Good day and thank you for standing by. Welcome to Nasdaq's Third Quarter 2022 Quarterly Update 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Ed Ditmire, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us today to discuss Nasdaq's third quarter 2022 financial results. On the line are Adena Friedman, our CEO; Ann Dennison, our CFO; John Zecca, our Chief Legal Risk 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, and 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. Lastly, a quick programming mention. We're excited to be hosting our Investor Day on November 8. Our leadership team will give presentations about our strategy, operations, and opportunities and will be available for your questions. I know many of you on the line today are planning to participate. If you have not registered, please do so at ir.nasdaq.com. I'll now turn the call over to Adena.

Thank you, Ed, and good morning, everyone. Thank you for joining us. I'll begin today with a summary of the new corporate structure for Nasdaq that we announced during the quarter. The new structure organizes our business units into the following three divisions that align us more closely to the foundational shifts that are driving our strategic evolution: Market Platforms led by Tal Cohen will include our North American and European market services as well as our market infrastructure technology business. The division will also include our digital assets and carbon markets businesses. Capital Access platforms led by Nelson Griggs will combine our corporate platforms and investment intelligence businesses. And Anti-Financial Crime led by Jamie King will include Verafin, our fraud detection and anti-money laundering solution, as well as our market and trade surveillance business. Our new structure will take effect by the end of the fourth quarter of 2022. As Ann will note later, we have provided supplemental information to help investors and analysts prepare for the financial and reporting implications of our new structure. This information is available on our IR website and was furnished in our Form 8-K filed this morning. Additionally, we will discuss our businesses through the lens of this new structure at our upcoming Investor Day on November 8. We believe the new structure will elevate our strategy and amplify our growth opportunities by allowing us to provide even more holistic solutions to our clients' most complex challenges. We view this as the next chapter in the strategic pivot that we launched five years ago, which solidified our focus on liquidity, transparency, and integrity as the foundation of our strategic growth pillars. While these strategic themes are carried across our divisions, each division has a central theme that will help define its strategic focus. Market platforms will focus on maximizing the liquidity of the capital markets through our role as a market operator and as a provider of market ecosystems to our technology clients. This division will center around the modernization of markets, including the migration of markets and core infrastructure to the cloud and the emergence of blockchain and the resulting digital assets as elements of future market infrastructure. Nasdaq today serves as a powerful capital markets platform. We are a leading force in the modernization of marketplaces through our world-class technology, including the progress we're making as we migrate our own markets to our next-gen exchange platform in an edge cloud environment. We are also actively deploying our next-gen market platform to our market technology clients. And through our new structure, we see an opportunity for us to drive a broader strategy as one integrated unit. For instance, as we move forward with our digital assets platform, we see our role as being broader than a market operator or a market technology provider. It is a true platform opportunity, creating a custody foundation with strong anti-financial crime capabilities that allows multiple market venues, including those to whom we sell our market technology, to connect and where we can facilitate institutional liquidity across venues more seamlessly than exists today. It's just one example of how the divisional structure will have more power, working together both as an operator and as a technology partner. We are excited to demonstrate how we can combine our expertise in managing market infrastructure coupled with our focus on leading technologies to support exchanges and market participants in new ways to drive the global flow of capital. In our Capital Access Platforms division, we will leverage the insights and capabilities across our corporate platforms and investment intelligence team. And we will be focused on the transparency pillar, reflecting the profound shift in behavior among corporates and investors with a focus on long-term value creation. We are seeing a sustained prioritization across the buy-side on long-term value creation and the subsequent response across corporates to engage their investor base in this evolving construct. For instance, there is a notable opportunity for Nasdaq to be a leading ESG solutions provider. We are centered first on a foundation of serving the specific needs of corporate issuers by providing advisory services along with SaaS-based data aggregation and reporting capabilities to facilitate their ability to communicate their ESG and climate strategies and progress to the investment community. As we mature our strategy, we have an opportunity to bridge these capabilities into the investment community through analytics, indexes, and data solutions. More generally, capital access platforms will be positioned to connect the investor and the issuer communities through actionable insights, industry-leading indexes, and modernized workflows. This will allow us to provide more seamless, more holistic, and more impactful solutions that help both stakeholder groups navigate the