Good day, and thank you for standing by. Welcome to the Nasdaq Fourth Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Neil Stratton, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us today to discuss Nasdaq's fourth quarter and full year 2022 financial results. On the line are Adena Friedman, our Chair and Chief Executive Officer; Ann Dennison, our Chief Financial Officer; John Zecca, our Chief Legal Risk and Regulatory Officer; and other members of the management team. After prepared remarks, we will open the line up to Q&A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SEC Regulation FD. I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and periodic reports filed with the SEC. I will now turn the call over to Adena.

Thank you, Neil, and good morning, everyone. Thank you for joining us. My remarks today will focus on the following areas: Nasdaq's fourth quarter and full year 2022 financial and business performance. The progress we have made to advance Nasdaq along our strategic journey, and our enterprise-wide ambitions and priorities for 2023 and beyond. I will also provide comments on the current market and regulatory environment before turning the call over to Ann for a deeper look at our financial results. We continue to deliver solid growth in 2022, even with an uncertain macroeconomic backdrop and following a very strong 2021. 2022 was also a year of milestones, strategic firsts and market-leading innovation for Nasdaq. I'm proud of the Nasdaq team and the resiliency of our business as well as the trusted relationships we have with our clients. Before I turn to our financial performance, I want to remind everyone about our new corporate structure that we implemented during the fourth quarter. When we gathered at our Investor Day in November, we noted how the alignment of our business across three new divisions, Market Platforms, Capital Access Platforms and Anti-Financial Crime, allows us to capitalize on mega trends shaping the financial system to unlock new growth opportunities for our company. These trends include the modernization of markets where we continue to deliver innovation that powers the world's economies and enhances the underlying infrastructure, the development of the ESG ecosystem where we help companies and investors successfully navigate increasingly complex reporting frameworks, access more seamless routes to capital and achieve their net zero or sustainability objectives, and the increasing need for advanced anti-financial crime technology, where we can enhance the integrity of the financial system through emerging technologies, including cloud and AI. Our financial results today reflect the new divisional alignment, and we look forward to continuing our journey as we deliver world-leading platforms that improve the liquidity, transparency and integrity of the global economy with our long-term goal of becoming the trusted fabric of the global financial system. Now let's turn to our results. I'm very pleased to report Nasdaq's financial performance for the fourth quarter and full year of 2022. First, regarding the fourth quarter, Nasdaq achieved $906 million in net revenues, a 2% increase compared to the prior year period and a 5% increase on an organic basis, excluding the impacts of changes in FX rates and acquisitions and divestitures. In the quarter, we delivered 5% organic growth across our Solutions businesses even with an 11% drop in our Index revenues. We also delivered 4% organic growth in our Trading Services business in the fourth quarter on top of a very strong trading performance in the fourth quarter of 2021. For the full year of 2022, net revenues of $3.58 billion increased 5% from 2021 and 7% on an organic basis. Our Solutions businesses generated 10% annual organic revenue growth despite a fast-changing market environment, and our Trading Services revenues increased 1% on the back of very strong performance in 2021. Our annualized recurring revenue, or ARR, ended the year at $2 billion, an increase of 8% year-over-year. Annualized SaaS revenues increased 13% to $725 million in the fourth quarter of 2022, representing 36% of total company ARR. For the full year, non-GAAP earnings per share of $2.66 increased 6% from 2021. Our strong performance in 2022 against a challenging macroeconomic backdrop illustrates the strength of our diversified business and our ability to deliver against our longer-term objectives. Next, I'm going to turn to specific divisional highlights, which reflect the new corporate structure, focusing mainly on the fourth quarter results. In our Capital Access Platforms business -- division, we delivered $420 million in total revenue in the fourth quarter, a 2% increase in organic growth. Revenue in our Data and Listing Services business increased by 3% from the prior year period and 6% organic growth. primarily due to an increase in annual listing fees and growth in proprietary data revenues driven by higher international demand, partially offset by a decrease in initial listing fee revenues. In 2022, Nasdaq maintained its position as the leading U.S. exchange for IPOs for the 10th consecutive year with 87 operating company listings for a 92% annual win rate. In Europe, our Baltic, Nordic and First North exchanges combined welcomed 63 new listings in 2022, including 38 IPOs. For the second consecutive year, Nasdaq Stockholm remains the most successful listing venue in Europe. In our Index business, we saw revenue decrease by 11% versus the prior year period, primarily due to lower average AUM and exchange-traded products linked to Nasdaq indices, partially offset by higher revenues related to futures trading linked to the NASDAQ 100 Index. Year-over-year average AUM for the fourth quarter declined by 19%. The fourth quarter presented a particularly challenging market backdrop on both a year-over-year and quarter-over-quarter basis. Ann will provide more details on the AUM and trading dynamics that drove the fourth quarter revenue decline. Focusing on the full year performance, our Index revenues for the full year of 2022 increased 6% versus 2021 due to higher net inflows and futures volumes. Net inflows into exchange-traded products totaled $34 billion in 2022, and we saw demand grow for our new offerings with 44 ETPs tracking Nasdaq indexes, accumulating $3.5 billion in AUM during the year. In our Workflow and Insights business, which include our Corporate Solutions as well as our Investment Analytics business, our fourth quarter revenues increased 8% from the prior year period or 10% organically, reflecting deepened client engagement and strong client retention. Turning next to our Market Platforms division. We delivered $403 million in total revenues in the fourth quarter, a 3% increase from the prior year period or 5% organic growth. Our Trading Services business, which includes our transactional and U.S. Tape Plan data businesses, delivered combined total revenue of $253 million for the fourth quarter, an increase of 4% organically from the prior year period. This is primarily due to higher U.S. equity derivatives trading revenues, reflecting higher revenue capture versus the prior year period and higher industry volumes. Cash equities trading revenues were lower year-over-year, primarily driven by lower European cash equities revenue, partially offset by modest growth in the U.S. cash equities business. During the fourth quarter, we were incredibly pleased to announce the migration of Nasdaq MRX, 1 of our 6 U.S. options exchanges, to the cloud in partnership with Amazon Web Services. The new cloud-enabled system delivers -- continues to deliver ultra-resiliency to our market participants while improving latency performance by 10%. As the first exchange to put a major market in the cloud, this marks a significant milestone in our journey to build the next-generation technology infrastructure for the world's capital markets. This success has also reinforced our credibility with our technology clients. As illustrated by Bolsa Electronica de Chile's agreement earlier this month to migrate their current on-premise Nasdaq trading technology to our cloud-based marketplace services platform. We are thrilled that BEC has chosen us to help manage this next phase of their cloud journey. And lastly, in our Marketplace Technology business, we delivered $150 million in revenues during the fourth quarter, of 5% increase versus the prior year period. Growth in revenue was primarily due to increased demand for connectivity, driving a record year for our Trade Management Services business as well as higher SaaS-based market technology revenues. Order intake in our Market Technology business totaled $106 million for the quarter and $264 million for the full year, which compares to a record of $304 million in 2021. We had strong order intake across both existing