Good day and thank you for standing by. Welcome to the Nasdaq Fourth Quarter 2021 Results Conference Call. Please be advised today's conference may be recorded. I'd now like to hand the conference over to your host today, Ed Ditmire, Senior Vice President of Investor Relations.

Good morning, everyone. And thank you for joining us today to discuss Nasdaq's fourth quarter and full year 2021 financial results. On the line are Adena 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 the line to Q&A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SEC Regulation FD. I'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'll now turn the call over to Adena.

Thank you, Ed. And good morning, everyone. Thank you for joining us. Let me first note how proud I am of the resilience of Nasdaq's business, the nimbleness and dedication of our global team, and the trusted relationships we have with our clients. We are certainly familiar with how unpredictable today's operating environment can be as we continue to navigate a dynamic pandemic and economic landscape. Before I turn to our performance, I would briefly like to address the current market environment. While the markets have experienced increased levels of volatility since the start of the year, we maintain a positive overall economic outlook going into 2022 as the underlying economy continues to have the ingredients for continued growth. Notably, consumer demand for products and services remains high. The ongoing digital transformation of industry continues to drive long-term demand for advanced software and other technology and market innovations. The resulting employment environment is very strong. That said, there are several factors driving the current market volatility, notably due to cyclical and structural issues we are entering 2022 with a tight labor market and supply chain challenges, both of which are contributing to inflationary pressures. Those pressures are then creating uncertainty around the pace and rate of monetary policy adjustments. Additionally, broader geopolitical challenges and continued pandemic impacts are adding to the macro uncertainty. So, while our overall outlook remains positive, we expect the confluence of market-driven factors, macroeconomic and political factors to continue to drive volatility over the near term. Within that context, we also remain confident in the strength and resilience of our business. For example, we've seen significantly higher trading volumes, and within the last week, the industry processed and Nasdaq processed a new record number of messages in a single trading day. We continue to have a healthy pipeline of companies expecting to tap the public markets during 2022. In fact, we have more than double the number of S1s on file with the SEC compared to the prior year period, although market volatility could cause some delays to IPO timing, something we are monitoring closely. In our index business, we expect index asset values to experience some impact associated with various market levels and investor appetite for products tracking our indexes, but also the benefit from higher futures trading volume due to the use of our core indexes in market hedging strategies. The diversification of our business over the past number of years has created a flywheel effect between our foundational U.S. and European marketplaces and the technology solutions we deliver to thousands of clients across public companies, investment managers, and banks, as well as the 100 plus market infrastructure operators, all of whom rely on our mission critical software to navigate the financial system successfully. This is especially the case during these periods of heightened market turbulence. We help asset owners rebalance their portfolios and manage asset allocation decisions. We enable banks and brokers to prevent financial crime while handling increased investor activity. We provide critical investor relations insights to corporate clients to understand changes in their investor base. We empower exchanges around the world to handle the market volumes and volatility. Nasdaq is there as a critical partner across the financial markets, and our business has demonstrated time and again that we can achieve success in the face of these types of backdrops. I'm confident this time will be no different. Let's now turn to our results. My remarks today will focus on the following areas: Nasdaq's full year 2021 and fourth quarter 2021 financial and business performance; the progress we've made to drive Nasdaq forward along our strategic direction; and an update on Nasdaq's cloud journey, as well as our ambitions for 2022 and beyond. I'll then turn the call over to Ann who will provide further details about our results, as well as give updates on our guidance, capital deployment, and sustainability efforts before we move to Q&A. Let's begin with our results. I'm very pleased to report Nasdaq's strong financial performance for the fourth quarter and full year of 2021. First, on the fourth quarter, we achieved $885 million in net revenues, a 12% increase compared to the prior year period, while non-GAAP earnings per share of $1.93 rose 21% compared to the fourth quarter of 2020. For the full year of 2021, net revenues of $3.4 billion increased 18% from the prior year. We achieved 14% organic growth with double-digit contributions from both the Solutions segments and Market Services. Our annualized recurring revenue or ARR ended the year at $1.87 billion, an increase of 19% year-over-year. This underscores our continued progress across key secular growth opportunities, including building out our Anti-Financial Crime Technology, as well as our analytics and workflow solutions for asset owners. Within our recurring revenue businesses, we see some of our best performances from our SaaS-based solutions. Annualized SaaS revenues totaled $640 million in the fourth quarter of 2021 representing 34% of total company ARR, up from 28% in the fourth quarter of 2020. The 43% year-over-year increase in annualized SaaS revenues primarily reflects the inclusion of Verafin, as well as strong organic growth in our markets surveillance and investment analytics businesses. Because of our 2021 performance, we entered 2022 with solid momentum and we intend to lean into our success as we operate our advanced client-led technology solutions and our foundational marketplace businesses diligently