Nasdaq, Inc.

Good day, and thank you for standing by. Welcome to NASDAQ's first quarter 2026 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. In the interest of time, please limit yourselves to one question. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Asa Garrett, Senior Vice President and Investor Relations Officer. Please go ahead.

Good morning, everyone, and thank you for joining us today to discuss NASDAQ's first quarter 2026 financial results. On the line are Dana Friedman, our Chair and Chief Executive Officer, Sarah Youngwood, our Chief Financial Officer, and other members of the management team. After our prepared remarks, we will open the line for Q&A. The press release and earnings presentation accompanying this call can be found on our investor relations website. I would like to remind you that we will be making forward-looking statements on this call that involve risks. A summary of these risks is contained in our press release and a more complete description in our annual report on Form 10-K. We will discuss our financial performance on a non-GAAP basis, excluding the impact of acquisitions and divestitures, as well as the impact of changes in FX rates. Definitions and reconciliations of U.S. GAAPs and non-GAAPs. Plus, adjustments can be found in our earnings presentation, as well as in a file located in the financial sections of our investor relations website at ir.nasdaq.com. And with that, I will now turn the call over to Adina.

Thank you, Otto, and good morning, everyone. Today, I'll start with a review of our first quarter financial results, and we'll then review the operating performance across our divisions. I will then hand the call over to Sarah to walk through the financial results in more detail. NASDAQ entered 2026 with strong momentum, and our first quarter performance reflects one of the strongest starts to a year in our company's history. We delivered the highest Q1 organic growth since 2021 across net revenue, solutions revenue, and operating income, as well as our highest ever quarterly revenue growth in the financial technology division. The results this quarter demonstrate the breadth and depth of the client engagement we are experiencing across our platform, which is resulting in meaningful growth. As we outlined at Investor Day, the power of our platform enables us to serve as a trusted transformation partner to our clients, underpinned by our embedded client community, deeply integrated solutions, gold standard data, and engineering excellence. This is a dynamic moment for the world and for markets, underpinned by an accelerated pace of technological change, persistent geopolitical tensions, and concerns about the stability of the private credit market, as well as overall complexity across the global economy. In the U.S., softer labor conditions and inflation pressures are offset by resilient spending from higher-income households and continued capital deployment in AI. Investment in AI continues to be a meaningful driver of economic activity, especially in the United States, through large-scale data center and infrastructure build-outs. Within this overall environment, macroeconomic growth remains balanced and constructive in the U.S. and across other major economies. Smart regulation is also starting to take shape across the capital markets and banking industry, and as a result, clients are moving forward with investments in the modernization of their core infrastructure. Within the banking sector, we're experiencing increasing demand for cloud-based, mission-critical solutions that include AI features to support workflow automation. Within capital markets, we're experiencing demand for solutions and services related to the transition to always-on markets and the tokenization of assets. As the industry addresses these trends, NASDAQ is well positioned to reinforce its role as the trusted fabric of the global financial system. Turning to our financial results, in the first quarter, we delivered $1.4 billion in net revenue, a 13% year-over-year increase. Our overall annualized recurring revenue, or ARR, grew 12% year-over-year to $3.2 billion. Expenses were $608 million, up 8% year-over-year. Operating income was $799 million, up 17%, and we delivered 21% diluted EPS growth. Within our divisions, capital access platforms generated 10% revenue growth and 7% ARR growth. Financial technology delivered 18% revenue growth and 16% ARR growth. And market services delivered 10% net revenue growth. As we move into divisional performance, I'll cover how our results reflect disciplined execution against our expand, evolve, and transform growth framework, from delivering on one NASDAQ across our core franchises to evolving our solutions with new innovations to transforming the business in key strategic areas. Starting with capital access platforms, we'll all first discuss data and listings. In our U.S. listings franchise, we welcomed 15 new operating companies, raising over $5 billion in proceeds during the quarter, including seven of the top 10 IPOs. Early in the second quarter, we were pleased to welcome Arxis and Calera Therapeutics, two of the biggest IPOs of Q2 so far. While the IPO environment has been uneven amid market volatility, Issue engagement remains strong. Companies in our pipeline continue to prepare for market entry. We are seeing an encouraging environment for improving IPO activity entering the second quarter, and we believe that we are well positioned to support that activity as momentum builds. In our data business, we continue to deliver strong revenue growth, highlighted by 32% year-over-year growth of enterprise license agreements and continued momentum in Asia and the Middle East. Looking ahead, we see continued progress towards always-on markets creating meaningful operations for our data business, enabling trading activity in regions where demand for NASDAQ proprietary market data is already rising. Our index franchise delivered $79 billion in net inflows over the last 12 months, including $6 billion in the quarter, exiting the quarter with ETP AUM of $836 billion. Our average AUM this quarter increased 32% year-over-year to reach a record of $877 billion. Net inflows were modestly positive, impacted by sector rotation and a risk-off environment tied to market uncertainty in March. We view this impact as short-term tactical behavior and not representative of structural trends. Although we don't view early quarter flows as predictive, We are encouraged by the momentum we've seen to date in the second quarter with $15 billion of net ETP inflows as of April 20th. Our index performance has been underpinned by our success in product innovation. 