistically as we become the trusted fabric of the world's financial system. And with that, I will now turn the call over to Sarah to review our financial details. Thank you, Adena, and good morning, everyone.

Speaker Change: Licensing revenues for futures contract linked to the NASDAQ100 index increased as well.

Speaker Change: Driven by higher capture partial.

Speaker Change: Partially offset by a decline in trading volumes.

Speaker Change: As a reminder, our.

Speaker Change: Capturing Christmas once we cross a volume threshold and then we said at the beginning of each year.

Speaker Change: What Marlin site index revenue also benefited from index data revenue growth.

For capital access platforms was $1 2 billion up 3%.

Speaker Change: Our growth was largely driven by analytics and to a lesser extent data and listings.

Speaker Change: The muted IPO environment impacted al Gore.

However, we are cautiously optimistic that we could see a recovery in ipl's.

Sarah Youngwood: I am thrilled to be here for my first earnings call at NASDAQ. I could not be more excited to join the firm at such a transformative time. And I look forward to seeing many of you at InVa today.

Combined with more normalized sales cycle as we progress through 2024.

Speaker Change: As a reminder, substantially all of index revenue is excluded from al.

Sarah Youngwood: Now, I will turn to our financial results. My commentary will be focused on non-GAAP results, and a year-on-year growth rate will be provided on an organic basis. Similarly, operating margins will be discussed ex-adenza for comparability purposes. I will discuss the Adenza Standard results at the end of the FinTech section.

Speaker Change: The division's operating margin was 54% for the quarter, an increase of four percentage points due to higher revenues.

Speaker Change: For the full year. It was 55% of roughly 50 basis points. The increase was driven by higher revenues, partially offset by inflation revenue related expense and investments in particular of course data on an index.

Sarah Youngwood: Before we move to the quarter, I would like to give you the highlights for the full year 2023, starting on slide 12 of the earnings presentation. In an uncertain environment, we delivered solid financial performance and strong cash flow generation. Revenue of $3.9 billion was up 5%, with solutions revenue of $2.9 billion, an increase of 7%. Non-GAAP expense was $1.8 billion at 5% in line with guidance for a 52% operating margin, which was a class versus the prior year. This resulted in diluted EPS of $2.82, reflecting organic growth of 6%. We had $1.6 billion of pre-cash flow ex-Adenza, a growth rate of 11%. Moving on to the fourth quarter, on slide 13.

Speaker Change: Moving to financial technology on Slide 16, the division delivered revenue of $399 million for the quarter up eight.

Speaker Change: Sent.

Speaker Change: Regulatory technology grew 17% with paraffin at 25%.

Speaker Change: There has been added 100, new clients this quarter.

Speaker Change: <unk>, our third tier one bank.

Speaker Change: While we are excited about these additions as we have previously discussed the contracting and implementation with the larger more complex institutions is longer.

Speaker Change: We will start recognizing subscription revenue in 2024, but we believe that <unk> will only accelerate as we extend relationships with its clients.

Speaker Change: The strong performance of del Tin, along with 6% growth in surveillance led to the 17% growth of regulatory technology.

Sarah Youngwood: We reported revenue of $1.1 billion, up 7%, with solutions revenue of $860 million, an increase of 9%. Non-GAAP expense was $504 million, up 2%, and with an operating margin of 52%, up 3 percentage points. Overall, this resulted in diluted EPS of $0.72, reflecting organic growth of 11%. Turning to slide 14.

Speaker Change: For surveillance.

Speaker Change: Fourth quarter growth was impacted by the timing of bookings in 2023 versus 2022.

But fundamentals remain strong for the year with six new clients in the fourth quarter and 27% for the full year.

Speaker Change: We also made inroads with the tier three broker client cohort, which reflects progress beyond our leadership position with large banks.

Cloud foot 12 surveillance is now above 50% deployment, which is an important driver of client stickiness.

Sarah Youngwood: ARR totaled $2.6 billion, up 6% organically. The annualized stats revenue totaled $910 million, representing organic growth of 12%. Excluding ADENSA, SAS was 38% of AR, an improvement of 2 percentage points; including Adenza, that number is 35%, which will improve as the cost portion of their revenue increases. As a reminder, we only consider the cloud portion of their revenue to be self-employed. Let's review division results for the quarter, starting on slide 15.

Speaker Change: With the speed and efficiency it enables us to provide.

Speaker Change: Moving onto capital markets technology.