in the months ahead. Now I'm going to turn to specific highlights of our businesses focusing mainly on fourth quarter results. Our Solutions segments businesses delivered combined total revenues of $581 million during the fourth quarter, a 19% increase from the prior year period driven notably by standout performances from index and listing services, exciting momentum in our investment analytics offerings, and strong performance in our Anti-Financial Crime offerings, including the impact of the acquisition of Verafin. In our investment intelligence segment, we delivered $288 million in total net revenues in the fourth quarter, an 18% increase from the prior year period with contributions from across the business. We continue to invest in product innovation to meet the evolving needs of our clients. During the quarter, we brought to the market several new products that are seeing encouraging initial demand. Let me highlight a few. Data Fabric, which is our new enhanced cloud-based offering, is a powerful new feature inside of Nasdaq's Data Link that allows clients to bring their own data to the platform and have it securely managed as a service. The early traction we observed with Data Fabric is encouraging, and this offering is quickly becoming a critical part of our clients' investment workflows. In our Index franchise, we saw demand growth for the new offerings in our expanded Nasdaq-100 related and ESG-focused indexes, including two new sustainability-focused ETFs tracking the Nasdaq-100 ESG and the Nasdaq Next Gen 100 ESG indexes. In total, 61 ETFs tracking Nasdaq indexes launched in 2021, accumulating $2.9 billion in assets through the end of the fourth quarter. Notably, 67% of ETF launches in the year were outside the U.S., demonstrating the strong international demand for Nasdaq's index franchise. Turning to investment analytics, building upon our successful partnerships with leading investment consultants that were announced during 2021, Nasdaq's Asset Owner Solutions now distributes investment research and insights from Mercer and Aon among others to our growing community of asset owners and asset managers on the investment platform. This is just one of several ways we're increasing the value of investment and the broader asset owner solutions offering to our clients. And I'm incredibly pleased to see the tremendous sales growth from new clients reported by eVestment and Solovis for the full year of 2021. Combined new sales in 2021 totaled $26 million, an increase of 41% over the prior year, driven in large part by 79% new sales growth in the Asset Owner business. And Solovis’ new sales grew 145% across all applying groups. Turning next to our Market Technology segment, we delivered $131 million in total net revenues in the fourth quarter, a 24% increase from the prior year period. This was primarily driven by the inclusion of revenues from Verafin in our results. More broadly, we saw continued growth in demand for our SaaS-based offerings, both fraud detection and anti-money laundering solutions, which we call FRAML, and from the market and trade surveillance areas of our Anti-Financial Crime Technology, as well as a growing number of market operators utilizing our cloud-native marketplace solutions. Over the course of 2021, I'm pleased to report that in addition to 197 new banks, credit unions, and FinTech companies that adopted Verafin, our other market technology businesses welcomed 231 new customers, of which 26 chose our SaaS solutions. Though Market Technology overall had a transformational year in 2021, in particular, as we grow Nasdaq into an Anti-Financial Crime leader with related shifts in revenue composition, we have an equal focus on catalyzing recovery in the growth of our Solutions business for our market infrastructure operators. Revenues recognized in that business decreased in the fourth quarter, on a year-over-year basis, due to factors including lower nonrecurring professional services revenue caused in part by pandemic-related logistical challenges that we've previously disclosed. However, we're seeing some encouraging trends that bring us incrementally closer to a positive inflection in revenue. First, we're making progress on some of the larger, more complex implementations that have been more exposed to the pandemic-related challenges of travel and restrictions to onsite collaboration. In particular, two key projects are approaching their first go-live and acceptance phases in the first quarter of 2022. And in a third, the collaboration with the client resulted in its scope and timeline adjusted to reflect both expanding customer needs balanced against evolving delivery timeline realities. Second, in the fourth quarter of 2021, we achieved strong new order intake of $142 million, capping a record full year of $378 million, excluding Verafin, which constitutes a very substantial 58% increase in new order intake from 2020 that was highly impacted by the onset of the pandemic. Furthermore, we have seen a substantial uptick in early-stage discussions with clients who want to learn more about our progress bringing the benefits of the cloud and managed services to their own markets. We are excited to see how that can play out not only in driving further growth in new contracts down the line, but also because SaaS and managed service projects entail simpler delivery processes versus our legacy on-premises installations. Obviously, the duration of the pandemic has exceeded everyone's expectations. However, we are encouraged by the growing interest in our next-gen capabilities and the future opportunities to increase the way we serve market infrastructure operators to complement the strong growth that we see today in our larger Anti-Financial Crime offerings. Moving to our foundational marketplace businesses, our market services segment delivered net revenues of $303 million during the fourth quarter of 2021, an increase of 5% from the prior year period. We maintained our strong competitive performance amid a dynamic trading backdrop as the retail and institutional investment communities found new opportunities across equities and options to drive their strategies. Our U.S. options business set a new annual record for trading volumes in 2021. And we are starting 2022 with new records being set in volumes and message traffic. In early December, we announced our decision to begin the migration of our options