Good morning, and welcome to Nasdaq Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ 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, Ato Garrett, Senior Vice President and Investor Relations Officer. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us today to discuss Nasdaq's third quarter 2023 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 up the line to Q&A. The press release and earnings presentation are available on our website. We intend to use the website as a means of disclosing material non-public information and complying with the 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, Ato, and good morning, everyone. Thank you for joining us for Nasdaq's third quarter earnings call. Before I begin, I would like to offer brief comment on the situation in the Middle East. We were horrified by the acts of terrorist violence that occurred in Israel last week, and we were deeply saddened by the subsequent loss of innocent lives in Israel, Gaza and the wider region. Our focus has been on supporting our people and our clients with connections in the region. We will continue to monitor the situation closely and stay engaged with them throughout this emerging crisis. Turning now to my remarks about the quarter. I will start by covering Nasdaq's performance and how our strategy is unfolding in the context of the current operating environment, as well as provide key business highlights. I will then turn the call over to Ann for a detailed review of our financial results. I'm pleased to share that Nasdaq continues to make solid progress in our strategic objectives to capitalize on the key megatrends shaping the financial system. Nasdaq continues to execute against the strategic vision to become the trusted fabric of the global financial system, delivering broad-based growth across our businesses, including 6% overall net revenue growth and 8% year-over-year organic revenue growth in our Solutions Businesses. I'm proud of the team's efforts to continue to serve our clients and I'm pleased to see our revenue growth improving in the third quarter, aided by strong performance in our Capital Access Platforms division, particularly in our Index business. In addition, our Anti-Financial Crime division delivered -- continued to deliver strong results with solid growth in our Surveillance business and Verafin continuing to demonstrate strong new customer growth, as well as an expansion contract with the Tier 2 clients. With respect to the market backdrop, during the quarter, we saw variety of cross currents, including increasing market volatility, fluctuating equities markets and rising long-term interest rates. Nevertheless, we experienced modestly improving momentum in our Listings business amid a gradual re-emergence of the U.S. IPO activity with 35 operating companies choosing to list in Nasdaq during the quarter. Based on our client conversations and our growing IPO pipeline, we remain cautiously optimistic on the outlook for the upcoming year. Across the company, as we've discussed before, Nasdaq is well-positioned to thrive by capitalizing on three key megatrends that are shaping the financial system: the modernization of markets, the development of the corporate and investor ecosystem for environmental sustainability, and the increasing need for integrity solutions across the financial system, including risk management, surveillance, regulatory compliance and anti-financial crime technology. By aligning our business to these key megatrends, we're unlocking attractive opportunities for sustainable growth and we're building a diversified business that's well-positioned to succeed through economic cycles. In this regard, I'd like to provide a few highlights from the quarter that illustrate the progress we're making to capitalize on these growth opportunities. First, our focus on market modernization continues to deliver innovation that enhances the liquidity and underlying market infrastructure that powers the world's economies. A major driver of that innovation has been our ability to adopt and leverage technologies, including cloud and artificial intelligence across our markets and in our products. In the third quarter, we are pleased to announce the approval by the SEC of the first exchange AI-powered order type, which we call Dynamic Midpoint Extended Life Order or Dynamic M-ELO. For the last several years, we've offered an order type called the Midpoint Extended Life Order for clients seeking larger trade sizes at the midpoint. The order introduces a fixed holding period together order interest before execution. Through extensive testing and consultation, we determined that our clients trade execution could be improved under certain market conditions by applying adaptable holding periods. This led to the creation of Dynamic M-ELO, which leverages AI to adjust the length of holding periods throughout the trading day on a stock-by-stock basis to improved fill rates and reduce market friction. We're very excited to rollout this enhanced order type to our clients in the coming months. And we see significant opportunity ahead to drive the application of AI and other emerging technologies across our markets. Next, regarding the development of the environmental sustainable ecosystem, during the quarter, we were proud to launch two new offerings designed to help corporates and investors streamline their sustainability journeys. Following the acquisition of Metrio last year, we have integrated Nasdaq's OneReport and Metrio's sustainability reporting and workflow offerings into a single solution called Nasdaq Metrio, which was officially launched during the quarter. Nasdaq Metrio is a SaaS based end-to-end solution that helps corporates better collect, measure and report sustainability data on a single platform. In addition, in our Investment Intelligence business, we announced the launch of Nasdaq eVestment ESG Analytics, which is designed to help asset managers better quantify and showcase the environmental, social and/or governance impact of our portfolio's position in the market. It enables asset managers to demonstrate their portfolio's sustainability strategies to asset owners, including pension funds, sovereign wealth funds and endowments. These two solutions underscore our role as a bridge between corporates and investors by creating market-based demand driven solutions that help bring clarity to a rapidly evolving environment for sustainability reporting. Lastly, looking at the increasing need for integrity solutions, including risk management and anti-financial crime technology, we're developing innovations that make our clients anti-money laundering or AML programs more efficient. Specifically, in October, we have launched the beta version of an AML workflow to co-pilot tool that will leverage generative AI to automate portions of our clients' AML processes. We look forward to updating you on our progress with these opportunities in the quarters to come as we continue our journey to leverage technology to advance our clients' evolving needs. Turning next to our results. I'm pleased to report Nasdaq's continued solid financial performance in the third quarter of 2023. We achieved $940 million net revenues, an increase of 6% compared to the prior year period, an increase