Nasdaq, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the NASDAQ first quarter 2020 results. At this time, all participants' lines are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Ed Dittmeier, Vice President of Investor Relations. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today to discuss NASDAQ's first quarter 2020 financial results. On the line are Dina Friedman, our CEO, Michael Potasnik, our CFO, John Zecca, our Chief Legal and Regulatory Officer, and other members of the management team. After prepared remarks, we'll open 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, nonpublic information, and complying with disclosure obligations under SEC Regulation FD. I'd 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 Adina.

Thank you, Ed, and good morning, everyone. Thank you for joining us. My remarks today will focus on three areas. I will review NASDAQ's start to the year, in particular, how we are adapting to the challenges of the COVID-19 pandemic and our results for the first quarter of 2020. I will discuss how we are seeing the potential for our business in 2020 to be impacted by the pandemic. And I will discuss the secular trends that have informed our long-term strategy and how we see them developing through and after the current pandemic crisis. I would like to begin by acknowledging that we are all navigating through an unprecedented moment in history as our global community fights the spread of COVID-19 and prepares for what will be a lasting impact on our daily life. I speak for the entire NASVAC family when I say our thoughts are with those who are battling this virus, the families who have lost loved ones, and those who are on the front lines of our economy and our society, putting themselves at risk every day to care for us and our well-being. They include the millions of people who work extremely hard to make sure that we have food, power, and other necessities. They are the many who are keeping critical stores open and shipping goods to our homes. They are the healthcare workers who are putting their health and their family's health at risk to care for the sick and handle the heartbreaking loss of life. There are not enough words that can express our deep gratitude to the millions around the world who are enabling us to stay home and stay safe. The crisis has highlighted how the human spirit manifests itself, and it has been truly awe-inspiring. To provide immediate assistance to those in our communities who are most at risk, we took action last month and committed $6 million in cash and in-kind donations to the COVID-19 response and relief efforts. In addition, NASEC employees have been engaged in our philanthropic response, including our double matching program, which has raised more than $400,000 so far for charitable organizations fighting the pandemic. Turning to the NASAC community specifically, from the start of the pandemic, we have been committed to the safety and well-being of the NASAC team, as well as the broader needs of the NASAC client community. As COVID-19 spread across the world, we moved quickly to transition our global workforce to a remote operating environment through a combination of work from home and split teams for critical onsite employees. At this time, 98% of our global team are working from home to support the various country or statewide measures to flatten the curve. For those few staff around the world who are performing critical onsite functions, we're deploying extra precautions to ensure their safety. We remain deeply committed to serving our clients seamlessly while keeping our employees as safe as possible. I am so proud and impressed with the entire NASDAQ team and their commitment to our mission. In fact, our role in the economy in which we serve as a critical market operator has never been in sharper focus as it has been in the past six weeks. Additionally, our clients across the world have turned to us for technology expertise as well as insights and analytics to support their decision-making in this period of extreme challenge. We have invested and prepared for many years to be ready for what has transpired around the globe in the past several weeks. Across our markets in the US and Europe, our teams across technology, operations, legal, and client service are collaborating extremely well to provide a high-quality trading experience for our broker-dealer and investor clients during a period of unprecedented volatility and volume. Our market technology team, who provides strategic technology solutions to other exchanges around the world, has been supporting our exchange clients with our technology expertise to support their own spikes in trading activity. Across corporate services, we are providing our corporate clients with critical insights regarding the drastic changes in their investor base and what it means for their equity relationships going forward. And in information services, we're providing institutional investors with key insights into their funds positioning in relation to their peers, and now with the addition of Sylovis with deeper insights into their portfolios across private and public assets. These times of stress and uncertainty test us, and I'm extremely grateful to the entire NASDAQ team for rising so successfully to the challenge. while they also balance their own personal situations throughout this period. Turning next to our financial results, during the first quarter of this year, we set new quarterly highs of $701 million in net revenues and non-GAAP earnings per share of $1.50, up 11% and 23% respectively compared to the first quarter of 2019. Our market services business rose 21%, and our non-trading segments grew 7% from the prior year period. On an organic basis, revenues in the non-trading segments increased 8% year over year. We also continue to make certain investments to advance our business, acquiring ESG workflow provider OneReport and investment analytics firm Solovus during the quarter. These initiatives align with our discipline strategy to maximize opportunities as a technology and analytics provider while sustaining our leadership position of our core marketplace franchise. Turning to the specific highlights in the first quarter, I will start first with our foundational marketplace businesses. Our market services segment saw net revenues of $281 million, driven by higher cash equity and equity derivatives revenue, as the business was able to handle the historic surge in quoting and execution volumes, despite having to navigate the many business continuity challenges that the health crisis posed. While I believe, in aggregate, the exchange industry our broker-dealer intermediaries, and our regulators have responded strongly and successfully to the significant challenges that came with the enormous rampant activity. I'm particularly proud of how NASDAQ's marketplaces were able to fulfill their mission to the investment community, all while we took proactive steps to protect the health and safety of our staff providing critical market functions. Our corporate services segment delivered revenue of $128 million in the first quarter, a 6% increase, boosted by year-over-year growth in our issuer base, particularly from larger cap issuers, and increased demand for our investor relations intelligence and governance offerings. NASDAQ was extremely busy in the earlier portions of the first quarter. NASDAQ led U.S. exchanges for IPOs during the period, welcoming 27 IPOs, a 69% win rate. We listed six of the top 10 IPOs by dollars raised, including PPD, Inc., which provides drug and development services to the biopharmaceutical industry, the largest US IPO year to date. Our acquisition of one report during the period will broaden our strategic engagement and collaboration with corporate clients who are seeking clarity and efficiency in their ESG reporting. We believe this solution will further strengthen our value with the thousands of clients who already rely on our team for counsel on a range of governance and sustainability-related issues through solutions like our ESG advisory service and our board assessment and collaboration technology. Now let me turn to our technology and analytics businesses. In the first quarter, our market technology segment delivered $81 million in revenues and signed $80 million in new order intake. Our annualized recurring revenue in the quarter was $257 million increase year over year. I'm extremely impressed with how the multitude of exchange and broker-dealer customers of NASDAQ's market technology business successfully responded to the challenges of running their franchises in the midst of both market turbulence and the human health crisis. And I'm proud that our resilient marketplace technology was able to support them meaningfully as they did so. Turning to our information services segment, we delivered net revenues of $211 million in the first quarter, up 18 million or 9% year over year. I would like to highlight that our index revenue saw double-digit growth as AUM and NASDAQ-licensed ETPs rose 5% year-over-year, meaningfully outperforming the declines in the broad market indices over the same period, and volumes in NASDAQ-licensed equity index futures set new highs in the quarter. The AUM was bolstered by continued inflows into our flagship index products. For instance, despite the sharp declines from the market peak on February 19th, through the bottom experience on March 20th for the NASDAQ 100, over that time, the largest ETF globally that tracks the NASDAQ 100, which is the Invesco QQQ ETF, experienced $5.2 billion in net inflows. In fact, total ETF industry AUM for the 12-month period ending March 31st was down 0.5%, according to research provider ETFGI, while NASDAQ's ETF AUM increased by 5%. We are pleased with the resilience of our index products in a period of record volatility and extreme downward pressure in the broader market. I will also note that for the second quarter, the majority of information services revenue came from index licensing and investment analytics products, the result of years of investment into expanding our capabilities in these higher growth areas. Now that we've covered the first quarter results, I would like to talk about the changing industry dynamics we are observing. We are fortunate to have a particularly resilient operating and financial model at NASDAQ. We deliver many essential and increasingly strategic products and services to a diverse ecosystem of clients. The balance of a trading franchise that performs best during periods of maximum uncertainty and a larger recurring revenue business across information services, corporate services, and market technology delivers relative stability and aggregate over a wide range of macroeconomic environments. Focusing on our volume-driven businesses, as we look forward to the remainder of the year, it is very difficult to protect the volume environment. We are currently focused on the following signals. First is the continued volume strength in April, with $12.7 billion in average daily share volume in U.S. equities, which is a 92% increase over last April, and nearly $25 million in average daily contract volume in U.S. equity options, a 51% increase over last April. Second is a myriad of economic unknowns that the COVID-19 crisis virus carries with it as it continues its global spread. And third