markets to the cloud beginning in 2022, starting with our Nasdaq MRX Options market. This innovation in the infrastructure that underpins our markets will create more elasticity in our capacity while maintaining or improving the performance that our clients have come to expect from us. This will be made possible with the build-out of the broader cloud infrastructure within the Carteret data center supported by AWS and our local partner Equinix. I will cover this topic in more details in a few minutes. Turning to U.S. cash equities, the increase of our volumes as compared to the fourth quarter of 2020 mirrored the industry volume increase at approximately 3%. In the Nordic markets, we continue to experience strong trading performance, including a matched equity market share among lit venues of over 75%. The European equities value traded per day also increased 23% in the fourth quarter versus the prior year. Finally, our Corporate Platforms segment delivered net revenues of $162 million in the fourth quarter, a 17% increase driven primarily by our continued leadership in new listings across our U.S. and European markets, as well as growth and demand for our complementary IR and ESG services. For the ninth consecutive year, Nasdaq led U.S. exchanges for IPOs in 2021 with 752, capitalizing on one of the strongest years for new issuances over the last two decades, and with a 73% overall IPO win rate. Nasdaq also ranked number one in the U.S. in terms of IPO capital raised for the third year, with $181 billion and listed nine of the top 10 U.S.-based IPOs in terms of proceeds raised. We also had 33 new companies switch their corporate listings to Nasdaq in 2021, including Honeywell, Palo Alto Networks, and Baker Hughes, representing an aggregate of $361 billion in global equity market capitalization. The total market value of all companies transferring to Nasdaq in the last decade has exceeded $1.7 trillion. In Europe, our Nordic, Baltic, and First North exchanges also experienced a record year for new listings with 207 companies raising over $15 billion. For the first time ever, Nasdaq Stockholm facilitated more capital raised than any other country in the EU, while our combined Nordic exchanges had more IPOs than any other market operator in Europe. Demand for our IR intelligence and governance solutions drove 4% year-over-year revenue growth for the fourth quarter within the IR and ESG business. We continue to see deepened client engagement across Nasdaq IR Insight and Advisory and have also invested in the expansion of our ESG advisory and reporting services to corporate clients. We now provide those services in our portfolio solutions offered to companies who list on our U.S. market. Next, I'd like to provide an update on the important progress we made in 2021 to advance our cloud journey and how these milestones support our broader strategic vision to unlock potential growth and accelerate our transition to a SaaS business model in our technology data and investment analytics businesses. Our move to the cloud began over a decade ago, and we have used its innovation capabilities to deliver client-driven solutions while evolving our own infrastructure for a digital future. In fact, a wide range of Nasdaq solutions are already in the cloud today. We've also advanced our market's ecosystem by migrating several of our market surrounding systems that have greatly benefited from the hyper scaling that the cloud affords us to manage elevated volumes in the world's markets. We were therefore very excited to announce in December a multi-year partnership with Amazon Web Services to build the next generation of cloud-enabled infrastructure for the world's capital markets, committing to move one of our markets to the cloud this year. The partnership with AWS will accelerate the migration of our North American markets to the cloud through a phased approach. Specifically this year, we plan to move our MRX Options market to our generation trading technology and as part of that migration, we also plan to move MRX into AWS's cloud environment within the Carteret data center. The new edge computing solution that we co-designed with AWS may also be used by other market infrastructure operators and market participants to move their trading systems to the cloud. We look forward to engaging with our market technology clients on this future-oriented approach to managing market infrastructure. In addition, the partnership will include opportunities to explore new ways to leverage AWS's cloud capabilities across Nasdaq's Anti-Financial Crime, data and investment analytics, as well as our market infrastructure software businesses. Now, as I mentioned at the beginning of my remarks today, Nasdaq made notable progress against our broader strategic journey in 2021. As we continue that path, we would like to share our core ambitions and execution priorities for 2022 and beyond. First, we want to reinforce a culture of inclusive, frozen prosperity within our own organization. We want to continue increasing collaboration across our entire enterprise to deliver more through our deep client relationships, further increasing our value proposition as an employer, and advancing our sustainability practices. Second, we want to advance our client-first approach to serving the financial ecosystem. We will continue to deliver our core marketplace solutions with superior client service, utmost integrity, and technological excellence. We will also continue to listen to our clients' needs as we expand our offerings in index, investment analytics, Anti-Financial Crime, and ESG solutions. Third, we are accelerating our technology modernization, and our AWS partnership is an incredible example of this. But we have additional opportunities to leverage machine learning within our offerings, as well as our agile development within more of our innovation areas. We look forward to updating you on our progress on these ambitions in the quarters to come. As I wrap up, I will summarize by saying our fourth quarter produced solid results for Nasdaq, completing a very successful 2021 for our company. We remain relentlessly focused on advancing our strategic position as a technology company that is advancing the financial system as we move forward into 2022, capitalizing on the strong momentum generated last year. With that, I'll now turn the call over to Ann to review our financial details.