of 5% on an organic basis. Revenues across our Solutions businesses were $694 million, up 9% from the prior year period and 8% on an organic basis. Our total ARR increased 6% to $2.1 billion. Annualized SaaS revenues totaled $773 million in the third quarter, which represents an annual growth rate of 11%. Our SaaS revenues now comprise 37% of total company ARR. In our Capital Access Platforms division, we delivered $456 million in total revenue in the third quarter, an 8% increase from the prior year period. Our Index revenues grew 15% from the prior year period. The performance in our Index business reflects strong year-over-year market performance, $24 billion in net inflows over the past 12 months, including $5 million in the third quarter and strong features capture, partially offset by lower derivatives volumes. Our Workflow and Insights revenues grew 5% over the prior year period, reflecting sustained demand for project work in our ESG Solutions and steady analytics solutions sales to asset managers. While we continue to see elongated sales cycles for certain products in this business, we've not seen a material improvement or worsening of sales cycles from the second quarter of 2023. Our Data and Listing Services revenues grew 5%. Our Listings revenues was largely unchanged due to continued muted IPO activity and heightened de-listings, while our Data business delivered continued strong revenue growth, driven by demand from international data clients. We maintained our track record for winning new operating company listings, ending the quarter with strong momentum from some of the year's biggest IPOs by proceeds raised. Year-to-date, Nasdaq welcomed 83 new operating company IPOs for an 84% win rate. As of the end of the third quarter, we have welcomed four of the five top IPOs by capital raised. And in the third quarter, we achieved an overall win rate of 95% and welcomed several marquee IPOs including Arm Holdings and Instacart. This momentum was also bolstered by several notable listing switches to Nasdaq in the quarter, including DoorDash and Roper Technologies. Overall, 11 companies had transfered to Nasdaq year-to-date, representing a total market value of $184 billion. The September Listing success coincides with the launch of our new IPO and Broadcast Center at the Nasdaq MarketSite in Times Square, further establishing Nasdaq as the world's premier venue for listings. The reimagined space reflects our commitment to showcasing our clients and elevating their IPO experience, and enables us to create more visibility for first trade celebrations through increased access to global media outlets. Looking ahead, we remain well-positioned to capture new listings activity. We have a strong pipeline of companies who are committed to Nasdaq and are in close contact with these companies as they evaluate their IPO timelines. Turning next to our Market Platforms division. We delivered $381 million in total revenues during the third quarter, a 1% increase over the prior year period. In our Trading business, revenues declined 1% compared to the prior year, with lower European revenue, partially offset by modest growth in U.S. equities revenue due to higher revenue capture and a small FX benefit. In our Marketplace Technology business, revenue grew 4% with growth in both trade management services and market technology solutions. During the period, we completed delivery of a major CSD project for a Latin American central securities depository and signed a contract extension, including an upgrade to our next-gen trading system with one of the largest stock exchanges in Southeast Asia. Turning next to a brief update on Adenza. We're progressing well towards the closing of the Adenza transaction. We have completed the anti-trust review and Thoma Bravo is on track to obtain the remaining approvals from the Nordic and Baltic financial regulators to become a major shareholder in Nasdaq. Therefore, we expect to close the transaction in the fourth quarter of 2023. As previously disclosed, this business will be reported as part of the newly created Financial Technology division, alongside our Marketplace Technology and Anti-Financial Crime businesses. In the third quarter, Adenza continued its strong performance, delivering constant currency ARR growth in the high-teens. Year-to-date through the third quarter, they added 17 new clients and three total cross-sells, which compares to seven new clients and three cross-sells over the same period last year. Additionally, Adenza maintains solid growth in net revenue retention at 97.4% and 113%, respectively. We're also pleased with the momentum of Adenza's journey towards the cloud-based delivery of its solutions across both existing and new clients. Through the first three quarters of 2023, 55% of bookings have been for cloud delivery solutions versus 27% over the same period last year. Since the transaction was announced in June, we've held extensive integration and planning discussions with the leadership team at Adenza, and we're very excited about the opportunities ahead. As a result of our early interactions together, we have developed a very clear path and process for integration that we intend to execute successfully starting on day one post-close. Finally, turning to our Anti-Financial Crime division. We delivered $93 million in total revenue during the third quarter, a 21% increase in the prior year period. Nasdaq Verafin grew 29% primarily driven by growth in the adoption of our Fraud and Anti-Money Laundering or FRAML solutions by small and medium sized banks, as well as an expansion of wallet share among existing clients. We continue to expand client relationships with 47 new small-medium sized financial institutions adopting our FRAML solutions. Additionally, we continue to have momentum in our move-up market. This quarter, we signed an expansion agreement with an existing Tier 2 bank client. Specifically, this is a bank client that's signed on to our Fraud Detection and Workflow solution in the first quarter of 2023 and is now expanded their relationship with us to include our complex investigations solution. We view this expansion as a strong proof point and our ability to land and expand our relationships with large bank clients. We continue to be actively engaged in contract negotiations and proof-of-concepts with several Tier 1 and Tier 2 banks, and remain on track with our plans to sign additional large banks in the coming quarters. Our Surveillance business delivered 9% organic revenue growth with continued new customer growth including Tier 3 banks and retail brokers as we expanded our leadership position with large customers. And lastly, I'm pleased to announce that we've officially named Brendan Brothers, Executive Vice President of our Anti-Financial Crime division. As you may recall, Brendan was named to the role on an interim basis earlier this year and we're thrilled to welcome him formally as a member of our leadership team continuing to report directly to me. To wrap-up, our third quarter results demonstrate the strength of our diversified business and reflect our strong position going into year-end with the closing of the Adenza transaction view. And with that, I'll now turn the call over to Ann to review our financial details.