is the upcoming U.S. election, which when coupled with the virus, provide ingredients for continued elevated volumes for our markets in the months ahead. The flip side impact of the volatility and economic uncertainty, however, is the effect on IPOs. In our corporate services franchise, we entered 2020 with incredibly strong momentum, maintaining our U.S. listings leadership through what had been a very busy period for IPOs. In addition, we steadily grew the issuer base in NASDAQ's Nordic markets, and in our corporate solutions subsegment, after many years of investing, restructuring, and reposition, we saw growth reemerge. All of these factors will continue to benefit us. However, we are beginning to see the impacts of the pandemic influence corporate issuer behavior in the near term. While a number of corporate clients are turning to our IR intelligence team for short-term mandates to understand the underlying activities in their stock and demand for our ESG advisory offering continues to have momentum, the vast majority of IPO candidates are waiting to see if market conditions stabilize. We are also seeing some companies delaying corporate solutions purchasing decisions and in some cases looking to reduce near-term discretionary spend. In our market technology business, we're extremely fortunate to have a large, diverse, and well-established customer base across market infrastructure operators and banks and brokers with long-term locked-in contracts as the underpinning of the business. Therefore, our revenue base is very solid, and we had a successful year in 2019 in signing up new clients and renewing some of our key existing clients. However, our early observations of the impact of the virus in 2020 makes us more cautious about our short-term growth prospects for the remainder of the year. Specifically, our clients are dealing with the twin challenges of a surge in trading volumes and the logistical challenges of the health crisis with their staff working remotely. As a result, we're seeing clients take longer to make upgrades and new purchasing decisions. They are also extending implementation schedules and instituting temporary code freezes that will delay the timing of short-term change requests. Additionally, we continue to have great engagement with prospects in our new markets initiatives, and we believe that our sales pipeline remains strong. However, we expect the purchase and market launch decisions will likely come under additional scrutiny and review while those prospects observe the economic impacts of the virus. In our information services business, the dynamics of the environment bring varied implications for each of the subsegments. At investment, we have not yet felt substantial impact from the pandemic and remain focused on expanding our capabilities in client and markets, but we could see short-term results impacted by some of the following COVID-19-related factors. On the positive side, when asset owners see more alpha opportunity in more volatile markets and become more interested in active or alternative asset management, investments, evaluation data, and analytics become especially important. We also believe asset owners are more likely to demand the real-time portfolio analytics delivered by Sylovis, and those that have them are more likely to respond by adjusting their allocations. On the risks to our near-term revenue growth, while we have not yet experienced a measurable change in our clients' behaviors, we will be watching to see if the pandemic leads to heightened client attrition through closures of small asset managers or consolidation. as well as the potential for moderated spend per client or delayed purchasing decisions by new client prospects. Our index franchise so far is demonstrating strong resilience and is bolstered by continued elevated volumes in its futures products. However, it's hard to predict how the market performance of index products will develop as the economic impact of the virus continues to evolve. We're very pleased to see that the investment inflows mute the downward pressure on the AUM from the drop in market values. which we also experienced in Q4 2018 when the markets had a different valuation dislocation. However, it is always difficult to predict future investor behavior. Our market data business has demonstrated resilience across prior recessionary periods, but it is not completely immune when economic downturns are more protracted. Additionally, in recent years, we have successfully diversified our clients outside our traditional US markets, but there could be some pullback from these clients if they view real-time data to be discretionary in a time of economic pressure, as this period may represent. As you know, we do not issue short-term, current-year revenue growth guidance at NASDAQ. Our trading businesses are subject to significant external factors, such as volatility, and therefore we do not provide any revenue outlook for our market services segment. For our non-trading businesses with recurring revenues as their foundation, We have issued ranges describing where we expect organic growth in those segments to average over perspective rolling three to five year period, which we consider medium term. Since early 2018, we have targeted an organic compound annual revenue growth rate across those non-trading segments collectively of five to seven percent over that medium term three to five year period. We also said that over shorter periods of time, We expect there to be data points above and below our communicated range, especially during the most impactful peaks and troughs of the economic cycle. Over each of the past two years, we have delivered organic growth from the non-trading segments at or above the top of that 5% to 7% medium-term outlook range, and we continue to believe that same range is appropriate outlook looking forward over the next three to five-year period. However, in the short term, taking into consideration all of the dynamics that I just described across our businesses, While we remain confident in the strength and resiliency of our business overall, we see increasing risks to reaching the lower end of that 5% to 7% range collectively across our non-trading segments for the full year of 2020. We will continue to provide updates on our growth progress for 2020 in upcoming quarterly calls as we gain more knowledge and experience in the current environment. Overall, we are proud of the resilient and diversified nature of our business, with a coupling of volume-driven revenue and more stable recurring revenues serving as our foundation. With our diversity, we benefit from certain segments bolstering our results when others face some short-term pressures. That has been the story of NASDAQ for many years now, and overall, it provides for more stability and predictability than many of our direct peers. As a result, while we remain a performance culture where individual employment decisions are still made on the basis of each of their efforts and contributions, We have made a commitment to our employees that we will not initiate any broad-based layoffs this year. We are proud to support our employees and help them feel secure in their professional lives while they address the challenges of COVID-19 and its implications that they have on their personal and family situations. While we actively address the particular challenges of the pandemic and related economic impacts in the near term, We're also paying close attention to what the changing world tells us about the most important long-term secular dynamics in our industry, the changes that are most impacting our clients, and where we have the largest opportunities to grow as we deliver against the opportunities they create. What we are seeing overwhelmingly is that the pandemic is in many ways reinforcing these longer-term dynamics. For example, we recognized during our strategic review in 2017 that the investment management industry is going through profound change, including an enlarging passive investing trend on one end of the spectrum, a private market on the other end of the spectrum, and an increasingly pressured traditional active management industry in the middle. During the pandemic-induced downturn, we're seeing continued positive flows into ETFs despite the market pullback, while private equity firms are raising new capital that might be put to work in particularly distressed industries. Among our traditional asset management clients, it's an increasingly competitive world with certain firms outperforming the market and drawing in new capital while others face significant outflows. We believe that how we partner with asset managers to launch new innovative ETFs that help them participate in the passive trend, how we assist private companies and private equity funds with liquidity events through the private market, and how we help active managers and private equity funds compete for flows with investments will continue to be increasingly important. In market technology, with our next generation trade lifecycle technology platform, we see the benefits of marketplace and surveillance solutions leveraging the cloud to be scalable to any level of activity and accessible by both users and operators from anywhere in the world. We view that to be even more critical in a world that likely considers a much wider spectrum of business continuity scenarios than it ever has before. And with our corporate issuers who are faced with increasing challenges that they have to meet to effectively navigate public ownership, we believe that the need for a technology-enabled and highly specialized consultative partner to assist with activities such as managing by-site interaction and governance and sustainability matters will be even more essential. Over the past three years, we have set a course for transformation of our business without sacrificing the quality of service we provide to our clients. and while remaining focused on value creation for our stakeholders. The results we have delivered is a rewarding indication that this strategy is working. Yet we recognize that to maintain our momentum against the business backdrop that is still digesting the shock of the COVID pandemic, we must continue to challenge ourselves each and every day. As I wrap up, I will summarize by saying our communities are adapting to the challenges of isolation and the uncertainty of what lies ahead. These times of stress and uncertainty test us, and I am proud of what we have delivered for our clients and stakeholders this past quarter. We are looking out for each other, and we are continuing to get the job done for those who rely on us. We are also incredibly grateful for and inspired by the collective compassion that has surfaced as a result of this crisis, particularly demonstrated by frontline healthcare and other essential workers. Moving forward in 2020, we remain focused on advancing our strategic mission, As our teams have adjusted to the remote nature of daily life, I'm reminded by one of NASDAQ's founding principles, that people do not need to be in the same physical place to be part of the same community. This founding principle continues to drive us as we face the unexpected, and I believe we are moving NASDAQ in the right direction this year. And with that, I'll turn it over to Michael to review the financial details.

