Nasdaq, Inc.

Good day, and thank you for standing by. Welcome to the NASDAQ second quarter 2021 results. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ed Dittmeier, Senior Vice President of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us today to discuss NASDAQ's second quarter 2021 financial results. On the line are Adina Friedman, our CEO, Ann Dennison, 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 as 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 NASDAQ's second quarter 2021 financial and business performance, as well as the progress we've made to drive forward along our strategic directions. I would like to begin by acknowledging the NASDAQ team's deep commitment in delivering results for our clients, while creating sustainable value for all of our stakeholders. NASDAQ's mission reflects our focus on becoming the premier platform and ecosystem for the global capital markets and beyond, with unmatched technology, insights, and markets expertise, and we made important progress during the second quarter. Our financial results demonstrate our business's ability to capture opportunity in a unique economic environment, even as we continue to strengthen its position for long-term growth. We see strong demand for many of our products and services as corporate issuers, institutional investors, banks, brokers, and marketplace operators all navigate today's rapidly changing world. Our core foundational marketplaces benefited from an active capital market backdrop that saw record-setting industry, U.S. equity, and options trading volumes in the first half of 2021. Our client-first model has also driven our ability to win the majority of new listings in one of the strongest periods of industry activity in years. Meanwhile, expanding demand from institutional owners for index strategies as well as asset allocation and portfolio management tools, from banks for modern anti-financial crime solutions, and from corporates for ESG and investor relations solutions underpinned our performance in the solution segment businesses. Our performance in these businesses is also a testament to our client-centric approach and strategically aligned offerings as we invest in and grow new and innovative technology to meet that demand. We also achieved other important milestones against our corporate journey this quarter. First, NASDAQ completed the sale of our U.S. fixed income business to trade web markets at the end of the second quarter. Second, we announced our strategic investment in PuroEarth, a leading carbon removal marketplace. Along with the launch of our new ESG data hub, these solutions further expand the ways that we can partner with our clients to support their unique sustainability efforts. And third, we announced yesterday that we are starting an exciting next chapter for the NASDAQ private market as part of our partnership with a group of leading banks in the private market space. It highlights both the success of the private market platform we developed at NASDAQ and the growing interest in developing a robust ecosystem for private company liquidity. All of these actions underscore our commitment to our strategy and allow us to reprioritize elements of our unique business model to advance our focus on the most impactful secular opportunities. I will now turn to our financial results from the second quarter of 2021. Overall, NASDAQ delivered net revenues of $846 million, an increase of $147 million, or 21% from the prior year period. Driven by 18% organic revenue growth in our solution segments, and 10% organic growth in our market services businesses. We continue to execute against key secular growth opportunities, as illustrated by strong momentum in our institutional investor analytics and anti-financial crime solutions businesses, as well as the broad-based growth in total company ARR of $1.8 billion. This equated to an increase of 22% compared to the prior year period, reflecting both the acquisition of Verifin and a 12% increase in our existing ARR. Turning now to specific segment highlights from the second quarter, I will begin with our foundational marketplace and corporate businesses. Our market services segment saw net revenues of $312 million, a 13% increase from the prior year period. Market services transactional revenues, the sum of our cash equity, equity derivative, and fixed income commodities trading businesses increased by 27% in total in the second quarter of 2021 compared to the prior year period. with the largest contributor of this being our equity derivatives revenues, where we experienced strong increases in U.S. options industry volume. NASDAQ's options markets specifically traded $782 million of multiply listed options contracts, an increase of 28% year over year. Driven by an active, dynamic equities market, we have also seen increased levels of activity from companies seeking to tap the public market to raise capital. which has resulted in a 13% increase in the overall number of operating companies listed on the U.S. on NASDAQ in the last 12 months. Specifically, we have 352 more operating companies listed on NASDAQ in the U.S. than we did in June of 2020. The increase in our number of listed companies naturally contributes to higher industry volumes and contributes to higher trading on NASDAQ in