We saw 3% wallet.

Speaker Change: Given by data center connectivity demand, we had new market Tech contract signings in Latin America.

Speaker Change: With one of our U S tier one clients.

Speaker Change: Expect this contract to start to accrue in 2024.

Speaker Change: As Adena mentioned, we continued to increase our market technology presence in Latin America and to have a leading role in the modernization of markets in the region.

Sarah Youngwood: For capital access platforms, revenue of $461 million increased 10%, driven by excellent performance in index. In data and listing services, which saw 3% growth. In data, we have seen a continued increase in proprietary data revenues, driven largely by higher international demand. In listings, the positive impact of pricing was partially offset by the combined impact of delistings, a muted IPO environment, and the rollout of the prior year's initial listings revenue.

Speaker Change: A L. Aqua Fintech totaled $135 billion, an increase of 10% due to continued customer wins.

Speaker Change: <unk> as well as growth in trade management services and market technology.

Speaker Change: The division's operating margin in the fourth quarter was 40% up four percentage points.

Speaker Change: The organic margin expansion reflects solid top line growth and expense control with a notable increase in revenue related costs offset by efficiencies and lower professional fees.

Sarah Youngwood: Web through Onion Sites revenue increased 3%. Analytics delivered high single-digit growth, reflecting our ability to monetize the value of our data to the buy side, with new business and increased pricing across traditional and alternative asset managers. The strength in analytics was partially offset by a weaker capital-raising market and the impact of elongated sales cycles in corporate solutions. However, index revenue increased 26%, and overall AUM grew by 34%. Over the last 12 months, our net inflows were $31 billion, $10 billion of which occurred during the fourth quarter. Licensing revenues for futures contracts linked to the NASDAQ 100 index increased as well, driven by higher capture, partially offset by a decline in trading volume. As a reminder, our capture increases once we cross a volume threshold and then resets at the beginning of each year.

Speaker Change: We are progressing on our journey to improve the efficiencies in market technology are continuing to support the work of Barra spin and surveillance.

Speaker Change: For the full year, the operating margin was 40% up five percentage points with a story, which mirrors that of the quarter, including strong operating leverage and investments.

Speaker Change: Before closing on Fintech, a few additional words on our agenda.

Speaker Change: For November and December advent that contributed.

Speaker Change: $149 million in revenue.

Speaker Change: $458 million of a year, all of which $98 million was in touch.

Speaker Change: $35 million in non-GAAP operating expense.

Speaker Change: A strong finish to the year drove a 77% operating margin for two months of an issue.

Speaker Change: On a full year basis.

Speaker Change: <unk> had an adjusted EBITDA margin of 15, 9%.

Sarah Youngwood: For smaller in size, index revenue also benefited from index data revenue growth. ARL for capital access platforms was $1.2 billion, up 3%. AR growth was largely driven by analytics and, to a lesser extent, data, and listing. The muted IPO environment impacted AR growth. However, we are cautiously optimistic that we could see a recovery in IPOs, combined with more normalized sales cycles as we progress through 2024.

Speaker Change: Head of our initial 58% outlook for the year.

Speaker Change: Let me now talk about <unk> full year revenue on a O.

Speaker Change: Revenue was $583 million in 2023 up 14%.

Speaker Change: <unk> of $458 million or 16%, excluding a significant bankruptcies that occurred during the year.

Sarah Youngwood: As a reminder, substantially all of index revenue is excluded from AR. The division's operating margin was 54% for the quarter, an increase of 4 percentage points due to higher revenue. For the full year, it was 55% of roughly 50 basis points.

Speaker Change: 14% net of it.

Metrics on a constant currency basis.

Speaker Change: We had nearly 50% of new activity coming from cloud this year.

Speaker Change: As Tom close take up by our clients.

Speaker Change: Our growth and efficiencies.

Revenue growth benefited from a large portion of a are up for renewal in the quarter and in the year.

Sarah Youngwood: The increase was driven by higher revenues, partially offset by inflation, revenue-related expenses, and investments, in particular, across data and index. Moving to financial technology on slide 16, the division delivered revenue of $399 million for the quarter, up 8%. Regulatory technology grew 17% with verafin at 25%. Verifin added 100 new clients this quarter, including our third tier one bank.

Speaker Change: Going forward, we expect that linzess revenue growth to be in the low to mid teens consistent with the medium to long term outlook, we provided when we announced the acquisition.