Thank you, Dina. 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 the attachments to our press release and in the presentation that's available on our website at ir.nasdaq.com. I will start by reviewing first quarter revenue performance as shown on page 3 of the presentation, and organic revenue growth on pages 4 and 14. The $67 million increase in reported net revenue of $701 million is the net result of organic growth of $81 million, including a 22% organic increase in market services and an 8% organic growth in the non-trading segments, an $8 million net negative impact from acquisitions and divestitures, and a $6 million unfavorable impact from changes in foreign exchange rates. I will now review the quarterly highlights within each of our reporting segments. I'll start with information services revenues, which as reflected on pages 5 and 14, increased $18 million, or 9%. Organic revenue growth during the period was also 9%, reflecting growth in the index and investment data and analytics businesses. Included in index revenues is a $5 million collection of previously unpaid license usage fees. Market technology revenue, as shown on pages 6 and 14, increased $4 million, or 5%, with organic growth of $5 million, or 6%. The organic increase was partially offset by a negative $2 million impact from unfavorable changes in foreign exchange rates. Organic growth during the period primarily reflects an increase in software as a service surveillance revenues and an increase in software delivery and support projects. As Adina mentioned, annualized recurring revenue, or ARR, rose 9% compared to the prior year period. This increase was net of an adverse impact from changes in foreign exchange rates, which also affected the comparison to the preceding fourth quarter of 2019. Without that impact, the year-over-year growth in ARR was 11%. Turning to corporate services on pages 7 and 14, revenues increased $7 million or 6%. Organic revenue growth was also 6% or $7 million, reflecting an increase in the total number of listed companies and annual renewal fees, as well as higher governance solutions revenues and IR intelligence revenues. Market services net revenues on pages eight and 14 saw a $48 million or 21% increase. Excluding the negative $3 million impact from unfavorable changes in foreign exchange, the organic revenue increase was $51 million or 22%. The organic increase during the period primarily reflects an increase in cash equities and equities derivatives net revenues due to the higher industry trading volumes. Now turning to pages 9 and 14 to review expenses. Non-GAAP operating expenses increased $14 million to $336 million. The change reflects a $23 million or 7% organic increase, most of which was due to the impact of higher achievement within our performance-based compensation programs in relation to the higher organic growth. This is partially offset by a $5 million decrease from the net impact of acquisitions and divestitures and a $4 million favourable impact from changes in foreign exchange rates. Turning to slide 10, we are updating our 2020 non-GAAP operating expense guidance to a range of $1.32 billion to $1.37 billion. Adjusting largely for foreign exchange rates and the recent acquisitions of Sylovis and OneReport, The midpoint of the expense range represents an approximate 3% organic increase year over year. This 3% organic increase is consistent with our medium-term 3% expectation and is unchanged from the three months ago when we reported fourth quarter results. Moving to operating profit, and margins. Non-GAAP operating income increased $53 million in the first quarter of 2020, and the non-GAAP operating margin was 52% compared with 49% in the prior year period. The 300 basis point increase in the margin year-over-year reflects the strong operating leverage, particularly in our market services business, as well as multi-year efforts to enhance the company's scalability, though we would expect some near-term reversion should market volumes moderate. Net interest expense was $24 million in the first quarter of 2020, a decrease of $10 million, primarily due to our debt refinancing in the first half of 2019. The non-GAAP effective tax rate was 26.5% for the first quarter of 2020. For full year 2020, we expect the non-GAAP tax rate to be between 25.5% and 27.5%. Non-GAAP net income attributable to NASDAQ for the first quarter of 2020 was $251 million or $1.50 per diluted share, compared to $204 million or $1.22 per diluted share in the prior year period. Excluding the impact of Section 31 fees, which is a pass-through of fees collected on behalf of the SEC, free cash flow in the first quarter of 2020 was $380 million. Now, let me turn to the balance sheet, where we've taken actions to strengthen our liquidity and cash position and address refinancing risks in response to the uncertainty posed by the COVID-19 and related economic impacts. First, in February, we took advantage of relatively low rates in the euro bond market to refinance the 600 million 2021 euro bond with a new 10-year 600 million 2030 euro bond. reducing our borrowing costs from 3.875% to 0.875% annually. This also eliminated near-term bond maturities until May of 2023. Then, starting in March, we observed conditions in the market for Tier 2 commercial paper issuers were deteriorating, impacting both costs and actionable duration of CP issues. And so we borrowed under a revolving credit line to eliminate funding uncertainties. Among NASDAQ's funding sources, our revolver serves the principal purpose to provide liquidity and act as a backstop on our commercial paper program, so that if we encountered a time when issuing commercial paper was unavailable or unattractive, we would have the option of borrowing on the revolving credit line instead. We typically maintain around $400 million to $500 million in commercial paper, and given the uncertainty in the debt market during March, we decided to borrow approximately $800 million of our available liquidity on Revolver. The approximate $800 million provided the company the ability to repay our commercial paper, including the remaining $350 million as it comes due over the balance of Q2, plus create an additional cash cushion of approximately $300 million. Looking forward, we expect to maintain this more conservative cash position in the near term, and as always, we'll weigh funding alternatives, which include... utilizing our borrowings under the revolver, returning to the commercial paper markets if conditions are attractive, or issuing long-term debt. Turning to slide 11, the net of these actions is that as at the end of Q1 2020, debt increased by $721 million versus Q4 of 2019, primarily due to the net borrowing of approximately $800 million on the revolver. This is partially offset by a net reduction in other debt instruments. Our total debt to EBITDA ratio ended the period at 3.0 times, up 0.4 times versus the fourth quarter of 2019, but our net debt to EBITDA was 2.3 times unchanged from the fourth quarter of 2019. While adjusting our balance sheet positioning to enhance our liquidity brings slightly higher interest expense, it has enabled us to have uninterrupted ability to continue executing our capital deployment plan. For example, during the first quarter of 2020, The company funded the two aforementioned tuck-in acquisitions, Sylovis and OneReport, as well as continued funding of our important R&D initiatives, such as our work to expand the investment solution set to serve private equity investors and the continued rollout of our SaaS market technology model. Also during the first quarter of 2020, the company paid a common dividend in the aggregate of $78 million and repurchased common stock in the amount of $122 million. With an additional $30 million of repurchases completed thus far in Q2, we have largely offset the dilution from our equity programs for 2020. Today, the company also announced that our board has approved a 4% increase in the quarterly dividend to $0.49 per share, which takes into account our growth in income and cash flow over the last year, but also the heightened uncertainties around the magnitude and duration of the COVID-19 pandemic's future macroeconomic impacts. Looking forward, we plan to continue with our stated capital deployment priorities of working to identify investment opportunities that meet our strategic and financial objectives, of maintaining our dividend policy with the intention to provide stockholders with regular and growing dividends over the long term as earnings and cash flow grow, of executing our buyback program to target a stable share count, and to manage balance sheet leverage to maintain an investment-grade credit profile. With that, I thank you for your time, and I'll turn it back over to the operator for Q&A.

Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Please limit yourself to one question, and then please rejoin the queue. Please stand by while we compile the Q&A roster. Our first question comes from Rich Rapetto with Piper Sandler. Your line is open.

Good morning, Adina, and good morning, Michael. Adina, thanks for the review of the business segments and I guess the sensitivities to this, I guess, changing and challenging environment. Thank you. And it helped very much. The one question I'm getting from investors and sort of jumped out at me too was the new order intake in market technology. So it came down from the elevated levels of you know, from 4Q, but the ARR didn't materially, you know, change quarter over quarter. So I'm just trying to see that big number that you put up in 4Q, you know, could you review again how that could flow through and how you could see benefits in the market tech segment?

Sure. Yeah. Thanks, Rich. So we did have a high level of order intake in the fourth quarter. And that obviously then had some impact on the amount of order intake we took in on the first quarter. But as a reminder, the order intake can come in three different groups. So one is renewing and in some cases expanding existing client contracts so that it's both extending out of the contract term and in some cases expanding the services we offer. The second is new client acquisitions for trading solutions and what I would call marketplace solutions. And the third is the more SaaS-oriented revenue that's more immediately SaaS in our surveillance business. And what you're finding is the order intake that took place in Q4, the way that it flows through ARR is in the SaaS, it's kind of the surveillance business that's currently SaaS. And any new markets that are truly SaaS, that can come in pretty quickly into the ARR in the following quarter. But the vast majority of the order intake is either is an expanding out of contract so that it will then start to flow into ARR as our contracts are extended, or with new clients where we have to develop the solution and then deploy it, the ARR will not, it won't show up in ARR until we've deployed the solution because we don't count the build costs and the build revenue oriented revenue as ARR. So in the vast majority of the cases for the fourth quarter order intake, it is requiring us to build out the solutions first before they'll show up in ARR. So there is a delay.

Got it. Thank you very much. And, again, thanks for the review of the segments.

Sure. Thanks a lot, Rich. Thank you. Our next question comes from Dan Fannin with Jefferies. Your line is open.

Thanks. And just a question, again, on market tech, thinking about some of the forward-looking implications you highlighted earlier, The 1Q results were slightly below what we were looking for, so curious if you started to already see that play out in March and in the 1Q revenues, or if there are other things that maybe impacted that kind of potential first quarter result in terms of the slowdown. And then also, last quarter you mentioned margins improving on a year-over-year basis in that segment going forward, given the forward look for revenues. I assume that's maybe not as doable, but maybe talk about the margin profile for that segment, given the changes you've been implementing for a while and the transition to SaaS and those things and how that might still play out from a margin perspective.