Thank you, Adena, and good morning, everyone. Turning to this quarter's results. 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 a file located in the financials section of our Investor Relations website at ir.nasdaq.com. I will start by reviewing third quarter 2023 performance, beginning on Slide 11 of the presentation. The 6% increase in reported net revenue of $940 million is the net result of organic growth of 5%, including an 8% organic increase in the Solutions Businesses and slightly lower Trading Services revenue, and $3 million in net positive impact from changes in FX rates and acquisitions and divestitures. Moving to operating profit and margins. Non-GAAP operating income increased 4%, while the non-GAAP operating margin of 52% was down approximately 90 basis points from the prior year period. Non-GAAP net income attributable to Nasdaq was $349 million or $0.71 per diluted share compared to $335 million, or $0.68 per diluted share in the prior year period. Turning to Slide 12, as Adena mentioned earlier, ARR totaled $2.1 billion, an increase of 6% from the prior year period, while annualized SaaS revenues totaled $773 million, an increase of 11%. ARR and SaaS revenue growth in the quarter reflect broad based growth led by continued bookings strength in our Anti-Financial Crime division. We are delivering solid performance despite ongoing elongated sales cycles in certain areas of our Workflow and Insights business similar to recent quarters. We are working closely with our customers in the current uncertain macroeconomic environment and are executing well on our strategic pillars of bringing liquidity, transparency and integrity to financial markets. I will now review quarterly division results on Slides 13 through 15. Starting with the Market Platforms division, revenues increased $2 million or 1%, driven by a positive impact from changes in FX rates. Trading Services organic revenue was down 2% driven by lower European trading revenues due to lower volumes. Despite better cash equity revenue capture that offset largely flat U.S. revenues. While we have seen an increase in off-exchange trading, which is common in a lower volatility environment, Nasdaq share of available volume has remained steady. In Marketplace Technology, we delivered 3% organic revenue growth, reflecting solid revenue growth in our Market Technology business. As a reminder, Marketplace Technology revenue growth in the first half of the year benefited from testing revenue and a large project delivery that we don't expect to recur in the second half of the year. We continue to expect full year revenue growth for Marketplace Technology to be at the upper end of our medium term outlook. ARR totaled $511 million, an increase of 2% compared to the prior year period. This growth rate is lower compared to prior periods due to slower Trade Management Services growth resulting from near term market conditions. Market Platforms operating margin was 52% in the third quarter of 2023, representing a 370 basis point decrease from the prior year period due to lower revenue, resulting from lower European trading activity, as well as higher compensation costs, ongoing investments related to migrating U.S. markets to the cloud, and investment in new growth opportunities in Marketplace Technology. Turning to Capital Access Platforms. Revenues increased $34 million or 8%, reflecting organic revenue growth of $32 million and a $2 million positive impact from changes in FX rates. We delivered broad based organic growth in the third quarter, driven by strong performance in Index. Index revenue increased 15% compared to the third quarter of 2022, primarily driven by a 22% increase in average AUM over the prior year quarter. Licensing revenues for futures contracts linked to the Nasdaq 100 Index increased 14%, reflecting higher pricing per contract, partially offset by a decline in trading volume. Additionally, we saw in net inflows over the trailing 12 months of $24 billion including $5 billion in the quarter. While AUM has benefited from a strong year-to-date market performance, we saw AUM impacted by overall markets trending lower in the last two months of the quarter. Moving to Data and Listing Services. Our revenue grew 5%; excluding the positive impact from changes in FX rates, our organic growth was 4%. Revenue growth reflects continued strength in our Data business and the combined impact of de-listings and a more muted IPO environment on Listings revenue growth. However, as Adena mentioned, we have seen several high profile initial listings and 11 switches year-to-date. Workflow and Insights revenue increased 5% organically compared to the third quarter of '22, reflecting growth across our ESG and Analytics businesses, despite ongoing elongated sales cycles with corporates, particularly for our IR tools and for our asset owner portfolio management solutions, affecting revenue growth in the third quarter. ARR for Capital Access Platforms totaled $1.2 billion, an increase of 4% compared to the prior year period. While ARR growth related to our data products remained solid, the Capital Access Platforms ARR growth rate has been impacted by slower listings growth and the impacts of continuing elongated sales cycles on parts of our Corporate Solutions and Analytics businesses. The division operating margin was 56% in the third quarter of 2023, an increase of roughly 50 basis points from the prior year period. Anti-Financial Crime revenue increased $16 million or 21% compared to the third quarter of 2022. Growth reflects robust demand for Fraud Detection and Anti-Money Laundering solutions, as well as our SaaS-based Surveillance Solutions. Our Fraud Detection and AML solutions revenues grew 29% compared to the third quarter of 2022. Surveillance revenues grew 9% compared to the third quarter of '22 with continued customer growth including Tier 3 banks and retail brokers. These new customer wins reflect our ability to drive growth beyond our leadership position with large banks and expand into new customer segments. ARR for Anti-Financial Crime totaled $348 million, an increase of 18% compared to the prior year period. Signed ARR, which also includes ARR for new contracts signed but not yet commenced totaled $381 million, an increase of 19% versus the prior year period. The Anti-Financial Crime division operating margin was 33% in the third quarter of 2023 versus 27% in the prior year period with approximately one half of the margin growth resulting from the timing of recognition of incentive compensation. Turning to Page 16 to review both expenses and guidance. Non-GAAP operating expenses increased $32 million to $449 million. The increase primarily reflects a $32 million organic increase or 8%. The organic year-over-year increase reflects increased compensation and benefits expense due primarily to increased headcount and the impact of merit increases, higher technology spend attributable to continued investment in our business and higher G&A expense. We are narrowing our 2023 non-GAAP operating expense guidance to $1.785 billion to $1.805 billion, which is a $10 million reduction to the top end of the guidance range. As a result, the midpoint of the updated expense guidance range is $5 million lower than our prior guidance, which reflects an annual expense increase of approximately 4.5% for 2023. Assuming stable performance and exchange rates, we currently expect 2023 expenses to be near the middle of the updated guidance range. Additionally, we narrowed our full year non-GAAP tax rate guidance range from 24% to 26% to a range of 24.5% to 25.5%. We expect to come in at or around the midpoint of this updated range for the full year. Turning to Slide 17. Excluding Adenza related debt, our adjusted total debt to trailing 12 months non-GAAP EBITDA ratio ended the period at 2.4 times, down from 2.6 times at the end of the second quarter of 2023. During the quarter, we paid common stock dividends in the aggregate of $108 million. And in September, our Board approved an increase to our share repurchase authorization to a total of $2 billion. Our balance sheet remains solid and our cash flow generation is strong, including $1.6 billion of free cash flow on a trailing 12-month basis. We remain well-positioned to support organic growth, execute on the deleveraging plan we announced with the Adenza acquisition, increase our dividend payout ratio over time and repurchase shares to minimize dilution. In closing today, Nasdaq's third quarter results reflect the continuation of the Company's ability to perform consistently well across a wide range of operating environments. Thank you for your time and I will turn it back over to Adena.