Speaker Change: The timing of contracting up for renewal and the mix of revenue between cloud and on premise delivery will have an impact on revenue growth in any given quarter and year.

Speaker Change: This is why we are focused on al <unk>, which is not as impacted by annual renewable and delivery method.

Sarah Youngwood: While we are excited about these additions, as we have previously discussed, the contracting and implementation with these larger, more complex institutions takes longer. We will start recognizing subscription revenue in 2024, but we believe that Diabtec will only accelerate as we expand relationships with this client. The strong performance of VeraFEN, along with 6% growth in surveillance, led to the 17% growth of regulatory technology. For surveillance, the fourth quarter growth was impacted by the timing of bookings in 2023 versus 2022. But fundamentals remain strong for the year, with six new clients in the fourth quarter and 27 for the full year. We also made inroads into the Tier 3 Broker-Client Cohort, which reflects progress beyond our leadership position with large banks. Cloud for Trail Surveillance is now above 50% deployed, which is an important driver of client stickiness because of the speed and efficiency it enables us to provide.

We'll provide more details on the revenue dynamics of authentic division at Investor Day.

Speaker Change: And wrapping up our divisional overview with market services.

Speaker Change: Net revenue was $247 million for the quarter plus it flat with growth in U S cash equities offset by decreases in U S options.

Speaker Change: U S cash equities growth was driven by higher capture partially offset by lower share.

Speaker Change: In a very competitive U S options environment, we are defending our strong market share lead and our attractive capture.

Speaker Change: Meanwhile, in Europe have been exchanged volume were positively offset by a $7 million nonrecurring payment and by the benefits of diversification between fixed income and equity.

Right.

Speaker Change: The investments we have made in leveraging our technology and data to provide a European markets clients with transparency help them to generate alpha. This has enabled us to help our clients improve the execution quality and has been key to our ability to reclaim our 72%.

Sarah Youngwood: Moving on to capital markets technology, we saw 3% growth driven by data center connectivity demand. We had new market tech contract signings in Latin America and with one of our US-01 clients. We expect this contract to start to accrue in 2024.

Speaker Change: Sure a two percentage point increase.

Speaker Change: The division's operating margin was 57% in the fourth quarter of 2023.

Speaker Change: Compared to 60% in the prior year quarter.

Speaker Change: The result of higher compensation costs.

Sarah Youngwood: As Adena mentioned, we continue to increase our market technology presence in Latin America and to have a leading role in the modernization of markets in the region. ARR for FinTech totaled $1.35 billion, an increase of 10%, due to continued customer wins at VeraFame, as well as growth in trade management services and market technology. The division's operating margin in the fourth quarter was 40%, up 4 percentage points. The organic margin expansion reflects solid supply growth and expense control, with a novel increase in revenue-related costs offset by efficiencies and lower professional fees. We are progressing on our journey to improve the efficiency of market technology by continuing to support the growth of verification and surveillance.

Speaker Change: Continued to invest in our people and higher technology costs due to ongoing investments related to both capacity and migrating U S market to the cloud.

Speaker Change: The full year operating margin for the division totaled 59% with the same drivers at the Pagani story.

Speaker Change: Turning to slide 19.

Speaker Change: This quarter's non-GAAP operating expense was $504 million.

Speaker Change: An organic increase of $8 million or 2% versus organic revenue growth of 7%.

Speaker Change: One point a story in the businesses and it reflects good expense discipline as well as the timing of marketing and professional fees.

Speaker Change: Overall this reflects a 52% operating margin up three percentage points.

Speaker Change: For the full year, our non-GAAP operating expense was $1 $83 billion.

Speaker Change: In line with guidance.

Speaker Change: We were up 5% consistent with revenue growth for a flat operating margin up 52%.

Sarah Youngwood: For the full year, the operating margin was 40% of 5 percentage points, with a story that mirrors that of the quarter, including strong operating leverage and investment. Before closing on FinTech, a few additional words on Adenza. For November and December, ADENA contributed $149 million in revenue, for $158 million of ARR, of which $98 million was in SATS, and $35 million in non-GAAP operating expense. A strong finish to the year drove a 77% operating margin for a two-month ownership on a four-year basis. Adenza had an adjusted EBITDA margin of 59%, ahead of our initial 58% outlook for the year. Let me now talk about Adenza's four-year revenue and ARR. Revenue was $583 million in 2023, up 14%. ARR was $458 million, with 16% excluding a significant bankruptcy that occurred during the year, or 14% net of it. Both metrics are on a constant currency basis. We had nearly 50% of new ATVs coming from clouds this year.

