Thank you, everyone, for joining us today at MarketSite here in Times Square, and those joining remotely through our webcast for the 2018 Nasdaq Investor Day. First of all, I just want to note I'm kind of getting over a little bit of a cold, and want to apologize if I'm a little bit difficult to hear. I'm about 50/50 today, a big improvement from yesterday. We have a very busy day at MarketSite today. If you hear any cheering or noise, it's probably the Bilibili IPO, which is a video gaming and content company in China that's IPO-ing today at the MarketSite. I want to start off by reviewing some logistics for the day. First of all, to use the restrooms, I'd encourage you to use the door on the back left-hand side there. Make a left at the corridor and you will find the bathrooms.
Second, for Wi-Fi. The Wi-Fi network is username, Nasdaq, password, MarketSite, all lowercase letters. That's Wi-Fi network guest MarketSite. Let me review the agenda today. We'll be hearing about our strategy and direction from our CEO, Adena Friedman. Lars Ottersgård and our technology team, we'll review our Market Technology business. After that, we'll have a 10-minute break and return to hear about our corporate services business, our info services business, and the market services business. Our finance and capital review with Michael Ptasznik, then we'll get all the executives back on stage for a group Q&A. Each of the business leaders will also have a Q&A at the end of their segment.
Around 12:30 P.M., we'll break for lunch, and we'll give you an opportunity to talk more to the leadership team and take advantage of four product demos that we've set up for you to not only see the products, but talk to some of the people that work with the clients on those products as well. Let me take a moment to read our standard disclosure. This investor presentation is 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 is contained in our press release and periodic reports filed with the SEC. We're going to play a quick video about Nasdaq and where we're going, I'm going to turn it over to our CEO and President, Adena Friedman.
Tomorrow. For most of the world, it's simply the day after today. For us, tomorrow is an idea, a way to think, to innovate, to move the world forward. When we look at the world of tomorrow, we don't see one made up of individual markets. We see a connected ecosystem that creates a market of possibilities. One driven by untapped data and analytics, cutting-edge technology, and forward thinking, daring leaders, and fearless dreamers. At Nasdaq, we're relentlessly reimagining the markets of today, not by chasing the possibilities of tomorrow, but by creating them. Nasdaq, rewrite tomorrow.
All right. Thank you. Thank you, Ed, and welcome, everyone. As Ed mentioned, we do have the Bilibili IPO today. At some point, you're likely to hear a lot of cheering as they do their first trade. There are obviously a lot of people dressed up in costumes. It is an anime-oriented company, so it's been really fun to watch them kind of create a real performance around their IPO. Today, I'm going to start by talking about our strategy and how we're moving the company forward. Then I really look forward to having you listen to each of our business leaders, because they're the ones who are going to be executing on that. They're the ones who, frankly, are driving the strategy and making sure that we can deliver on it. I will try to be as brief as possible.
The first thing is that we want to make sure that you understand that our business and our strategy is going to be driving accelerated growth. We embarked on our strategic review in 2017. Starting at the beginning of the year, we went through a pretty detailed process of determining how we want to carry our business forward to make sure that we're building on our strong foundation, but also leveraging the unique opportunities that we have to strengthen our role in the global capital markets with our technology and analytics expertise. The goal is to accelerate growth in our business, to accelerate our partnerships with our clients, but also ultimately to deliver great value to our shareholders. On the back of that, we are providing you updated outlook on our revenue.
To be able to look at for our non-trading businesses, our outlook is now to deliver 5%-7% growth across those businesses. You'll see that we provide you a segment level view of that. We also want to make sure that we maintain our expense discipline so that we can continue to deliver great profitability and growth in that profitability over time. We are also increasing our return on invested capital targets for new investments that we make with organic and inorganic to be able to deliver at least 10% ROIC across those investments. With the ultimate goal, of course, of overall increasing the ROIC of Nasdaq, and then also delivering on the ultimate objective to drive double-digit total shareholder return to all of you. How are we going to do that?
We're first going to build on the strong foundation that Nasdaq has today, we'll talk about that strategic pivot and the process we went through to be able to deliver a great new strategy for Nasdaq, what that means in terms of our vision and our outlook. What is our foundation? Today we are, as you all know, a very resilient company with $2.4 billion of revenue against four key segments. 76% of our revenue is driven by recurring and subscription businesses, we deliver a 47% operating margin on that revenue, a very strong and stable operating margin. That means we deliver a lot of cash. A lot of cash flow comes out of Nasdaq, and over the last several years, we've been increasing our distribution of that cash in the form of our dividend.
Today, again, we've announced that we are increasing our dividend to $0.44 per share, which represents a 42% payout ratio and a 2.2% yield on our dividends. We're very pleased that we can continue to deliver those returns to our shareholders as we continue to grow our cash flow. How did we get there? As we look over the last four years, and I've been back at Nasdaq for just around four years, I think we wanted to say, "How have we been able to deliver on that to get to the foundation we're in today?" Over the last four years, we've delivered 4%-6% growth in our non-trading businesses. That also on the back of very strong execution and expense management, we've been able to grow our margin by 300 basis points over that period and deliver 9% EPS growth.
I think that we have a very strong growing franchise across the businesses we're in today. With the growth in EPS, our distribution through our dividend, and the market appreciation for the performance that we've delivered, we've been able to deliver to you a 20% annual total shareholder return. We do that by leveraging our four key business segments. We've categorized those business segments into two areas, our growth segments and our foundational segments. That's going to be relevant as we continue to talk about our strategic pivot. Our market technology business is one of our growth segments. We deliver a full market infrastructure technology capabilities as well as market surveillance capabilities to 96 other markets around the world and over 145 broker-dealer firms around the world.
We're very proud of what we've been able to build in terms of being a trusted partner, a trusted expert to our clients around the world in terms of bringing market structure expertise on top of great technology, data management capabilities, and other analytical capabilities that we can deliver to them as they drive the operating of their capital markets and as the broker-dealers navigate those capital markets. We also have our information services business, where we deliver market data to millions of investors around the world, and that's a growing number. It's really been interesting to see that globalization of our data, Bjørn will talk about that later. We also have a diversified and unique index franchise. Moving over to the foundational side, our corporate services business is a combination of our listings business and our corporate solutions business.
Obviously, our listings business is core to our brand, as you can see here today in terms of this center and all the activity that we have here. We are a global brand for innovators, and we are very proud of the innovative companies that choose to come to Nasdaq. We also provide a suite of solutions that really help the C-suite within our corporate clients navigate the public markets, and we'll talk a lot more about that as well. Lastly, our market services business. That's really what we're all built upon. We are a trading business. We understand that trading at a very detailed level. Today, we are a diversified multi-asset class trading firm, an exchange company, really focused on U.S. equities, options, treasuries, and futures, and European equities, options, and futures.
One of the things that we think distinguishes us as a company is our client orientation. Today, institutional investors, broker-dealers, corporate clients, and other marketplaces really rely on us to help them navigate the public markets or to be a public market. We provide our technology, our analytical insights, and our market structure expertise across everything we do for them. We are really fortunate because we've taken a partnership approach to our clients, and that means that they are dedicated to us just as we're dedicated to them. I think that's really accrued to the benefit of all of our businesses. That's our foundation. What can we do to build upon this strong foundation to drive more growth and success to our clients and our shareholders? Well, that's what the strategic review is meant to define for us.
We started with, what are the key trends that are going to define this industry over the next decade? We looked at it and said, "Well, what does Nasdaq have? What are our strengths that we can bring to those trends? What can we do to help drive those trends or shape those trends over the next ten years? What are we really good at? What do our clients expect of us? What do they expect us to be the unique partner for?" Therefore, where should we be allocating our capital and our investment over the coming years to be able to deliver on that? We started with four key trends. The first one is the data explosion trend, which I know it really is impacting every industry. If you really think about the financial industry, data is the lifeblood of our industry.
It has been for many, many decades. If we look at how more and more data is coming in to the industry, alternative data sets, the ability for us to look much deeper and create more intelligence and insights off of the data that we have, that really is going to make it so they're making smarter investment decisions, smarter trading decisions, better compliance decisions, and we can be a big part of that. The second is the evolution of the investment management industry. Everyone talks about the move to passive. We also are really looking at the move to alternatives, the move to quantitative strategies. The fact of the matter is, it is still a big growing pie of investable assets. The overall number of investable assets will continue to grow. It's estimated that it'll reach 102 trillion by 2020. That varies.
If you have more of a move to passive and a move to alternatives, the traditional asset managers are facing more competition. They still do get the benefit of a growing number of assets coming into the market. We look at that and say, well, if you're facing new competition and you're coming into a new competitive landscape, what generally happens in that case? Generally speaking, companies look to technology, they look to analytics, they look to become more sophisticated, and they look to become more efficient. That is where we believe that plays to our strengths in terms of the role that we can provide and serve to the asset management industry. The banks are also evolving.
Coming out of the credit crisis, if you look before, most of their technology really was self-created, and they very much held that within their operations and their organizations. They looked at market infrastructure, trading infrastructure, capital markets infrastructure as kind of core to their differentiation. Today, speed, resiliency, and high capacity are kind of table stakes for every market leader to be able to compete and to be able to participate in the market. Where do they differentiate themselves today? They differentiate themselves on their ability to manage their data and insights and algorithms to drive to better trading decisions. That infrastructure today is seen as more foundational, and that's where we can play a big role in becoming a partner to them going forward. Lastly, the market economy.
We've written a couple pieces about this, over the last few years, we're seeing more non-financial markets coming in and saying, or non-financial industries, I should say, coming in and saying, "There's maybe a better way to do price discovery in our space. Maybe the idea of two-sided markets or complex auctions, ways for us to have the participation of our clients in price discovery is the way forward." They've been actually inbounding to us to ask us for our help in bringing our market structure expertise and our technology to help them drive disruption in their own industries. We want to take that and carry that forward in a more proactive way.
As we embrace those trends, we're very certain that we're making the right decision to continue to evolve our company, to leverage our technology and our analytics expertise, coupled with our market structure expertise, to become a more important and critical player in the industry. This really opens the door to new clients, whether it's traditional asset managers or non-financial markets or private companies. We think that we have more and more of a role to play in the industry. That made it so that we started to think through, okay, you got the trends. We understand where we want to play. What does that mean for capital allocation within Nasdaq? I would say that in the past, Nasdaq has been more opportunistic in how they look at allocating capital internally. If an idea comes up, we put capital towards it.