and new clients with over 90% of our new clients signing up for SaaS solutions, an encouraging indicator of growth returning to the technology business post pandemic. We signed 12 new technology clients and completed five implementations in our Market Technology business in 2022. We continue to make good progress with our post-trade implementations, taking two of our largest clients into live operation during the year. Over the past 18 months, we've seen increased demand for our technology solutions with many current and new client conversations focused on market modernization initiatives encompassing both cloud delivery and SaaS. Before I conclude my remarks regarding our Market Platforms division, I want to offer brief comments here on the SEC's equity market structure proposals, which the commission published in December of 2022. We're encouraged that the proposals addressed many of our recommendations from a paper that we published last year on optimizing markets. While we believe that the equity markets work well now, we acknowledge that there are always opportunities for improvements. Accordingly, we support the SEC's efforts to modernize and enhance equity market structure to improve trading efficiency, bolster competition, increase market transparency, strengthen best obligations and ultimately, achieve better outcomes for investors. In proposing to introduce significant changes to markets that are already highly complex and interconnected, we think it is critical for the commission to strive to avoid unintended consequences by proceeding incrementally, methodically and collaboratively. There are also a few areas where we differ with the SEC's approach, and we plan to recommend improvements, modifications and or alternatives during the comment period. Finally, turning to our Anti-Financial Crime division. We delivered $82 million in total revenue during the fourth quarter, a 21% organic increase from the prior year period and 14% when adjusting for the impact of the deferred revenue write-down. The revenue increase was driven by strong demand for our fraud detection and anti-money laundering solutions or what we call our FRAML solutions in addition to modest growth in our surveillance solutions. Regarding our FRAML solutions specifically, revenue grew 23% when adjusting for the impact of deferred revenue in the prior year period. The business saw continued growth in new clients across small to medium banks with 98 new SMB clients signed during the quarter. In addition, the business signed its first two clients to its crypto anti-financial crime platform in 2022. This is an exciting offering that allows crypto companies to identify crime, ensure regulatory compliance and prevent losses. We also continue to see momentum following several proofs of concepts with a number of Tier 1 and Tier 2 banks, including signing a Tier 2 bank for our enterprise fraud solution during the fourth quarter. Feedback on the proof-of-concept results has been very positive, and we anticipate signing additional clients in 2023. I want to take a moment here to acknowledge our leadership appointment that took place this month in our Anti-Financial Crime division. Brendan Brothers, a co-founder of Verafin and the division's Head of Strategy, has been appointed interim Head of our AFC division. He succeeds Jamie King, who's retiring from Nasdaq. We're grateful for Jamie's tremendous contributions to Verafin, and we wish him very well in his next chapter. And we're excited to have Brendan step in to his role as we continue to execute against our AFC road map. As I mentioned at the start of my remarks today, Nasdaq has made notable progress against our broader strategic journey. With the year ahead now in focus, I'd like to share our enterprise priorities for 2023 and beyond. First, we will strive to realize the benefits of our new divisional alignment. We aim to unlock the growth opportunities that our new structure provides us. We intend to deliver an enhanced client experience by delivering more unified solutions through a One Nasdaq approach to our clients. We will have a focused capital allocation strategy across our three divisions, and we will increase our go-to-market agility by integrating related software development and marketing talent into each division, which would facilitate streamlined decision-making. Second, we want to remain positioned for success amid a dynamic market environment. With macroeconomic uncertainty likely to persist as we continue into 2023, we want to demonstrate the value of our mission-critical solutions in an environment where businesses know that they need to keep investing but are increasingly focused on quick time to value and strong return on invested capital. And third, we want to continue advancing our long-term cloud and AI strategy across the Nasdaq franchise by optimizing our agile development and leveraging machine intelligence across our solutions to unlock more opportunities to deliver innovation to our clients. Within market platforms, as we deploy our new data-centric system architecture, combined with the scalability and the analytics engines that are offered through the cloud infrastructure, we believe we'll be able to develop new AI-based order types and we'll offer more advanced capabilities to our market participants connected into our ecosystem. These capabilities will also become available to our exchange technology clients as we work collaboratively with them to deploy cloud-based market infrastructures in their home markets. Beyond market platforms, we're already well positioned with our cloud-based SaaS solutions across many of our solutions businesses, and we're on our journey to bring more of our solutions into the cloud. In 2023, we're currently migrating our clients onto our next-gen cloud-based governance platform and trade surveillance platform. As our anti-financial crime solutions demonstrate, having a cloud-based data lake unlocks enormous potential in applying advanced AI algorithms and self-reinforcement learning engines to our solutions. And with new step function improvements in AI that are coming to market, we're extremely excited to apply those technologies to more of our solutions in 2023 and beyond. We look forward to updating you on our progress on these priorities in the quarters to come. Before I wrap up, I would like to address the current market environment. Uncertainty still lingers across the global economy and market-driven headwinds. And if they persist throughout the year, that could impact our near-term growth outlook across listings and index in 2023. We are also seeing a modest elongation of sales cycles for certain of our solutions, notably our IR solutions and our asset owner solutions, which is part of our Analytics business. We are viewed by our IR and asset owner clients as a trusted partner to help them manage through the challenges that the markets have presented. But we are finding, particularly in more hard-hit sectors, that clients are going through more internal gates to approve investments in IR and portfolio management solutions. More generally, across our broader Nasdaq platform, client demand remains strong. Despite the macro uncertainty, we believe 2023 will be marked by how well businesses continue to adapt to the digital transformation of the economy through investments in technology. Nasdaq benefits from that digital transformation given our range of technology and analytics solutions. Building on our foundation of solid client retention, competitive success and deepened engagement with clients, we have confidence that our clients' investments in technology and cloud-based SaaS solutions will continue to be a priority. Therefore, we maintain our conviction in the investments we're making to deliver modern world-class solutions to our clients. We have a very resilient and diversified value proposition and are well prepared to guide our clients and our companies through this dynamic environment. We are entering the year with a continued focus on achieving our revenue growth outlook over the medium term as we navigate a complex 2023, and we remain confident that our longer-term investments across market modernization, ESG solutions and anti-financial crime technology will create value for our clients and shareholders alike. As I wrap up, I will summarize by saying that our fourth quarter produced solid results for Nasdaq, completing a very successful 2022 for our company. Looking ahead in 2023, we enter the year focused on realizing the benefits of our new corporate structure to amplify growth across our key pillars of liquidity, transparency and integrity as we look to advance towards our goal of becoming the trusted fabric of the global financial system. And with that, I'll now turn the call over to Ann to review the financial details.

