Nasdaq Inc at UBS Financial Services Conference Transcript

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

Question: Alex Kramm - UBS Securities LLC - Analyst : So in the interest of time, I'm going to start very, very, very big picture. So obviously, Nasdaq has been a company in transition for quite some time now, and quite frankly, I feel like we talked to people already 10 years ago about how you shouldn't really be viewed as an exchange anymore. But quite frankly, I still run into people who haven't fully gotten that memo or understand it. So why don't you tell us then briefly what the company is today and what the vision is for the next decade?

Question: Alex Kramm - UBS Securities LLC - Analyst : So why don't we dig deeper into this then? So the focus for investors here in the last year or so has been on that new fintech segment, which is the combination of the Adenza acquisition, Verafin, that you had acquired a couple years before that. And then you also have some legacy technology business in there. So why -- or tell us why it made sense to bring all these businesses together and why they're going to be positioned even stronger now under the Nasdaq umbrella.

Question: Alex Kramm - UBS Securities LLC - Analyst : So let's unpack it a little bit more in particular on the cross-selling side between those different businesses. You have a few initiatives running at the moment. So what are the results you can talk about so far? What has surprised you positively, maybe negatively as well as you're still learning? Hopefully, for 2025, what should we be expecting? How important is cross-selling?

Question: Alex Kramm - UBS Securities LLC - Analyst : Good. So being a little bit more specific, because I've got to ask about near-term numbers, you just reported fourth-quarter results, and the initial take, when I look at what we wrote and then also how the market reacted initially was ARR and the fintech business had slowed a decent amount, both year over year and quarter over quarter. I know ARR is not a perfect metric, but it's a good metric, a pretty good metric. So why should we now have confidence that things will actually accelerate again to meet the outlook that you said at the Investor Day last year?

Question: Alex Kramm - UBS Securities LLC - Analyst : Okay, good. You mentioned Verafin already just a second ago, but I'm going to go into it again, because that's been on a pretty impressive trajectory. It's also expected to be the fastest-growing business in the mid-20s. Now when you talk to some investors, some are even more bullish and think with all these events that we've had, financial crime events, not to name any particular banks because some of them may be here, that could lead REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 6:00PM, NDAQ.OQ - Nasdaq Inc at UBS Financial Services Conference to an actual acceleration. Maybe it's a 30-plus grower. So maybe just on that, do you think that's a reasonable assumption? And then outside of that, how have the conversations changed with Tier 1s, Tier 2s? And yes, how excited should we be about international as well?

Question: Alex Kramm - UBS Securities LLC - Analyst : Fair enough. One more, I think, on the fintech side. And this has come up a little bit already on the earnings call, but obviously a lot of stuff happening since the election and how that may impact the financial services industry. And the things that come up when I speak about Nasdaq are financial deregulation, which I'm sure we're hearing about a lot at this conference, and then bank M&A potentially picking up. Both of those things do look like a net negative on the surface because growing regulation has been cited as a driver of why you did the Adenza deal, for example, and then on the bank M&A, Calypso and Verafin, very important customer base. So why should investors worry or not worry about those, I guess, potential changes? We'll see what happens. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 6:00PM, NDAQ.OQ - Nasdaq Inc at UBS Financial Services Conference

Question: Alex Kramm - UBS Securities LLC - Analyst : Good. All right. I can spend all day on the fintech segment, but we're moving on for now. So maybe going back to some of the legacy businesses that still obviously are very important, starting with listings, a lot of excitement here post the election again that there's so much pent-up demand for IPOs and we're going to start seeing a lot more in 2025. So you're obviously engaging with a lot of prospective companies that may go public. So what are you seeing? What are you hearing? And then also, maybe help us understand how more IPOs actually help your business, because quite frankly, it takes a while until the flywheel really starts moving, if you say it like that.

Question: Alex Kramm - UBS Securities LLC - Analyst : Speaking, as you just mentioned, that part of the business -- and that is part of workflow and insights, which probably is the biggest soft spot, I would say, at the moment. Your long-term targets, they are high single to low double digits. You're fairly far away from that. So is there still a path to get there medium-term? And, yes, how do we get there?

