Nasdaq Inc at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Blostein - Goldman Sachs - Analyst : It's slightly different audience than what we're used in financial services world. So a figure we could get started with maybe a little bit of an introduction and level setting who Nasdaq is in the context of a technology firm. So most investors in the room are probably familiar with Nasdaq's brand, primarily as an exchange. So at a high level, we can maybe get started with you telling us a little bit about why Nasdaq makes an interesting investment as potentially a technology company.

Question: Alex Blostein - Goldman Sachs - Analyst : Great. Well, let's zone in a little bit more on this. I was hoping we could start with the market opportunity you see for the firm and really looking it through the lens of customers and thinking about what are the typical companies? What are the typical kind of customers that Nasdaq services today? What are the challenges you sort of helping them tackle. And ultimately, what does that mean in terms of market opportunity, both with the SAM and the TAM as you think about the business?

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. So when we think about the growth prospects of the business, there are three kind of components that really always stood out to us. The first one being the index business. And it's a business that Nasdaq has had for quite a bit of time. So maybe we can start there. It's been a phenomenal grower. So talk a little bit about the opportunities you see for the index franchise at Nasdaq, and we can then hit on some of the others. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2024 / 6:00PM, NDAQ.OQ - Nasdaq Inc at Goldman Sachs Communacopia & Technology Conference

Question: Alex Blostein - Goldman Sachs - Analyst : I got you. Makes sense. Makes sense. Let's talk a little bit about the independent crime business. And Verafin has been a big success for the firm. And just for background, Nasdaq acquired Verafin back in 2021, I think we're about $3 billion. It's been a solid grower north of 20% type of growth in that business. Can you talk a little bit about the drivers and the opportunity there you see ahead of Nasdaq?

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. So maybe double click into that. I think one of the more significant relationship you announced, I think it was around the Investor Day with Citi, which is, of course, a very, very large bank. So maybe talk a little bit about sort of proof of concept that you're getting through that relationship, how important do you think that is going to be for you sort of lending other Tier 1 banks. And Citi has a huge international footprint also, so therefore, kind of helping you guys expand outside the US.

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. Great. Makes sense. All right. Let's touch on the third kind of pillar of some of the growth areas, which is within financial technology, which is, of course, Adenza. It was a sizable acquisition that Nasdaq did a couple of quarters ago for $10.5 billion purchase price. You guys are in the middle of integrating this today. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2024 / 6:00PM, NDAQ.OQ - Nasdaq Inc at Goldman Sachs Communacopia & Technology Conference So just to kind of level set everybody in the room, maybe spend a minute on sort of rationale for why this deal made sense for Nasdaq to do, expected benefits of Adenza in the context of Nasdaq and maybe a bit of a mark-to-market and where you are in the journey of kind of capturing some of the benefits that you were hoping to achieve for this deal.

Question: Alex Blostein - Goldman Sachs - Analyst : Got it. Got it. That makes sense. Just maybe double-clicking on Axiom for a sec. You said 97% of GSIBs already use it, right? So at a high level, you could say, well, you sound pretty penetrated that much. So outside of the big bank, can you talk a little bit about what's the next leg of growth is for exam in particular, when it comes to regulatory software? And to what extent the regulatory or the scrutiny of regular regime really matters, right? Because obviously, we have an election coming out, depending on the outcome of the election, the regulatory landscape of banks could go one way or another. How much does that matter?

Question: Alex Blostein - Goldman Sachs - Analyst : Got it. All right. I got one more and then more thematic set of things, but let's talk about AI for a second. Obviously, a super important topic for both investors and companies. So maybe spend a couple of minutes on how Nasdaq is incorporating this technology from both an expense and efficiency perspective? And is there a revenue opportunity perspective as well?

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. I got you. All right. Let's shift gears a little bit. I once -- I was hoping to hit on a couple of financial metrics as well on KPI. So as you were talking to investors and as you're measuring yourself internally, what are the kind of most important KPIs that you would like investors to track when it comes to Nasdaq's performance?

Question: Alex Blostein - Goldman Sachs - Analyst : I got you. Helpful. So -- and again, importantly now, that solutions revenue, the 8% to 11% growth. Is that majority of the revenues, right?

Question: Alex Blostein - Goldman Sachs - Analyst : At the end of the day, that's still --

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. So when you think about the 8% to 11% growth in solutions, and I appreciate that it will be hard to kind of summarize that in a couple of minutes that we have left here. But as you think about the growth algorithm to kind of help you kind of get to that 8% to 11%. Can you help maybe frame what's coming from new customers, what's coming from cross-sell and what's coming from pricing, understanding that different businesses are probably going to have a slightly different way of getting to that growth. But as a whole, how would you frame that?

Question: Alex Blostein - Goldman Sachs - Analyst : Yeah. Great. Let's hit on capital allocation for a second as well. You mentioned the deleveraging plants, which you guys have been executing against very nicely, and that's progressing. But also Nasdaq has been obviously quite acquisitive in the past. And that's one of the more sort of common questions that I get is like, well, should we still expect Nasdaq to get back and do larger deals once they hit their leverage target. How do you think about the capital allocation framework from the firm from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2024 / 6:00PM, NDAQ.OQ - Nasdaq Inc at Goldman Sachs Communacopia & Technology Conference

Question: Alex Blostein - Goldman Sachs - Analyst : Great. We have about a minute left. So if there's a quick question from the room, we can probably take one now. Okay. Otherwise, we can leave it there. Great. Thank you so much.