increasing complexity of the evolving financial system. And finally, our Anti-Financial Crime division will continue to focus on strengthening and safeguarding the integrity of the financial system. Anti-financial crime technology represents an already large and fast-growing sector with structural and regulatory tailwinds. As the financial system transforms and becomes more technologically driven and sophisticated, the threats to its integrity are growing in scale and sophistication as well. Financial institutions face significant challenges in detecting and preventing financial crime and are therefore investing significant capital and resources in combating those threats. Nasdaq's Anti-Financial Crime division focuses on delivering a world-class platform with holistic solutions and capabilities to support financial institutions in fighting financial crime more effectively across their networks and the wider financial system. We are very excited about the opportunities ahead of us to further lean into the areas that are prime for growth as we become the trusted fabric of the financial system. As I noted earlier, we will have an opportunity to provide more details and answer your questions about this new structure for Nasdaq at our upcoming Investor Day on November 8. Now let's turn to our results. Nasdaq delivered strong third quarter results with $890 million in net revenues, a 6% increase compared to the prior year's period and a 9% increase on an organic basis, excluding the impacts of changes in foreign exchange rates, acquisitions, and divestitures. Our total annualized recurring revenue, or ARR, increased 8% to $1.97 billion. Annualized SaaS revenues totaled $699 million in the third quarter of 2022, growing at an even faster rate of 13%. We are pleased with the continued consistent growth across our recurring revenue segments, complemented by positive organic contributions from other areas, including index licensing and trading. Turning next to the specific business highlights starting with our Solutions segment. Our Solutions segment delivered total revenue of $584 million during the third quarter, an 8% increase from the prior year period or 10% organically, excluding the effect of foreign exchange and acquisitions. The growth was driven from activity across the full breadth of our businesses, including our index and investment analytics offerings, the expansion of our listed issuer base, our anti-financial crime offerings, and market infrastructure technology business, as well as strong demand for our IR and ESG services. In our Investment Intelligence segment, we delivered $284 million in total revenue in the third quarter, a 4% increase overall from the prior year period. Our organic growth was 6%, excluding the effect of foreign exchange, with contributions to organic growth from each of the three businesses during the quarter. Revenue in our market data business increased by 2% from the prior year period and 5% organically, excluding the impact of foreign exchange, primarily due to an increase in proprietary data revenues from international clients. Our index business saw revenue growth of 5% versus the prior year period, driven by positive net flows of $56 billion over the last 12 months. We also saw continued strong results from licensed futures activities, which, together with the impact of positive inflows, more than offset the negative impact of market beta. In our Analytics business, revenues grew 8% from the prior year period and 10% organically, excluding the effect of foreign exchange. Our combined investment in Solovis offerings saw strong revenue growth driven by the sequential impact of new sales and client retention. This was the sixth consecutive quarter of double-digit organic growth for that team, which underscores the power of these offerings across both asset owners and asset managers. Turning next to our Market Technology segment. We delivered $132 million in total revenues in the third quarter, a 16% increase from the prior year period. This was driven by growth in both the anti-financial crime and market infrastructure technology businesses. Our anti-financial crime technology business had a very encouraging third quarter with a 24% increase in revenues versus the prior year period. Growth was driven by new sales across both our fraud and anti-money laundering and surveillance solutions, as well as the $7 million impact of the Verafin acquisition deferred revenue adjustment recorded in the prior year period. Regarding Verafin specifically, we grew revenues 25%, excluding the $7 million impact of the deferred revenue write-down on the prior year period. We are particularly proud of the team's continued ability to sign new clients across small to medium banks, which is the core of the current franchise, with 54 new small and medium bank clients signed during the quarter. We are also pleased by the results of recent proof of concepts with several Tier 1 banks. As an example, in one proof of concept that we ran, we were able to reduce false positives by 25% by simultaneously identifying 3.5 times more dollars in fraudulent payments. Moving next to our market infrastructure technology business. We generated $55 million in revenues, representing 8% organic growth. We are pleased to see the business return to positive organic growth versus the prior year period for the first time in over a year. We continue to be on track with large complex deliveries, and we have a strong pipeline of engaged clients and prospects. Moving to our foundational marketplace businesses. Our Market Services segment delivered net revenues of $305 million during the third quarter, a 4% increase versus the prior year period or 8% higher organically, excluding the impact of foreign exchange. The increased revenue year-over-year was broad-based, with especially strong growth in trade management services, which had a record quarter, and increases across