Thank you, Adena, and good morning, everyone. My commentary will primarily focus on our non-GAAP results and all comparisons will be to the prior year period unless otherwise noted. Reconciliations of U.S. GAAP to non-GAAP results can be found in our press release as well as in the file located in the Financials section of our Investor Relations website at ir.nasdaq.com. As a reminder, on Slide 4, our financial reporting reflects the new corporate structure that we announced last quarter. Additionally, in order to better align our financial reporting with our internal management structure, we also recast the U.S. cash equity and options tape plan revenues into the Trading Services business within Market Platforms division from the Data and Listing Services business within the Capital Access Platforms division. Investors can review an updated supplement on the IR website with historical time periods reflecting this change. I will start by reviewing fourth quarter 2022 performance beginning on Slide 11 of the presentation. The 2% increase in reported net revenue of $906 million is the net result of organic growth of 5%, including a 5% organic increase in the Solutions businesses and a 4% organic increase in Trading Services, partially offset by a 3% negative impact from changes in FX rates and the net impact of an acquisition and divestitures. Moving to operating profit and margins. Non-GAAP operating income decreased 1% while the non-GAAP operating margin of 49% was down from 51% in the prior year period. For the full year 2022, the non-GAAP operating margin totaled 52%, a decrease of 1 percentage point from 2021. Non-GAAP net income attributable to Nasdaq was $317 million or $0.64 per diluted share compared to $328 million or $0.64 per diluted share in the prior year period. Turning to Slide 12. As Adena mentioned earlier, ARR totaled $2 billion, an increase of 8% from the prior year period, while annualized SaaS revenues totaled $725 million, an increase of 13%. I will now review quarterly division results on Slides 13 through 15, starting with the Market Platforms division. Revenues increased $10 million or 3%. The organic increase was 5%, and there was a 2% negative impact from changes in FX rates. Trading Services' organic growth totaled 4% with the increase primarily due to higher U.S. equity derivatives and U.S. cash equity revenues due to higher capture and higher industry volumes, partially offset by lower European cash equity revenues due to lower industry volumes. Within marketplace technology, we had strong performance in our Trade Management Services business and delivered another quarter of organic growth in the Market Technology business, driven by higher SaaS revenues and strong order intake during the period. This builds on the positive organic revenue growth in the third quarter of 2022 and, is a further encouraging proof point that the programs and initiatives implemented by the leadership team are moving the business forward. ARR totaled $503 million, an increase of 5% compared to the prior year period. The division operating margin of 52% in the fourth quarter of 2022 and 54% in the full year of 2022 both decreased 2 percentage points from the prior year period. The change primarily reflects increased expenses associated with the continued investment in our people and our businesses, including our digital asset strategy. Capital Access Platform revenues were unchanged, reflecting organic revenue growth of $7 million or 2% as well as a 2% negative impact of changes in FX rates. Organic revenue growth during the period reflects positive contributions from the Workflow and Insights and Data and Listing Services businesses, partially offset by an organic decline in Index revenues. Spending a moment on Index. Overall Index revenue declined by 11% compared to the fourth quarter of 2022. When examining the key drivers of the financial performance, our asset-based licensing revenues declined 21% compared to the prior year period, partially offset by a 25% increase in futures-related revenues linked to the NASDAQ 100 Index. Average AUM during the period, which is used to calculate our asset-based revenues each quarter, decreased 19% from the prior year period and trading volumes in futures linked to the NASDAQ 100 index increased 21% from the prior year quarter. To assist analysts and investors going forward, we are updating our public disclosures to provide average AUM each quarter in addition to the end of the period, which will be -- which will better align our key disclosures with our key revenue drivers for the business. One additional note looking forward to the first quarter of 2023. Trading activity of instruments linked to our indexes achieved certain annual thresholds during the second quarter of '22 that resulted in an increase in licensing economics during the remainder of the year. As we begin 2023, the economics of certain agreements reset for the new year. We estimate that this will lead to approximately $9 million of lower revenue in the first quarter of 2023 compared to the fourth quarter of 2022, assuming similar trading activity and product mix in the two periods. ARR for Capital Access Platforms totaled $1.19 billion, an increase of 7% compared to the prior year period. The division operating margin of 50% in the fourth quarter decreased -- the fourth quarter of 2022 decreased 3 percentage