Nasdaq Inc Q3 2024 Earnings Call Transcript

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

Question: Owen Lau - Oppenheimer & Co. Inc. - Analyst : Hi, good morning, and thank you for taking my question. So your financial client management tech was pretty strong, growing at 20% year over year, but it was below the medium-term outlook, which is mid-20%. You said mainly because of the top comp and timing of deliveries, or there something else in there that we should be aware of? And how should we think about the near-term outlook for Verafin? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:00PM, NDAQ.OQ - Q3 2024 Nasdaq Inc Earnings Call

Question: Owen Lau - Oppenheimer & Co. Inc. - Analyst : Sounds great. Thanks a lot.

Question: Craig Siegenthaler - BofA Global Research - Analyst : Good morning, Adena, Sarah. I hope everyone's doing well. I have a follow-up on the Verafin question. First, I saw you signed another Tier 1 client in the quarter. Was that the same client that you announced in the last earnings call in July, I think you cross-sold it from Axiom or is this actually a new one? And then will this one start with payment fraud, because I think that's how most of the Tier 1s start with? And just the final one here is, with your existing Tier 1 wins, including Citi, have you been able to upsell them after the initial signing, or is it too early?

Question: Craig Siegenthaler - BofA Global Research - Analyst : Thank you.

Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst : Great, thanks so much. Good morning. I was just hoping you could elaborate a bit on the cross-sales campaigns, particularly with Axiom and Calypso, how that's progressing? It seems like you're about to embark on some additional campaigns in the fourth quarter. Maybe you can elaborate on what your plans are for that and what success might look like? Thanks.

Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst : Great. Thanks so much.

Question: Walt Gian - RBC Capital Markets - Analyst : Hey. Good morning, everyone. This is [Walt Gian] on for Ashish Sabadra. Appreciate you taking our question. I just wanted to double click real quick on the comments earlier. On the timing aspect, when you're onboarding these new clients, SMBs, Tier 1, Tier 2, is there a timeframe that we should think about on the ramp-up period? Is it quicker for new clients -- or sorry, new clients versus cross-sells or is there relatively the same amount of time between both? And just as a quick follow-up, any kind of clarity you can share on the IPO market that's shaping out? And then maybe if there's any issues from the upcoming elections that are hurdles for any client perspective. Thank you.

Question: Walt Gian - RBC Capital Markets - Analyst : Great, thank you very much.

Question: Patrick Moley - Piper Sandler & Co. - Analyst : Yeah. Good morning. Thanks for taking my question. I just have a follow-up on the cross-sell campaigns. The new campaigns that you're running in the fourth quarter from a revenue standpoint, how large is the opportunity compared to the campaigns that you're currently running? And then in the scope of just the overall cross-sell campaigns that you expect will allow to get to that $100 million of cross-sell revenue target by the end of 2027, where do you think we are in that journey? Thanks.

Question: Patrick Moley - Piper Sandler & Co. - Analyst : Thank you.

Question: Kyle Voigt - Keefe, Bruyette & Woods North America - Analyst : Hi, good morning. Just wanted to focus in a bit more on the international opportunity for Axiom. You noted the first clients in certain geographies in India, the Philippines, you also noted success in Colombia and Latin America. I guess, can you help us frame the international opportunity here when you look at your market share or penetration rate in more developed markets? And then, therefore, how meaningful some of these new international markets could be or maybe even frame the international growth rate within Axiom? And then just also if you could frame or give us some more color as to whether you're displacing any competitors in these international markets or if it's really just displacing the in-house regulatory reporting functionality? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:00PM, NDAQ.OQ - Q3 2024 Nasdaq Inc Earnings Call

Question: Kyle Voigt - Keefe, Bruyette & Woods North America - Analyst : Thanks very much.

Question: Michael Cho - JPMorgan - Analyst : Hi, good morning. Thanks for taking my question. I just wanted to touch on pricing for a second. We can start on Verafin, but just trying to get an update more broadly. There is a rollout of upgrades like entity research Copilot or the new AI features and Corporate Solutions help with pricing REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:00PM, NDAQ.OQ - Q3 2024 Nasdaq Inc Earnings Call from existing clients. And when we think about AxiomSL and Calypso, I know you mentioned some campaigns, but are there areas where you see broader upgrade opportunities ahead maybe in the context of pricing for existing clients? Thanks.