What we're now doing is making sure that if an idea comes up, we're framing it out in the context of what we're good at and where we're going as a company to make sure that we're driving our investment dollars into those things that are consistent with our strategy and that can help drive growth. One of the exercises we did as a team last year was to bucket all of our sub-businesses into 3 categories. We put them into this slower growth business category that's really not in our foundational businesses, and then our high growth businesses.
In terms of the lower growth businesses, we really wanted to make sure that we optimize the efficiency of those organizations, or in some cases, make the hard decision to divest the businesses where our clients don't see us as a strategic partner, the businesses themselves are not strategic to other parts of our business, and where we may not be the best provider. As a result of that decision, we have chosen to divest of our PR and our digital media assets. We've been very fortunate to find a partner in West Corp, where this is actually core and foundational to what they do. We have a great opportunity to develop a partnership with them as they come in and buy those businesses later in Q2.
In terms of our foundation, we want to make sure that those are the businesses that are core to our brand, that provide strategic value to our clients, and that provide tremendous scalability to our shareholders. That is really our marketplace businesses, our listings business, and our trading businesses. We want to make sure that we maintain our investment in those businesses by bringing the Nasdaq Financial Framework, which you'll hear more about later, into our core markets and by continuing to invest in this MarketSite and the bigger building behind us to increase and improve our client experience here for our corporate clients. Moving to the high growth businesses, those are the areas where we can make a meaningful impact on the future of the capital markets. We can drive that technology forward. We can bring all of these emerging technologies into the marketplaces.
That's where the Nasdaq Financial Framework is critical to the future of our franchise, we're really excited to be able to give you a better view into that technology and the architecture we're building there. We also want to make sure that we are increasing our value and our strategic relationships with our core clients in the asset management space with the investment acquisition and continue to build on our analytics capabilities. One of the things we also did in the strategic pivot is to make sure that we looked at all of our R&D efforts to say, where do they fit in to the industry trends, making sure we're investing those dollars appropriately. We're putting as much money into those things that we think will really drive to the future of the industry. This is a depiction of our core R&D efforts.
You can see the bubbles do represent the relative size of investment, in terms of how we're using our R&D dollars. The Nasdaq Financial Framework really does cut across, in my opinion, actually three of the trends, because certainly the marketplace economy, building a platform that can allow us to scale and deliver services in a more nimble way to new markets, the banks evolving and becoming the market infrastructure partner to the banks over time, also the data explosion. The way that we're building out the Nasdaq Financial Framework, the data management, the way that we're being able to pass data throughout that infrastructure is really critical to being able to take advantage of all the data that's coming into the marketplace.
You've got Project Ocean, which is a little bit of a code name for a little inside baseball, but it's really the trading and that we use it as our dark pool strategy to be a technology partner on dark pools. It really is actually building out to say we're going to be a trading system partner to the banks and brokers. The smart buy side is clearly an area where we believe that the asset management industry and the data explosion are the key trends driving that. The Nasdaq Futures Exchange is really us becoming an even bigger and better partner to our banking clients. The Analytics Hub being a data explosion strategy to make sure that we can serve our asset managers and our trading clients with better insights and analytics. Finally, the Nasdaq Private Market.
The Nasdaq Private Market really has been making sure we take advantage of this trend where asset managers are investing more and more in private companies. Alternative asset managers are looking for ways to deliver more liquidity to their investors. The Nasdaq Private Market is there to capture both of those key trends. As we think about Nasdaq going forward, I just talked about the strategic pivot and how that's driving to an accelerated growth opportunity. We also are making sure we're putting our money where our mouth is by allocating our resources to those opportunities. We're also focused on building an employee culture that allows our employees to be a part of this change. We want to make sure that we're building an innovative and inclusive culture, one that's still very focused on execution, very focused on efficiency.
One, I'm very proud of the fact that in 2017, we do an employee engagement survey every year, in 2017, our employee engagement increased by 700 basis points just on the back of the fact that they're so excited about where we're taking the company. Lastly, our clients. Our clients are really everything. If we do the right job for our clients, we will do the right job for our shareholders, that is something that we're very focused on deepening our relationships. We want to be a technology leader serving the capital markets and beyond. We want to maintain that client orientation. As opposed to really being a competitively oriented company, let's make sure that we're really focused on the clients and the future of their businesses.
We want to make sure we deliver meaningful growth, organic growth to our shareholders using a scalable platform as a service and through delivering transparent and disciplined capital management. Before I finish up, I want to make sure I'm going to go through a little bit of a technical thing. We're changing some of the segment orientation, to deliver, to be aligned with the strategy I just talked about. The first thing is that within Information Services, we've always discussed Information Services in two sub-segments, the data products division and the index licensing division. We're now going to break that into three sub-segments. We're going to have the market data division, which is really all the data that comes off of all of the exchange and marketplace engines. We're going to have our index business, which will now include our index data in that sub-business.
We're going to have our investment data and analytics business, which, incorporates investment, the Nasdaq Fund Network, the Dorsey Wright data business, and other smaller things that we're doing, including Analytics Hub. That's going to be a third sub-segment within Information Services. Bjørn will go through the strategy across those three. In terms of Market Technology, there is a business within Market Technology called BWise. BWise is a governance, risk, and compliance service offered to over 250 corporate clients around the world. The reason why you think, "Well, why wouldn't that sit inside of Corporate Solutions?" The reason is that it has been a deployed solution, a kind of a perpetual license business and a deployed solution to our clients.
Lars and his team has been very well equipped to be able to support that business and drive that business because that is what we have done for our clients for many, many years on the market infrastructure side. We are migrating that to a software as a service model. We're in the middle of that transition. We've been moving our clients more towards a subscription model from a revenue perspective. It's time now with the reorientation of Corporate Solutions and the focus that we have on that business to move BWise into Corporate Solutions. Lastly, we are also going to be reflecting today and in the future, the fact that we, on a pro forma basis, we are removing the PR and DMS businesses from Corporate Solutions.
All of the presentations today will incorporate these changes, we will be showing this to you on a pro forma basis, along these lines on the right-hand side. Just to finish up the introduction. What does this mean? As you go through a strategic review, of course, you have to come up with a new vision, a new mission. It's amazing at how much you wordsmith those words that go out. It's amazing how many times you want to try to refine it and change it. Our vision today is to reimagine markets to realize the potential of tomorrow. I actually really think that, frankly, all of those words really matter other than maybe the prepositions. The reimagining markets.
We are here to help our clients march into the future, to future-proof their businesses, to bring emerging technologies, new ways of thinking about technology, new ways of thinking about market structure and markets, and allow them to succeed as they go into the future. We're also applying that to our own markets to make sure we continue to have great success in delivering our capital markets to our clients. We also want to make sure that we are helping our corporate clients use technology in the markets that exist today and tomorrow to realize their own potential. We really do feel that this really encapsulates what we are doing here and what our vision is for Nasdaq. Just to sum it up, we are uniquely positioned to be able to provide technology, analytics, as well as market structure expertise to our clients worldwide.
We are definitely making sure that we are capturing the evolving landscape, both in terms of the technology landscape and how it evolves, and the industry landscape and how it's also evolving. With a clear strategy that you can understand, that is going to orient our thinking, our capital allocation, our decisions, the way that our employees interact with us. Finally, we want to make sure that we deliver on this, we execute on it well. That's a great segue to me introducing the first business unit to make sure you hear how we are executing on our strategy. Thank you very much. Now on to Lars. There you go.
Thanks, Adena. What we're going to do is Lars is going to present on the Market Technology business. We're going to bring our technologists onto the stage to have a discussion about some of the work they've been doing to put the strategy into action. Finally, we're going to open up the Q&A to the entire team.
Thank you, Ed. My name is Lars Ottersgård. I'm running the Market Technology division of Nasdaq. I have done that since 2008, and I joined actually in 2006. Before that, I have 20 years in the IT industry. I would like to talk a little bit about what Market Technology is today, how we're advancing our strategy in line with what Adena has told, and how we look at the growth opportunities and an outlook moving forward. Market Technology today is a $247 million business. We have experienced a decent growth, both from a revenue side, but more so on the margin side in the last three years. We are a leader in the industries and the niches that we have chosen to serve. We have a strong position in those markets that were established. Who are those markets?
If you look at this slide, you can see that our history is actually from left to right. The three market segments we serve all start with the market infrastructure operators. That's the new term that we established for exchanges, clearing houses, central depositories, as well as regulators. This is the bread and butter from where we come. We have served clients for more than a quarter of a century in this space. It's very much driven by on-premises enterprise software solutions, and very sticky for our client set. From that side, we expand into the sell-side and buy-side segment, starting with the surveillance space, where we know today, as Adena mentioned, have around 145 of the largest broker-dealers in the world and buy-side firms using this technology for their surveillance. We also moved into execution services.
Adena mentioned Ocean. We have the Goldman Sachs. We also have other clients. We had one client going live just a few weeks back using this solution for running their global FX in three data centers out of New York, London, and Tokyo. I cannot mention the name, unfortunately. Going from there, we're now moving into what we call non-financial markets. We have clients there today. We're using complex auction technology to serve those clients. We're also moving in there to help them establish marketplaces, new markets that is not traditional financial markets. A part of our DNA and our history is that we have very loyal clients, as I mentioned. We have been the proven R&D partner through waves of disruptions.
Nasdaq was the first electronic FI exchange more than 40 years ago. We have then been in the forefront of technological leadership ever since then. We have helped our clients and established a position with them, so we are actually, to a large extent, their R&D divisions of those clients, working close with them. We've taken them through the high-frequency trading era, down to after the crisis, the regulatory demands that come upon them. Now we see a new era, an era where new business models are being established and a lot of new technologies, exciting technologies, are going to change the marketplace we operate in. How will we earn the right to continue to be this R&D partner to our clients? Well, we are uniquely positioned.
We are not only the most comprehensive provider of technological solutions to this marketplace. We are, as Adena said, we are a complete operator in this space. We live what we sell. We develop internally. We have our own R&D to be part of this industry. We also have our clients that we work very closely with. This position will help us not only to deliver software or technology or manage solutions. It also means we have know-how. We have capabilities to do more for our clients than just providing a software solution. If I look at how we are advancing our strategy, starting with the industry trends that we are capitalizing on. If I simplify the world, I see two areas. The environment within our clients operates in, us, we and our clients, very complex, unpredictable, changing regulations, globalizations.
It's harder and harder competition, increased margin pressures, and the existing business models are challenged. From a technical point of view, I simplify it again, two waves. One, a lot of outdated legacy technology out there. We have clients that have so old technology that it's actually hard to find skill in the market that can continue to support and develop those technologies. Inflexible solutions that cannot keep up with the pace of change that we're now realizing. The other part of the technology trend is, as I mentioned, all the new innovative technology solutions that are coming out there. They're starting to mature, cloud, artificial intelligence, blockchain, DLT, et cetera. We see that these are now becoming realities to be used in real business solutions and not only buzzwords. The client needs.