Thank you, Ann. And before we turn to Q&A, I would like to take a moment to acknowledge Ann Dennison. After eight years at Nasdaq, Ann will be stepping down from her role as CFO at the end of this year. Ann has been a guiding voice to the market on our financial performance, a leader in enhancing our Investor Relations and ESG reporting efforts, and as steward to our company's transformation, most recently, through our announced acquisition of Adenza. In conjunction with Ann's upcoming departure from Nasdaq, we're pleased to welcome Sarah Youngwood as our next EVP and CFO. Sarah will join us from UBS Group, where she served as CFO and a Group Executive Board member. Sarah will officially join us on December 1, and will work closely with Ann and the team to ensure a seamless transition. I want to thank Ann personally for her many contributions to Nasdaq. She has been a phenomenal partner to me and the company, and we wish her the very best. And now, I'll turn the call back over to the operator for Q&A.

Thank you. [Operator Instructions] And I show our first question comes from the line of Michael Cho from JPMorgan. Please go ahead.

Hi. Good morning. Thanks for taking my question. I just wanted to touch on Adenza for my first question. I think, Adena, you talked through the update and I think you mentioned the ARR. But can you also just -- hoping you can talk about for both Axiom and Calypso, the year-to-date revenue growth trends for both of the segments? And then related to that, I was hoping you can touch on kind of the revenue opportunity or revenue growth opportunity as you think about clients going from on-prem to the cloud solution for Adenza. Thanks.

Sure. Great. Thank you. Well, we don't provide or break out the financial, the revenue differences between Axiom and Calypso. But we do provide -- I can give you some color in that, when we're looking at new bookings for the year, we had -- as I mentioned, we had 17 new clients so far in 2020 or I should say they have 17 new clients so far in 2023 and three cross-sells. And when we break that out between Calypso and Axiom, so Calypso had nine new clients sign up and one cross-sell; and Axiom had eight new clients sign up and two cross-sells. And then in terms of the upsells, 95 total and it's really a good even split, 55% upsells in Calypso and 40 in Axiom. So it's really a nice split of revenue growth and opportunity across both of these solutions. When we think about why that is the case, I think that there are a range of reasons, just trends out in the marketplace that are driving demand for both risk management solutions, more advanced risk management solutions for -- across all asset classes, as well as better regulatory reporting solutions. And obviously, those are the two great things that Calypso and Axiom do. And when we think about that acceleration of new sales because they had seven new sales -- new clients sign up last year versus 17 this year, we're definitely seeing a momentum in terms of the regulatory obligations that are coming into the United States as well as the Basel III end game that's really coming across both the U.S. and Europe driving certain demand, but then also moving down market. I mean I think Axiom did a really nice job of bringing in even more banks and brokers into their solutions. So generally, it's just -- we're very pleased with the continued momentum in the business. When it comes to cloud, it's really interesting to see. As I mentioned, the 55% of total bookings were for cloud -- I'm sorry, new bookings were for cloud delivery solutions versus 27%, I think it was last year. And that's really, I think, a combination of two things. One is the fact that banks are more ready to accept cloud delivered solutions. And so that's been a real -- we've seen that across all of our solutions across Nasdaq. They're just more ready to have cloud be a big part of their infrastructure. And they're trying to -- some banks are purposely trying to move out their data centers. I think that the second is that the cloud based delivery solutions are modern. They're modular, they're more flexible. And I think that the team has done a really nice job of selling the benefits of that and you're right in terms of the revenue opportunity. There is a revenue uplift when we are able to sell a cloud module because we become a managed service provider and that takes away costs from on their side for managing an on-prem solution. So we are able to upcharge from that. We haven't discussed what that means in terms of revenue uplift. But -- so one thing just to recognize also is that from a GAAP perspective, cloud revenue is recognized ratably over the life of the contract, whereas the on-prem revenue, there's more revenue recognized upfront. So this will create more stability in revenue going forward as well.