each of our trading businesses: equity derivatives, cash equities, and FICC. Lastly, we were excited to announce during the quarter the launch of our new digital assets business to power the digital asset ecosystem. This new business underscores our ambition to facilitate broader institutional participation in digital assets by providing trusted and institutional-grade solutions focused on custody, liquidity, and integrity. As part of our Market Services segment, Nasdaq Digital Assets will initially develop an advanced custody solution, coupled with liquidity and execution capabilities geared toward serving institutional clients by enabling safe transaction and storage of digital assets. This solution is developed through an innovative technology approach that brings together the best attributes of hot and cold crypto wallets, providing a high degree of accessibility without compromising security. Additionally, we will incorporate our anti-financial crime technology with new coverage for the cryptocurrency ecosystem, including a comprehensive suite of crypto-specific detection and investigation capabilities. Finally, our Corporate Platforms segment delivered revenue of $168 million in the third quarter, an 8% increase from the prior year period or 11% organically, excluding the impact of foreign exchange and an acquisition. The growth was driven primarily by the increased demand for our IR and ESG services and secondarily, due to the expansion of the issuer bases across both our U.S. and Nordic listing franchises. Revenues in our IR and ESG services businesses increased 13% organically, underscoring the strong demand for our technology-based and consultative solutions during the period. The number of corporate clients using Nasdaq's IR and ESG solutions increased 5% from the prior year period. Examining our IR ESG solutions more specifically, we have increased the number of companies using our ESG advisory services by 35% versus the prior year. We've also tripled the number of clients using our ESG workflow solutions to 170 companies, coming from both strong growth in one report and the acquisition of Metrio. Turning to our Listing Services business. Revenue increased 6% to $105 million as the number of Nasdaq listed corporate issuers, excluding SPACs, increased 5% compared to the prior year period. Nasdaq continued its competitive leadership in attracting the majority of new U.S. listings during the quarter with 28 operating company IPOs and a 90% win rate. Next, I want to touch briefly on the current market environment. As we enter the final months of 2022, we continue to find ourselves amid an uncertain macroeconomic and geopolitical backdrop. While we will remain vigilant and maintain flexibility to respond effectively to changing conditions, we believe we continue to be well-positioned to deliver for our clients and our shareholders throughout the cycle. Our results continue to demonstrate the quality of our businesses and the value inherent in our diversified model. We also continue to see compelling opportunities to further deepen relationships with our clients in this environment and expand the ways we support them as they navigate these dynamics. The new corporate structure we unveiled last month will serve as a great foundation, providing us even more opportunities to lean into areas most prime for growth and deliver even more holistic solutions to our clients across the ecosystem. With that, I will 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 Financials section of our Investor Relations website. I will start by reviewing third quarter 2022 performance, beginning on Slide 9 of the presentation. The 6% increase in reported net revenue of $890 million is the net result of organic growth of 9%, including a 10% organic increase in the Solutions segment, and an 8% organic increase in Market Services, partially offset by a 3% negative impact from changes in foreign exchange rates and the net impact of acquisitions and divestitures. Moving to operating profit and margins. Non-GAAP operating income increased 7%, while the non-GAAP operating margin of 53% was unchanged compared to the prior year period. Non-GAAP net income attributable to Nasdaq was $335 million or $0.68 per diluted share compared to $303 million or $0.59 per diluted share in the prior year period. Turning to Slide 10. As Adena mentioned earlier, ARR totaled $1.97 billion, an increase of 8% from the prior year period, while annualized SaaS revenue totaled $699 million, an increase of 13%. I will now review quarterly segment results on Slides 11 through 14. Starting with Market Technology. Revenue increased $18 million or 16%, with $7 million of the increase due to the impact of the deferred revenue write-down on Verafin in the prior year period. Organic growth for the Market Technology segment was 18% in the period, driven by both the anti-financial crime and market infrastructure technology businesses. Our market infrastructure technology business grew 6% as compared to the prior year period and 8% organically, excluding the impact of foreign exchange. This inflection reflects the progress we have made in advancing some of the largest client implementations through critical milestones earlier this year, new and expanded customer relationships, and the lapping of a difficult comparable due to the planned rollout of a client support contract in the second half of 2021. This progress is an encouraging early proof point that the programs and initiatives of our market infrastructure technology team have been implementing will move this business forward. ARR for market technology totaled $456 million, an increase of 7% compared to the prior year period. The Market Technology segment operating margin was 15% in the period and increased 6 percentage points compared to the prior year period. Investment Intelligence revenue increased $12 million or 4%, reflecting organic revenue growth