points from the prior year period. The operating margin for the full year 2022 was 54.4%, up 60 basis points from 53.8% in 2021. Anti-Financial Crime revenue increased $14 million or 21%, with $4 million of the increase due to the impact of the deferred revenue write-down on Verafin in 4Q '21. Organic growth was 21% in the period or 14% when excluding the impact of deferred revenue, reflecting healthy demand for fraud detection and anti-money laundering solutions as well as SaaS-based surveillance solutions. Fraud detection and AML solutions revenues grew 23% compared to 4Q '21, excluding the impact of the deferred revenue write-down. ARR for Anti-Financial Crime totaled $312 million, an increase of 16% compared to the prior year period. Signed ARR, which also includes ARR for new contracts signed but not yet commenced, totaled $338 million, an increase of 17% versus the prior year period. The Anti-Financial Crime division operating margin was 32% in the fourth quarter of '22 and 26% in the full year of '22. Turning to Page 16 to review both expenses and guidance. Non-GAAP operating expenses increased $26 million to $460 million. The increase reflects a $45 million organic increase, partially offset by a $20 million decrease from the impact of changes in FX rates and a $1 million decrease from the net impact of an acquisition and divestitures. The organic expense increase is primarily driven by higher compensation and benefits expense and general and administrative expense. The higher compensation reflects our continued investment in new employees to drive growth, including a 10% increase in the team over the past 12 months; and annual merit increases, which were higher than prior years due to inflationary pressures on compensation. The higher general and administrative expense primarily reflects higher travel versus the prior year period as we returned to a more normalized level of travel in 2022. During the fourth quarter of 2022, we initiated a divisional alignment program with a focus on realizing the full potential of our new corporate structure. As a reminder, we did this to focus our business more sharply on three megatrends: modernizing markets, ESG and anti-financial crime. The structure change not only increases our focus but will also bring commercial teams closer together, put technology and marketing resources closer to our products and redefine how we engage, attract and retain clients across products. As a result, we expect to incur $115 million to $145 million in pretax charges, approximately 40% of which will be non-cash charges. The program will be open for two years and has three main components: one, asset impairments and contract terminations; two, employee-related costs to support the divisional realignment; and three, onetime consulting and other spend designed to help us unlock revenue synergies. We are targeting benefits in the form of combined annual run rate operating efficiencies and revenue synergies of at least $30 million by 2025. Costs related to the divisional alignment program will be recorded as restructuring expense. We are initiating our 2023 non-GAAP operating expense guidance to a range of $1.77 billion to $1.85 billion. The midpoint of the expense guidance range reflects an increase of just over 5%, including an increase of 1% related to our digital asset strategy and primarily reflects our continued investments to drive growth across ESG, anti-financial crime and market modernization. We expect the 2023 non-GAAP tax rate to be in the range of 24% to 26%. Turning to Slide 17. Debt increased by $27 million versus 3Q '22, primarily due to net issuances of $465 million of commercial paper and $164 million increase in Eurobond book values caused by a stronger euro, partially offset by repayment of $600 million of 0.445% senior unsecured notes at maturity. Our total debt to trailing 12 months non-GAAP EBITDA ratio remains at 2.7 times as compared to the third quarter of 2022. With record free cash flow, excluding Section 31 fees of $1.5 billion in 2022, our weighted average cash cost of debt of 2.2% and no long-term debt maturities until 2026, we have positioned the company to minimize the impact of rising rates and to provide flexibility to support our growth strategy. During the fourth quarter of 2022, the company paid common stock dividends in the aggregate of $98 million. As of December 31, 2022, there was an aggregate $650 million remaining under the Board-authorized share repurchase program, reflecting an increase in authorization approved by the Board in December. Turning to Page 18 of the presentation. I would like to highlight some of the significant progress we have made, executing on our sustainable strategy. For the seventh consecutive year, we were named to the Dow Jones Sustainability North America Index, one of the most prestigious environmental, social and governance ranking benchmarks. Nasdaq was 1 of 8 diversified financial services companies selected for inclusion in the 2022 index. In addition, we were only -- 1 of only 283 companies out of 15,000 evaluated and named to CDP's 2022 Climate Change A list. In closing today, Nasdaq's fourth quarter of 2022 results reflect a continuation of the company's ability to consistently perform well across a wide range of operating environments. Thank you for your time, and I will turn it back over to the operator for Q&A.