All these three segments that I showed, the MIOs, the sell side, buy side, as well as the non-financial markets, have very common needs. There is some very positive signs that I see, a switch from cost pressure and only living up to regulatory requirements, and that is a need to see growth. An optimist, also a need to find ways of growing your revenue top line. They need to be differentiating themselves from each other in a more stronger way than before. The data focus is absolutely through all of those. You have to be mastering the data. You have to be able to leverage data, you have to be able to use it for your own decisions, but also to create new services and solutions to your clients. The pace in the industry is improving. Faster time to market, flexibility and being quick and adapt to changes.
At the same time, excellent operation. You cannot fail. You have uptime of 100% requirements from your clients, and it's no way that you can be so fast and so agile that you start to lose your resiliency of your solutions. Again, regulatory proficiency. You need to understand the market in which you operate and live up to all the regulatory requirements that is coming over you all the time. You also see clear trend of renting instead of buying. How are we going to reposition ourselves to meet these opportunities and capture this wave? Well, we're moving away from an enterprise software on-premises implementation model. We are moving to be a managed solution model. In this way, we can much better help our clients be faster and agile, but also to leverage all our know-how and how you operate markets in this industry.
We're going to expand our solution portfolio, both in current clients, but also to address new market opportunities. The data centricity, absolutely a cornerstone on the whole development of Nasdaq Financial Framework, and we're going to help our clients to master the data for their own use, but also when they're creating solutions. We're going to be the fintech company that actually deploy fintech outside of the fintech financial industry. With this, we think we can accelerate our growth in a profitable manner, and we can maintain our leadership in our industry. This will also open up an absolutely different addressable market for us. Historically, with our niche solutions and the way we have deployed them, we have addressed a market opportunity of approximately $3 billion, capturing in the range of 5%-10%.
In the future, conservatively calculated, we feel comfortable that we will address more than $20 billion size of markets. The non-financial markets, where we are still evaluating how big this opportunity will be, I personally believe it will be bigger than the MIO segment that we have been historically addressing. How will we do this? We will do this through our new managed solution model architecture. You will hear it over and over again because it is our future, Nasdaq Financial Framework. That is the base of this complete change of how we are going to operate. Very important to say, when I say this complete change, it is an evolution. We will not disrupt our clients in a way that are dangerous for their business. This is an evolution where we will bring them on this journey in an evolutionary fashion.
The Nasdaq Financial Framework platform was first announced at one of our industry events called ToF in 2016. At that time, it was more announced as a technology stack, a new platform for traditional way of doing business. We have now evolved to build this Nasdaq Financial Framework platform to a solution platform to be managed by us as a service. This means we are building it completely native to cloud. We have containerized it, and we do all the things that necessary to both run it as a complete service model to our clients, but also allow our clients to run it still on-prem. Because again, this is a journey where we will bring our clients with us as we move forward. What are the expected benefits for our clients in this work?
First of all, we all look for cost. We will be able to reduce the client's cost by bringing a broader set of services and solutions to them. Today, when you sell an enterprise software that is installed on premises, the client have to operate it, run it, and take care of it all the day. That's a costly and cumbersome effort. When we move over to a managed solutions offering for clients, we will take a lot of that burden off them, lower their cost, but increasing our share of the wallet spend. It will give them an operational simplifications and higher resilience and higher quality of the operations. They will reduce the number of vendors.
Today for a client, they have a lot of vendors. It's only a commercial complex situation, but it's also a complex situation when you have to integrate all the solutions and operate them yourself. It's going to help with more rapid implementations, but also more rapid changes as time passes to meet the new changes in the markets. It will reduce the risk of, risking buying something that's going to be outdated or not good enough over time. It's not only our clients that will win on this, it's a win-win situation. The managed solution model is going to deliver both a reduced cost for our clients, and we aim to reduce their cost with about 10%-20%. The way we do it is taking a larger share of their efforts.
For us, it's going to give a lower cost, so higher revenue by taking a bigger part of their wallet share spend by providing more complete services as a managed solution. Also lower cost, because by doing it in centralized fashion, we can minimize the number of different software versions, the adaptations, and complexities that is out there in the markets today. We will lower the cost and increase our income from our clients. This is a lot of promises. We can read it in the literature about how this is good, but we actually have an in-house case study that showed that we both understand what a software as a service or a managed solution model means. We have operated our SMARTS solution since 2010.
At that point, SMARTS, which is the surveillance solution in our portfolio, was primarily an on-premises solution, and there are still an on-premise solution in many parts of our businesses. We invested to create this SMARTS Trade, which is a software as a service solution, managed solution, that we bring to primarily the buy-side and sell-side firms. That has accelerated our growth and improved our margins. We have today increased the number of subscriptions for users with tenfold since the acquisition in 2010. We can compare with the on-premises solution with our managed solution services, and it's at one and a half times higher margin on the services that we provide rather than the on-premises implementations.
We are now in a transition where we're investing to go from the traditional enterprise software provider, with good margins, with stable growth, but not the growth or the margins we want to have. We are now investing to transition from this software vendor to a managed solution partner to our clients. There will be a time when that will impact our margins, but we do it because when we start to deliver services, full service solutions to our clients, we will both grow our revenue faster, and we will improve our margins as we move forward. What are those growth opportunities that we think that we will be able to capture with these new solutions? Start with the market infrastructure operators. I mention it again because it's so important for me that we bring our existing clients with us.
We're going to do this in a stepped fashion. We are already upgrading a number of our key clients to use the Nasdaq Financial Framework more in a traditional manner, as a tech refresh. We can start to migrate this installed base of on-premises operated solutions into managed solution services from us. This will be done stepwise. It's not a big bang that suddenly a big exchange is outsourcing the entire infrastructure to Nasdaq, but we can help them, taking solution by solution and provide it as a service. That will increase our share of wallet spend, and we will also help them because it's a very important part of this Nasdaq Financial Framework, it is an open architecture.
We're going to put our capabilities, our applications, and microservices on this platform, but it's also going to be open for our clients to put their own microservices and application on it. To put their clients' applications and managed services on them, which means that they will start to build their entire ecosystem using this managed platform. When they do that, they will then be hub of their ecosystems. That will allow us to, together with our clients, create new solutions and services to be provided in respective markets. We see a mid to high single-digit CAGR looking forward into this market infrastructure operator segment. The next segment, the buy-side, sell-side, we aim to have a double-digit CAGR growth as we look forward. We are going to achieve that through three different approaches. One is based on the very strong position we have in the surveillance space.
We're going to expand into the RegTech space. Similar as we expanded from the MIO into buy-side, sell-side, and then to non-financial market, we will do it from our core of surveillance, and then we gradually move into this space. We are going to become a market leader in front office services, in the sell-side business. With trading, with risk handling, and with surveillance to continue to provide a surveillance solution, but doing more and more of the managed operations for them. We're going to broaden our buy-side offerings. The third group, the non-financial market, very small segment for us today. We have five clients signed, and several of them in operation, but it's still only a business of $4 million. We will see a strong growth in this segment. It's very difficult to put any numbers on it, but it will be significant.
We are going to do that by helping those non-financial markets to establish new markets with our capabilities in this space. We look at how we're going to do this. What are the markets? What are the industries that will be most relevant for us? We have a very strong inflow of interest from the markets, but we want to make sure that we build a very careful plan on what are the industries where our technology will be most sufficient and help most. We will proactively go after those markets with very strong value propositions. We're also going to work on our marketing to make sure that the inbound interest for our technology will be as accurate as possible to what we actually can provide with our knowledge, with our technology.
What we look moving forward is starting to grow our business faster. We look at the CAGR growth, the coming 3 to 5 year, in the range of 8%-11%. Market infrastructure operator stable, mid to high single-digit. Buy-side, sell-side, double-digit growth, and in non-financial markets, a very high growth. If there's nothing else that you remember from my pitch here, there's three things I would like you to remember. We are a leader in the key niche markets where we are serving today with our differentiated offerings. We're going to leverage that position in a transition away from enterprise software solutions to a new managed solutions model, where we have a bigger opportunity to capture more addressable market space, new markets, but also a higher share of the wallet spent on the existing clients we're serving.
We're going to see higher returns on our business as our clients start to move over into the managed solution model. Thank you, Ed.
Thank you, Lars. We're gonna do a quick video to explain a little bit more about the Nasdaq Financial Framework. We're gonna welcome the technologists that really power this strategy, and Lars is gonna lead a panel discussion. We'll just start this off real quick.
Nasdaq. Built on innovation and an eye toward rewriting tomorrow. Providing mission-critical technology solutions to the capital markets industry for 20 years, end to end and across all asset classes. Powering over 100 organizations in 50 countries. As we pioneer the future of financial technology, we're always reinvesting, innovating, and evolving. Regulatory complexity and constant changes in the market structure have created the need for a flexible infrastructure. The Nasdaq Financial Framework, designed to help market operators lower their total cost of ownership, reduce time to market, elevate performance, differentiate and grow. A robust and dynamic architecture capable of scaling to fit your unique needs. With the Nasdaq Core at the heart of the framework. Connected to the core is our spectrum of interoperable business applications, engineered to help customers accomplish any operation in the trade life cycle, providing the widest degree of application choice, including custom-developed software integration.
It's an evolutionary approach to rewrite marketplace technology, bringing customers' products to market faster, more cost effectively, and more efficiently. Future-proof your organization with the Nasdaq Financial Framework. One company, one platform for all your needs. Nasdaq. Rewrite tomorrow.
Okay, thank you. Now I'm going to welcome our technologists. I'm gonna set up some chairs first. First is Brad Peterson, our CIO. Next is Tom Fay, Senior Vice President of Systems and Performance. Lastly, Patrik Färnlöf. Came from our Stockholm office to join us today. He's a vice president of software engineering. I'll turn it over to you, Lars, to lead the discussion.
Thank you, Ed. This is my friends. That's good to make all this happen. We have this background in the Nasdaq Financial Framework, as we have some questions for you. Brad?
Yes.
You are our CIO. You and I are in this together as a team. In your own word, what is Nasdaq Financial Framework?