Okay. No. Great. Thanks for all the color there. If I could just switch gears a little bit for my second question. I just want to touch on Verafin. I mean, it seems like revenue growth is accelerating there. I'm just curious the types of conversations that Nasdaq’s happened with clients there. I mean, do you get the sense that the SMB clients are tightening budgets or expanding budgets for these types of solutions in Verafin?

I would say that every bank is facing more and more challenges of fraud and AML. So the fraud side is just a pure -- it's a very easy return on investment calculus because they are losing money to fraud and they have to -- and when they make their clients good on something that's happened in their accounts. So it's a really nice clear return on invested capital when they come in and leverage our solutions. Additionally, it is a cloud-based solution. So they're having to make less of an upfront investment from an infrastructure perspective. And so it's a cleaner kind of, frankly, commitment to us. And then lastly is, we do a really good job of onboarding clients. And so particularly small to medium banks, we have an amazing machine to onboard those clients and bring them up into the system very quickly. For the large scale banks, we're working really well with them to integrate or implement and integrate these solutions. And as you can see, we did have that one expansion contract with the client that just signed OFS (ph) in the beginning of the year. So they took our solution. We've been able to implement it and immediately sort of realizing that they wanted more capabilities from us with the complex investigations. So we see really good opportunity to expand. In the AML side, it's a matter of just a lot of regulatory pressure and frankly, the banks really having a true interest in just making sure they do not have that type of money laundering going through their systems. And so again, it's an increasing threat. It's become more complex. Our systems are more advanced than many others. We use a lot of AI in the algorithms to root out criminals. We're able to show much -- many fewer false positives and more activity found than our competitors, and it's just driving a lot of good conversations and demand. So we're -- I really do think -- also the last thing I would say is, when I go to these conferences and I have gone to meetings with small banks, and I have had banks come up to me and say Verafin is by far their favorite partner. They just -- they find that we're a really good partner, and they use that word as opposed to vendor. And I think that that's really a testament to the great service that the Verafin team provides to the clients.

Great. Thank you so much, Adena.

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

Hi. Good morning. So now that you have line of sight to deal closure and you have a bit more clarity on the interest rate environment and where your stock is trading, just wanted to revisit the topic of capital allocation after the deal closure. How should we think about capital priorities, specifically on deleveraging versus buyback, post deal closure? And is there any framework you could provide for maybe level of buybacks anticipated for a specific period post deal closure that could kind of help frame the mix there?

Ann?

Sure. Hi, Kyle. Absolutely. So, as we think about post deal closure, obviously, we will evaluate the market conditions from a share repurchase perspective. But in terms of our capital priorities, first and foremost, we are going to continue to invest to drive the business organically. But after that, our priority is to deleverage and to meet the deleveraging targets that we set out when we announced the Adenza acquisition. And then beyond that, we -- our next priority will be to increase our dividends to get our payout ratio up to the 35% to 38% ratio over the next three to five years. And then beyond that, what's left over, we're going to use to offset the dilution, both from our employee share issuances and then also from the issuance related to the Adenza deal. And our cash flows remain very strong. I mentioned we had $1.6 billion in free cash flow on a trailing 12-month basis. So we feel really well positioned to do all of those things in the priority order that I listed.

Okay. Understood. Thank you for that. And Adena, I mean, you mentioned some of the drivers for the strong kind of high-teens growth for Adenza ARR. Just given the nature of the Adenza business, kind of the length of the sales cycle there and the progress that you've seen since the deal announcement in June, just wondering, if you could provide any updates on -- do you feel more or less confident in kind of that medium term -- low to mid-teens medium-term revenue growth target for Adenza as we look out and for 2024, specifically?

Yeah. So we don't, as you know, provide anything specific to a year. But our medium-term outlook of low to mid-teens revenue growth across the Adenza business, and that would be ARR plus the customer delivery revenue. We continue to have confidence in our ability to achieve that once Adenza becomes part of Nasdaq. I think, as I mentioned, there continues to be a really nice strong demand generally for the solutions. And then also, I think that they've really been able to show the ability to upsell the clients. So the fact they're signing more new clients this year than last year just gives us more upsell capability over time. And the environment is -- these are kind of need to have solutions from banks. I think that, particularly as we're managing through an increasingly complex regulatory environment, there’s more risk in the system than there has been in the past, pretty risk and other things that – and also across currents across asset classes, they really are driving demand for the solution. So over the medium-term outlook, our medium-term outlook remains the same at that low to mid-teens overall revenue growth.