[Operator Instructions] And I show our first question comes from the line of Richard Repetto from Piper Sandler. Please go ahead.

Yes, good morning, Adena, and good morning, Ann. I didn't quite get those restructuring charges, but I think I'd like to keep my question broader. Adena, you talked right at the conclusion in your prepared remarks about sort of the outlook for '23. And I think we all get if the markets are down, the index business, the listing business, et cetera. But I'm trying to see what businesses might flourish, or is there any businesses that might make progress if we get -- with this macroeconomic uncertainty? Because investors look at exchanges to be a little bit countercyclical. And right attached with that, that this sort of outlook, I know it's early on, but the Reg NMS changes, just on balance, they're not going to happen this year. But if they -- the whole balance, whether the fee -- cap fees versus the higher volumes, how you look at the balance from the proposed changes.

Sure. Okay. So that was a good long and multi-pronged question, Rich.

You can just take one. I apologize. Just take one.

That's okay. No, no, that was good. Okay. So in terms of outlook for 2023, I think the general view inside of Nasdaq right now is that we continue to have really strong client interactions across all the businesses that comprise our annualized recurring revenue. So that's our Anti-Financial Crime business, our -- what we call our Corporate Solutions business, our investment analytics capabilities and particularly in our analytics and our data businesses and in our Marketplace Technology business. We still see really good client demand, client interactions, progress against our strategy. I feel our ESG services had double-digit growth and we continue to see really great capabilities and opportunities there. Our anti-financial crime technology continues to show really strong growth. And I think that the market modernization efforts are really impact -- having a positive effect on our engagement with our market tech clients as they're thinking about modernizing their infrastructure. So what I would say, the long-term trends that we're really driving towards feel good as we go into 2023, and we feel really great about the client engagement. The market backdrop, obviously, we're not immune to it. No company is. But I would agree that exchanges have a really resilient -- we're a resilient platform because we have this underpinning of trading, we have this underpinning of our listings and listing fees. We have an underpinning of data that really help keep us really strong and quite resilient in -- across all different market environments. But there are a couple of areas where we have market beta. So certainly, listings revenues won't grow as fast if we don't have listings come out to the market. We have 200 companies on file looking to tap the NASDAQ and hopefully, if the markets open up as we go through the year. But as you know, it takes 2 to tango. So we've got the supply the demand really comes for investors feeling confident underwriting new deals. And I think if we can see interest rates kind of top out and we kind of know where that ends up, we see inflation continue to come down and we have a more certain economic underfooting, we could actually see activity pick up, particularly in the latter half of the year. And we're hopeful for that. And that will help, obviously, with '23 growth but also help with '24. I think with the Index business, it's obviously subject to market beta with our AUM. And we were able to withstand a lot of changes in market values last year. But the fourth quarter, you could see, had a big impact. So the AUM dropped a lot. We didn't have as robust inflows in the fourth quarter to counteract that. But as we go into 2023, we're leased off to a better start. We'll have to see how that evolves, and that's an area where we will have market data through the year. So we'll have to see that goes. But if I were to sum it up, though, the areas where we have recurring revenues and we have our SaaS revenues, we feel really good about how we're engaging with clients. We do have some elongated sales cycles across IR and analytics. But generally speaking, really strong demand. The trends that we're underwriting, we feel really good about and investments we're making there. And I think the markets will be the markets, but I think we've been able to demonstrate really strong performance across different market cycles. Lastly, you asked a question about Reg NMS and the fees and volumes. It's really early, Rich. It's an initial proposal from the SEC. There'll be rounds of comments, there'll be probably revisions in the proposals. And so it will be several years before we kind of see the impact of that. But you're doing the same tactics that we're trying to do, which is we see more opportunity to bring more retail volume onto lit venues, and that's obviously going to benefit us. But we also see a change in the tick sizes and the relevant access fees, and that's where we have to kind of look at that, the kind of what I'll call the different dynamics that that will result in. And so we actually kind of net-net are generally positive on what the SEC's proposed. But we obviously want to make sure we're calibrating the tick sizes and the access fees appropriately for what they're trying to achieve there.

Thank you.

And I show, we have our next question from the line of Michael Cyprys from Morgan Stanley. Please go ahead.

Good morning. And thanks for taking the question. I wanted to dig in a little bit on Verafin. I was hoping you can update us on how the sales environment and pipeline is evolving. And you mentioned some proof of concepts that are undergoing right now. I was hoping maybe you can elaborate on how many you have with Tier 1 banks, and historically, what's been the time to conversion with those historical clients signing over to becoming paying customers? Thank you.