Thank you, Adena, and good morning everyone. My commentary will primarily focus on our non-GAAP results and all comparisons will be to the prior year period unless otherwise noted. Reconciliations of U.S. GAAP to non-GAAP results can be found in our press release as well as in a file located in the financial section of our investor relations website at ir.nasdaq.com. I will start by reviewing fourth quarter performance beginning on Slide 12 of the presentation. The 12% increase in reported net revenue of $885 million is the net result of organic growth of 10%, including a 12% organic increase in the solution segments and a 6% organic increase in market services, and the contribution from Verafin as well as the impact from divestitures, partially offset by the negative impact from changes in FX rates. Moving to operating profit and margins, non-GAAP operating income increased 18% while the non-GAAP operating margin of 51% increased three percentage points compared to the prior year period. Non-GAAP net income attributable to Nasdaq for the fourth quarter of 2021 was $328 million or $1.93 per diluted share compared to $268 million or $1.60 per diluted share in the prior year period. Turning to Slide 13, as Adena mentioned earlier, annualized recurring revenue or ARR totaled $1.87 billion, an increase of 19% from the prior year period while annualized SaaS revenues totaled $640 million, an increase of 43%. Excluding the impact of Verafin, ARR increased 9% year-over-year. I will now review quarterly segment results on Slides 14 through 17. Starting with market technology, revenue increased $25 million or 24%. The increase reflects the positive $35 million impact from the acquisition of Verafin and the $3 million increase in our existing Anti-Financial Crime Technology business, partially offset by an organic revenue decline of $10 million in our market infrastructure technology business. Excluding a $4 million purchase price adjustment on deferred revenue associated with the closing of the Verafin transaction, Verafin revenues would have been $39 million in the fourth quarter, an increase of 30% year-over-year; and Anti-Financial Crime Technology would have been $76 million, with both our existing Surveillance and Verafin's FRAML Solutions continuing to exhibit strong momentum. On a sequential basis and excluding the impact of the purchase price adjustment on deferred revenue, Verafin revenues of $39 million in the fourth quarter compares to $36 million in the third quarter. As we discussed last quarter, the revenue decline within the Market Infrastructure Technology business was impacted primarily by the successful completion of mid-year of a significant long-term maintenance and support licensing contract with a customer who will continue to use our technology as well as a decrease more broadly in change requests and installation revenues mostly due to capacity constraints we are working through as a result of logistical implications of the pandemic. That said, as Adena discussed a few minutes ago, we see some encouraging signs, including the $142 million of order intake during the quarter. ARR for Market Technology was $428 million in the fourth quarter of 2021, an increase of 51% compared to the prior year. The Market Technology segment operating margin was 15% in the period, an increase compared to the prior year quarter primarily due to a $25 million reserve related to an unexpected loss on an implementation project taken in the fourth quarter of 2020. Excluding the impact of the previously mentioned $4 million purchase price adjustment related to Verafin, the operating margin would have been 18% in the fourth quarter of 2021. Investment Intelligence revenue increased $43 million or 18%, reflecting organic revenue growth of $44 million. Organic revenue growth during the period reflects very strong growth in our index business as well as a meaningful contribution from analytics. ARR was $567 million, an increase of 10% compared to the prior year period. AUM and ETPs licensed to Nasdaq indices rose 18% compared to the prior year period to $424 billion, including $74 billion from net inflows and an $83 billion net increase from market appreciation, partially offset by $92 billion in net negative impact related to the ETP sponsor switches that we have discussed earlier in 2021. The Investment Intelligence segment operating margin of 64% is down 1 percentage point compared to the prior year period as we continue to make strategic investments in Index and Analytics to support sustained growth. One note looking forward to the first quarter of 2022. Trading activity of instruments licensed to our Indexes achieved certain annual thresholds mid-year that resulted in an increase in licensing economics in the second half of the year. Similar to what we described in the call one year ago, as we begin 2022, the economics of certain agreements reset for the New Year. We estimate that this will lead to approximately $7 million of lower revenue in the first quarter of 2022 compared to the fourth quarter of 2021, assuming similar trading activity and product mix in the two periods. Corporate Platforms revenues increased $23 million or 17%, reflecting organic growth. The increase was primarily driven by higher U.S. listings revenues due to the 23% expansion in our listed corporate issuer base, primarily due to a higher number of IPOs as well as higher adoption across the breadth of Investor Relations and newer ESG and reporting offerings. Corporate Platforms ARR was $546 million and increased 16% compared to the prior year period. The Corporate Platform segment operating margin of 37% increased 7 percentage points compared to the prior year period, primarily driven by the continued increase in the listed issuer base. Market Services net revenues increased $15 million or 5%. The organic revenue increase was $17 million or 6%, and there was a $2 million negative impact from changes in tax rates. The organic increase primarily reflects higher equity derivatives and trade management services revenues. The segment operating margin of 61% was unchanged from the prior year period. Turning to Page 18 to review both expenses and guidance. Non-GAAP operating expenses increased $28 million to $430 million; the increase reflects a $6 million or 1% organic increase and a $24 million increase from the net impact of the acquisition and divestitures, partially offset by a $2 million decrease from the impact of changes in FX rates due to a stronger U.S. dollar. Excluding the $25 million reserve in the Market Technology segment taken in the fourth quarter of 2020, the organic expense increase totaled 8%. The organic expense increase has two main drivers: first, higher compensation expense, reflecting our continued investment to drive growth as well as an increase in variable performance-linked compensation due to our outstanding results; and second, marketing and advertising expense driven by higher levels of new listing activity. We are initiating our 2022 non-GAAP operating expense guidance to a range of $1.68 billion to $1.76 billion. The expense guidance range at the midpoint has three components. First, a core increase compared to 2021 at approximately the mid-point of our medium-term expense growth objective of 3% to 6%, the majority of which is being allocated to our highest growth product areas: Anti-Financial Crime, Index, Analytics and ESG. Second, is a roughly 2% additional increase, reflecting certain shorter-term factors including costs related to the heightened competition for talent in today's market, inflationary pressures as well as some budgeted rebounding costs associated with return to office and travel and entertainment. Third, there is also the full-year impact of the 2021 M&A activity and the impact of changes in foreign exchange rates, which together net to a decrease of under 1%. Our expense philosophy and budget are driven by our strong growth opportunities and our willingness to invest to properly support execution against them. And as Adena went over earlier in her remarks, our positioning versus these large and growing opportunities has never been better. We expect the 2022 non-GAAP tax rate to be in the range of 24% to 26%. Turning to Slide 19. Debt decreased by $97 million versus 3Q 2021, primarily due to a net payment of $60 million of commercial paper and a $39 million decrease in eurobond book values caused by a weaker euro. Our total debt to trailing 12 months non-GAAP EBITDA ratio ended the period at 3.1 times, down from 3.2 times in the third quarter of 2021. Let me take a moment now to update you on stock repurchases. During the fourth quarter of 2021, in addition to retiring 0.4 million shares of stock representing the final 20% of the $475 million accelerated share repurchase program or ASR agreement we entered into in July of 2021, the company also repurchased an additional $58 million in shares in 4Q 2021. Moving to the first quarter of 2022, thus far in January, we have repurchased $142 million in stock. Later this week, we plan to execute a second ASR for $325 million, which we expect to fully complete in the first quarter of 2022. These repurchase plans are consistent with our desire as part of our capital plan to maintain a stable share count and with our intention to materially offset the dilutive impacts of the NFI divestiture beyond the first 12 months of that transaction closing. Turning to Slide 20, I want to touch on Nasdaq's unique set of opportunities in terms of our sustainability and external impact and the strong momentum we have in executing against them. In terms of what makes our ESG opportunities unique, we're committed to the highest level of sustainability in terms of how we run our businesses and serve all of our stakeholders. But we have also positioned ourselves to deliver high impact outside the organization through our Anti-Financial Crime Solutions and ESG products and services, our position as a marketplace operator to advance standards and practices, and our efforts to further financial inclusion through focused charitable activities and volunteerism. As we look back at 2021, we have made significant progress across all pillars of ESG. We meaningfully expanded our disclosures and commitments, including our first-ever task force on climate-related financial disclosures report; we enhanced our suppliers' sustainability program, received SEC approval on our Board diversity rule, and added Puro Earth, a provider of carbon removal solutions to our growing suite of ESG product offerings. We are pleased to see several third-party ESG research and ratings firms recognize our meaningful progress over the year, including Sustainalytics, ISS, CDP, the Dow Jones Sustainability Index, the Human Rights Equality Index, and the just capital ranking of 100 companies that prioritize critical business behaviors. We're also moving further in 2022. Earlier this month, Nasdaq announced its partnership with TRIBE Freedom Foundation, a charity focused on fighting human trafficking and modern slavery. Nasdaq will support TRIBE in the creation of a survivor financial empowerment program, a centralized portal including content, practical tools, and educational financial literacy material tailored to support survivors of human trafficking. We look forward to updating you on a regular basis as we progress our ESG initiatives going forward. Thank you for your time, and I'll turn it back over to the operator for Q&A.