Thanks, Adena.

Thank you. And I show our next question comes from the line of Michael Cyprys from Morgan Stanley. Please go ahead.

Hey. Good morning. Thanks for taking the question. I wanted to ask about Verafin. I was hoping you could speak to the competitive environment today for Verafin, how you see that evolving. Understand there's big tech companies, such as Google, that have introduced some AML solutions. So maybe you could speak to how your solution differs, talk about some of the steps you're taking to stay ahead of the big tech competitors that have deep pockets in AI expertise?

Sure. Yeah. So I think that there is a difference between what Google is doing and what we're doing. So Google is partnering with a specific bank and providing AI algorithms to support that internal bank's -- essentially think of it as like an internal build but leveraging Google's infrastructure. So the bank is bringing to that relationship very specific algorithms and patterns of that they're looking for, what we call agents. And so that really is kind of what I would say, more of a facilitated on -- a facilitated bespoke build, but with the Google -- underpinning the Google infrastructure and you're right, in the benefit of their AI capabilities. What we do is a purpose built complete software solution that is purpose built for the needs of fraud and AML detection, investigation and reporting. And so we provide an end-to-end solution. The fact that we have transaction data across 2,500 banks, and we also -- we are a cloud-based solutions. So we're able to bring all of that transaction data together. And we leverage AWS. So AWS is our cloud provider. We're leveraging their AI capabilities and their AI engines, including the bedrock solution that we're using for the Gen AI capabilities that we're adding. I think that it allows us to benefit from another great large technology company. But we have built a purpose built solution that is scaled across 2,500 banks. And so it makes it to the bank doesn't have to do their own bespoke build. We are benefiting from the knowledge across all of these banks and the experience in what they're seeing to continue to tune our engines and to build out the solutions. And the last thing I would say is, we do weekly releases. And so we're always staying on touch with the banks as to what they're seeing and bringing those agents into the system that then benefits all of our clients, not just one client. So we're really -- we do think it's a different -- it's certainly a different sale than it would be to look at -- as compared to what Google is doing with that one bank. The last thing I would say is, we are winning share and we're winning in terms of taking out internal builds because of the benefit of the consortium data that we have and the really nice workflow solution and we're also taking out competitors. So we're really pleased with the momentum.

Great. And just a follow-up question, if I could, just on Verafin. FedNow just launched in July a new real-time payments rail. But there's some concerns around fraud that might limit the uptake by institutions. So can you just speak to Verafin's real-time payment solution, how you see the opportunity set evolving there? And any sort of lessons learned from the clearing houses real-time payment service that's been in place for some time and I believe you have a solution there as well?

Yeah. Actually, we do. We connect with FedNow. We connect with the clearing house. So we are rolling out a real-time payment solution. And we've been in contact with the Fed in the context of their rollout. We've been working with the big banks, the core banking system providers because they also -- they provide core infrastructure to the banks to be able to integrate FedNow and other real-time payment solution. So we've been working with them to make sure we're integrated into their solutions and make it easy for the banks to onboard us for fraud detection. So it's definitely -- that is actually a specific growth area that we're engaged with our SMB banks, our small to medium banks on as we speak.

Great. Thank you.

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

Thanks. Good morning and thanks for taking my question. I wanted to first touch on the pickup in IPO activity. So it was really nice to see a high win way at Nasdaq this quarter, including several big IPOs. But since then, we've seen the markets pull back, rates rise. Now I know you mentioned you have a robust pipeline, but how is the recent macro, including the conflict in Israel impacted the near-term pipeline?

Yeah. It's a great question, Craig. It has impacted it. So I think I would say what -- how would you characterize '22 and '23? It's been -- we're coming off of a very significant environment in, what I would call a free money environment, coming into an environment that with rising interest rates, which creates unpredictability of the future, an economy that seems to have a lot of resilience, but is still slowing down and a lot of unpredictability that investors are struggling with, because at the end of the day, they have to underwrite the future earnings of a company, and if they can't understand the overall economic environment it's hard to underwrite that risk. So I would say '23 started with a pretty deep frost (ph). We started to see some light green shoots, as Nelson, likes to say, as we went through the spring or as the interest rate environment became a little bit more known. But the fact is that it kind of fits and starts. So we'll have a window open and we obviously had some really interesting companies come out in September. And then you're starting to see the macro environment change again, the geopolitical environment become much more unstable. And that, of course, is making investors pause again on understanding how to take that risk. So we do actually have a really good pipeline of companies. We're really, really proud of the team. I mean, our team is just awesome. And so they're really working hard to work with clients. But the majority of the conversations we're having with clients, not all of them, but the majority are about the first half of next year much more so than the second -- than the fourth quarter of this year.

Thanks, Adena. And just for my follow-up also on a similar topic, can you remind us what percentage of your data and listings revenue is coming from initial listings? And can you quantify the headwinds from roll-offs from accrued revenue from that strong 2021 and '20 IPO period?