of $16 million or 6%. Organic revenue growth during the period reflects positive contributions from the index, analytics, and market data businesses. Asset-based licensing revenues declined 6% compared to the prior year period and represented 61% of index revenues. AUM and exchange-traded products linked to Nasdaq indexes totaled $311 billion, a decline of 14% from the prior year period. ARR totaled $583 million, an increase of 5% compared to the prior year period. The Investment Intelligence segment operating margin of 64% decreased 1 percentage point from the prior year period. Corporate Platforms revenues increased $13 million or 8%, including 11% organic growth. The increase was primarily driven by higher U.S. listing services revenues as well as higher adoption across the breadth of Investor Relations and ESG advisory and reporting offerings. Our listed corporate issuer base increased 7% or 5% excluding SPACs. Corporate Platforms ARR was $589 million and increased 11% compared to the prior year period. The Corporate Platform segment operating margin of 44% increased 2 percentage points compared to the prior year period, driven by a combination of recent growth in the listed issuer base and lower marketing expenses due to the subdued IPO environment. Market Services net revenues increased $13 million or 4%. The organic revenue increase was $24 million or 8% and there was an $11 million negative impact from changes in foreign exchange rates. The organic increase reflects growth across trade management services, U.S. cash equity, equity derivatives, and fixed. Turning to Page 15 to review both expenses and guidance. Non-GAAP operating expenses increased $20 million to $417 million. The increase reflects a $40 million organic increase, partially offset by a $19 million decrease from the impact of changes in foreign exchange rates and a $1 million decrease from the net impact of acquisitions and divestitures. The organic expense increase is primarily driven by higher compensation and benefits expense, reflecting two factors. First is our continued investment in new employees to drive growth, including a 9% increase in the team over the past 12 months. Second is annual merit increases, which are reflected in the quarterly expense run rate starting in the second quarter. The increase is higher than prior years due to inflationary pressures on compensation, which we reflected in our guidance at the beginning of the year. We are lowering our 2022 non-GAAP operating expense guidance to $1.70 billion to $1.72 billion, lowering both the top and the bottom of the prior range to reflect a combination of the continued strong organic growth dynamics as we progress through 2022, along with the impacts of a stronger dollar on our non-U.S. expenses. Lastly, we are lowering our 2022 tax guidance to a range of 24% to 25% versus 24% to 26% previously. Turning to Slide 16. Debt decreased by $344 million versus Q2 '22, primarily due to net repayment of $222 million of commercial paper and a $123 million decrease in Eurobond book values caused by the strengthening dollar. Our total debt to trailing 12 months non-GAAP EBITDA ratio ended the period at 2.7x, down from 2.9x in the second quarter of 2022. During the third quarter of 2022, the Company paid common stock dividends in the aggregate of $99 million. As of September 30, 2022, there was $293 million remaining under the board-authorized share repurchase program. Turning to Page 17 of the presentation, I would like to touch on some of the very material progress we have made executing our sustainability strategy. I would like to note that Nasdaq's ESG reduction targets were approved by the science-based targets initiative. Our targets, including reducing Scope 1 and Scope 2 GHG emissions by 100% by 2030 and absolute Scope 3 ESG emissions by 95% by 2050. Additionally, EcoVadis upgraded our sustainability rating from silver to gold status, which is reserved for the top 5% of all companies rated. We also earned a place on Seramount's 100 Best Companies list and were recognized as the best company for Dads for the second consecutive year. We continue to see opportunities to advance our sustainability program across multiple aspects and look forward to updating you regularly on our progress. I would like to take a moment to discuss the new organizational alignment that we recently announced. On the Investor Relations website, we published a supplement to help with the financial reporting under the new corporate structure, which will take effect by the end of the fourth quarter 2022. The supplement covers the revenues, operating income, and operating margin of each of the three new segments: market platforms, capital access platforms, and anti-financial crime, as well as the revenues of their underlying businesses. In addition, I would also like to call your attention to a change in how we are grouping our recurring revenue segments collectively. In particular, we are now adding trade management services to the prior solutions segment grouping and calling it Solutions Businesses. The Solutions Businesses cover 75% of our last 12 months revenues and encompass all of our non-trading revenues. At our Investor Day on November 8, we'll discuss our businesses, opportunities, and strategy through the lens of this new corporate structure. And at that time, we will provide associated updates to our growth outlook and other objectives. As such, we will answer any questions regarding the revenue growth outlook on Investor Day. In closing today, Nasdaq's third quarter results reflect the continuation of the Company's ability to consistently perform well across a wide range of operating environments. We delivered 10% organic revenue growth in the Solutions segment, 9% organic revenue growth across the entire company, and achieved a 53% non-GAAP operating margin. Thank you for your time, and I will turn it back over to the operator for Q&A.