Good. Well, thanks for the opportunity to share this. As you heard, it's built on the foundation that we had that started with INET, which was really a distributed architecture, message-based architecture, that allowed us to deliver the performance low latency that we've seen for many years. It's allowed us to have the resiliency that's required in capital markets. As evidenced by the last couple of months or almost now the whole Q1, the scale. The ability to scale up. When markets come alive, to really handle that volume. That was at the core. Nasdaq Financial Framework builds on that foundation. We perfected it. It's our technology. We perfected it over the years. The reason why it's architected this way, we've moved the core to a microservices-based architecture.
Today, the core, and Tom will talk a little bit more about this, there's 18 of them today. The 18 are architected so there's well-constructed boundaries. This is really key because the underlying technology is changing so fast, so you want to be able to change out components and incorporate new technology without having to change the entire application. This is absolutely at the core level. It allows us to have that agility. It allows us to have the ability to incorporate new technologies as they become available. The next piece is what we talked about, is the common applications. When you have just about 100 markets live, and you've seen that, patterns emerge. You see that over and over again, the same thing, the same core components, applications, are involved in just about every type of market.
Our first investment for the common apps was a set of nine that we know are going to be heavily reused. They show up in almost every market. They're things like order entry protocols and gateways. How many gateways have people built over and over again? We're taking the best, we're looking across all of our implementations, taking the best, and being able to allow those to accommodate all the different variants we have seen in the world. You look at matching buyers and sellers. We call it a matching engine fondly. Really, as we talked about markets everywhere, what happens in every market is price discovery and matching of buyers and sellers.
We also have seen all the different opportunities to build one that can accommodate the financial markets as well as what we envision, what we talked about in Adena's vision of non-financial markets as well. You see market data. You see also almost every Nasdaq Financial Framework environment will connect to another one, so routing is a key common application. We have, running these markets, you have market operations, you have technical operations. We see a whole set of common applications that are around just the good operations support systems that are there. I guess the last one I'll just touch on, and I know Patrik is going to go a little deeper on this, and that's a common application called our Reference Data Manager.
This is where we turn, and it's kind of the magic of it, is we turn an equity market into an options market, into a fixed income market, into a salmon market. We realize that the only difference is the reference data in the system, and then the system can be turned into selling and doing those common functions across anything internally. We think that's a really key piece that, as I said, Patrik will talk a little bit more about. We come to the third piece of the Nasdaq Financial Framework, that's around data. Lars talked about us being a leader in surveillance, trade surveillance, and it's an optimized application around a core set of trading data. We also have applications around risk management that really are calculating very quickly what are changes in positions and ultimate risk.
At the end of it, we all take in trade data, and we have to decide how to price what's going on in the market and how to bill. If you think about it, in an activity-based billing system, it's all about those same exact data elements. We've seen very naturally, these separate applications we built, the common thing is they're all acting on the same data. These applications don't have to have the low latency characteristics of matching and trading. They very naturally end up in the cloud, and that's what we've done internally. We've built these applications to be cloud resident. From that, we think that the next generation of those applications have a separation between the business logic and the actual data, and they ultimately will be delivered to our customers in the cloud.
Why don't I stop there and-
Maybe.
Hopefully you understand those three. Yeah. Maybe.
Tom You have led the development of the NFF core. Can you talk a little bit what it will mean for us, and what it will mean for our clients?
Sure. Thank you, Lars, it's great to be here. We're very passionate about this, so I welcome the opportunity to talk about it. Brad mentioned the Nasdaq Financial Framework as an evolution of our INET technology. That's the technology that powers the markets that Nasdaq runs, as well as those that we provide to our market technology customers. Over the years, a number of different implementations of that technology stack have evolved to service different segments of that user community, each providing disproportionate value and each innovating. What we found was, as an innovation occurred in one of those implementations, it became more difficult, more time and effort was required to make that innovation available in others.
That in the context of the ever-increasing rate of change of technology and the pace of innovation, we wanted to do something to refactor our architecture, reimagine our architecture, that we could take advantage of those emerging technologies much quicker than we could before. That's really fundamentally what the Nasdaq Financial Framework core platform is about. As Brad mentioned, we chose a microservices architecture. We did that deliberately to decompose our platform into a set of services that could evolve independent of each other. What we see is many times innovation is specific or material to a dimension or a slice of a market system. In a monolithic delivery, as we were doing before, it became difficult to introduce that in a timely fashion.
By using microservices, we can target that innovation to a specific microservice and make it available to our customers much faster than we were able to do before. We're going to talk a little bit more about some of the interesting microservices that we have decomposed. I would say that if I had to sum it up or define what core platform was in a single sentence, I would say it's a foundation for innovation.
Thanks, Tom. Patrik, in the same way as Tom, you have been leading the development of Common Apps. Can you talk a little bit what that means?
Absolutely. If you look at all the systems we have, we have a lot of different solutions, be that a clearing system or a trading system or something that surveys market data. What we're doing now is that we're looking across all those systems, and we see these patterns, as Brad said, coming to life, actually, and we're looking at and seeing what's the common business components each and every system needs. One of them is actually reference data. All our systems need to be configured, they need to be set up, regardless if it's an equity market or a derivative market, or if actually that's an index calculation system. They all need data.
What we've done is that we've taken a component and created a new one that can actually replace, I think, if I calculate, around 7 to 10 of the existing configuration components we have and provide one that we can use across all the different solutions that we're deploying right now. It can be configured to run financial markets as well as non-financial markets that Lars mentioned. This, I think, is instrumental in the having a fast-moving platform where we can easily add new functionality onto it and not just stay with what we use today. We can actually prepare it for growth for the future. That's what we're doing with reference data or master data, and now we're looking as well at other patterns, gateways. We have how we actually provide information out to other systems, surrounding systems.
There are patterns there as well, and how we can build common components to support that. This is really fundamental in what we're doing right now.
Thank you. Back to you, Tom. Core, we started with the core. When did we start, and what have you accomplished so far with the Nasdaq Financial Framework?
Thanks. Yeah, we've accomplished quite a bit. We had the initial thoughts around what we wanted this architecture to look like in late 2014. Spent the first half of 2015 building a reference architecture, the second half starting to build some of the initial services. In fact, one of the first things we did, which was done out of necessity, was a blockchain service that allowed us to deliver blockchain solutions to a proxy voting application. Since then, obviously, we've grown that service suite up to the 18 that Brad mentioned. Data is fundamental, or the architecture itself is data-centric. What I mean by that is all these microservices communicate with each other through a well-defined set of APIs, we expose those APIs up to the business applications that Brad mentioned as well, in a very structured fashion.
This allows us to maintain interoperability, introduce new services, as Patrik mentioned, in a controlled fashion. We've been on a quarterly release cadence ever since the beginning of 2016. We made our first release in advance of the formal announcement at ToF, our Technology of the Future Conference in May of 2016. We're about to do our eighth release this Friday, which will be our version 3.0 release. Of those microservices that we mentioned, there are those that support our core messaging platform. There are those that support a set of data services. Common ways to read data into these services, transform that data, produce results and pass those results on to another service is another example. We also have a hardware abstraction layer that allows us to take advantage of technologies like FPGA and GPUs.
We also have services that kind of homogenize how we log, how we surveil our markets, and provide common data interfaces to third-party systems to do those types of things. We expect the service set obviously to grow over time. We are structured such that things that we identify, as we see patterns emerge, we can promote those into the platform and make them available more pervasively. We expect, obviously, all of these services to mature over time as technology drives us that way.
How about support for the cloud?
Yes. All of these services were built such that they could be deployed on our on-prem data centers. We standardized on Docker on bare metal. Since we use that as a container technology, we can also deploy that in the cloud, the public cloud. That is a pervasive technology that is supported by all the major cloud providers. Additionally, we are using Kubernetes to do our orchestration, so that also is a portable technology, and is available across all cloud providers. We can use those same constructs in our data centers that we run, so the application logic never need change. It is really just a deployment decision as to where we want to deploy those microservices.
A lot has already been accomplished. Brad, what is coming in the coming two years? What is up for development?
Perfect. I start with, it is all about growth and supporting growth. I will break it into three areas. One is for our new customers coming in. A lot of our new customers are starting with this as a managed service, and a lot of our new customers also that are non-financial are comfortable going straight to the cloud. We think the new customers often will go right to this, the new Nasdaq Financial Framework, with a set of applications that are available as we build them out. The second one is really about migration. We have markets internally that we have to migrate, and it is going to be a multi-year effort to migrate our internal markets to this platform, as well as our customers. We see ourselves being very busy the next couple of years with the migrations.
Brenda Hoffman in the back is running one of the key internal ones for Nasdaq's fixed income platform. That is the first internal one we are doing. We have a number of our customers engaged. I do not know if we are naming them, but a number of them have already taken the core platform with a few of the common applications. Then the last piece is, we talked about this being a multi-year investment. We have done the nine investments in the common applications this year. We will look at the new products and the new common applications that we want to invest in next year. We can dial that down, we can dial it up, we can tailor that to where we think the opportunity and the demand is.
That will probably occur for, also the next couple of years, and then it will settle down into probably more applications that are related to growth and expansion in new areas. We'll be busy, though.
Yes. That's good. You talked about migrations and clients, and, Patrik, as responsible for the common apps, you've been quite engaged in the migration of our clients. What is the status with our clients today?
First of all, I would say that since the launch of the Nasdaq Financial Framework, there's been so much engaging and interesting customer discussions that I've been having the opportunity to take a part of. I thought I would mention two of them. One is for a big derivatives clearing and trading house. We're delivering the Nasdaq Financial Framework to them, and what we've been able to give them and new opportunities they can get is for growth, is for scale. To give a few examples there is that we can now, where before there might have been two matching engines in one instance, we can now add an additional two, as an example, without affecting any of the other surrounding market infrastructure that might have. Here is really the scalability of the platform, how we can add new components in there.
In the future, there could be a clearing engine that need to grow. We can add another clearing engine on top of it. It's really setting it up to be able to take leverage of everything that we're putting into the Nasdaq Financial Framework, and it can grow on that. The second one that I thought I would mention, and Lars, you mentioned it as well, is this big exchange that's trading FX 24 hours a day. That's a new area for us in terms of trading that FX market in three different locations around the world. The platform itself enable us to do it and to break into a new area where we're going to banks and broker segment with this type of platform. We can operate it centrally across the different locations and see exactly what's happening in the three locations.
We can move assets between the different locations on the platform. It's really a different way of how we operate it all on one common platform.
Great. I have one more question to all of you.
Okay.
We always talk about all these new technologies, machine intelligence, blockchain, et cetera. We talk about how Nasdaq Financial Framework is going to enable that and integrate those technologies. The question to all of you is, what are the most exciting new technologies that you see, and how will it be integrated in Nasdaq Financial Framework? I start with Patrik this time.