Our first question comes from Rich Repetto with Piper Sandler.

Yes. Good morning, Adena; good morning, Ann.

Hey, Rich.

Hey, Adena. First, congrats on the AWS partnership because it shows that market trends continue to move in your favor, which is by no means an accident. I got a question. Given this technology focus, I have a question on Market Technology; you're going to kill me for this question. But we had a record quarter, revenue increased 15%, high order intake increase in SaaS, the margin expanded, but the ARR stayed flat quarter-to-quarter. It was the only segment where the ARR did stay flat. So can you give us some insight into the incremental, I guess, revenue composition in the pick-up in the revenues and Market Technology?

Well, first of all, Rich, we welcome all of your questions. Thank you for that, and thanks for the mention on AWS. But Ann is going to go ahead and give you some color on that.

Sure. So thanks for the question, Rich. We did – we were flat in ARR for Market Tech overall, and so there's a couple of different pieces to it. What I would say is we saw growth in the Anti-Financial Crime portion of ARR and some – a slight decline in the market infrastructure technology piece of ARR as we had a contract that was – there was a duplicate contract that we were serving a client in transition that rolled off. So a minor thing there. What we're also seeing, when you see the revenue growth in the Market Technology business, a lot of that growth is in this quarter is coming from additional change requests and the seasonal type items we see in the fourth quarter. Those things don't contribute to ARR, but I will want to just point on the positive side that we had a very strong order intake quarter in the fourth quarter and also a record order intake number for the year in marketplace infrastructure tech. And so when you think about the future, while we won't see that coming into ARR right away because there's an implementation phase in many of those projects, we will see the benefits in ARR over time.