Yeah. Again, a good question to understand kind of the dynamics in the listings business. So I don't know the exact percentage of revenue that's coming from new listings. Because just to remind everyone, we have our annual listing fees and then we have our initial listing fees. Our initial listing fees are amortized over a two to four-year period -- two to six-year period, I think, depending on the type of listing it is, and how big it is. So you're right that there is some initial listing revenue that's rolling off in -- from the 2021 listings, not all, but some as that amortization flows through, and that will come off in '24. The answer is around 10% of our overall listing revenues, so -- which is and the listing revenue is somewhere in the range of...

Year-to-date, $300 million.

Yeah, $300 million. So it's -- that revenue will have some fluctuation as you go into 2024. And so you've got to look at the combination of the new listings and as well as from an annual listing fee revenue perspective, the de-listings that we're experiencing, we do provide you that data every quarter, as we think about what the billing cycle is going to look like in January for the annual fees. So those are the big factors to consider in '24.

Thanks, Adena.

Sure.

Thank you. 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 your organic growth of the Solution Businesses accelerated and come back to your medium to long-term outlook. You talked about the strength in Index and anti-fin crime business. I'm just wondering, if the equity market, Verafin and other business remain stable in the near term and IPO market remain like muted (ph), how should investors think about your organic growth over the next few quarters excluding Adenza? Thank you.

Sure. Hey, Owen. Well, I mean, we don't give specific guidance or specific outlook quarter-by-quarter or year-over-year. But I think that you're right that we're really pleased to see the Solutions Businesses revenue growth really returning into the medium-term outlook that we're -- we have been communicating to you all for a while now. And I think, Owen, if we have a healthy IPO environment, and that really starts to -- that engine starts to turn on again in '24, I think that you'll see the primary benefit of that will actually start to happen in '25 just because it then outflows into our annual listing fees. But beyond that, if we have a stable and healthy trading environment, listing environment, that then obviously drives really good index flows, it drives data demand. And it also probably loosens up and makes it so that corporates and investors are more ready to invest in their new solutions that help automate a lot of the manual processes they have. So it could -- that could continue to unlock more interest, and frankly, easier sales decisions in that space. When it comes to Market Tech and Anti-Fin Crime though, those are really good solid demand businesses where exchanges are very, very focused on bringing their technology into the future, and we now have -- I think we've done a nice job of really getting to a state of maturity across our CSD solution, our next-gen clearing solution, our next-gen trading solution, so -- and our risk management solutions there. So we feel like that demand driver is more stable generally. And then anti-fin crime is just -- as you know, it's a need to have technology, and we do think we have the best technology available. So that demand, we just feel like is much -- is very structural. So I can't say, Owen, exactly what that means for Solutions Business growth. But having a healthy -- general healthy market environment certainly helps create even more opportunity for us.

Got it. That's helpful. And a quick one on the sales cycle on Adenza. I mean, we have been talking about the elongated sales cycle. I'm just wondering, is there any like sales cycle impact on Adenza? I mean, you talked about high-teens growth, I think, for Adenza in the third quarter. I'm just wondering, if there's no, like, elongated sales cycle, the budget gets hike (ph) in release or things like that, how high it could have gone? Thanks.

Yeah. I actually do think that there are more gates that are -- all of the larger institutions have a lot of gates to walk through. And I think that our Anti-Fin Crime business, we're marching through these gates, but the gates -- there are many gates, and we have great experience in the past especially with our Surveillance business, to kind of understand that. But with Adenza, there are more gates that they're walking through to get to a sale, particularly with the larger institutions, except when there's a regulatory demand. And that's what we're really interesting. I mean, we've had some really interesting super regionals sign up for Axiom like within three months or four months, that's been some really shorter -- some really short sales cycles when there's a regulatory demand. But if there isn't really a near-term or immediate regulatory demand, the sales cycle is a little bit longer. I think they actually experienced longer sales cycles in '22 than they're experiencing in '23. But generally speaking, they -- I think that if we had a really healthy macro environment around us and more predictability of the macro environment, it would certainly be advantageous to Adenza over time.

Got it. Thank you very much.

Sure

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

Great. Thanks. Good morning, folks. Thanks for taking my question. Maybe just back on Verafin. Just in terms of the normal seasonality we have seen in the last couple of years in that business, or I should say Anti-Financial Crime broadly, do you expect that also to represent the past pattern over the last two years in the fourth quarter? And then just sort of confidence around that 20% plus type of growth rate that you've been able to achieve in that going into 2024?

Great. Well, generally, we do see the -- I think it's somewhere in the range like 40% of bookings occurs in the fourth quarter for our Anti-Financial Crime business and we would say that, that's generally what we're seeing. And so we -- now the difference, though is that if we, when we do upsell to the largest banks, there's a little bit of that's not necessarily seasonal, and we don't have as much experience there. So we're not seeing -- that's not something that every single fourth quarter, we're going to see something different. But certainly with the small and medium banks, which is the core business of the anti-fin crime business so far, the fourth quarter is a big sales quarter. And that's actually the case for Adenza as well, kind of 40% to 45% of bookings tend to come in the fourth quarter. In terms of just the general growth characteristics of the anti-fin crime business, we're very pleased with the progress. We continue to see good opportunity to continue to grow in that 18% to 23% growth rate that we've been experiencing.