46% of inflows were driven by product launches over the last five years, and 25% were driven by launches over the last three years. Institutional adoption of our index products grew among annuity providers, contributing to a 30% increase in insurance-related revenues. International expansion was driven by strong demand from EMEA and APAC this quarter. This contributed to 19% of total EPP AUM coming from non-U.S. clients. We launched 31 new products in the quarter, including 12 international products and 11 in the institutional annuity space. We also launched the NASDAQ Private Capital Indexes, a way for investors to benchmark private market investment allocations, an asset class that has historically lacked transparency. We were also pleased to announce that we will expand access to the NASDAQ 100 later in the spring with two new carefully selected partners, BlackRock and State Street, while continuing to work closely with our longstanding partner, Invesco. The pricing terms related to the index license for these upcoming new U.S.-listed ETFs will be consistent with the QQQ pricing terms. We are excited to continue to grow and expand distribution of our flagship index to new investors across the U.S. and globally with all of our high-quality partners. For example, with Invesco, we continue to create new marquee products to address investors' evolving needs. Recently, we expanded the Invesco QQQ Innovation Suite with the launch of the Invesco QQQ Equal Weight ETF. Additionally, with the expanded partnerships with BlackRock and State Street, we look forward to working with them to make the NASDAQ 100 more accessible to their investor universe. and to help drive additional institutional adoption. Turning to workflow and insights, revenue grew 6%, driven by continued strength in analytics. Analytics delivered solid revenue growth, underpinned by investment-strong performance, which benefits from powerful network effects and sustained demand in volatile markets. Within investment, we continue to expand the reach of our data assets to meet the evolving needs of our clients and to enhance the value that we bring to asset owners and asset managers, including in private markets. This quarter, we integrated our data with Databricks to broaden entitled access to investments, comprehensive institutional investor data. Across analytics, we're leveraging our gold standard data assets to support our client's AI strategy. Investment AI-ready data has been adopted by global asset managers, GPs, and institutional investors representing over $9 trillion in assets under management and helps drive a 29% year-over-year increase in Q1 bookings. In corporate solutions, AI adoption is strong with 74% of IR inset users and 51% of board vantage users leveraging our AI solutions. Overall, the corporate buying environment remains muted, driven by lower IPO activity compared to historical levels. Turning to financial technology, we delivered record revenue growth of 18%, driven by sustained global demand for our mission-critical technologies. We continue to deliver on our one NASDAQ strategy with strong bookings performance for Q1, signing 64 new clients, one cross-sell, and 85 upsells during the quarter. The division sustained compelling land and expand momentum, grabbing more than 50% year-over-year growth in ACV bookings, while supporting clients' transition to cloud. Cloud-based solutions accounted for 80% of ACV bookings in the quarter. I would like to call out a key expansion this year of an existing Axiom SL and Calypso Tier 1 bank client that brings our cloud, AI, and One NASDAQ strategy to life. In Q1, we completed a significant renewal and expansion of AxiomSL, driven by our ability to deliver cloud and AI-enabled regulatory solutions. Early in the second quarter, we expanded the relationship further with a cross-sell for Nasdaq Verifin, our cloud-based AI-native financial crime management solution. The expansion of this relationship illustrates the power of our platform as we deliver innovative technology to address our clients' top regulatory and risk management needs. Turning now to a review of the subdivisions, starting with financial crime management technology. NASDAQ Verifin delivered another strong quarter with 21% revenue growth across a growing client base of more than 2,800 clients representing nearly $12 trillion in collective assets. During the quarter, we signed 58 new S&B clients, driving a 24% year-over-year increase in ACV bookings from that client segment. In enterprise, we signed two renewals and one expansion with existing clients. And early in the second quarter, we added further momentum with an enterprise upsell and a new Tier 1 client cross-sell that I mentioned a moment ago. NASDAQ Verifin is evolving its platform through strategic partnerships, including our recently announced partnership with FIS. This agreement expands our ability to deliver leading AML and fraud solutions to FIS's banking and payments clients. We continue