Yes. And I think 1 other just piece of color on the order intake for the year, when we look at it, more than 50% of the order intake is from either expansions of our relationships with existing clients or from new clients. So it's a net new revenue opportunity for us as we execute against these contracts.

Yes. The positive thing is you get us focused on ARR. So...

I agree. That's a great thing. Thank you.

Thanks.

Thanks.

Our next question comes from Alex Kramm with UBS.

Hey, good morning everyone. Just want to talk about the 2022 outlook a little bit more in terms of organic growth. I know you have your medium-term guide here, 6% to 9%, starting this year. Obviously, last year was great. And I know some of the things that impacted a number like the Index business obviously had a bad start to the year. I think AUM is down 12% or so year-to-date, if my numbers are right. But I think even with that and looking at some of the exit rates and some of the other businesses, that 6% to 9% seems fairly safe. So I was just wondering if you could give us any commentary on how you feel about that 6% to 9% for fiscal year 2022 and any other color would be great. Thanks.

Great. Thanks, Alex. So first of all, we continue to support our medium-term, long-term outlook on our Solutions segment revenues in terms of the outlook that we provided to you around that 6% to 9%. I think that all of the businesses have slightly different dynamics. But the one thing I would agree with you on is that the entry rate for those businesses is quite strong. So we had a really strong end to 2021. And then, of course, with ARR, annual recurring revenue, it kind of portends to a strong entry rate for 2022. As we look at the longer–medium to long-term trends of the business, we continue to support that 6% to 9%. And as we continue to perform and execute and grow and expand the businesses, like we did when we announced the Verafin deal, we will certainly make the appropriate adjustments there. But I think, Alex, that as you know, it's always a very dynamic environment. So we feel very comfortable with that outlook, and we will see how we execute against it this year.

Fantastic. Thank you.

Our next question comes from Dan Fannon with Jefferies.

Thanks, good morning. I wanted to also talk about the outlook for Market Services and understanding that volumes are going to come and be what they are. But thinking about capture rates within both options and equities, whether that's because of mix or any competitive factors, how you're thinking about those into 2022?

Yes. You actually pointed out a lot of key contributors, Dan. So capture is really – is definitely mix plays a big role in that. The types of instruments that are also more heavily traded in any given period of time, and then deliberate actions that we might want to take in order to attract certain volumes into our markets from a competitive perspective. As you know, with more retail, particularly in options just to point out, and heavier volumes in what I would call the price-time markets in options, during turbulent times, those venues carry with them a lower capture. Whereas in our Philex and our ISC marketplaces that support more complex transactions have a higher capture. So any time where you see more retail and more volumes coming into the price-time venues, you're going to see capture change. But then at the same time, we do try to manage our capture quite actively in terms of attracting certain order flow into our markets. So there's a lot of dynamics underpinning that. But what we look at is the mix of capture and market share and volumes to try to make sure we're optimizing the results for our shareholders. I think we've done an excellent job of that, really maintaining a strong marketplace across all of our businesses, all of our markets in a highly competitive time for the marketplace.

Great. Thank you.

Our next question comes from Owen Lau with Oppenheimer.

Good morning, and thank you for taking my question. I have a question about your partnership with AWS. When people saw this news about this partnership, I think many of them understand this partnership from the cost perspective. But could you please explain a little bit more about like if you have an example, if there's any revenue opportunity here? And Adena, you mentioned the migration, I think, option market first and then your target over the next 12 months. But could you please talk about the pace of when do you expect to complete all the migrations? Thank you.

Sure. Thanks, Owen. So yes, our AWS partnership actually, I think is really unique because there are a few things. First of all, we do have a lot of our technology services today that are already cloud-based in AWS and also in Azure. So we already have a lot of experience in working in the cloud. As we start to really focus on the marketplace businesses and we bring our markets into the cloud environment, I think we're doing it in a really, really thoughtful way. But what's really cool, and I think unique about the relationship that we've developed here is that bringing AWS into the Carteret data center. Then Equinix has committed to significantly expanding the data center. We're doubling the size of the data center and doubling the power into the data center. So, as we create this best private local zone for AWS in Carteret, number one, it makes it much easier for our clients to migrate to the cloud environment that they're going to create inside the data center. And number two, it gives us more space, more power to offer additional services to our clients and gives our clients a chance actually to bring more of their surrounding systems, more of their trading systems into a cloud environment, but in a very controlled way. It gives us expansion opportunities within Carteret and ways to expand our client relationships. With the go-to-market plans that we have with AWS with our market technology clients around the world, this private local zone construct and the ultra-low latency edge compute system that we co-designed with them, we can then deploy that to other major markets around the world and help them with their cloud journeys. That gives us a chance to be more of a, number one, to deploy our cloud-based marketplace solutions, which we also are implementing for MRX. And then number two, to become more of a managed service provider to our Market Tech clients, which then builds a bigger relationship with them that accrues to our benefit. So a lot of revenue opportunity there in the coming years. I just want to say, those are all long-term, kind of think about the data center, for instance; it's going to take a couple of years to build out the data center. It will take some time for us to deploy our cloud solutions to our Market Tech clients. We see a really nice medium-to-long-term journey that we can have with AWS on that. In terms of our own markets and moving our markets, we are starting with MRX in 2022, we want to gain some experience with it. We want to hear from our clients as we manage the migration and complete it. We will set a more targeted timeline for how we'll continue the migration of our markets in the U.S. But I want to say we want to start with the first one before we commit to a very specific schedule for the rest.

