Nasdaq Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

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

Question: Michael Cyprys - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So why don't we start out big picture, a little bit of a level-setting question for you for those that are a little bit less familiar with the Nasdaq story. To my earlier point, Nasdaq has been most recognized for its exchange and listings brand, but in recent years, has been transforming into a fintech and financial services broader provider. And Sarah you spent many years at JPMorgan as an executive. You joined Nasdaq, I think it was a little over a year ago, 14 months, maybe roughly there. So just curious to hear your perspective on Nasdaq's evolution, where are we headed over the next three to five years? And if you could also maybe just touch upon a little bit how you're allocating your time these days? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:05AM, NDAQ.OQ - Nasdaq Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. So you are involved in some of the sales processes?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Maybe just diving into Verafin, start there, your anti-financial crime management business. It's the fastest-growing revenue stream at Nasdaq today, growing at 20% plus annually. Maybe talk a little bit about some of the demand trends that you are observing for the Verafin business globally. Where do you see some of the most pertinent need for cloud-based ML solutions as you look across different jurisdictions and regulatory backdrops? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:05AM, NDAQ.OQ - Nasdaq Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Maybe jumping out a little bit, let's talk about AI since you did reference that. Maybe talk a little bit about how Nasdaq is leveraging AI across your different businesses today, maybe starting with Verafin there just because it already is sort of an AI at a core user, if you will. Where are you along the journey, and how do you see that progressing? What's next to come at Nasdaq?

Question: Michael Cyprys - Morgan Stanley - Analyst : Just to dig in just a little bit there. I just want to make sure I heard right. So 1,000 users, is that right, you were mentioning with the Verafin one, with the Copilot tool? So these are clients that are using it?

Question: Michael Cyprys - Morgan Stanley - Analyst : Interesting. And as you kind of look ahead over the next three to five years, just any sort of perspective on sort of like what's next to come as you think about AI tools, adoption, other ways to sort of bring other tools to the marketplace?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Maybe turning to Axiom. That's your software solution for regulatory reporting, risk, and compliance, talk about the competitive landscape there, how Axiom differentiates versus others? And maybe talk about some of the scope for adding additional services and sleeves and modules.

Question: Michael Cyprys - Morgan Stanley - Analyst : And so when you think about the competitive landscape, maybe just talk a little bit about who you're bumping up against as you're looking to win more sales or win more modules? And how do you think about expanding out the offering as well for Axiom?

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. And with the Adenza acquisition that brought you Calypso as well as Axiom and then an earlier acquisition of Verafin, maybe talk about the opportunity there with cross-sell across this entire fintech business. What's been the uptake so far? What sort of anecdotes or traction are you able to share with us today?

Question: Michael Cyprys - Morgan Stanley - Analyst : Just to make sure I heard you right on the numbers. So it's $100 million of synergy targets, which you had previously communicated by '27 for which you've executed on '17. Is that correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:05AM, NDAQ.OQ - Nasdaq Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Number of deals.

Question: Michael Cyprys - Morgan Stanley - Analyst : Number of --

Question: Michael Cyprys - Morgan Stanley - Analyst : Cross-sell. Okay. 17 cross-sells so far. And then when you look at the pipeline, about 10% of the number of deals in the pipeline.

Question: Michael Cyprys - Morgan Stanley - Analyst : Number of deals. Okay. Not dollar million. I just wanted to clarify.

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Before we wrap up on fintech, maybe we could just talk for a moment about the new administration.

Question: Michael Cyprys - Morgan Stanley - Analyst : That's dollars. Okay. Thank you.

Question: Michael Cyprys - Morgan Stanley - Analyst : Just wanted to keep (inaudible) dollars.

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Before wrapping up on fintech, maybe talk a little bit about the new administration. We've seen the administration here in DC. They're moving very quickly on policy decisions. What's been the reaction from your customer base at Nasdaq?

Question: Michael Cyprys - Morgan Stanley - Analyst : Early.

Question: Michael Cyprys - Morgan Stanley - Analyst : And that's the Calypso, one with --

Question: Michael Cyprys - Morgan Stanley - Analyst : What's driving that?

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Maybe shifting over to listings. Maybe you talk a little bit about what you're seeing now in terms of the IPO pipeline and how you see the cadence of that unfolding this year.

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. While we're talking about markets here, maybe we're talking about 24/7 markets or maybe 24/5 before we get to 24/7. So just wanted to get your thoughts on how you see that developing in the US. What hurdles need to be overcome? What's the potential implications for market infrastructure? And how are you thinking about that for Nasdaq and for the industry, too?

Question: Michael Cyprys - Morgan Stanley - Analyst : Do you have a sense on the time frame for that? Is that a '25 event?

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. And crypto has emerged again as a topic of conversation, particularly under this new administration. We've seen an uptick in overall activity levels across crypto. It's been some time since we've approached this topic. But Nasdaq, so I just wanted to get your latest thoughts on how Nasdaq is thinking about playing a role in the digital asset ecosystem.

Question: Michael Cyprys - Morgan Stanley - Analyst : So potential more business for Calypso and Axiom is you're thinking -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:05AM, NDAQ.OQ - Nasdaq Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Why don't we talk about capital allocation? We have a few minutes left. You've de-levered to 3.6 times gross debt to EBITDA. Congratulations on that. It's come down meaningfully and also well ahead of plan. I think you expect to hit 3.3 times gross debt to EBITDA this year. I just -- how does your capital allocation evolve once you hit 3.3 times? What happens from there, and how much lower do you want to take it?

Question: Michael Cyprys - Morgan Stanley - Analyst : And you mentioned M&A. I know the focus remains organic growth in the near term. But as you, I guess, move towards 3 and maybe even below at some point and you start thinking about buybacks versus M&A once you're below 3. I guess, how might the M&A appetite evolve? Where do you see potential white space at this point?

Question: Michael Cyprys - Morgan Stanley - Analyst : Okay. Maybe we see if we have any questions in the room for the last two minutes we have left? Over here. Unidentified Participant Great. Thank you so much. I wanted to ask about some of your initiatives of moving from on-premise to cloud. Can you give us an update on just what are some of the businesses that you feel like you've had the most progress on? Where are some of the areas that might be it's taking a little bit longer and kind of what you're doing to address that?

Question: Michael Cyprys - Morgan Stanley - Analyst : Any key milestones to be thinking about broadly with cloud or Calypso for this year or next year?

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Well, I'm afraid we're out of time. Please join me in thanking Sarah Youngwood. Thank you so much.