Okay. I would talk about two things, I think. The first one is data. We talked about data, how central that is to what we're doing. With the platform, we're enabling data discovery, which means that we can unlock the data across all the different applications that we put on the top of the platform. You can discover the data models of those applications and be able to consume all the data. We can do this in a secure fashion as well. We know that security is very, very important when we deal with data and governance. It's encryption at rest, encryption in motion, and really taking that data to where it's needed. Where it's needed is where the compute is.
We believe that the cloud is absolutely fundamental in allowing a good growth and a good scalability of compute on top of your data assets. That's really our important part of the framework itself, cloud and data and the data centricity of it.
Thanks, Patrik. What would you put forward, Brad, in this segment?
All right. I'll give you one trend and two technologies. How's that?
That's a good one.
The trend that I'll mention, it's key to one of the technologies I'll talk about. The trend is really this notion of markets everywhere, the fact that you can use markets for a better outcome for optimizing the distribution of resources. Of course, it's well written about the lines that get redrawn between companies and what can happen in a distributed fashion outside of companies. I'm not going to proclaim that companies are going away, because I don't think that's the outcome, but I think redrawing of the boundaries. Things like Uber are a great example, where the people that are engaged don't have to be employees. They can actually use market pricing models, matching buyers and sellers on a platform.
I think that has a profound effect, that's at the core of us understanding where those boundaries are being redrawn and where our solution can play a role in that price discovery of matching buyers and sellers. The second piece is how that transfer, once that is consummated. In financial markets, you have to keep track of who owns what and who sold what. We think the innovation with blockchain, while the timing is probably later than my second technology I'm talking about, it still has a profound impact that you have this distributed record-keeping system with high integrity that I think ultimately ends up for a lot of hard assets in cloud. The cloud providers will naturally offer blockchain services.
That's why, as Tom mentioned, we integrated blockchain in an independent way so that as we see different services available, whether they're different winners or there's just different alternatives for very quick record keeping, change of ownership, or more long-standing ones like housing and security assets. We think there's different services and different flavors that will evolve, we need to be able to talk to both of those. Blockchain would be my technology, the second one is really machine learning, that one is here and now.
What we've observed in our labs and what we've learned from the machine learning that has given computers vision through all the data you have with photos and videos, we've taken that analogy and said, "How would we look at seeing the patterns in trade surveillance?" We can now start to see, using the same techniques, we can start to see layering, spoofing emerge as very distinct patterns using machine learning. I think that's a very practical here-and-now application and an improvement to what we already do in trade surveillance.
I think we're really rewriting tomorrow.
Yep.
If you talk about tomorrow, Tom, I know you would like to talk about something.
Yeah.
That's really cool.
Yeah. One of the really interesting things that we're looking at very closely now and then certainly a little bit further out is quantum computing. As Brad mentioned, if you think of it, quantum computers are very good at solving optimization problems. They're very good at detecting patterns or problems around patterns. We think, certainly that technology in terms of market surveillance and ensuring market integrity, this is something that's very interesting to us. Additionally, because of its applicability to solving optimization problems, running Monte Carlo simulations and/or things like Black-Scholes or those types of methods on a quantum computer, we can do that much faster than can be done on a classical computer. That could have profound implications upon how surveillance is done, how market integrity and how price discovery is actually done. We're really interested in that.
We're working with a number of leading companies that are in the quantum space, and we're working with them to identify and build algorithms right now using the programming paradigm, which is real, the languages and the compilers, which are real, the SDKs which exist, and simulators that run in the cloud to have these algorithms ready to bring to bear to this market and make available to our customers as soon as the hardware is ready. We're kind of getting ahead of this, and we want to have a portfolio of these services kind of waiting on the hardware. We're working very diligently to do just that.
Thank you. I think that means we end this panel and we're open for questions.
Actually, why don't we leave the panelists up here, and we'll open it up to Q&A to the audience. That way, if someone has a question on these things, we can ask anybody. Can we bring a microphone over here to Alex? I'm going to ask everyone to please wait for the microphone to get to you, announce your name, introduce yourself, and then ask the question.
Sure. Thank you. Alex from UBS. Can you just elaborate a little bit on the non-financial opportunity on the market technology side? I mean, you said it's $4 million, 5 clients. A, is this all little $1 million clients that you see out there? Or how big could some of these opportunities be on an individual basis? How is the pipeline in general? I mean, you said you've got a lot of incoming calls right now, but are you actually out there trying to promote this? Do you need to have a better or different sales force to do this? How are we going to think about this for the next couple of years in terms of spending and then also the pipeline going forward?
First of all, we are lucky enough to have extremely scalable technology. The smallest client I have is actually the exchange in Papua New Guinea, very small, running on a laptop. Then we're running exchanges like our own here. Many of those new markets have been startups, but we also have very interesting incoming requests from very big and established firms. I expect to see us a range, very big range of very small deals to very large deals. We definitely have those opportunities in there, too.
Maybe talk about, Scott, too, the fact that we do have-
One good example is with the complex algorithmic technology. We have Hong Kong Jockey Club as the largest client in this segment, there's growth of expectations in this area also. When it comes to how we go to market and how we look at that, we have a dedicated business development group looking at how to develop these market segments. We are going to use both the established sales force that we have all over the world, we have offices in many countries, to look into this because the underlying offering is not so different from what we're selling to the financial marketplaces. We think that we can leverage the existing sales force. We are strengthening it with business development capabilities, and we have that in place.
Why we do that is to develop a plan for what are the industries that we proactively should go after. We have a view, we have done work, but we're not yet final with the outcome of that. We're going to use also external help in identifying where these best opportunities are. Then we will go after this with established people, but we're also going to staff up as we go forward.
Great. Next question.
I want to expand a little bit on the non-financial markets, I guess. The Hong Kong Jockey Club sounds great. What I've heard, one of the biggest markets is online advertising, that they use high-frequency trading techniques. There's companies right here in New York that house and have developed platforms. Have you looked at that area? I'm trying to think of the broad categories that really use--
That's one that just jumps out to me. Have you looked at that or no?
Absolutely. We have the NYIAX Exchange, which is a futures exchange for advertisement already as a client. That's one of the five. I think I don't want to nail into which exact market we think are the biggest opportunity. For instance, we signed [XRe, a reinsurance company, recently, where you can get in and out of risk in a more efficient manner. We look at the healthcare industry, where we have incoming opportunities. We have in the supply chain management areas, opportunities that are very large. I think it's a little bit too early for us to say that's the market, because I think we will see a list of three, four, maybe five markets where we really want to go after with tailor-made value propositions for them. Advertisement industry could be one of those, and we're already in that space.
We have time for one last question in this segment. Later, Lars will be back with the entire management team for more questions. Okay, take the question from Mike Carrier.
Yeah, Mike Carrier, BofA, Merrill Lynch. Lars, two questions. First on the buy and the sell side. It seems like the market opportunity there is the biggest potential for you guys. I think on the one slide you showed, I think it was $15 billion. If you look at the double-digit growth that you're aspiring to, is that future, or are you actually seeing that now? What's driving that? Meaning, I think you mentioned some outdated systems, like from a cycle, have a lot of firms not been able to invest because of a lot of other kind of issues that they've been navigating through? Are the legacy systems just a lot more outdated versus like history, and is that driving it? Just one other question on the margins.
I think you said you have some investments in 2017 through, say, 2019. What should we be expecting for the margins versus 2019 and beyond when you start to scale up?
I will try to answer. I didn't hear every nuance of your question. On the banks and brokers space, the sell-side space, it is a lot about making sure that the resources they have is focused on what is bringing them differentiating value. We can help them with doing the, should I call it the plumbing? Why should they build a matching system? Why should it be a surveillance system or risk systems that we could provide for them in a managed operation manner? We also see clear interest from that segment of the market to actually not buy software and operate it themselves, but really buy a managed solution from a partner.
It's about lowering cost, it's about refreshing old technology to more modern technology, and it's about freeing up their internal resources to focus on where they can make a difference for their competitiveness in the market. There's a huge space there of, should I call it inefficiency, that we could help with. RegTech being one big space, huge cost for our clients, where a partner could really help lower them the costs. On the margin, I will pass over to Adena to comment on that. If I start with a Market Tech perspective, yes, we're going to see some pressure on the margin short-term, but we do this because we know that a software as a service model will have higher margin than on-premises technology solutions in the future. We will see an uptick. You will not see a bump.
You will see a gradual improvement because we will have to bring on new clients using the managed solution model, and you will see existing clients gradually moving over. It will not be that one day everything is over into managed solutions. You will definitely see an improved margin over time. Adena, you want to say something about the overall? No? Okay, fine.
I can later.
Okay, great. Listen, I want to thank you, Lars. I want to thank Brian, Tom, and Patrik for joining us today. What we're going to do now is we're going to take a 10-minute break, and then we're going to restart promptly at 10:30 A.M. Thank you, everyone. Everyone, we're going to start in just a few seconds. Okay, we're going to start in just 15 seconds. Okay, welcome back everyone. We're going to kick off the next session with a quick video, and then Stacie Swanstrom, Executive Vice President, Corporate Solutions, and Nelson Griggs, Executive Vice President, Listing Services, are going to discuss our corporate services business.
Okay. We are so proud to partner with those amazing companies who are up there. I think that the theme of a lot of our companies, they look towards the future, not the past, and they're all about innovation. That's the Nasdaq brand. My name is Nelson Griggs. I'm the Executive Vice President of the Listing Services business. I have been with Nasdaq for 17 years, and for the last three and a half years, been running this business.
I'm Stacie Swanstrom, Executive Vice President of Global Corporate Solutions. I've been with Nasdaq for 25 years, and the last three years, I've headed Corporate Solutions.
Great. In the next 20 minutes, we're going to cover the new look of the Corporate Services business, how we are positioned for growth, and also what we see over the next three to five years. Looking at the business as it exists today, the balance between the Listing Services and the Corporate Solutions business is about a 50/50 mix. The Listing Services piece has not changed in terms of the construct of it, but as we've talked a bit today already, the Corporate Solutions business is now made up of the Investor Relations, Board and Leadership, which is the fastest-growing product we have. As well as, Stacie and I are very excited to welcome in the BWise business, the governance, risk, and compliance, because there's such an overlap in terms of the clients that we talk to.
From a high level, just some of the numbers on the right-hand side. The way this business would look today, it's about a $501 million revenue business, a 32% margin profile. We've highlighted some client statistics. I'll just touch on two. We now have over 3,900 clients across the U.S. as well as the Nordics from a listing perspective. That Board and Leadership, that's really fascinating today, has grown to having 130,000 users on that platform. We're very excited about some of those numbers on the clients that we touch, and I'll talk more about that as we progress through the discussion here.