Okay, great. Thanks. So with regard to the 1Q results and looking at how they are developing as we go through the year, I think that we, I would say that we didn't see a lot of impact of the COVID-19 situation on our 1Q results, but some, because remember a lot of our clients are in Asia and And so they were hit much earlier by the virus than the rest of the world. And so some of the work that we were doing in that region got delayed. So I would say that there was some impact in Q1. I think that now that it's become more of a global situation, we wanted to make sure we did give you a view into what we are seeing so that you can understand where there might be delays in work that we're working on. We are still, for instance, doing design studies, but if we're doing design study remotely, it just takes longer to get the design studies done. And we are still doing them. It's actually been really great to work with our clients that way. But it does take longer to get through the design work when you're having to log in on Zoom together. And then in terms of some of the new enhancements that we are working on for our clients or, frankly, upgrades of their trading systems or other systems, they've asked for some short-term delays while they're managing through a remote working environment. And so those are the types of things that we're starting to see. We're not seeing general underlying weakness in our clients or client relationships. It's really just showing that there are other diversions of their attention right now and that will have some short-term impact on how we can recognize revenue against project-related work, short-term change requests, as well as new deliveries that we're working on. In terms of the margin, we are as focused as you guys are on managing the margin in the business. And so the way that we're looking at that balance is we want to be able to continue to develop and deploy our next-gen technology stack. And there's work that we're doing to really fill out our staff capabilities against that technology. And we will – our goal is to continue to do that work. We also have to make sure we're managing to our client expectations in terms of managing the workload we do have. But we also have the ability to look at that in terms of making sure that we're making the right decisions around building out the teams and managing the teams so that we can try to manage to the shorter-term margin issues. So we are still working towards showing an expansion of margin there. But as you said, it will be harder with lower growth this year. Thank you.

Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Great. Thanks. Thanks very much for your comments also, Dina. Very helpful across the businesses. Maybe just to circle back on that in terms of that, it sounds like it's mostly from within the market tech segment in terms of the COVID-19 related slowdown. But maybe if you can just sort of characterize what you think the base revenue run rate is on a quarterly basis, that is guaranteed effectively through this period. And then also if you can just comment on the index data that looked like it was very strong in relation to the actual metrics. So just wondering how the index data might play out in the second quarter given where the markets have turned.

Sure. So we don't communicate kind of that base revenue that you're looking for we tried to provide enough context for you to understand that we have a very broad and secure base of clients across all of our businesses. So whether it's market technology, corporate solutions, information services, and our markets business, we have active and engaged conversations, and we have a very broad base of clients. So we have the benefit of diversity in And when I gave my comments, I wanted you to see either what we're starting to see or what we could see as we understand this pandemic and its potential impact on our clients. But we don't provide a specific kind of revenue-based number that you're looking for. We're just trying to make sure you understand how our growth could be impacted going forward through the year. In terms of our index business, the index business was impacted by three things. First, As Michael mentioned, we did have a collection of unpaid invoices that we were able to secure in the quarter, and that had a positive impact of $5 million. But even without that, we did have double-digit growth in the index business, and that was driven by the fact that our AUM is up, so that's one, and that volumes in the futures business, as you know, we have an agreement with CME on the futures volumes in the NASDAQ 100 index futures. And those volumes were very, very high during the quarter, which obviously helped supplement the growth in the business.

Got it. That makes sense. Okay. Thank you very much.

Thank you. Our next question comes from Alex Cram with UBS. Your line is open.

Yeah. Hey, thanks. Sorry to jump back into the index business real quick, but can you actually be a little bit more specific and maybe this is for Michael then on the pieces on the quarter to quarter basis because I feel like there's still something missing so AUM I think average AUM was up 5% quarter over quarter in ETPs and I think the volumes you mentioned on CME I think were up 109% quarter over quarter so maybe just in terms of dollars where you know what the contributions were and then also maybe on the subscription side if there was a big increase there it just seems like there's a You're either doing a lot better than we thought or something else going on. So just curious if you can flesh out the pieces a little bit better.

Sure. So I think that a couple of things, and I'll also send it over to Michael to see if I miss anything. So the first thing is recognizing that the AUM is 5% growth in AUM, but then also depends on where the AUM is coming from. And in this particular case, we saw pretty strong growth reflection of AUM in our benchmark indices that tend to carry a slightly higher fee rate. So that's one to consider. And then the second thing is on the futures volumes. When I looked at last year, I looked at like all of last year, and the futures volume revenue contributed about 12% of the overall revenue, 12.5% of the overall revenue in the index business, whereas in the first quarter it was 19%. So hopefully that will give you a sense of the scale of the change in the futures revenue. But I don't know, Michael, if you have anything else.

No, I think it's primarily within that futures revenue. As you know, we do have a new contract with CME, and so when you look at it on a year-over-year basis and the additional volumes plus the e-mini micros that they have, when you take that all into account with the mix, et cetera, it adds up in the results that we're seeing, plus in addition to that $5 million that Adina mentioned earlier and that I mentioned in my remarks.

Yep, thanks. No, those numbers from Adina were great. Thank you.

Okay, great. Thank you. Thank you. Our next question comes from Chris Allen with compass point. Your line is open.

Yeah. Morning everyone. Um, I guess I just want to ask quickly just on the, on the, on the, uh, taking down the revolver and maintaining the cash buffer. Um, I get the, you have to repay the CP, um, in the second quarter if the, the, the CP markets do not improve. Um, I'm just wondering why you think it's necessary to maintain that level of cash buffer right now, just given the, cash generation capabilities of your businesses and just where you are from a kind of leverage standpoint at present?

Yeah, thanks, Chris. I think the simple answer is it's really belt and suspenders. As we're going through an unprecedented time, something that comes along once every hundred years, and you're in a situation when we were in March with the markets were very volatile. The short-term funding markets obviously had it tightened up substantially. And honestly, in a position like this, it's just a matter of having liquidity is a very good thing to have, and it just allows us to sleep well at night. So there was no immediate need for that additional buffer. It honestly was just putting some additional cash on the balance sheet so that we had some protection for unforeseen circumstances, again, given just the uncertainty around the events. And as things settled down and now with the government stimulus and the markets returning to normal, we will take a look to see whether we need to maintain that additional $300 million or so, and we'll pay down the revolver when we feel comfortable. But it was really just, like I said, a belt and suspenders approach.

Thank you.

Thank you. Our next question comes from Mike Carrier with Bank of America. Your line is open.