particular, since we have approximately two times higher market share in our own listed stocks than we have in stocks listed on other markets. I would also like to highlight for a moment another record-breaking NASDAQ closing cross during the annual Russell U.S. Index's reconstitution, which occurred in late June. The closing cross successfully executed 2.3 billion shares of NASDAQ-listed securities, representing approximately $81 billion in market value, and occurred in under two seconds. This closing cross was 760 million shares larger than our second largest closing cross ever, which occurred in March of this year with the Triple Witch expiration. I'm incredibly proud of our team as this milestone underscores our leadership in operating the industry's most robust and resilient market infrastructure. Next, our corporate platform segment delivered revenues of $154 million, a 22% increase year over year. The business continues to thrive with elevated levels of new listings since the market recovery in the second half of 2020. In our listings business, NASDAQ again led U.S. exchanges for IPOs during the period, welcoming 135 IPOs that raised $31.7 billion, including 88 operating company IPOs and 47 SPAC IPOs. The NASDAQ stock market led U.S. exchanges with a 78% total win rate on IPOs, as well as executing the largest direct listing ever, Coinbase. In addition to new listings, we also welcomed 10 switches in the second quarter of 2021, representing a combined $183 billion in market value, including Honeywell, a Dow 30 company. The total market value of all companies transferring to NASDAQ since 2016 now exceeds $1 trillion. Meanwhile, our Nordic listing platform hosted 62 IPOs in the second quarter, bringing the total to 86 in the first half of 2021, contributing to an 11% year-over-year increase in the Nordic listed issuer base compared to the prior year quarter. NASDAQ is proud to be the exchange partner supporting companies throughout their corporate lifecycle, with our commitment to providing issuers with an industry-leading market model and a full suite of investor relations, board engagement, and ESG solutions. Revenues in our IR and ESG services increased $4 million, or 8%, to $56 million in the second quarter compared to the prior year period, as we continue to see strong demand for our investor relations and advisory and ESG product offerings. The economic impacts of the pandemic, combined with the sudden and likely lasting landscape of virtual or hybrid investor engagement, has increased corporate's focus on investor relationships. and has accelerated their professionalization of their ESG programs, both of which has intensified the demand for new data and tools to power their programs. Now let me take a minute to talk about the actions we've taken to advance the NASDAQ private market going forward. This week we announced an agreement to contribute NASDAQ private market into a joint venture with Silicon Valley Bank, Citi, Goldman Sachs, and Morgan Stanley. This creates a new entity to build upon NPM's success becoming the leading marketplace platform for issuer-led private company tender transactions. The partnership will enable increased investment in a broader set of capabilities designed to enhance NPM's position as the go-to marketplace for private company liquidity. Nasdaq Private Market will continue to expand from its foundation of facilitating private company tender programs to enhance and refine its buy-side book building, auctions, investor block trades, and pre-direct listing continuous trading programs. Additionally, the platform will provide end-to-end settlement, and through the new ownership structure, will create a unique and powerful distribution network serving private companies and institutional investors. NASDAQ's market technology business will be contracted to supply MPM with its technology platform on a go-forward basis. NASDAQ Private Market's talented team has made strong progress in the seven years since we established the business as measured by the close relationships we've built with more than 250 leading private companies worldwide and the more than $30 billion in transaction volume that they've executed for many of the world's largest private companies. This new entity will expand upon that success going forward. In the last 12 months, ended June 30th, revenues for NASDAQ private market increased $13 million or approximately 200% over the prior year period. Going forward with our partners, we expect to unlock significantly more value for our clients and shareholders by advancing the market for private company shares with a high-integrity, advanced platform that facilitates liquidity in new ways and builds on the momentum that we've developed over the past several years. Now let me turn to our market technology and investment intelligence segments. Our market technology segment delivered $117 million in revenues, a 39% increase year-over-year, including a 5% organic increase from our existing business and an additional $27 million contribution from Verifin. Revenues in the second quarter of 2021 also included a temporary $10 million purchase price adjustment on deferred revenue associated with the closing of the Verifin transaction. In our anti-financial crime technology business, revenues increased $29 million, or 