We thought it would be helpful just to rewind 2 years back to Investor Day. Since then, Corporate Solutions has been going through a bit of a transformation. The strategic review of the Nasdaq portfolio resulted in a pivot, essentially more focus on our strategic growth segments. The previous integration strategy actually was very helpful because it did help us lever our content. It also allowed us to package up our communications products for divestiture and to partner with West Corporation, who as Adena mentioned, is a global leader in technology-enabled communication services. We're also repositioning our GRC products alongside of our award-winning IR and BNL products. We think that that will greatly help us reposition and create a better competitive position in both our established and new marketplaces that we want to serve.
One of the reasons why Stacie and I are up here today together is because of this life cycle story that Nasdaq has that really no other exchange has in the world to position the breadth of what we do with our clients. It obviously starts with the listing business, and today we service quite a few companies in the private sector on their liquidity needs. We take them through the IPO process. There's, as mentioned, thousands of companies that we list, all the way up to the five largest companies, market cap wide in the entire world that are listed on our marketplace. It's a breadth of services from a listing perspective. It's very in-depth and broad, what no one else can really talk about is our ability to service them through these technology applications as well.
The board and leadership product extends not just to public companies, but privates as well as some of that ecosystem, like some of the sponsor companies will use that platform as well. The GRC is a great asset for us to have now, thinking about what companies do when they're public, but also preparing to go public from audit, risk, governance, compliance. Those are all really critical discussions for us to be able to have with our clients, have a very engaged discussion with them. The investor relations and intelligence allows them to effectively navigate the public markets. We're also starting to support some companies before they go public. Again, that whole life cycle story is very unique to Nasdaq. Most other exchanges are talking about various partners, providers that they have to refer to.
We go in there as Nasdaq, as a team, to service the clients. Thinking about that business today on a pro forma basis, the listing services and the IR piece is, overall, this is a very healthy reoccurring revenue, consistent business with higher margins. That listing services and the IR piece is a steady business, very consistent for us. The higher growth greenfield businesses of the board and leadership and corporate governance represent about 23% or so of that mix. This business, as we reported in 2017, had a 28% margin when you included the multimedia IR website, webcasting business. Today, that margin profile is 32%. Now we're going to move on to how we're positioned to grow the whole business for growth.
Sure. All right. Let's talk about why we think that Corporate Solutions is positioned for growth. This slide demonstrates the sheer size and scale of the business. With over 6,000 clients globally, we also have about 28% of our revenue in Corporate Solutions that are from Nasdaq-listed clients. That means a very large 72% are from clients that are not listed on Nasdaq. This represents a huge opportunity for us beyond our listings business that people don't realize that we have. With over 6,000 clients, we have an immense amount of data and scale. We feel that we can provide more strategic value to our clients across our product mix. Who are our buyers, and what is the value we provide? We're focused on the highest level strategic buyer at a company.
Our goal is to give the C-suite advanced tools to help them navigate the capital markets, and also to basically operate efficiently and effectively. The convergence in terms of what the board wants to know and our investor relations and our GRC and our BWise products continues to move together. The content is typically curated by the C-suite, and it's also handed over to the corporate secretary to publish and share with the board and the subcommittees. Some examples of where we see a convergence to the board with investor relations and GRC are things like an activist study or a capital allocation study. Those are projects that we do with our clients more and more, that the board is very interested in. On the GRC side, it might be something like SOX or internal reporting. Again, very interesting to the board.
Serving the C-suite and the board and creating interconnectivity with our products really helps us walk the halls and continue on our land-and-expand strategy. Of course, these people also make the listings decisions.
Let's do.
All right. I'm really excited about this slide because I think in the green, it does show our unmatched and unparalleled position that Corporate Solutions has in the market. Not only do we have, like we mentioned, 130,000 board and leadership users and 6,000 clients globally, we have penetration of 90% of the Nasdaq-100 index and 88% of the Fortune 100 index. This just, again, demonstrates incredible size and scale of the business. These global clients can also feed our listings business, which is why Nelson and I are here speaking together. We recently welcomed a long-time large Corporate Solutions client, PepsiCo, as the latest mega-cap listing switch. That was very exciting for us. It definitely demonstrates how these businesses can feed each other.
Yeah, that was incredibly exciting for my group particularly. You think about a company that's been listed on our competitor for well over 100 years, making the decision off that value proposition story that I had mentioned. When I was up here just two years ago, talking to the group, since then, we've had over $150 billion more in market cap transfer from our key competitor. I'll talk about that more in a moment. The IPO win rate today, or the last three years, has been 70%. We're pretty excited about our efforts on some of the larger cap IPOs. Last week, you saw Dropbox list raising over $750 million. Today, Bilibili is going to raise last night about $480 million. Tomorrow, we have a company that's scheduled to raise over $2 billion with a $13 billion market cap.
Our progress in IPO win rates is truly exciting to us. One area that doesn't get quite as much attention, our Nordic markets over the last three years had 287 listings. In Europe, that's by far the largest number of listings on a European exchange. The efforts in private market, although it's taking longer to scale than we had initially thought, we processed over $15 billion in transactions over the last three years. Working with some of the largest growth companies that are out there pre-IPO, and that business is now positioned pretty well for some further growth and having more meaningful impact on the listing revenue. We often get asked, what drives these listing decisions? Clearly, as you walked in today, you saw some of the visibility aspects we do for an IPO company. It's truly a transformative day for the company. It's magical.
It's very exciting. That also extends beyond the IPO. We have one of the most advanced digital and social teams. Some of the largest companies in the world rely on us for their social platforms and how we actually promote their brand. You've seen if you watch Squawk Box in the morning, they now report downstairs. As Adena mentioned, we're thrilled to have a more expansive footprint here at Nasdaq. We focus relentlessly on the execution of the trading component of this, not just on the ongoing basis, but we've been down this process to have a much more efficient, resilient opening process, and we've seen that result in more listing clients choosing Nasdaq. We spent a lot of time talking about the Corporate Solutions. I can't underestimate the importance of having these deep, meaningful conversations with the C-suite about their stock.
That's truly why they list on a marketplace, having ownership over those services is very valuable. As you move through the story here, no other exchange has the index components that Nasdaq has. We have world-leading indices. That's very important to clients. Lastly, we have a rational fee structure that's appreciated by the clients. Although we had a 70% win rate overall, you look at the sectors that drive the most listing activity, the healthcare, finance, and technology, that represents 75% of the listing IPOs in the U.S. We have almost an 80% win rate there. We spend a lot of time protecting these sectors. I will touch very briefly on the switch story because this slide gets a lot of mileage for Nasdaq as a whole and surprises a lot of people.
The last 10 years, we've had over $1.1 trillion in market cap transfer. Obviously, we're excited to bring over technology leaders such as Workday or Texas Instruments. The breadth of these companies, whether it's a CSX, American, Xcel Energy, the 10th largest utility company in the U.S., switched last year, Principal Financial. This opens up a lot of eyes about who Nasdaq is today, and these companies wanted to be part of the home of the future. This is a story that continues to pay dividends for us, and we'll also do that in the future.
Great. Let's take a few minutes to walk through our primary growth drivers. First is to increase our board and leadership market penetration. This is our biggest growth driver in corporate services. It's estimated that only 25% of boards today actually use a board portal. This creates a lot of green space for us. We also need to execute on our segmentation strategy, and this will help us sort of get deeper penetration into the markets we serve, but also create new verticals for us. We'll continue to expand BWise's global penetration. That's our next biggest opportunity. Historically, we've sold perpetual licenses for BWise, and so we've had a four-year program actually to move from the perpetual licenses to more of a subscription model, as Adena mentioned earlier.
In 2018, we expect the subscription fees actually to surpass the perpetual license fees that we get, or revenue, I should say. In the short term, it's been a little bit of a drag on the top-line revenue, but moving away from the perpetual license to the subscription model obviously will create a more stable revenue base for us and also future growth. The next one is leveraging automation, and we've done a lot of that in our investor relations business. We've spent a lot of time on machine learning and natural language processing. Essentially, what that's allowed us to do is have our analysts move away from the more mundane and sort of elevate their insights and their services to our clients. That's been an exciting shift for us. We also have future opportunities to further segment this market.
Today, giving our clients actually, in the future, options to move away from an all white glove service, that's all we do today, to further options down to a low touch or maybe a no touch for maybe micro caps. That would be more of a robo-advisor type of service. Lastly, on the automation side, we'll continue to introduce our new innovative products. We have Insight360, which is our benchmarking product, and we also have passiveIQ, which is essentially helping our clients understand who owns their index and why they own their index. These are exciting new value props for us, but also we will demonstrate those for you in the back once we're finished. We're excited to sort of show you what we're doing and where we've come. The IR Insight platform's back there too, as well as board and leadership.
Did I do too much of a plug?
I love it.
It's awesome. You're going to love it.
It's an amazing tool. In the listing business, we talk about we play the long game at Nasdaq. I'll take you back 45 years, when we had zero revenue from listings, to where we think we are today, taking on this entrenched competitor and winning just tremendous market share over the last five, 10 years. Our opportunity here is really to continue that, focusing on some of the larger IPOs, continuing on the switch business, and maintain our market share where we're exceptionally strong today. The listing business has room to run there. When we look at how that's going to evolve over the next three to five years, where we are today, we're extremely confident in our business today. The ability to execute the divestiture exceptionally well, we're working hand-in-hand with Stacie on that, and we're confident in where that sits today.
This relationship with the C-suite is super powerful for us, and the ability to go out and talk about these complex things that they face today is going to really power Stacie and my ability, our teams, to capitalize on this and sell more products, position more services, and gain more market share. We're excited to share that we are moving our revenue outlook up to a 3%-5% growth rate over the next handful of years. Again, we're able to do that in our mind because of the foundation we have. That's really where I'll summarize here is the foundation's critical to us. This reposition of the businesses and the focus on things that truly matter to our clients day in and day out gives a great foundation.
We think this life cycle story is truly unique to the exchange space, lets us talk about the value proposition to a company's whole entire cycle as a private company, a public company, with the tools they need. This refocused effort has our whole teams energized to go out and position this story. That's where we are today.
Thank you. Thank you. We're going to give about five minutes to take a couple questions, and then later, Nelson and Stacie will join us for the group Q&A as well.
Adena, can you repeat the questions as they're asked?
Yep. Got it. Okay. Microphone to Rich here.