Good morning, and thanks for the update and taking the question. So questions around the organic growth, and, you know, thanks for, you know, all the updates. I think that was helpful and, you know, to be cautious this year. But, you know, when you think about the low end of the range, like in terms of determining that, is it like kind of the depth, you know, of the recession and the impact from the pandemic, or is it more the duration, meaning if it lasts a long time? And then, Michael, just on the expenses related to, you know, the non-transaction or the non-trading part of the business, like how flexible is that And I think you mentioned on the organic growth, like the longer term, but a lot of times you go through, you know, like issues like this, and a lot of customers kind of rethink businesses. So, you know, are there any parts of the business that you think, you know, you could actually see more demand, you know, for outsourcing and some of the services that you provide, you know, to your customers?

Great. Thanks a lot. So I'll start with the organic growth range. I think that when we've been really evaluating businesses 2020. And we also have been looking at it long term, as I mentioned. So it's kind of like, what's the immediate impact and how should we make sure that we're communicating at least what we're seeing and what we know about a great unknown right now? And then also looking longer term, are we still playing into the right trends? Are we seeing those trends either develop as they have been or even accelerate? So taking both in order, On 2020, I think that we are trying to make sure that we recognize that if things kind of are able to return to a quote-unquote new normal, I'm going to call it that, relatively in a sustainable way as we get through the first half of this year and into the second half of the year, then I think that we'll find that IPOs come back in, albeit slower than what we had experienced last year in the first quarter. We will also expect that we will continue to have great ability to provide intelligent solutions to our investment management clients and our corporate clients. And then we also have a lot of projects and a lot of opportunities within market tech that we would expect that our clients will want to hop right back to it and get those going as they see their own worlds normalized to a degree. We do think there will be a new normal, though. We don't expect all of our employees to come back to the office right away. We don't expect our clients' employees to come back to the office right away. And so it will be, hopefully, a steady improvement in the environment as we get better testing, as we hopefully implement some contact tracing, and we can be better at managing and equipping our employees to work safely. So I think, Mike, that that's a new normal. That's something that we would like to see, and I think that gives us you know, that plays right into what we're good at and what we can do. But we also recognize that that's not necessarily the outcome. So we wanted to give you a sense of where are there the risks. And those risks, you know, to the extent they continue to manifest will make it harder for us to reach the low end of the range this year. And we wanted to make sure that you were aware of that. But when we look longer term, We continue to be really optimistic about where we're investing and why what we're doing is important. And I actually completely agree with your comment, which is that as people look forward and they say, okay, what do I need to do myself? And where can I find a partner who can do it for me? Or what do I need to do on site? And what can I put into a cloud environment to make it so I'm not as dependent on my data center and the people there? I think that we have a lot of opportunity to partner with our clients on tech. I mean, I really do. I think that they will be looking for more and more solutions that can scale up, that can be operated remotely, managed remotely, that make it so that they can operate in a more of a BCP environment. And I believe that what we're building and what we're doing will play into that quite nicely. In terms of the expenses, I'm going to send that over to Michael because I forgot what the question was.

Yeah. Thanks, Adina. And, you know, the answer on the expenses and whether it's the trading or the non-trading expenses, you know, I think NASDAQ has historically shown that it's a very efficiency-focused organization. And we do look at our expenses on a very detailed basis across our different segments. And depending on what's happening with respect to the nature of the business, we do have some levers that we can affect. We obviously have some discretionary spend across our different programs. Number one, we'll take a look at those, and that includes things like marketing and travel and entertainment and other types of opportunities. In addition to that, we do have our initiatives. And there's initiatives that, you know, Dina referred to earlier in our R&D program. But there's also a number of other underlying initiatives that, as an organization, you have the opportunity to either do faster or slow down, depending on the nature of the environment that we're facing. And then you can always continue to look at other elements within the cost base. We now have much more flexibility with respect to our working environment, and so we'll take those things into account. So I think we'll be very cost-conscious, and we will obviously observe the environment and adjust our expenses accordingly. All right, thanks a lot.

Thank you. Thank you. Our next question comes from Ari Ghosh with Credit Suisse. Your line is open.

Hey, good morning, everyone. Assuming this one for Dina, I appreciate all the color that you provided, and apologies again, but back to, you know, your comments around, you know, the potential risk of hitting that 5% to 7% range in 2020. Just based on your early assessment, You know, and I know you've hit on this a little bit, but again, apologies if I missed it. Could you just talk about specific areas and segments that might be driving that? Because, you know, if I think about the trends that you saw early this quarter, info services, there were solid trends there. And then just overall in the business, whether it's analytics, surveillance, tech infrastructure, you know, those are sort of more essential and I imagine would be a little more sticky areas. in the near term as well. So maybe can you just drill down by maybe high-level business and then specific either client segments or regions that you see right now that could potentially drive some of this weakness in the near term. That could just help maybe sort of ring fences for us to think about sort of how long this could last in terms of whether it's more near-term concern with the particular sub-client segment or maybe longer-term nature. Thank you. Sure.

Okay. So I'll try to be brief, but it's a big question. So the first thing I would say is you are correct that we have a sticky client base, and I think that we should recognize that. And hopefully I conveyed that in my prepared remarks that we do provide critical services, critical technologies, critical information that allow our clients to navigate the capital markets or operate capital markets successfully. So you are very correct that we have a sticky client base. And so that gives us great confidence in the overall base and foundation of our business. But when we look at growth, it's driven by obviously in upgrading or even increasing the relationships we have with certain customers or finding new customers or making changes in pricing. And I think we've made our normal course changes in prices this year, and those are already being reflected through the results. But when we look at the other two, I think that when it comes to our current client base, whether it's corporate clients, investment management clients, broker-dealer clients, or exchanges, they're very busy right now. So they will look to us for immediate needs, And we will be able to provide them to them like we helped them through the surge in traffic and volumes through their systems. We've helped corporate clients really try to understand and do some new targeting work to help them understand how to attract new investors into their names. We certainly have done a lot of work with our investment management clients, and we're doing a lot of analysis now on business continuity planning and other things that help our investment management clients. So we have a lot of really interesting short-term work, and I think some of that was was well reflected in the quarter, but also will continue to benefit us. I think where we just want to make sure we recognize is that with our existing clients, they are quite busy. And so decisions get slowed down. And they are also dealing with their own uncertainties. And so they want to make sure they kind of understand where the world might sit Certainly before they make big decisions, but also even with some of the smaller ones, it just takes longer to get things through the process. I think that the other thing is with new customers, we have a very good pipeline, frankly, and we continue to have a good pipeline across our business. But those clients also are thinking through their own kind of how quickly can they get it to market? How quickly can they get their new customers to test the system, for instance? How quickly do they want to switch over to a new service when everyone's working from home? So to me, those are delays and decisions. But generally speaking, in our recurring revenue segments, we do find that we have a strong base, but we have some clients who are either lengthening their decisions or deferring them. Or they might. They haven't yet, but they might. So we want to make sure that you're aware of that. And then I would say that in certain places, and I did mention this in my comments, where we have, particularly in corporate clients, where we have a range of clients across multiple segments, they are going through different phases. So some of the segments are quite secure, like healthcare and technology, and other segments are managing through significant disruptions. And that can make them make different decisions around any sort of what they would consider discretionary spend. Again, we haven't seen a lot of that yet, but that's a risk that we recognize in our business, particularly if this situation continues over a longer period of time. So that's all within our non-trading businesses that I mentioned. Within our trading businesses, as I mentioned also, we don't try to predict volume. We tried to long ago. But it's not an easy thing to predict. So we try to make sure we maintain our business and manage our business through cycles. And we benefit our shareholders when we have a cycle of high volumes. But we definitely try to make sure that we don't commit ourselves to thinking that there's going to be a high volume environment forever. We just are looking at the signals that we're seeing right now and seeing a healthy volume environment right now. So that was what I was basically trying to convey to you. I hope that helps.