Question: Alex Kramm - UBS Securities LLC - Analyst : You just mentioned index for a second, although you said it in terms of the market performance. But onto the index business, which has been a great growth story, a lot of it is beta. Let's not forget about that. But there is an alpha component here. So maybe you can talk about that a little bit more. What are you doing to drive new products, flows? How much can that add over time? And then maybe a quick topical question, there's been -- we saw biggest price cuts on ETFs from Vanguard maybe a week ago. A lot of people think this is a new time for ETF price compression, so maybe touch on that as well. How are you immune against that, or how are you exposed to potential ETF fee wars, if I can use that word. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 6:00PM, NDAQ.OQ - Nasdaq Inc at UBS Financial Services Conference

Question: Alex Kramm - UBS Securities LLC - Analyst : Good. Thank you. I'm actually going to go back to fintech for a second, because there's one business we didn't talk about, which is the legacy business, the exchange technology. So you sell technology to a lot of exchanges around the world, other trading businesses. So the business seems fairly mature. It's long sales cycles. But there's certainly this megatrend of market modernization that's playing out. So maybe you can talk about some of the new opportunities you see there. Are there any upgrade cycles that we should be thinking about? And yes, anything near-term that could surprise us in that business?

Question: Alex Kramm - UBS Securities LLC - Analyst : Continuing with legacy businesses, we haven't spoken at all about your trading businesses, still very important, 20%, a little bit over 20%, I think, of revenues and very high margins. So I'm going to ask this with a very open question because there's so many different businesses in there, so different dynamics, volumes, market share, pricing. But if I ask you very, very big picture, what are you very excited about as you look at your trading business? Anything that could surprise us, positively or negatively? And then, yes, what should we be paying more attention to within those businesses?

Question: Alex Kramm - UBS Securities LLC - Analyst : Good. And then maybe lastly, it looks like we have time for Q&A. Get ready, people. I'm going to call on people. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 6:00PM, NDAQ.OQ - Nasdaq Inc at UBS Financial Services Conference

Question: Alex Kramm - UBS Securities LLC - Analyst : Yes, lastly, you're still in deleveraging mode, but you should be getting there faster to your targets that you originally anticipated. So the obvious question is, what's next? You have this fintech segment now, and quite frankly, it looks like you have a right now to add more capabilities that you can cross-sell, as you're showing that you can do that organically and through deals. Yes, what's next? What is Nasdaq most interested to when it comes to adding capabilities that firms like us are interested in?

Question: Alex Kramm - UBS Securities LLC - Analyst : Okay. I promised that we have time for Q&A. I don't know if we have mics, but --

Question: Alex Kramm - UBS Securities LLC - Analyst : It's a shy group right after lunch.

Question: Alex Kramm - UBS Securities LLC - Analyst : There we go. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 6:00PM, NDAQ.OQ - Nasdaq Inc at UBS Financial Services Conference Unidentified Participant Okay. I had two quick ones. Can you talk about the delistings and what has driven that over time, and is that improving or not? And then just in terms of IPOs, you said Q2 is probably really the opportunity to look forward to. Did you think that Q1 would be better than it actually is?

Question: Alex Kramm - UBS Securities LLC - Analyst : Anything else?

Question: Alex Kramm - UBS Securities LLC - Analyst : Sorry. Go ahead. Unidentified Participant So one of your competitors has seen quite a lot of international listings, so delisting in Europe, for example, and listing here in the US. What are your thoughts on that as a trend, and if you see more of it, and how is that evolving?

Question: Alex Kramm - UBS Securities LLC - Analyst : I will offer one or two more, since we have time.

Question: Alex Kramm - UBS Securities LLC - Analyst : Here you are. But look, what we haven't talked about is AI. Because clearly, and this is where I started, you're more of a tech company now than maybe an old exchange. So 2025 seems to be a year that AI could become really all over, ubiquitous, to use a bigger word, and more integrated and visible. So yes, what are you doing and both maybe on the revenue and the cost side, and anything that could be a needle mover?

Question: Alex Kramm - UBS Securities LLC - Analyst : I'm looking -- we have one minute. There he is. Unidentified Participant Could you talk a little bit about stablecoins and how you're engaging with blockchain technology, less from an IPO perspective in terms of companies coming public, but more just how you're thinking about potentially working with them in the context of a technology that Nasdaq could use to make the business grow faster, be more efficient?

Question: Alex Kramm - UBS Securities LLC - Analyst : I see the mean red light, so I think we actually have to cut it off.

Question: Alex Kramm - UBS Securities LLC - Analyst : All right. Thank you very much, and I'm pleased to thank Adina for making time today. I enjoyed the chat.