You have a 3%-5% which is improved, like you said.
Yeah.
Could you walk through the steps of maybe breaking out between corporate listings and corporate services, and how the impact of PR, the sale of the business, because I would expect that improved growth rate once you separate that.
I'm just going to repeat the question. Asking for a little more detail about your raised revenue growth rate and how the two segments, as well as the changes you've made, impact that growth rate.
Yeah. Well, moving out the webcasting, web hosting, PR, increased that margin profile by 4%. That's part of it. What's left Yeah?
Growth profile?
No, I'd say on the margin profile. The growth profile, we don't think, doesn't really impact the business. We're keeping what we feel are most of the higher growth businesses for us. You break down that group, the pie chart, and the board and leadership and the BWise will be the higher growth, and they're probably at that upper end of the range or further. You have the listing business is somewhat of a beta business, so it all depends on how the market's moving, but we do have some power to increase the revenue there in the lower single digits. I'd say the IR is right in that same range. The growth drivers are on those, the board and leadership and the BWise.
Question over here.
Thank you. Could you just talk about the IPO win rate did tick down a little bit in 2017 over 2016, you highlighted the good growth in financials, technology, and healthcare. Was that a strategic decision to not focus on certain areas or just maybe some color around what drove the year-over-year decline?
Yeah, I'll take it back. Oh, sorry.
I'm just going to repeat the question, make sure everyone on the webcast can hear. The question was about some of the year-on-year changes in win rates.
Yeah.
Whether or not Nasdaq is changing its focus on which sectors it's chasing the hardest.
Yeah. If you look back three, four years ago, our win rate was 50%. The blended rate over three years is 70%, we think is really strong. Even last year was a very strong year for us. Sometimes year-over-year, depending on what sectors are more active than others, can impact the win rate to some degree. If we're going to be in that 65+, 70% win rate, we're pretty excited about that. We are focused on this large cap area.
Could I maybe just ask a follow-up? Any update on the total addressable market for GRC?
Lars, you want to I'm sorry, go ahead.
As I'm handing it over, I can answer the question.
Yeah.
Absolutely. The addressable market with the existing solution is about $1.3 billion. We are developing also the Viva solution into a service where we adding content, we see that the opportunity, that we're going to be able to address is around $5 billion.
Great. I'd like to thank Nelson and Stacie for their presentation today. We'll see them again later on, but now I'll turn it over to Bjørn Sibbern, EVP and Head of Global Information Services. Thank you, Bjørn.
Thank you, Ed. Can you hear me in the back? Great. I really look forward for today. I look forward to spend the next 20, 30 minutes to give you an update on our Global Information Services business. My name is Bjørn Sibbern. I'm responsible for Global Information Services, and I've been with Nasdaq for 10 years. Early in my career, I was running our European equity business and our commodity business. Some of you are seeing me for the first time today, but I guarantee you that more or less all of you have been seeing the Global Information Services products, services in action at least a couple of time.
When you have been looking at the stock ticker from CNBC, if you've been looking at your iPhone, your Bloomberg terminal, or if you have been looking at your financial websites, you have everything equal been looking at data or index products from Nasdaq. As you can hear, I'm from Europe. I came in as a part of the OMX acquisition, and it has been great 10 years with Nasdaq and OMX. I even more look forward to the next 10 years. As you heard from Adena, we launched our strategy last year. Global Information Services have a fantastic potential, which was highlighted at our strategy launch last year. We kicked it off with the acquisition of eVestment, which is a great new start for our new third growth pillar, and I will talk about eVestment a little bit later today.
Before looking at the future journey, let me spend a couple of minutes on where we are today. We have through many years built a very strong growth engine for Global Information Services, and it represents now 27% of Nasdaq revenue. We have strong index brands like Nasdaq-100 or Nasdaq Biotechnology. We are the industry leader in the market data space, and we have more than 320 exchange-traded products tracking the Nasdaq indices in 19 countries. At the end, we had $160 billion in AUM that are tracking our indices, which is, by the way, upward 35% from end of previous year. We have seen strong historical growth, we see even stronger growth going forward. It will be based on many factors, let me just mention a couple of them. We provide financial data and analytics to billions of people around the globe.
One example is our Nasdaq Basic, our cost-efficient U.S. equity product that provides great value to more than 400,000 subscribers across the globe. We are the leader in smart beta and multi-factor indices. We have products like Dorsey Wright Focus 5 or Dividend Achievers families of products. Lastly, we are expanding our data analytics with our franchise, with the acquisitions of eVestment. I really like this slide. This is because it shows some of the strong growth potential we have, and also how resilient and diversified our business is. We have gold source data from 29 marketplaces, mainly in North America and Europe, data from our exchanges on equities, Fixed Income, commodities. What I also want to highlight with this slide is that the revenue we have is not only from U.S. equities.
The revenue we have from the U.S. share tape accounts for less than 20% of the total Global Information Services revenue. We do not only see a strong growing business and a diversified business, we also have a unique position with leading index brands for both retail and institutional investors. Let me give you a couple example. We have Nasdaq-100, Nasdaq Biotechnology, Dorsey Wright & Associates, and the leading index in the Nordics, OMXS30. More than 40% of our AUM is tracking indices in the smart beta area. Through eVestment, we are the leading source of analytics for institutional investors and asset managers. We are truly global, and we have a strong presence in more than 70 countries around the globe. I'm actually proud about our performance last year, these slides highlight that.
During the last three years, we've been able to grow organically on average 5%. Last year, we accelerated our growth and delivered 7% in revenue growth last year, we outperformed most of our peers. We have high growth expectations going forward. Let me talk about how we will deliver going forward. I will now talk about three growth pillars. When you look at the Global Information Services business, you should think of us looking at it from three different growth pillars, each with different great growth opportunities. The first one is our market data business, mainly data coming from our exchanges. The second one is our index business, and the third one, investment data and analytics. Let me turn to the first one. First growth pillar, market data, mainly data from our exchanges.
We will grow our market data business through many different drivers, let me just mention a couple of them. We have in the past and will, going forward, do targeted and strategically considered fee adjustments. We do not just increase fees across the board. When we change fees, it's because we have added value to the products. When we do fee changes, we actually reach out to the customers to explain to them why and the impact. It's not only good customer service, but it also limit attrition. Another way we want to grow our business is by onboarding new customers. We onboard quite many new customers, either by selling our existing products, launch new product or services, or by globalizing our franchise. We see strong growth opportunity outside U.S. and especially in the Asia-Pacific region.
That leads me to the first customer case, the first case study, how we work with a customer. This case study is from China. It's around Sina. Sina is one of the largest media companies in China. They operate the internet portal called SINA.com and a Twitter-like social media called Weibo. Sina is, by the way, a great listed company here with Nasdaq. Sina now offer last sale information for all U.S. listed stocks and ETFs. The Sina customers now get financial data, last sale data from Nasdaq to more than 375 active users. A great value proposition for Sina, and of course, a revenue opportunity for Nasdaq as well. Should also mention that Sina customers do not only look at the last sale data product, they also look at our index data.
A great example of how we grow with a customer, serve their customer's need, and how we'll grow with new customers going forward. The Asia-Pacific region is a great opportunity for us from a growth point of view, it also an important growth opportunity for the second growth pillar I will talk about, our index business. We see strong growth potential by continuing to expand our index business with innovative solutions, which is in line with the move from active to passive. We are very well positioned as the leader in the index licensing space, the leadership is across the four major product areas you see on the slide behind me. We work with most of the leading exchange product issuers globally, and we expect to see more than 25 exchange-traded products launched this year based on our indices.
We of course, do that in close cooperation with the different ETF issuers. We see an increasing demand for global ETFs, and we see great opportunities by spreading the Nasdaq-100 across the world. Nasdaq-100 is a fantastic brand, not only here in U.S., but also outside U.S. As we move into new countries, new geographies, Nasdaq-100 ETF is in demand. We see the great ETF demand, especially in the APAC region, but we will also launch our first Nasdaq-100 ETF in Africa in Q2 this year. We also see a great potential by partnering with existing ETF issuers to assist them, help them opening up new markets. We always try to form new alliances with sponsor firms, which leads me to the second case study. The case study is with Principal, which is a great example how we work with ETF partners.
Principal did, by the way, switch their listing to Nasdaq last year, their equity listing. Principal partnered with Nasdaq to create a new line of smart beta ETFs. By partnering with Nasdaq, Principal tap into some of our core strengths, translating complex strategy into rule-based and transparent indices. We have together launched nine funds, and it has now more than $200 billion in AUM, increased during a little bit more than two years. It's a great partnership, and that's the way we want to work with partners going forward. Let me turn to the third growth pillar, investment data analytics. I'm really excited about this one because this is the area where we have the highest growth expectation. We have a growing list of products that appeal to different communities of investors. Dorsey Wright Associates, our technical analysis platform that is targeting thousands of investors, financial investors.
We have the Nasdaq Fund Network that distribute end-of-day pricing for more than 35,000 funds and investment vehicles. We see great opportunity by expanding Nasdaq Fund Network globally and actually also include more investable assets. Today, Nasdaq Fund Network is basically only a product in U.S. Globalizing that is a great opportunity. Finally, through our eVestment acquisition, it's a great growth opportunity, and we see great growth from eVestment's global institutional investing network. Let me spend a couple of minutes on a very important milestone for Global Information Services and for Nasdaq, our acquisition of eVestment. The acquisition closed in October last year, and we are very happy with eVestment, both from a growth point of view and from a performance point of view. eVestment has also tailwind from the global growth in AUM and the institutional community's need for transparencies is also a tailwind for eVestment.
Last week, I participated in eVestment's annual conference with more than 300 buy-side customers, and I got information on following. eVestment is the industry standard for institutional investment data. eVestment has a great reputation and strong relations throughout the entire buy-side ecosystem. Many of you are customers today or else some of your customers are customers. eVestment has a strong track record on double-digit growth, high customer satisfaction, and is very well positioned to continue its leadership within this industry. We expect eVestment to be able to upsell to their customers, grow internationally, and to aggressively pursue certain unserved markets like private equity. By the way, it will be possible, like Stacie also mentioned, to see a demo on eVestment after today's presentations. Let me turn to the third case study, which is a good example of how eVestment and eVestment customers work together.
The case study is around GQG Partners, a boutique investment firm that focus on global and emerging markets. It's a relatively young firm, and when they started in 2016, one of the first things they did was reach out to eVestment. Some of the employees have worked with eVestment before and knew the value from eVestment from a distribution point of view, competitive landscape insight, understanding how you're positioned versus your competitors. They signed up for a handful of eVestment products, which gave them the insight to the client's needs, their own position in the market. GQG used eVestment analytics to support their amazing growth, and they have also increased their spend with eVestment with 33% within one year. This is a great example of how we want to work with small and big customers in this space and illustrate how well-positioned we are.