Great. Thank you very much.

Thank you. And our next question comes from Ken Hill with Rosenblatt. Your line is open.

Great. Thanks. Good morning, everyone. I wanted to ask, yesterday you guys announced the launch of NASDAQ Cloud Data Services. I was hoping you provide a little bit more detail on kind of what the enhanced flexibility does there. I mean, obviously, it seems like it allows you to kind of update the product more often, have a more tailored data set. But is there anything tangible we should be thinking about from maybe an expense footprint perspective, or the ability on the revenue side maybe to tap into new customers or new clients who might not have used the legacy products in the past? So just kind of wondering how to think about that tangibly. Thanks.

So you nailed it. So we are looking at that cloud data service. First of all, it's not for the ultra low latency clients, but it is for the broader investor base out there in the world and for clients who tailor to investors around the world because it's delivered in a millisecond environment. So it is truly real time. And that's pretty exciting to be able to deliver that out through a cloud infrastructure, and that's some engineering work we did with our cloud partner. The second thing is that it's a really light touch in terms of what the client needs to do to take it. It's a very easy API for them to ingest and to build up front-end capabilities against. So it's a very modern language. It's very simple. And it makes it so that they can ingest it and develop front ends very quickly against it. So it's like a light, think of it as like a light development kit that allows them to take in the data a lot faster and have a lot less cost associated with managing the data. And recognizing that since it is in a cloud infrastructure, they're not having to take the data into and ingest it into their data centers. They can just ping it through and it'll flow through into their into their systems from the cloud and they can store it and they can manage it in the cloud. So our view is that it's a much lighter infrastructure as well. And I would say that we are expecting to be able to see new customers. That's kind of one of the main reasons we're doing it is to continue to expand our client base. But we also are working with customers that we've had who might take it as a new feed. Like maybe they took our basic feed before and now they want to take our depth because it's a lot easier to take in. So for all those reasons, we're excited. But it's new. So, you know, we just launched it yesterday and we have a lot of work to do to make sure we build up that pipeline and make it a reality for us.

Okay, great. Thanks for the detail there.

Thank you. And we have a question from Chris Harris with Wells Fargo. Your line is open.

How does COVID change how you guys are thinking about acquisitions? Do you want to potentially be a bit more opportunistic because I presume valuations have come down or do you want to be more cautious because we just don't know what the revenue outlook is going to look like?

A great question. So the first thing I would say is I think it's a little early for companies to necessarily admit to themselves that their valuations have come down. So while I do think we have a resilient business, we have a strong cash orientation to our business. We have a lot of opportunities to grow and continue to manage our growth organically in the context of what I've been discussing this morning. were there to be a really great opportunity out there that we really think is a great strategic fit and delivers a really good financial result, and we have line of sight into the future of that business, because that's the big thing that everyone's trying to grapple with, then we may choose to continue to take that opportunistic approach. But I think that we'll be more cautious in a couple areas. One is certainly making sure we're thinking about in the context of our own balance sheet and making sure we continue to have a very strong position there. And two is we really need to be able to model it successfully. And so these businesses, we have to be able to see through the cycle and know what's on the other end and know that they're also growing into or managing into a trend that we believe in. And so for that reason, I think you're going to find that it's, you know, I would say we're being more cautious, but we, it certainly is something that we have, you know, we will continue to evaluate. I think, as we've said before, the vast majority of our time and attention is focused on organic growth. We have the engines going, and while some of them may have a little bit of a slower roll this year, I think we still feel highly excited about everything that we have going on organically. So we don't spend every minute thinking about that question, but that is something that we'll consider if the opportunity is right.

Thank you, and our next question comes from Kyle Voigt with KBW. Your line is open.

Hi, good morning. Thank you for taking the question. Just on the investment data business, the slowdown in organic growth there to 5% year over year, just wondering if you could comment on what that was related to specifically. Was that any type of early impact, or should we be expecting some rebound from that growth rate? Also, just regarding that investment data business, it was good to hear that you haven't seen much change in client behavior yet, and you kind of won over the stickiness across a number of your non-transaction businesses. But very specifically related to investment, one that you can frame as a mission critical that really is for us to make a significant revenue pressure into 2021. Thanks.

Okay, great. I didn't quite catch the end of that question. I heard you want me to talk about investment, but I didn't quite catch the whole question. Do you mind asking it again?

Yeah, sorry. Okay.

How about this? I'll answer your first question and then I'll try to give you just color into investment. So, in terms of the growth rating investment data and analytics, it's comprised of a few things. So, we've got investment, which is definitely the largest revenue driver there. We also have Quandl and the NASIC fund network included in there. So, just want to make sure everyone knows that it's not just investment. But when we look at the growth rate of investment, what we chose to do going into 2020 and coming through 2019, is actually try to focus on deepening our relationships with our clients, which frankly is I think paying dividends right now. So we actually made a change in the way that we price investment to remove the per user charge and make it more of an enterprise charge per client, which has made it so that we've actually significantly increased usage of investment within the clients, but it also means that We don't have as many kind of smaller increases in per user revenues that would come in in any given period, but it does also mean that it gives us more of an opportunity to scale investment across the clients, create even more stickiness with our customers, and really work with them on developing and delivering new capabilities as this technology and the data is more propagated within our customers, meaning it's not just in the marketing group, it's in the senior management office, it's in the fund management office now, and so it gives us more of a chance to grow through new capabilities. And so on the back of that, that did moderate some of the growth, the near-term growth that we saw in the revenues this quarter, but it also gives us a lot of stickiness and a great foundation for us to continue to grow. And then I think that in general, we are doing a lot of investing in investment in the private market space. So we've built out a really great capability to be able to do the same thing for private investors as we can do for public market investors. And that has been an area of growth, but that I think will start to show up as we get through 2020 and into 2021. And so those areas, I think those are all the things that I think will drive us and continue to have very sticky and successful relations with our customers, expand into private markets, continue the global expansion of the business. But it did result in some slower growth as we transitioned our clients to a new pricing scheme.