No. Good to see the progress there. And then, Adena, maybe if you could just update us on the status of the SEC market structure proposals. I know it's a big debate in the industry and there's a lot of back and forth on that. But do you see anything being potentially implemented in 2024 or do you think it's -- the debate will sort of linger on at least into '25?

I think that on the four proposals that the SEC has proposed, I would expect that we'll see something come out to be -- to start to get implemented as we go through 2024. We don't know what that's going to look like yet. I think they've had a lot of comments on the proposals. And I think that in general, the two that seem very -- that feel a little bit more certain are the tick sizes and the 605. Those two proposals feel quite certain. I think that on the best decks and the order competition rule, those are ones that have engendered a lot more debate within the industry. So we don’t know exactly how that’s going to turn out.

Okay. Great color. Thank you.

Thank you. And I show our next question comes from the line of Simon Clinch from Redburn Atlantic. Please go ahead.

Hi, Adena. Hi. Thanks for taking my call. I was wondering if we jump back to Adenza again and just your comments about your preparations for integration. Obviously, this is a large transaction, and it's one that you're actually going to be fully integrating to the business. I was wondering, if you could give us an update on, I guess, what the puts and takes are to this plan, and ultimately, how to think about the technology stack and what that -- what the integration of that of Adenza into your existing cloud infrastructure really means for the expense base and margins of that business going forward?

Great. Thanks. Well, I can say that Tal and the entire team has been extremely focused on building out a very robust integration plan. We've been engaged with the Adenza team now for several months, and we're having regular engagement with them to develop those plans and make sure that we feel really good about how we're going to kick off the integration on day one. And we built a lot more granularity to the plan and we still obviously don't own them. So once we own them and we're able to meet more people and really understand the operations, we'll be able to flesh that out into a great amount of detail. But we're extremely committed to achieving the integration, our expectations that we delivered to you all at the announcement. We also definitely see benefit in the cloud infrastructure that we have. That's actually part of our integration. We have not done a lot of detailed work yet on that because we don't own them. We have a lot of, in my opinion, proprietary IP when it comes to our cloud capabilities and our cloud team. So we want to make sure that we own them before we go into really, really deep dives on the technical infrastructure. But our relationship with AWS, we think will be a benefit. I think the expertise that we have in creating very efficient cloud infrastructure, particularly from a data ingress/egress (ph) perspective, I think it's going to be very helpful. And so we look forward to really working with them to continue to develop this cloud capabilities. I have a great view of -- in five years, like how do we want these services to be delivered, how much do we want to have a single-tenant, multi-tenant capabilities, what kind of overall or overarching environment do we want to create for our clients so they see us as a strategic partner across risk management, reg tech, anti-fin crime, capital markets? There's a lot that we can do there, but we have to get in there, we have to own them. We have to kind of get really engage with them so that we can give you a better answer to that in the coming months and quarters.

That's great. Thanks, Adena. I guess just a second question here and just changing tack a little bit. Just on the cash equities business, I've noticed that the revenue capture has been rising quite substantially while the sort of market volumes have stagnated have fallen. And I know some of this has to do with mix, but I was wondering, if you could expand a little bit on sort of what the dynamics are there. And is this a deliberate sort of management on your part to, I guess, smooth out revenue by taking a bit more pricing when times slow down or how should we think about that strategy going forward?

Well, I think one of the things we've always said is that we like to make sure that we have a good balance between share and capture. And one of the things we've been focused on is, what is our share of available liquidity? And Ann mentioned before, we've been able to manage to a pretty stable share of available liquidity and what do we mean by that? In times when volatility goes down, there tends to be more trading that occurs off exchange. So the off-exchange trading percentage tends to go up. So then we look at it and say, well, what can we actually achieve and bring into the exchange and how are we competing with other exchanges? And there, we look at what we call available liquidity. And I think we've maintained a pretty stable share of about 30%. And then within that, we then said, hey, what kind of volumes are we trying to attract into our solution? We want to attract volumes that are additive to overall volumes in the platform. So one, certain orders that come into the market feed other orders, and we're going to work hard to get those orders in. The other thing is we provide a lot of really interesting, as we mentioned, specialized order types that also allow us to charge different rates for these services because they're specialized execution capabilities, and that allows us to have a higher capture. But the one thing we don't do is just chase share that just is fleeting, that if you chase that share, you can really have a significant negative impact on capture, and frankly, not get share that's additive to the NBBO (ph) not get share that brings other on their volume in. So we're very, very intentional about that, and that's why you're seeing some capture go up because more of the volumes moving towards our specialized capabilities, and we're not doing what others of our competitors are doing in terms of chasing fleeting share.

That’s great. Thanks so much.

Sure.

Thank you. [Operator Instructions] I'm showing no further questions in the queue at this time. I'd like to turn the call back to Adena Friedman, Chair and CEO for closing remarks.

Great. Thank you. Well, we are excited to continue to update all of you in the coming quarters as we approach the closing of the Adenza transaction and we continue to advance along our journey to become the trusted fabric of the world's financial system. And so thank you very much, and have a great day. Thank you.

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