Thank you. Our first question comes from Richard Repetto from Piper Sandler. Please go ahead.

Adena and Ann, you both mentioned the corporate structure. My question is about the organic growth rate, which has been crucial since your strategic pivot. I'm trying to understand if you're still committed to reporting the growth rate for market infrastructure technology, considering it's going to be integrated into the market platforms. That's the first part. The second part regards corporate structure. Do you foresee any conflict in selling technology to other exchanges while also potentially competing with them in the old market services business?

Sure. In terms of managing disclosures, we acknowledge that we have given investors considerable insight into our market infrastructure technology business for a significant period. We plan to keep providing regular updates so investors can monitor our progress in revenue and in reaching the goals set at the 2020 Investor Day, which we will review on November 8. We understand the importance of continuing to provide updates as we manage that business. I believe that our market platforms structure and divisional organization will enhance our ability to discover new ways to support our market technology clients. By adopting an ecosystem approach to delivering solutions, we aim to be seen as a deeper partner in assisting them with market modernization, liquidity generation, and infrastructure setup, among other things. We are excited about the potential to amplify our business through this. Regarding conflicts, we occasionally have to navigate situations where we provide market technology to a client while also competing in that same market. This is uncommon, but it does happen. We have established processes and governance structures in place, using our risk management and legal teams, to effectively manage these conflicts. Over the years, we have handled these situations well, and that will remain unchanged. It will now fall under Tal's oversight, with ongoing consultation from John Zecca, our General Counsel and Chief Risk Officer, as well as myself. Therefore, I don’t foresee any changes in how we will govern these matters moving forward.

Got it. I figured you'd want to continue reporting MIT growth, especially as it turned positive here this quarter, the organic growth.

Thank you. And I show our next question comes from the line of Gautam Sawant from Credit Suisse. Please go ahead.

Can you please expand on how your new initiatives in the digital asset space are complemented by some of the existing capabilities of the Nasdaq platform?

It's interesting because we are developing a new custody solution from the ground up while also utilizing what we refer to as the marketplace services platform to enhance the liquidity features on top of that custody solution. Our technology team is exceptional, allowing us to build on the financial framework we've established at Nasdaq and the next-generation exchange platform, while also integrating a custody solution tailored for digital assets. We have brought in talent that is well-versed in digital technology to support the custody solution, collaborating with our existing Market Technology team to leverage the capabilities we've developed over the past five years for liquidity. Regarding connectivity with other exchanges, we power nine crypto markets today, and as we expand our client base, we want them to view us as a reliable option for custodying their cryptocurrencies. We will also ensure connectivity with exchanges. Lastly, in terms of anti-financial crime measures, we've created a crypto component within Verafin and our trade surveillance business that includes modules to support all necessary anti-financial crime capabilities in the crypto market. Whether it's a digital wallet or a government wallet within a bank, we help banks manage their credential crime risks. For trading firms that deal with crypto, we offer custom-built modules specifically for crypto surveillance, together providing a comprehensive suite of services for the crypto industry.

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

Thank you for the insights on the new segments, Adena. If I could ask a follow-up regarding this, I know you'll provide more details at the Investor Day. Do you anticipate a significant shift in personnel between the segments in terms of collaboration, compared to how they currently interact? As a consequence, do you foresee potential revenue synergies arising from their cooperation within the new structure? Additionally, on the expense side, do you think this re-segmenting will lead to cost savings, or could there be more growth opportunities that you might want to invest in as a result?