Sure. Yes. Thanks, Michael. So generally, if we look at all of AFC, so you've got anti-financial crime, so you've got the FRAML business which is kind of the Verafin capabilities, and then you have our trade surveillance, which is really the surveillance technology we offer to trading firms and we have market surveillance, which is the technology -- the surveillance technology we offer to markets. In Verafin, as I mentioned, we continue to see really nice strong demand there, and client -- especially with small and medium banks, the conversion has been quite consistent, finding a lead to getting them to become paying clients. And we had, I think it was 98 new clients in the quarter. And we had really strong dynamics there. And it's -- I have to say, I think what we offer is a great product and it shows up in the sales. As we go upmarket, that's where we're kind of -- we, as Verafin, are facing some new unchartered waters, right? We're getting up to the top of the top of the banking universe. And I think that what we're seeing is Tier 2 banks, we're getting them signed up and lined up slowly but surely. The proof of concepts are showing a significant reduction in false positives and a better ability to identify real fraud. And so I think that's really -- the proof points are really helpful in getting to convert a client. Tier 2 banks, you're talking more like a, I would say, anywhere from a 6 to 12-month sales cycle there. And then you get up to the large Tier 1 banks. And that's where, again, we have several proofs of concepts that are completed now, and I think that we're showing really strong results in terms of improvements in lower false positives, better fraud detected. But the contracting cycles there are really long because they go through a really deep review internally. We go through, obviously, cyber review. We go through a lot of different things. And those sales cycles can be anywhere from, I would say, kind of 9 to 15 to 18 months. So we are really hopeful because we completed some of those proof of concepts in the first half of last year that we should be able to convert them this year. And I can only say, Michael, we're not giving specific numbers, but it's a good number of proof of concepts that we've completed. It gives us an opportunity to show that we can get into the Tier 1 banks as we go through '23. And so we're confident we'll be able to show those proof points as we go through the year.

Thank you.

And I show our next question comes from the line of Alex Kramm from UBS. Please go ahead.

Yes, good morning, everyone. This may be a little bit of a snippy question but I'm going to ask it anyways. It's about the recast. So obviously, you just in November resegmented and rolled out new targets for solutions 7 to 10. But then obviously, you just recast something today to basically move a no or shrinking business into the non-solution segment. So if my math is right, it's about 60 basis points of positive impact to organic growth to Solutions in the fourth quarter. So I guess my question is, should we hold you accountable for higher targets now? Was it 7.5% to 10.5%? Or how should we be thinking about it? Because, again, you did a nice job recasting and really moving Solutions to be non-trading, and now you're changing that around again? Thanks.

Yes. So Alex, thanks for the question and it's not snippy. So -- but I would say this. We actually made that change, so what happened was we used to have the options tape revenue sitting inside the Market Services business, and we have the equities tape revenue sitting inside of Market Data. And -- but what we did with the realignment was we actually moved the management of the equities tape into the Markets team because of the fact that the revenues associated with the equity tape are more -- they ebb and flow with market share and other dynamics in the market as opposed to just pure client demand. And so we decided, and so when we first redid -- went into the new divisional alignment, we actually moved the options tape into data as opposed to moving the equity tape into the markets. And we -- as we went through the fourth quarter and we really thought about kind of aligning the business with the management, we actually decided to make a switch. So we kind of moved the options and equities tapes now into market platforms because that's where the team that supports them are moving into the Market Platforms division, are being managed by the Market Platforms team. So we did not do it intentionally to kind of recast targets or anything like that. We're not changing our medium to long-term outlook across our Solutions businesses. 7% to 10% is the target and the outlook that we expect to be able to achieve over medium to long term. But we did want to move those products just into the group that's managing them. That's really the only catalyst.

And I show our next question comes from the line of Owen Lau from Oppenheimer. Please go ahead.

Good morning. Thank you for taking my question. So on the expense outlook, could you please talk about the area that you will invest in ESG and Anti-Fin Crime? Is there any specific examples you can give to us? And how should we think about the new product launches or even incremental revenue potential from these investments? Thank you.

Sure. I'll start. Hi Owen. So when we think about -- I guess, just coming back to the guidance, we've got that midpoint of our guidance is at 5%, which is when you look at our 4% to 7% medium-term outlook, we're just below the midpoint of that which would be 5.5%. When we think about what comprises that 5%, substantially all of our growth is to support, like you said, the -- our growth initiatives across ESG, AFC and market modernization. And I would characterize them as the investment we need to continue building out the long-term opportunities for those business to support the revenue growth we have in our outlook over the medium term. And so I think it's really about that 18% to 23% medium-term outlook on AFC and then our capital access platform medium-term outlook to support the growth there, ESG being the biggest or a high -- growing off a small base but a high-growing portion of the Workflow and Insights portion of the business.

Yes. And I think, Owen, one thing we did point out because embedded in that 5% annual growth in expenses is about, 1 percentage point of that is really the continued investment we're making in our digital assets business. As we kind of get closer to launching that business, hopefully in the first half of this year. So that's one concentrated investment that we've called out as we went through and discussed the outlook. I think beyond that, when we look at the remaining 4% growth, as Ann said, the majority of that growth really just comes from making sure we're making the right investments across the three key pillars. We're not kind of quantifying investments in each one of those pillars. But they're all -- you have to think about it this way. The growth outlook of one of those businesses, if there's a higher growth outlook, it's likely that we're putting more investment dollars or at least on a percentage basis, putting more investment into those businesses. So like our AFC business. If we have a medium to long-term growth outlook of 18% to 23%, we're investing in the R&D and the go-to-market and the sales capabilities to make sure we support that growth. And so that would have a higher level of investment than something that's growing 5%, let's say. But I also think that -- as a general matter, we feel like we're making the right choices of where to invest our capital to make sure we can sustain our growth and make sure we achieve this on the medium to long-term outlook.

And I show our next question comes from the line of Craig Siegenthaler from Bank of America. Please go ahead.

Good morning, everyone. So I had a question on the pretax charges from the divisional alignment. I was wondering if you could provide more detail behind the employee-related costs. And what does this really mean in sort of simple terms? Is it layoffs, new hires? And where are you increasing headcount and where are you potentially reducing headcount?