Speaker Change: <unk> due to investments in key growth areas inflation and higher revenue related expense.

Speaker Change: We also achieved efficiencies joined a year as we continue to optimize our location footprint and within the divisions together as part of our divisional realignment.

Speaker Change: If you include that ends up with a full year operating expense totaled $2 <unk> $5 billion.

Speaker Change: Now onto guidance.

Speaker Change: We are initiating 2024, non-GAAP operating expense guidance of $2, one <unk> 5 billion.

Speaker Change: To $185 billion.

Speaker Change: The midpoint of which reflects pro forma growth of 5%.

Speaker Change: This includes a full year of it ends up.

Speaker Change: And the in your expense benefit of net synergies.

Speaker Change: On an organic basis, excluding addenda nasdaq's expense growth would be just under four 5%.

Speaker Change: We will spend more time on synergies at Investor day, but we reiterate the net $18 million synergy target by the end of 2025 and $80 million cost to achieve all set forth in the restructuring program, we just initiated.

Sarah Youngwood: The strong cloud take-up by our clients supports our goals and efficiencies. Additionally, revenue growth benefited from a large portion of ARR up for renewal in the quarter and in the year. Going forward, we expect Adensa's revenue growth to be in the low to mid-teens, consistent with the medium to long-term outlook we provided when we announced the acquisition. The timing of contracts being up for renewal and the mix of revenue between cloud and on-premise delivery will have an impact on revenue growth in any given quarter and year. This is why we are focused on AR growth, which is not as impacted by in-year renewal and delivery methods.

Speaker Change: Additionally.

Speaker Change: We are guiding for full year tax rate of 24, and a half to 26, 5% on a non-GAAP basis.

Speaker Change: Slightly higher than 2020.

Sarah Youngwood: We'll provide more details on the revenue dynamics of our FinTech division at InBev today and wrap up our divisional overview with market services. Net revenue was $247 million for the quarter, roughly flat, with growth in U.S. cash equities offset by decreases in U.S. options. U.S. cash-equited growth was driven by higher capture, partially offset by lower share. In a very competitive U.S. options environment, we are defending our strong market share lead and our attractive capture. Meanwhile, in Europe, cap-paid exchange volumes were positively offset by a $7 million non-recurring payment and by the benefits of diversification between fixed income and equities.

Sarah Youngwood: The investments we have made in leveraging our technology and data to provide our European markets clients with transparency helps them to generate alpha. This has enabled us to help our clients improve their execution quality and has been key to our ability to reclaim our 72% market share, a two-percentage point increase. The division's operating margin was 57% in the fourth quarter of 2023, compared to 60% in the prior year quarter as a result of higher compensation costs as we continue to invest in our people and higher technology costs due to ongoing investments related to both capacity and migrating U.S. markets to the cloud. The fully operating margin for the division totaled 59% with the same drivers as the quarterly story. Turning to slide 19.

Sarah Youngwood: This quarter's non-GAAP operating expense was $504 million, an organic increase of 8 million, or 2%, versus our organic revenue growth of 7%. I went through the story across the businesses, and it reflects good expense discipline as well as the timing of marketing and professional services.

Sarah Youngwood: Overall, this reflects a 52% operating margin, up 3 percentage points. For the four years, our non-GAAP operating expense was $1.83 billion, in line with guidance. We were up 5% consistent with revenue growth for a flat operating margin at 52%. The decline is due to investments in key growth areas, inflation, and higher revenue-related expenses. We also achieved efficiencies during the year as we continue to optimize our location footprint and bring the divisions together as part of our divisional realignment. If you include ADENSA for the folio, operating expense totals $2.05 billion. Now onto guidance. We are initiating 2024 non-GAAP operating expense guidance of $2.105 billion to $2.185 billion, the midpoint of which reflects post-formal growth of 5%. This includes a portfolio of Adenza and the in-ear expense benefit of NetSynergies.

Sarah Youngwood: On an organic basis, excluding adenza, NASDAQ's expense growth would be just under 4.5%. We will spend more time on synergies at INVAS today, but we reiterate the net $80 million synergy target by the end of 2025 and the $80 million cost to achieve are set forth in the restructuring program we just initiated. Additionally, we are guiding the four-year tax rate of 24.5% to 26.5% on a non-GAAP basis, slightly higher than 2020.