Thank you. We will discuss this in greater detail on Investor Day. We are eager to share insights from Nelson, Tal, Jamie, and the entire executive team as we strategize on managing our divisions moving forward. The main goal of this divisional structure is to create more opportunities to serve our customers. We carefully considered the best way to integrate our organization to ensure we view our customers from an external perspective. For market participants trading across Nasdaq's markets and those using our technology, we are contemplating the future infrastructure to support our operations, especially as we transition into an edge cloud environment. We aim to develop our own data center into a local private zone to better serve our ecosystem. It’s essential to approach this both as a market operator and a technology provider to holistically meet market participants' needs. Additionally, we aim to enhance modernization in the markets alongside other exchanges. We now have a unified technology stack, which allows us to think differently about how we serve clients more comprehensively. This presents a revenue opportunity. The leaders of the North American markets, European markets, and Market Tech will be instrumental in supporting Tal. We have integrated the product engineering team under Brenda Hoffman into the division, enhancing collaboration between technology and business, and moved product marketing into the division as well. This creates a more agile management approach. Similarly, in capital access platforms, we're focusing on connecting investors and corporates, enhancing services for corporate communication with investors, and improving data offerings to help investors better understand corporates. Our investment in Solovis technology platforms will enable asset owners and managers to better track trends, including ESG trends, as we collect extensive data and provide strong support to corporates. Our index products remain a source of innovation, and we will continue to develop thematic indexes that highlight our market role. There are numerous possibilities to expand our services for investors, treating them similarly to corporates in governance and investor relations. This, again, represents a revenue opportunity. The businesses led by Oliver and Jeff Thomas will report to Nelson to facilitate this progression. Finally, the integration of product engineering and marketing teams into the division is intended to foster a more agile approach to advancing business objectives. Overall, the purpose of this restructuring is to create a revenue opportunity and operate these divisions as efficiently as possible, which will evolve over time. We look forward to sharing more details with you at Investor Day.

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

Our question is on the equity options business. There were some positive market share trends in the business this quarter. Most of this was actually driven by the BX Option Exchange. So can you talk about what drove the sharp increase in volumes at this specific exchange?

We actively manage our business with a focus on the strategies our clients are trying to implement. We consider both functionality and pricing in our approach. We have successfully increased the utility of the BX Options market, resulting in significant growth in market share across this segment. The foundational work we've been doing to attract more participants really paid off this quarter, leading to noticeable growth in market share. However, it's important to note that this is a dynamic environment, and we remain vigilant in ensuring our pricing serves our clients' needs while providing the necessary functionality. Across our six divisions, we are equipped to meet the needs of any options market maker or market participant.

Thank you. And I show our next question comes from the line of Michael Cho from JPMorgan. Please go ahead.

I guess I wanted to touch on Verifin for a minute and the performance this quarter. I think I heard you say there are 54 new client sign-ups, which I think is a nice pick up from 37 last quarter. So wondering, can you give some color on the sales environment for Verifin as it relates to new customers? Again, in some sense, it's a bit counterintuitive just given the macro and uncertainty out there? But just curious if anything has changed in terms of the customer acquisition or sales cycle. And then also, you mentioned some proof of concepts happening as well. Just also if you can update us on kind of the sales cycle from proof-of-concept to signing on a new customer?

Certainly. At the end of last year, we organized the Verafin business into two segments: small to medium banks and midsize to large banks. We appointed two leaders to focus on each group. This segmentation allowed us to implement specific programs aimed at enhancing growth in both areas, recognizing that their sales cycles and product approaches differ. As we engage with top-tier banks, we maintain our momentum with SMB banks while adapting to meet the needs of larger institutions. The initiatives we introduced earlier in the year for small to medium banks have yielded positive results, with substantial emphasis on pipeline management and client service. The sales cycles and onboarding processes for these banks tend to move quickly, indicating that our strategies are effective. Regarding the current market conditions, I believe software sales remain strong even in uncertain economic times. There is a widespread trend across various industries toward automation, driven by a tight employment market. Banks are increasingly looking for technology to help manage financial crime risks more efficiently and with fewer staff. This shift means there is ongoing demand for B2B software that facilitates automation and efficiency. Additionally, solutions that are easy to implement, low-cost, and not burdensome on infrastructure are especially sought after. Our cloud-based, SaaS solutions meet all these criteria, providing small banks with comprehensive platforms for improved crime management. For larger banks facing complex challenges, Verafin offers modular solutions that address specific issues such as wire fraud and ACH fraud. This flexibility allows us to tailor our offerings to their pressing needs, demonstrating tangible improvements in their operations. As a SaaS solution, it requires minimal effort for implementation while delivering significant outcomes, ensuring a solid return on investment. This approach positions us well to navigate varying economic situations, and we are enthusiastic about our engagements with larger banks. Managing the sales process with them requires time and expertise, as our trade surveillance business has proven, but we are confident in the progress we’re making as we aim to penetrate Tier 1 banks effectively.