Okay. Thanks, Craig. I can get started on that question. So if we think about just overall the realignment program that we've launched, the objective of the program is really tied very, very closely to our restructure of the -- and realignment of the divisions themselves. So when you think about the employee costs that are embedded in that range of $115 million to $145 million, they're really complementing our divisional realignment and not broad-based. We're not looking at anything sort of from a broad-based company perspective, but really the effect of looking at location and functional strategy within the alignment of the divisions. And then also migrating some of our tech to optimize the power of the combined divisions. And we think about those costs coming in over the next two years and with an expected return on those costs of an annualized run rate savings and revenue synergies of about $30 million a year sort of fully baked in by 2025. And I'd say that $30 million estimate, right now, the majority of that is on the expense side.

And I show our next question comes from the line of Dan Fannon from Jefferies. Please go ahead.

Thanks, good morning. I wanted to follow up on the Anti-Fin Crime. The 14% growth ex the deferred revenue this quarter, trying to bridge that to the 3 to 5-year outlook of 18% to 23%, and you've clearly talked about a lot of momentum. But is in the -- but the long sales cycles, do you need -- should we think about 2023 as being within this, the higher end? Or is it going to ramp as we kind of get and maybe exiting that -- exiting '23 or beyond to get to those higher numbers?

Sure. Well, I think that as we look at our kind of our medium- to long-term outlook, that 18% to 23%, we feel is well supported by the sales opportunities, the pipeline and the overall continued investment in the actual products so that we can continue to expand our capabilities. I thought I'd give you just a little bit more detail on how we look at the dynamics. And I mentioned -- as I mentioned before, we have our FRAML solutions. And that obviously, that's our Verafin asset, and that was delivering more than 20% growth in the quarter and continues to have really strong growth potential even as it continues to scale. And so I think there, Dan, we definitely think that the Tier 1, Tier 2 -- we're not dependent on Tier 2 and Tier 1 banks to support that growth rate in the short term. But as we continue -- as we move upmarket and we are able to attract this Tier 1 and Tier 2 banks, the ticket sizes are much, much higher. So over the longer term, showing momentum across that will be important to continue to maintain the strong growth trends that we're showing in that business. The other two parts of the business, trade surveillance, that continues to have kind of high single-digit, low double-digit growth, and it has for a long time. That's providing surveillance solutions to trading firms. And there, we're continuing to drive that growth by expanding the types of modules that we offer, like our crypto modules as well as more -- bringing more asset classes onto the platform and really continue to globalize the clientele there. We have gotten to the point where we become an enterprise provider of surveillance across large banks, and that continues to be a good growth opportunity to support that kind of high single digit, low double digits. The one area that is actually has a low -- I would say flat to low growth profile is our market surveillance business where it's the smallest part of the division. But it's a harder one to grow a lot because the overall base of client opportunities is smaller. That's where we provide surveillance to markets and regulators. And there, that business was largely flat for the year and continues to have a low growth profile. So that's -- I think certainly in 2022, that has created a little bit of kind of a lower growth view. And as we go into '23 and '25 or '23 to '24, '25, '26, we hope to find new ways to catalyze some growth there, but we will expect that to be a low grower in the years to come. So hopefully, that just gives you a little more context.

And I show our next question comes from the line of Brian Bedell from Deutsche Bank. Please go ahead.

Good morning. Thanks for taking my question. Maybe just one confirmation just on the divisional alignment program, the $115 million to $145 million. I just want to make sure that's those expenses are not included in the non-GAAP guidance. So just a clarification on that. And then more broadly, just in terms of the Solutions growth for this year, I realize 7% to 10% remains your longer-term target. But given the headwinds that you're describing this year from the elongated sales cycles and of course, the pressure on index licensing, should we be thinking of a near-term 2023 as being sort of lower than that? And then the initiatives that you're investing in would potentially then raise that in '24? So kind of a slowdown and then a reramp of that Solutions revenue.

Sure, Brian. So on the first part of your question, the divisional alignment program, the cost associated with those will be booked on the restructuring line, and they will not be included as part of -- they are not part of our non-GAAP expense guidance that we released for 2023, yes.

Yes. And then with regard to the overall outlook for the business, I think that -- I would say it this way, I think, Brian, that in general, we feel really good about how we're delivering on the growth of our Solutions businesses across, as we mentioned, AFC as well as the investment analytics, so insights and workflows for the corporates and I know market tech business. And I think we continue to see really good client demand. There are some elongated sales cycles and that could bring the growth down a little bit for the year. But I think the one area that we do have some dependence on the market backdrop is in our listings business and our Index business. And there, we are hopeful that we'll see some improvement across index values, market values, which will then, of course, support bringing more companies to market, and that will help us manage through the year and be consistent with how we are looking at our targets. But those areas could create more of a challenge if we don't see an improvement in the overall market environment for this year. I think that's why we like to keep those targets as kind of medium to long term as we look at an average over multiple years just because of the fact that there are years where you have a tougher market backdrop. I would point out, though, that even with the tough market backdrop that we had in 2022, we were able to deliver 10% organic growth across our Solutions businesses. And we had 8% improvement -- increase in our ARR and 13% increase in our SaaS. So even with a really challenging market environment from last year, I think we were able to show a consistent story across Nasdaq.

And I show our next question comes from the line of Gautam Sawant from Credit Suisse. Please go ahead.