to lead through advanced AI-driven innovation. Our agentic AI workforce is now deployed by more than 500 clients, up 40% since Investor Day. Later this quarter, we will launch our new drug trafficking analytic, which embeds generative AI directly into our models and synthesizes open-source intelligence, social media, and third-party research to help clients more effectively detect potential drug trafficking activity. Regulatory technology delivers sustained momentum supported by new capabilities introduced across our product suite, as well as structural trends impacting the industry. These trends include the transition to always-on markets, sustained investment in infrastructure modernization, and improving clarity of the regulatory environment. Specific to Axiom SL, this momentum is translating into meaningful client expansion and new wins across regions, as global institutions deepen their use of our regulatory reporting and capital management solutions. For instance, a large international bank significantly expanded its U.S. footprint with us, extending the use of our platform to support CCAR reporting. Another large bank expanded into cloud-based broker-dealer capital management and regulatory reporting, underscoring growing confidence in our cloud-enabled regulatory infrastructure. We also secured a new client in Europe for consolidated reporting across capital, liquidity, and financial regulatory requirements, highlighting continued momentum across the continent. We are realizing the benefits from investments we've made in our cloud capabilities as approximately 90% of Acumacel ACV bookings in Q1 have been for cloud-based solutions. We're also experiencing strong interest in our AI solutions within AxiomSL, including RegCopilot, RegSimplify, RegNavigator, and RegInvestigator, the products we detailed during Investor Day. In surveillance, we delivered strong growth this quarter, supported by upsells and renewals, including a renewal of a global Tier 1 bank. We are experiencing interest in our crypto surveillance services, both with new clients and upsell opportunities. We are also continuing to invest in our core product, to sustain strong client engagement and demand. For example, we recently introduced our Calibration Co-Pilot, an AI-powered tool that's enabling clients to optimize workflows, reduce false positives, and increase accuracy of detection. In the second quarter, we will release our GenAI platform extension, which connects news and market events to trade data. In beta, this capability has proven to be an effective solution for clients to uncover risks faster and more effectively. Capital market technology delivered an excellent quarter with strong demand driven by broad-based growth across the subdivision. In trade management services, we had outstanding results driven by robust demand and pricing increases that Sarah will address in her remarks. In market technology, we continue to experience momentum in our managed trading services business with a new cloud-hosted trading client for tokenized assets, in addition to an expansion of services with several of our large clients. We also continued progress on the rollout of our Eclipse product suite with two significant client implementations for trading and clearing completed in the first quarter. This progress demonstrates the strength and readiness of our modern cloud-enabled platform. In Calypso, we delivered four new sales, including one cross-sell. One of these wins was a new cloud-based booking for an enterprise-wide derivatives platform with a large U.S. insurance company, supporting the company's broader technology transformation efforts. Now turning to market services, the division delivered 10% organic net revenue growth driven by record volumes in our U.S. markets in both U.S. equity options and U.S. equities, as well as elevated volumes in our European markets. We're experiencing strong industry-wide momentum in short-dated options, and our market share and volumes align with our established leadership and equity options. We also continue to expand our opportunity within index options, with revenue more than doubling year-over-year. Looking ahead, we're excited to be leading the transition to always-on markets. With SEC approval to extend our market operations to 23.5, we are focused on expanding access, resiliency, and continuity for global market participants with a projected launch of December 6, 2026. We are excited to set a new standard for how regulated markets operate in an increasingly global and digital economy. In parallel, the SEC's approval of our proposal to enable the trading of tokenized securities allows us to enhance how investors access markets and how issuers connect with shareholders. We will continue to collaborate with BCCC and the industry to build the infrastructure needed to launch tokenized equities. Building on this foundation, we're advancing the NASDAQ equity token design. that takes modernization a step further by putting issuers at the center of ownership rights. This approach will give issuers greater control over how their shares are represented and managed in tokenized form. As stated in our initial announcement, we expect to provide early benefits of NASDAQ token design in the first half of 2027. Looking ahead, the broader forces shaping the global financial system, including rising complexity, investment in AI, and the need for resilient, trusted infrastructure continue to reinforce the role that NASDAQ plays at the center of the financial ecosystem. Supported by the scale of our platform and disciplined execution across our priorities, we remain confident in our ability to create durable value for clients as well as long-term value for our shareholders. And with that, I'll turn the call over to Sarah to walk through our financial results in more detail.