Thank you. And I show our next question comes from the line of Dan Fannon from Jefferies. Please go ahead.

I wanted to discuss the revenue potential from the companies that have recently gone public, as many of them are starting to use a lot of the free services you provide. Is there a way to measure aspects like ESG, and while some investors relations and other services are being used now, they could turn into paid services in the coming months and years? I'm just looking for ways to quantify that opportunity.

It's a good question. We don't provide specific statistics on the exact conversion rate. However, if you consider the IPOs that had larger fundraises, they typically have a more established investor relations group and needs. I believe the conversion rate is quite high because we make a significant effort to demonstrate our value during the three years they receive our services for free. Our team effectively manages clients to ensure they receive great value, making it a natural decision for them to continue this relationship and be willing to pay for it. While we don't share specific statistics, I think you'll need to examine the roll-off periods, the number of IPOs, and then make some assumptions about conversion.

Just a follow-up. Is there a way to think about what number of services that you bundle in that starter kit beyond IRs part of it? Is it just so we get a sense?

Sure. It's regulated, so the suite of services is publicly available. You can choose either surveillance, targeting, or perception, and you receive a set number of seats, specifically two for IR. The ESG reporting provides access to select reports from Metrio for data aggregation and reporting solutions, which are also publicly available. You can see what we're offering, and that's what would convert. Over the three years, we worked hard to demonstrate the benefits of the overall surveillance service, which gives insights into stock buying and selling. We also encourage them to consider targeting or a perception study, showing them the additional value they can receive during this period.

Thank you. And I show our next question comes from the line of Alex Blostein from Goldman Sachs. Please go ahead.

Just going back to the anti-financial crime and the new segmenting is the way you think about forward growth here. Would this business probably come into more of a spotlight is it sort of a stand-alone segment? How are you thinking about the trade-off and the opportunity on organic versus inorganic growth here? Obviously, it sounds like organic pipelines remain pretty robust given the efforts you have on the Tier 1 bank side. But should we think about M&A being a bigger part of the story now that it will be a separate segment?

Thank you, Alex. We primarily focus on organic growth, but we will be selective when considering acquisition opportunities to ensure they deliver financial returns and strategic value. Our acquisition evaluations concentrate on three main areas: modernizing markets with technology for the financial community, enhancing ESG capabilities for better connections between companies and investors, and tackling anti-financial crime. We're committed to making well-informed, value-driven decisions if we pursue inorganic growth. In the realm of anti-financial crime, there is significant growth potential, and we have a comprehensive solution in place. However, we will explore ways to enhance that strategy and expand into related areas over time, considering these themes as we approach future acquisitions.

Thank you. And I show our next question comes from the line of Owen Lau from Oppenheimer. Please go ahead.

Could you please discuss why you decided to enter the digital asset custody space during a challenging period for cryptocurrencies? There are other companies launching crypto solutions, but I would like to know what Nasdaq is currently observing in this market. Additionally, what future products do you foresee making sense for Nasdaq in the crypto arena? Will Nasdaq develop its own technology, or will you collaborate with third-party crypto custody or automated crypto companies to provide solutions to clients?

Sure. To begin with the last question, our main objective is to develop solutions that cater to the industry. We aim to introduce more modern infrastructure into the digital asset space, ensuring that our offerings are highly resilient and industrialized, similar to our existing markets and technology for other exchanges. We view ourselves as builders in this space, and we believe that we can set ourselves apart in this manner. Regarding how this initiative originated, we've been examining the digital asset space for several years, but we've conducted a more in-depth analysis over the past 18 months to identify our potential role in digital assets. We recognize that there are specific challenges preventing institutions from engaging in digital assets, and we excel at delivering industrial-grade solutions that enhance institutional participation in the market. Consequently, we decided to concentrate on creating infrastructure that facilitates adoption within the institutional community, ensuring a conservative yet thoughtful approach that adds real value. We wanted to avoid entering the market merely to become yet another crypto exchange; instead, we aimed to offer a differentiated platform that institutions can trust, which is accessible, resilient, and scalable. We chose to begin with custody, as it is essential for anything related to digital assets. The secure handling of coins is a foundational element, whether it involves cryptocurrencies, NFTs, or other digital assets. We felt it was crucial to excel in this area and provide reliable delivery. As we envision additional solutions, our first step will be an institutional liquidity solution tailored specifically for institutions, allowing them to convert and transfer coins across exchanges within our custody framework. Our future developments will depend on the success of this first step. We intend to launch effectively, secure the necessary licenses for successful operation, and gain valuable experience to inform our next moves. We are eager to enter this space while remaining fully aware of its complexities.