Good morning, Adena and Ann. I wanted to just spend a second on Puro.earth and the long-term opportunity there. I know Puro.earth presented at COP 27 and the trading certificates increased 250% in 2022. Can you talk about the potential earnings contribution from this business in the future? And is there an opportunity to sell Puro.earth directly to your corporate clients that are across the U.S. and Nordic businesses?

Sure. Yes. Actually, we do. So what -- I love talking about Puro.earth. So just as a reminder, Puro.earth a carbon removal marketplace where we have a minority position in partnership with a company called Fortum in Finland. And we are really excited about the opportunity that Puro.earth provides to us and, frankly, to our clients. So we do already tap our corporate clients as clients. So they come in directly and buy carbon removal credits through the Puro.earth platform, and we leverage our corporate relationships to really continue to grow the demand for those credits. I think that what's holding that market back today, and it's very small, so I just want to enforce off on everyone that, that is a small business today. It did grow, as you said, actually, I think it was like 250% to 300% year-over-year but from a tiny base, it sits in our Market Platforms business. It supports our ESG strategy and that mega trend. But what's really holding that platform are all -- that whole marketplace back is supply. So we are really focused on high-quality industrial carbon removals. We do diligence on every supplier we put on the platform. We have -- we work with an advisory committee to determine which scientific methods we're willing even to put on the platform. We're very, very discerning in how we bring supply onto the platform. And given the fact that it's still a pretty nascent industry, we're really hamstrung by small supply today. So over the next three to five years, we actually expect a lot of investment to come into the carbon removal space. We think that will really bolster supply. We're replatforming Puro.earth to have a really advanced blockchain based registry that we can then leverage across multiple trading venues. And we're working with some market makers to help create -- they're going to buy up from removals and start to create a secondary market, so that we can also have trading activity start to develop on the platform. But I want to say this. I think Puro.earth is kind of like a 5 to 10-year strategy. It's a very small investment for us as of right now. It's a small but mighty team. But we are really, really excited about what it can become, but just recognize it's a long-term strategy.

And I show our next question comes from the line of Alexander Blostein from Goldman Sachs. Please go ahead.

Good morning. Thanks for the question. I was hoping we could dig into some of the interplays in the kind of legacy listings business and the Corporate Solutions business. I guess, on the one hand, I was curious if you could help frame the revenues that could be at risk from stocks delisting over the course of this year, and then on the flip side, opportunities you guys might see from some of the discounts on the Corporate Solutions services that you provided to IPOs that listed over the last couple of years, those coming off and the probability of them starting to pay for service?

Great. Yes. Thanks, Alex. I mean the SPAC revenue represents just over about 1% of total revenue for Nasdaq. So it's a small part of our revenue stream. We are seeing SPAC combined, but we're also seeing a number of SPAC decide to provide the money back to their shareholders. So it's a small part of our revenue. And -- but we're -- but we also recognize that the environment has changed a lot for SPACs, and so we would anticipate some reduction in revenue coming from the back of SPAC ultimately not finding combinations. So I think that's something that will probably have more of an effect in 2024 than in 2023, but it's something we're watching pretty closely. But as I said, just to size it, it's a little more than just 1% of the revenue. I think with regard to Corporate Services and Solutions, which is our IR and our ESG solutions to support corporates, you are right. We have a lot of clients who come on to our platform. We've been supporting them through the IPO package for the last two years. And so as we get particularly into 2024, we're going to see the opportunity for us to turn them in and convert them into paying clients. And so that is obviously -- that part of our outlook for that business is how we convert those clients to paying customers. We've also upsold those clients even during the IPO package period where we might sell them into some of our ESG packaged solutions and into a deeper set of IR solutions. So we do have them some of them as paying clients now. And I think that obviously, even bolsters our view that they'll continue to want to use our services beyond the IPO period. But I just want to say, I think that's more of a '24 opportunity than '23, but we're very optimistic about that. We have strong retention of clients as we convert them.

And I show our last question comes from the line of Kyle Voigt from KBW. Please go ahead.

Good morning. Maybe a question on the BEC migration from your on-premise solution to your cloud-based platform. Could you just remind us of the revenue and margin impact for Nasdaq from this type of on-premise to cloud migration? I'm just trying to put some numbers around the impact so we have a better understanding of kind of the larger opportunity if we see more similar type announcements over the coming year or two?

Yes. I think that we'll probably need to come back to you to give you a little bit more of that view. I can't sit there and use one client and extrapolate it to the whole business. But when we do sign a client on to more of a SaaS-based market tech contract, there are two benefits. One is just it becomes an annualized recurring revenue as opposed to an implementation revenue, which has much lower margins, followed by a service and maintenance and license agreement which has a higher margin. So you have like more steady revenue and a more steady margin throughout the length of the contract. But I don't think we've given you a view yet into like what's the margin differential. And so I kind of feel like we probably need to come back and give a little bit more of an insight into that specifically as we gain more traction in getting our clients to sign on to cloud-based, particularly cloud-based solutions. So let's come back to you on that, but I just don't want to give you kind of a wrong answer right now.

Thank you. That concludes our Q&A session. At this time, I would like to turn the call back over to Adena Friedman for closing remarks.

Great. Thank you very much. Well, as we conclude today's call, I want to reiterate that our leadership team remains very focused on executing our strategy to deliver for all of our stakeholders, and we look forward to continued discussions throughout the year on the progress we aim to make against our strategic priorities. So thank you very much, and have a great day.

Thank you. And this concludes today's conference call. Thank you for participating. You may now disconnect.