Thanks for the caller. Sorry for the connectivity issues.

Oh, that's okay.

Thanks again.

Thank you. Our next question comes from Alex Bolstein with Goldman Sachs. Your line is open.

Greg, good morning. Thanks for taking the question. So back to the outlook for non-transaction business growth. So slower growth dynamics in current environment obviously make a lot of sense, but I was hoping you could talk a little bit about areas where we could see actual cost rationalization from some of your clients. So I think you talked about corporate solutions. as one of the areas in early responses. You just talked about investments, but any others that we need to be mindful of is obviously clients potentially might have to respond to their own revenue challenges. And if you could head on the kind of typical contract structure for those relationships, are these annual renewals? Could there be more near-term terminations just to kind of help us think about the path over the next couple of quarters? Thanks.

Sure. So So if I take it by group, so in the corporate services business, as I mentioned, to the extent that some of our corporate clients are facing more near-term expense challenges, they may come to us and try to work with us to change some of the fees that we charge, or they might have to make a decision not to take our service. But those are, I mean, we have thousands of customers who take our services, so it's still not going to be a large swath of our client base. And in those cases, what we have been able to do to the few that we've been working with so far is really just focusing on what are the services they really need. And so we've actually been able to retune the conversation towards, well, let's actually work on something that meets your more immediate needs, and then we'll get back to, let's say, a perception study later. So that they maintain their relationship with us, we do a different kind of work for them that's more relevant to the time that they're dealing with, but keeps them as a customer. And that's been highly successful so far. But those contracts are anywhere from one to three years generally, and they generally auto-roll. But it does give them an opportunity to have a conversation with us every one or two or three years. In terms of the data and index business, well, as you know, index is a little different, so I'm going to put that to the side. When it comes to our investment data analytics and some of the groups there in our data business, they tend to be either you know, one-year, multi-year contracts with an investment, but our data business is just you take it, you pay a monthly fee. So we don't tend to contractually obligate our clients over periods of time there. And that's worked quite well for us, frankly, and it is a highly resilient business across cycles, and we've been very pleased that our clients actually are coming to us and saying, well, how can I use your data to save money? So I'm just letting you know we have had various – good conversations with clients who are looking to take some of the proprietary data and maybe consolidate it to make it so that they can actually save money against some of the other data providers that they might have. This new cloud service also gives them the flexibility to take the data directly from us as opposed to through a vendor, which then also adds a layer of cost. So there are ways that we can work with them on that, but we have not, as I mentioned, other than some of the new clients, particularly outside of the United States that have taken our data and to the extent they see it as a discretionary spend, they may choose not to later. But generally, you know, we have a very resilient business there. In terms of market tech, as you all know, those contracts are longer term in nature. A surveillance agreement can be anywhere from three to five years. A market tech, a transaction or an execution system or a trade lifecycle system contract can be anywhere from five to ten years. So they're very secure contracts. Our exchange clients are looking a lot like us. They're very resilient businesses. They're very stable businesses. And so our conversations with them have been more around how can we support them through the short term? How can we make sure that we continue to work with them on upgrading and enhancing their technologies for the long term? And so those conversations have remained very, very productive. So I hope that helps.

Great. Yeah, thanks very much.

And we have a question from Owen Lau with Oppenheimer. Your line is open.

Yeah, good morning. Thank you for taking my question. I have a question related to the Skytra trading value, and then more broadly, how does the conversation change with other non-financial industries which may see the need to hedge revenue risk? So for Skytra, it may be a little bit hard to gauge, but how effective does Skytra exchange could have spread the risk from the travel industry to capital markets? And then more broadly, do you have more discussions about developing similar trading venue with other non-financial industries to hedge our revenue risk? Thank you.

Thank you. So I don't have any special knowledge of Skytra beyond the work that we're doing with them to develop their trading and clearing solutions. I think that I think that they've actually made statements around that, so I can work with Ed to see if that's something that we can get more clarity on from them. I think that they are excited about being able to launch this, and they want to be able to provide that hedging capability. And I think that they continue to target this year for their launch, so I would say that they continue to see this as being highly relevant, but I think that they would have to answer your specific question there. In terms of the broader new markets landscape, it definitely has opened our minds to working with clients on that kind of hedging type of capability. The key to Skytra's success, and I think what they expect to have as great success, is the data. So, of course, it's our trading solution, too. But the data they have is very comprehensive. They are getting data from an industry source that allows them to see into the vast majority of tickets sold in the industry. And that then gives them a very strong foundation for an index that then can serve as the foundation for the futures instrument. If you think about other industries, you know, other parts of our economy where there is this kind of vast amount of data that allows you to aggregate selling and buying behaviors and understanding the pricing of certain goods and services being sold and a very large percentage of them being sold, then I think you could argue that this is a relevant strategy for a lot of industries. And that's something that we've been thinking about a lot. We did a fun internal program where we asked our internal teams to come up with new markets ideas. And then we had judges come and judge the different ideas. And some of them were based specifically on what you just said, as to how we think about leveraging our technology to help other industries. So that's work that's ongoing, and obviously I agree that there's opportunity to take that model and apply it elsewhere.

Okay, thank you.

Thank you, and there's no other questions in the queue. I'd like to turn it back to CEO Adina Friedman for closing remarks.

All right, well, thank you very much. I just want to say that it's we are really fortunate to have a particularly resilient operating and financial model at NASDAQ, and that provides essential technology, information, and services across a diverse set of clients across the global capital markets. We also greatly benefit from our trading franchise, which provides an increased revenue opportunities in times of uncertainty, while the balance of our non-trading segments prepares us well to manage our business successfully over a range of macroeconomic environments. and we remain fully committed to our new long-term strategy. If anything, recent events have bolstered our belief that continuing our journey as a leading technology and information services provider that operates world-leading marketplaces is the best way to serve our clients and deliver returns to our shareholders over the long term. So I look forward to continuing our discussions throughout the year on our progress and what we continue to see as the situation evolves. And with that, I want to thank you very much for your time today. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating.

You may now disconnect. Everyone have a great day.