Thank you. And I show our next question comes from the line of Andrew Bond from Rosenblatt Securities. Please go ahead.

Just wanted to follow up on U.S. options. So options volumes market-wide continued to be robust, and that's actually a nice uptick in market share. The pricing remains elevated all through the peers. So retail activity is obviously driving activity across the board, but it seems like Nasdaq is also benefiting from higher catcher complex winners. So, I was wondering if you could talk a little bit about the size of the complex order market, how competitive it is and you're seeing significant growth there or most of the growth still coming from retail?

Regarding the complex order functionality, it remains relatively stable, and we haven't observed significant changes in demand. The market has become increasingly competitive, making it challenging to build and support. However, we are confident in our position in this area since we excel in it. We offer a genuinely differentiated exchange for complex order functionality. This segment doesn't fluctuate widely from quarter to quarter or year to year and is primarily driven by institutional demand. Additionally, we have our floor brokers at PHLX and our auction capabilities to manage block trades. That market experiences some variability with institutional demand, which also entails a different fee structure compared to retail platforms. So, I believe you're witnessing a mix of factors affecting pricing and our market share. Nasdaq differentiates itself by having both retail-driven and institutionally driven platforms, complete with a range of functionalities. This allows us to provide comprehensive services; even in diverse market conditions where retail engagement varies, we can effectively manage flow from all sectors. Currently, we are performing at full capacity across our options franchise.

This concludes our Q&A session. At this time, I would like to turn the call back to Adena Friedman, CEO, for closing remarks.

Well, thank you very much for your time today. Before I conclude today's call, I would like to make sure you're aware of a change in our Investor Relations team. Specifically, Ed Ditmire has chosen to take on a new challenge as the Head of Investor Relations in a different sector, and this will be his last earnings call with us here at Nasdaq. Ed joined us in 2013, and he has been truly instrumental in shaping and improving our relationships with our investors throughout his tenure here. In nearly a 10-year timeframe in which our stock delivered a 440% return, which is just an awesome track record for Ed. Along the way, Ed has become an integral part of the senior team at Nasdaq and has brought our investors into the room, figuratively at least, as we've made important and impactful strategic decisions. We are launching a search for a new Head of Investor Relations, and we will provide an update once our new head of IR is selected. During the interim period, Neil Stratton will report directly to Ann Dennison, and he will be the primary contact for analysts and investors. I now want to turn the call now to you, Ed, for a few comments.

Thank you, Adena, for the very kind words. Working for standout leaders like Adena and Ann, who were always curious about how we could improve, as well as an entire management team, with the vision and execution to drive real change, kept everything perpetually exciting in my time here at Nasdaq. I saw how creative, hard-working, and humble teams can accomplish so much. It has been very special to partner with Neil Stratton, with his keen sense of what goes into a compelling investment, and for sharing a really ambitious view of what's possible. To our especially discerning, mostly reasonable, and always entertaining group of analysts and investors, thank you for being eager to engage, for enduring my many arguments, and for passing back so many valuable nuggets we used to improve. I'll get to the point. It's been a privilege to tell the incredible story of Nasdaq and its dedicated people, but nothing has been more satisfying than to see the substantial value that can be created when standout business performance is multiplied by the increasing respect earned from our investment community. I look forward to keeping the lines of communication open during this very exciting time and Nasdaq, and then to continue our friendships for years to come. Thank you.

Ed will join us at Investor Day, where we can give him a proper sendoff. It is with sadness that I share this news, but we are very excited for Ed. Congratulations, Ed, on your new chapter and adventure starting later in November. In closing, Nasdaq's third quarter results showcase our strong execution so far in 2022, and we look forward to discussing our future plans with you at Investor Day. Thank you and have a great day.

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