Nasdaq Inc Q4 2024 Earnings Call Transcript

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

Question: Alexander Blostein - Goldman Sachs - Analyst : I wanted to start with your outlook on Workflow and Insights. Obviously, it's a business that has been growing a little bit slower, presumably gets better with cross-selling once the Listings business starts to pick up a bit and there's sort of positive synergies with the rest of the franchise. Can you help us maybe just bridge how you go from this kind of low to mid-single-digit range back to your targets, which would seem to be still kind of ways out?

Question: Craig Siegenthaler - Bank of America - Analyst : So our question is on the potential for large-scale deregulation of the US financial services industry under the Trump administration. And we understand you can't put the genie back in the bottle on many businesses like Prop and Merchant Banking. But Axiom was seeing strong tailwinds from more regulations like Basel III Endgame. So if there is a reversal in bank regulations, how should this impact client demand for Axiom's offering and your Regtech growth trajectory, just given its core clients are banks?

Question: Patrick Moley - Piper Sandler - Analyst : Maybe just diving into Financial Technology again. You gave an outlook for where you kind of expected to fall within the range of the three businesses within that segment. So where do you think that leaves us for the full year in terms of the overall 10% to 14% growth rate for the full segment? And then on Financial Crime Management, I believe you said that you expected that to come in at the lower end, so maybe you could just talk about some of the drivers there.

Question: Benjamin Budish - Barclays - Analyst : Just following back up maybe on Alex's first question on Workflow and Insights. I guess given your sort of optimism in the IPO pipeline, can you talk a little bit about the kind of conversion rate or what the timing looks like in terms of getting new sort of listed companies using some of those software solutions? And I'm just curious, it sounds like a lot of optimism around some of the policies from the new administration, but the tone is clearly more negative on things like ESG and sustainability. And so as regards to your ESG solution, any sort of change in outlook there?

Question: Michael Cho - J.P. Morgan - Analyst : I want to just touch on the regulatory topic as well, which is kind of under a slightly different tone. Adena, you've kind of previously discussed in the past about lightening the burden or the regulatory burden on public companies and making that option much more attractive. You've indicated some optimism in engaging the new administration around some of these efforts. So just for our context, can you just remind us and talk through some of the areas where we might see some of your efforts or just kind of general progress first?

Question: Dan Fannon - Jefferies - Analyst : Wanted to get a comment around professional service fees, what they were as a total within the financial -- within Fintech. And then as you look going forward, you talked about, I think, momentum in the business, particularly in the Regtech in terms of new implementations. So could you talk about the outlook for professional service fees as we think about 2025?

Question: Owen Lau - Oppenheimer - Analyst : So I have a question about your Cap Markets Tech ARR, it came down from 12% last quarter to 9%. It also drove your Fintech ARR down for the quarter. What was the driver of that decline? Is it the professional services fee we talk about? And then what does it take to reaccelerate that ARR in 2025?

Question: Michael Cyprys - Morgan Stanley - Analyst : Just wanted to ask about AI with the DeepSeek advancement. Just curious how you see that impacting your business in terms of potential for faster generative AI product innovation and development, potentially at a lower cost and how you see that potentially impacting the competitive landscape over time? And more broadly, maybe you could just update us on some of the steps you're going to be taking here in '25 to move Nasdaq forward with generative AI advances?

Question: Jeff Schmitt - William Blair - Analyst : On the Proprietary Index Options business revenues doubled during the year. Could you discuss what your plans are for that business and sort of whether you're looking to increase investments and focus there over time?

Question: Ashish Sabadra - RBC Capital Markets - Analyst : If I can ask just two clarifying modeling questions. One is on ARR versus revenue growth, we saw some differential there in '24, anything to be cognizant of as we get into '25? And then just on the expense side with that expanded synergies, which gets actioned in 2025, how should we think about those benefiting '25 on a quarterly cadence basis? Any color there will be helpful.

Question: Alex Kramm - UBS - Analyst : Just wanted to come back to Fintech for a second here. I know a lot of focus on the regulatory direction. I think the one other thing people are talking about a lot of financial services changing is maybe a pickup in bank M&A. So maybe you can just talk about that, obviously, a primary customer base for you. And I understand that maybe those banks get bigger and they actually get more sophisticated. So it could be longer term, but maybe add regulatory in this as well. But when you have a lot of these uncertainties, sometimes there's a little bit of paralysis. So just wondering if we should be expecting any sort of lengthening of sales cycles as it comes to selling into this end market just because these companies don't know what's going to happen next, both in regulatory and on the M&A side?

Question: Brian Bedell - Deutsche Bank - Analyst : Just wanted to go back to slide 8, the sales metrics within Fintech. They look very strong in the fourth quarter versus the 2024 trend -- quarterly trends and also versus the third quarter. Just trying to get a sense of to what extent that might be seasonal or you actually do see improving momentum in '25 on those metrics? And then could that portend even a stronger ARR growth rate into '26?