Got it. Thank you.

Our next question comes from Alex Blostein with Goldman Sachs.

Great. Good morning, thanks for taking the question. I had a follow-up with respect to the Market Tech business, particularly the comment around the order intake, 50% plus expansion with existing clients and new clients definitely encouraging. Can we get the breakdown between the infrastructure business and then the financial crime services business within that? And then Adena, to your point around accelerating momentum in some of the conversations you're seeing on the import truck side. Can you help contextualize that a little more in terms of what that means for revenue growth for 2022 in that part of the model?

Sure. Yes. So first of all, the order intake numbers that we provide still do not include Verafin. It only includes our trade and market surveillance business, in addition to the market infrastructure operator business. The majority of the large majority of order intake is related to our market infrastructure operator clients because they tend to have longer-term contracts. Our trade and market surveillance contracts tend to have shorter durations and smaller sizes. I think that you should assume that the large majority of ARR is related to market infrastructure operators. Ann, you're saying $20 million or 10%?

$20 million.

So about $20 million of the order intake is related to our market and trade surveillance business. Just to give you a sense of the size. In terms of – as we look into 2022, I think it's important to note a few things. Ann mentioned the fact that in the latter half of last year, we had a long-standing client who will continue to license our software, but it was always planned that they would come off our service and maintenance agreement, which is a recurring revenue part of the contract. So that happened in the second half of last year. I think in the third quarter, we announced that. That has to flow through the full year. So that will impact the first half of 2022. Then we also have two of our larger implementations going live with their first phase in the first half of 2022, which obviously gets us then into a different and a stronger revenue mode with them going into the latter half of 2022. We have this big set of new order intake that we took in during 2021, and that will take a while for that to flow into revenue as we complete the implementations of that. So you should assume that you're going to see more momentum as we go through the year of 2022 and digest that order intake as well as turn some of our clients into production clients and get through that full-year impact from that one contract. You can expect to see more momentum going through the latter half of the year.

Got it. Thanks so much.

Our next question comes from Craig Siegenthaler with Bank of America.

Thank you. Good morning, everyone.

Good morning.

So I had a follow-up on Market Technology, but I want to isolate it around Verafin. I appreciate Ann's comments that revenues are still growing quickly at 30% year-over-year. But as you leverage the network effect of Nasdaq's Tier 1 and Tier 2 financial services relationships, do you expect this revenue growth rate to remain robust? Or could there be some deceleration just as the larger revenue base affects it through the law of large numbers?

We continue to see massive opportunity for the Verafin organization in three areas. One is as you mentioned, moving up to the larger banks. We have signed some really great clients getting into some of the Tier 1 and Tier 2 banks. We actually have several POCs running with some of the largest banks as they're looking at our fraud solutions and really trying to evaluate that. Those sales cycles are longer, but obviously, the contracts are bigger. So we definitely see a lot of momentum there. The second is, as we look at global expansion and going into Europe, we do have one client that's fully live and working with us. We're building out a pipeline to help support more clients in Europe and making sure our solutions are geared towards the European landscape. That's an area of focus for us, and if that door opens well and we execute well there, that's just a huge growth area for us over the long term. The third is actually in the digital asset space. We're coming out with a solution geared towards providing traditional banks who want to offer digital wallets to their clients, as well as banks that need really stronger Anti-Financial Crime solutions tailored to the digital asset ecosystem. We plan to launch that more fully this quarter, and we also see it as a big growth runway for us, in addition to fintech. I would have to say, there's so many great avenues for growth and these avenues are long-term in nature. I think it's a great product, and it's proving itself out well.

Thank you, Adena.

Thank you.

Our next question comes from Kyle Voigt with KBW.

Hi, good morning. Ann, you mentioned some inflationary pressures being felt. You noted those are short term. Just wondering if you could speak about those pressures in a bit more detail. Is that entirely going to be felt in wages? Are there other areas to note? And looking forward to 2023, I guess, why are you comfortable that this 2% increase is more of a one-off item? If you're seeing more modest inflation on the expense side, are there any opportunities where we could pass along some of those inflationary pressures and take more price on the top-line side? Thank you.

On the cost side, so we talked about the incremental 2% within the expenses, maybe 1.5%. We see that as being inflationary pressure. Most of that is on the wage side. I do think there's some inflationary pressure across our supplier contracts, which we'll manage through. But the vast majority is on the wage side. As we think about managing through that, our ultimate goal here is attracting and retaining the best talent to continue to support the long-term growth of the business. While we see the pressure right now being short-term in nature, we expect to continue to invest over the long term against those needs.