88%, driven by the inclusion of revenues from Verifin, as well as the continued growth in surveillance solutions. With Verifin as part of NASDAQ for its first full quarter, we continue to find great opportunities working collaboratively with the Verifin team to open doors to new clients and expand their footprint. Verifin signed 36 new clients during the second quarter, and we remain extremely pleased with the business and its growth potential as it achieves its mission of fighting financial crime. In our marketplace infrastructure technology business, revenues increased $4 million, or 8%, in the second quarter of 2021 compared to the second quarter of 2020. New order intake for market technology hit a six-quarter high at $81 million, excluding Verifin. Market technology ARR increased 9% year-over-year, also excluding the impact of Verifin. If you include Verifin, NASDAQ market technologies ARR increased 61%. Turning to our investment intelligence segment, we delivered net revenues of $263 million, up $50 million, or 23% from the prior year period. Overall assets under management and ETPs benchmark to NASDAQ's indexes totaled $415 billion at the end of the quarter, an increase of 53% from the prior year period. We are pleased to expand our long-standing partnership with Invesco during the second quarter with the launch of two new thematic technology ETFs, tracking the NASDAQ Biotech Index and the PhilX Semiconductor Sector Index. These two indexes are the longest-standing benchmarks for their respective sectors and in the past year have increased in relevance for investors given the recent pandemic-related events. We also continue to see strong global interest in our index franchise, with 12 of 15 new licensed ETP launches in the second quarter occurring outside of the U.S. We are committed to bringing investment opportunities through our index partnerships and empower investors globally with access to diversified investment opportunities. For example, XP Inc., a technology-driven investment management platform in Brazil, launched one of the first locally listed NASDAQ 100 ETF offerings in Latin America during the second quarter, while Hashtex, also from Brazil, partnered with NASDAQ to launch the world's first ETF available in Brazil to investors utilizing the NASDAQ crypto index. During the quarter, two ETP sponsors, BlackRock and Vanguard, announced that they would be switching and consolidating their relationships with some index providers, and as a consequence, certain of their products would no longer be licensing NASDAQ indexes. While we're always disappointed to lose sponsors, the loss had a minimal financial impact, which Anne will touch on in her comments. And the continued expansion of our relationships with the broader sponsor universe, as well as the continued innovation and growth of the index product suite, gives us great cause for optimism going forward. Turning next to our analytics business, we delivered revenues of $50 million, a 14% increase from the prior year period due to growth in investment and syllabus revenues from higher new sales and increased retention. Driven in part by the success of the enterprise license contracting initiative, which spread usage of investments unique analytics to more users in more business areas of our client base. Lastly, revenues in our market data business rose 5% as compared to the prior year period to $106 million, driven primarily by expanding international demand for proprietary data products. As our business, our clients, and the broader markets begin to prepare to operate in a post-pandemic environment, we are excited to carry forward the strong momentum from the first half of 2021 and into the future. One increased area of focus for us is ESG. which we have seen growing interest from a range of clients in both the U.S. and Europe. NASDAQ's position at the intersection of financial, corporate, and regulatory communities gives us a unique perspective on corporate sustainability. From this vantage point, we're actively engaging with clients to help them successfully navigate the complex and fast-maturing ESG landscape. We were thrilled to have the opportunity in the second quarter to add Puro Earth's Marketplace for Carbon Removal Solutions to help our corporate clients meet their emission reduction commitments. At the same time, as a public company ourselves, we engage with our employees and our communities to improve our own practices, performance, and transparency on our own ESG journey. In that regard, I encourage our stakeholders to review our recently published and expanded sustainability report, which is available on our website. As I wrap up, I want to highlight how each of our businesses has expanded the diversity and depth of their client base in recent years, which underpins the strength and resiliency of the NASDAQ platform as we move through each quarter. Our strong engine of talent and technology is allowing us to expand our position in the capital markets in ways that can capitalize on the powerful secular tailwinds in a post-pandemic period. We're leading NASDAQ into the second half of 2021 with incredible momentum, and I look forward to updating all of you on our progress in the months to come. And with that, I will turn it over to Anne to review our financial results in detail.