Question: Michael Cho - JPMorgan - Analyst : That's great. Thanks for all the color.

Question: Dan Fannon - Jefferies - Analyst : Thanks. Good morning to all. I wanted to follow up on some of the comments on the Market Tech business. It sounds like momentum is building. I think you said professional services should build into next year, but you still have the tough comp going into 4Q. So hoping to just contextualize REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:00PM, NDAQ.OQ - Q3 2024 Nasdaq Inc Earnings Call that a bit more just in terms of how we think about revenues and maybe the growth into next year, putting those -- the momentum versus the kind of roll off of certain contracts and professional fees that are still kind of rolling through the system?

Question: Dan Fannon - Jefferies - Analyst : Great, thank you.

Question: Alex Blostein - Goldman Sachs & Company, Inc. - Analyst : Hi. Good morning, everybody. Thanks for taking the question. I was hoping to zoom out on Adenza for a second and just kind of talk about the near-term outlook you guys have for this business. There's been a few puts and takes, I guess, with the accounting change earlier in the year that, I guess, ultimately is meant to smooth revenue growth out a little bit. But as you look out into 2025, it sounds like the sales momentum is progressing nicely, and you're happy with the integration. So maybe talk a little bit about 2025 revenue growth expectations for both of those businesses, AxiomSL and Calypso? Thanks.

Question: Alex Blostein - Goldman Sachs & Company, Inc. - Analyst : Great, thank you.

Question: Benjamin Budish - Barclays Capital Inc. - Analyst : Apologies, I had you on mute there. I just wanted to see if I could follow up on Alex's question there. I know for Axiom, Q4 tends to be the biggest booking quarter and next year tends to be -- is expected to be a bigger upgrade cycle. So I'm wondering if there's any more color you can provide there? And maybe if you can sort of give more explicit guidance on what the revenue growth looks like. Maybe what is sort of like a reasonable expectation? What should we sort of see in a big upgrade cycle here? Should we see more professional services or more of an ARR acceleration? How should we be thinking about those different factors? Thank you.

Question: Benjamin Budish - Barclays Capital Inc. - Analyst : Understood. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:00PM, NDAQ.OQ - Q3 2024 Nasdaq Inc Earnings Call

Question: Bill Katz - TD Cowen - Analyst : Great. Thanks for taking the questions. Maybe if I could sneak in a two-parter. Adena, for you, I'm curious who talked about it. I'd love to get your perspective on the recently passed tick rule by the SEC and what might be the implications either intended or unintended for the platform? And then Sarah, I'm just sort of curious, maybe you covered this in your prepared remarks, it's been a busy morning. You gave a relatively wide implicit range for fourth quarter non-GAAP adjusted expenses. I was wondering what would frame the high end versus the low end? Thank you very much.

Question: Bill Katz - TD Cowen - Analyst : Thank you.

Question: Simon Clinch - Redburn Atlantic - Analyst : Hi, thanks for taking my question. Just wondered if you could quickly just give a sense talk to the renewal environment that we're in right now. It sounds like it's pretty good, but then you also referenced the pushout of a renewal, I think, for Calypso, by potentially up to two quarters, which -- I guess, I join you could talk about what that actually means in terms of the renewal environment?

Question: Simon Clinch - Redburn Atlantic - Analyst : Excellent. Thanks very much.

Question: Brian Bedell - Deutsche Bank Securities Inc. - Analyst : Okay, thanks. Thanks very much for squeezing me, I'll be quick. Most of my questions were asked and answered. Just on the index options business. Can you just comment on what you're seeing as the revenue contribution from that coming into 2025? And to what extent are you marketing this to retail like the online broker platforms?

Question: Brian Bedell - Deutsche Bank Securities Inc. - Analyst : Great. Thank you very much.