It's hard to know what the world can be like in 2023. In 2022 right now, we're frankly managing our talent really well. I think our attrition has stayed very consistent with our historical expectations. At the same time, it is a tight labor market we want to compete for the best talent. We have amazing talent in Nasdaq that we want to retain and reward. As we look at 2022, we feel good about being able to manage through that situation. It's hard to know what 2023 might hold. I think in terms of the revenue side, we do make price increases, CPI adjustments to our prices, and we do that during certain periods of time. We did some adjustments going into 2022. We also tend to take a long-term view of our clients. We really want to make sure that we're managing their long-term relationships and that they're getting value for every dollar they're spending.

Very helpful. Thank you.

Our next question comes from Brian Bedell with Deutsche Bank.

Great, thanks. Good morning, folks.

Good morning.

Just back to the topic of the day, the Amazon Web Services partnership. How are you thinking about the scalability of that migration over time? I realize it's still very early. But in terms of the impact on Nasdaq expense base, maybe first of all, can you frame out what sort of the build might the components of the build in the 2022 guidance might be? How should we think about the ability of this partnership to either reduce the long-term expense growth of Nasdaq or become more scalable? Longer term, do you view this partnership as more of a revenue opportunity or more of a cost reduction opportunity for Nasdaq?

The good news is that we've been working over the last five years with AWS to move a lot of our surrounding systems around the markets into the AWS cloud, which has accrued greatly to our benefit over the last five years because, for instance, just with these record volumes we're experiencing, the surrounding systems, which are like trade management solutions, have hyper scalability of our solutions today that otherwise we would have had to buy hardware to support. That's been a real benefit to us and allows for both scalability for our clients and definitely a moderation in terms of our CapEx expenses. As we go forward, a few things. We also have spent the last five years building out our next-generation trade lifecycle solution to be a cloud-ready, cloud-native solution. We deployed that for our BX Options market in 2020. We're now deploying that for MRX in 2022. We're also deploying that for our derivatives markets in the Nordics right at the beginning of 2022. We've been making the investments that we've needed to make. The partnership with Equinix and AWS, where they're going to be making their investments in our infrastructure, is immensely valuable. We see this as very much part of our 3% to 6% expense growth factoring in the investments we have been making and will continue to make in this area. Once we fully deploy, we do have the opportunity to look at lower CapEx expenses and more scalability in our expense base. But also, the bigger opportunity for us is in the revenue side because we have a bigger footprint in order to support our clients here in the U.S. and the ability to deploy this to clients around the world. So that is definitely the bigger opportunity in the long run.

That's very comprehensive. Three to five years is what you would describe as the long run?

I think that we actually look at this as these things always happen in slower motion than you think. We have six options markets in the U.S. and three equities markets in the U.S. We're starting with one. As I said, we'll gain some experience before we set a timeline for the rest. As we deal with our market tech clients, those implementations especially when you're changing out infrastructure, look at probably a two-year to three-year type of implementation once we've actually come to an agreement. This is more like, I would say, five to seven years, but I think that's the better timeline to consider.

Got it. Thank you so much. Great color.

Okay, thank you.

Our next question comes from Michael Cyprys with Morgan Stanley.

Hey, good morning. Thanks for taking the question. Just wanted to circle back to the Nasdaq Datalink. You mentioned the new Data Fabric offering. I guess just a bigger picture question here is how do you see the data link offering evolving over the next couple of years? What's your vision for that looking out five years? And maybe talk about what's on your to-do list in terms of next steps as you look out to 2022?

I think that one of the things we hear from our investment management clients is their biggest challenge is managing their data. They are dealing with all of this data, both the traditional financial data they've always had but then alternative data and other new data points relevant to making investment decisions or managing their portfolio risk. What Data Fabric does is we – Datalink in general is there as a container for alternative data as well as financial data, our traditional market data, and other exchanges data to kind of make it really easy to implement, and it's a cloud-based solution that is ultra-light for clients to be able to access the data. Data Fabric creates a data management layer for our clients so they can put their own data, their own research into the same platform and make it so that it's all there in one container available to investment professionals, traders, and research analysts. It creates a little bit of order out of the chaos that they're dealing with in terms of managing data. That's the vision, or that's what we've built. In terms of implementation and the five-year plan, I think that the cloud is there to support more and more real-time workflows. The cloud is there to be able to offer you a much better ability to create analytics off that data and to do machine learning algorithms on the back of the data. That's how we help our clients manage through this.

Great, thank you.

Thank you.

That concludes today's question-and-answer session. I'd like to turn the call back to Adena Friedman for closing remarks.

Great. Thank you very much. Thank you so much for your time today. In closing, Nasdaq's fourth quarter and full year 2021 performance was solid, and we are starting off 2022 with really strong momentum. Our leadership team remains very focused on executing our strategy to deliver for all of our stakeholders. We look forward to continuing our discussions throughout the year on the progress we make as we advance our strategic priorities and ambitions. Thank you very much, and have a great day.

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