On top of this, eVestment has seen fantastic growth opportunities outside U.S. We have already proven successes in different countries in Europe and the Asia Pacific region. Let me spend a couple of minutes on the outlook. What can you expect from Global Information Services going forward? You'll see a strong organic growth from three different growth pillars. We will deliver 5%-7% organic growth over the next three to five years. Let me just round up. Global Information remain a key growth engine for Nasdaq for following reasons. It's a differentiated business in term of growth, resiliency, and consistency. We are heavily client-focused, and you should expect us to show more partnerships or case study, as I just showed you. We have a great platform for future growth. Our brand, our reputation, and our employees are great assets.
Our technology platform, which you heard from Lars and Brad, is second to none. We benefit from tailwind, the move from active to passive, the need for transparency in the institutional space, and the need for alternative data is tailwinds that will help us grow going forward. Global Information Services, an important part of the Nasdaq story, and we serve more or less all part of the financial industry. Back to my example about more or less already using Nasdaq data a couple of times during today. With those words, I will open up for questions.
We have a couple of questions over here. One mic.
Hey, thanks a lot. Wonder if you can expand a little bit on the opportunity to grow through adding new clients, new customers, where the customer is coming from, and how penetrated do you think you are with respect to the total customer market?
I'm just going to repeat the question. The question is on where Nasdaq in Information Services finds new customers, how penetrated is this market for Nasdaq today? Let me try to give you a couple of examples. If we start with our data business, our revenue from outside U.S. and Europe, so basically the Asia Pacific region, is less than 4%, around 4%. To onboard new customers, like I showed with the Sina case, and you should expect to see more cases like Sina, mainly out of Asia, within the next couple of quarters, where we will onboard new customers. We have great dialogue with quite many customers in the Asia Pacific region that need to tap into the U.S. market. They need financial data about the biggest liquidity pool in the world. To get started to trade those markets, they need data.
That's why they go to us. That's one example. Another example I want to highlight is eVestment. eVestment is a fantastic story. 17 years, they have been able to grow their business year by year, double-digit growth. They still have a fantastic upside opportunity in Europe and in Asia. They have just started that journey by being a part of Nasdaq, and that give me two example of cross-sales we have done already. We had links to a couple of customers in southern part of Europe. That was customers that eVestment have never touched on point before. Nasdaq opened the door, we landed a deal in Italy. Another example is eVestment have not had open offices or have sales people in Japan.
By having the Nasdaq office in Japan and using the Nasdaq infrastructure, eVestment has the first sales guy in Japan, and we start to land the first deals also in Japan. By the way, eVestment already have a strong presence in Japan from a sales point of view, but suddenly have a salesperson on the ground will help. This is just a couple of few small examples, but we see fantastic opportunities, for eVestment, but also for our data business. My example around what we do on the index area, launch ETFs, Nasdaq-100 in quite many countries. I said more than 25 ETF launched outside U.S. based on Nasdaq indices. Great growth potential there as well.
Great, Brian?
Brian Bedell, Deutsche Bank. Just two-part question. First, maybe can you talk a little bit about the headwind from the market data, potential pressures from a regulatory perspective in the U.S., whether you think that's a real risk, and then do you think you can gain market share, within that segment, maybe just bifurcating between the proprietary and non-proprietary market data portions. The second part of the question is if you can expand a little bit on data analytics hub, the medium to long term revenue growth outlook for that effort and how that interfaces with the rest of the business.
Great. The first question was on the regulatory environment in U.S. equity data. Second, whether Nasdaq feels like it has an opportunity to gain share. Third, the outlook for the analytics hub.
Yeah. The discussion around U.S. equity data has been ongoing for many, many years, 10 years, and it will probably also continue. It has been actually tested in court a couple of times, and we have won. It is a competitive market. The conclusion is relatively clear. It's a competitive market. There are competitive prices, and we launched our alternative to the SIP, the U.S. tape, with Nasdaq Basic. It's a competitive market. There will be discussion around that, but we feel relatively comfortable. I should also mention that we work with our customers. The launch of Nasdaq Basic is a way to help customers have a lower cost base. We launched a product that we have a great revenue from and actually lowering the cost of market data for customers.
We have had great success with Nasdaq Basic, selling that in U.S., by the way, also outside U.S. This is a way where we work with customers actually to lower the cost on market data and an offsite for Nasdaq. Back to Analytic s Hub. Analytics Hub should be seen as a relative long journey. We launched in May last year. We are very happy with where we are. We launched with a data set, but it's a long journey. To gather the data sets, to put out new data sets, we've spent a lot of time looking at data sets, to validate the data set, normalize the data set, to make sure there's value in the data sets, to make sure that we can trust the partner. It's a relative long journey.
When we then have the data sets, we need to approach sell-side, buy-side customers that want to buy the data set, of course, because it will help them make smarter and better investments decision. One thing I would like to mention, that is one of the benefits from eVestment. eVestment sit on very, very interesting data. If there's a move from large-cap to small-cap, that is some of the searches you will be able to see, get data from the eVestment platform. That is the type of data set that we're working on right now, and we hope to launch and put on the Analytics Hub platform. We have a data set that will show if they've moved from, let's say, large-cap to small-cap or from China to India.
We expect to launch more data sets on our Analytics Hub, but you should see this as a relative long-term growth strategy.
Great. Any more questions for Bjørn? All right. Bjørn will be back later if you have additional questions. With that, we're going to bring up Tom Wittman. Tom's going to talk about Market Services, and then he's going to bring up some of his lieutenants that lead the different parts of Market Services. We're going to ask some of the top-of-mind questions we get on the Market Services business, and then open it up to the audience for additional questions.
How's your voice holding up?
Good.
Well, it's good to see everybody again. I think this is the third time that I've had the chance to talk to the group. We got to talk to some of you, some familiar faces down in Boca. My name's Tom Wittman, Executive Vice President of Global Trading and Market Services. I came to Nasdaq through acquisition from the Philadelphia Stock Exchange, and my background is really technology, where I wrote software and then ran software development for a number of years. I'm really happy to have part of the team. We have had Brad, Tom, and Patrik here. It's really fun to run these businesses with that kind of horsepower behind you. You know they're smart guys. You could tell that they don't wear ties, if you notice that. Those are the smart individuals in the company.
I'm glad to have them as part of the team. We're going to talk about the current businesses and the growth initiatives, we'll start with what I call the money machine. Let's take a look at our businesses right now from GTMS perspective. It's a well-diversified business.
Producing $881 million. My personal goal in life is to make sure we can get a number up there that looks like a billion for my own personal goal. 55% operating margin. I think what is the most interesting about this is a well-diversified business, it's anchored by a couple of very strong businesses. Equity options we're most known for, I think, through the acquisition of the Philadelphia Stock Exchange. 40% market share, number one in equity options. Of course, our cornerstone is our equities business. We talked about the listings business. It all starts with listings. We get great listed companies. We trade them on our platform, we enjoy 30% market share in the products that we list on the Nasdaq stock market. Of course, across the ocean with Nordics, we have a Nordic equities business that has 67% market share.
A great listings business there too. These are the pillars of which we build our businesses on. Let's take a look at how the revenues are driven here. You can see that on the top. I really like this slide to show the asset class diversification, also the geography diversification here. Equities in the U.S., equities in the Nordics, options in both places, futures in the Nordics, and commodities in the Nordic markets, as well as fixed income in the U.S. and fixed income products in the Nordic markets. We also have, at one point, we currently list crypto markets over in the Nordics, and we were actually the first. There's talk about other exchanges that list crypto markets. We have crypto markets that trade on the platforms in the Nordics. These well-diversified businesses drive recurring revenue businesses here on the bottom.
As I said before, it starts with listings both in the Nordics and in the U.S. markets. When we build very strong business here in the transaction area, it helps us drive our prop data and data analytics business if we can bring strong markets to Bjørn's and the GIS businesses. We also have a very strong, which we call trading management services businesses, which for each one of these platforms is membership, colo, ports, applications, and that's a recurring business which you saw on one of the original slides that Adena had. These markets drive these revenues, recurring revenues, and these transaction businesses sit here. There are some businesses which we have not tapped these services for yet, and that would be in our NFX Futures platform. As we grow and succeed in that platform, we'll be able to have additional revenues on this bottom line.
Let's take a look at how these businesses performed. I think what's interesting about this and satisfying to us is these businesses have performed well in low volatility times. Of course, as the volatility picks up, we'll realize more revenues. We should point out that we've had some success in the growth of these revenues through the ISE acquisition and the Chi-X Canada. The two ATSs, which are now exchanges in Canada, have helped us drive revenues here. The story here is we've been able to do this, bring new companies in, bring revenues in, meet synergy targets in the face of a waning VIX environment. Of course, that's not the case in the past couple of months. Turning back to the TMS business. In the transaction business, you see growth there.
In the trading management services, we also see the benefits of the acquisitions and the recurring revenues, both from these two acquisitions and also with our data services businesses, where we've got a data center in Carteret, we've got one in Väsby, and we also have a data center that we connect to in Chicago for our futures business. We've got some new services here, third-party connectivity and other services that we use to expand our revenues here. Once again, as we grow other asset classes, we should see more revenue move to the bottom line here. Let's talk about some growth initiatives now that we set up the base of the core. I want to turn to three areas which we'd like to take a look at positioning the core, and let's start with market share.
I don't think that these businesses are very competitive, we're very happy that we've been able to grow market share in both equities and options in our Nordic equity markets. Of course, the Canadian markets are small, but we've grown our market share there. It's important for us, as Adena said earlier, to make sure that we keep these cores strong with market share. When you look at these businesses, you look at ADV market share and capture for all these. We like to balance, we like to keep the market share growing in the right direction here. We'll talk about some ways that we can maintain the market share in these areas and hopefully grow in other areas. Just a couple high-level points here. We always want to stay client-focused in whatever we do. We've stayed that way.
We've been that way with all the businesses we've run. We want to position and look at what I'll call OTC buy-side institutional trading, both in the U.S. and in the Nordics. One thing that we've just recently got approval for is the Midpoint Extended Life Order, abbreviated called MILO. This is an order type that we implemented just recently on our equity platform. The buy-side institutions really are enjoying the behavior of this order type. It's an order type that disabuses speed. It's one that sits at the midpoint in our primary market. Sits for half a second and will trade with liquidity that's willing to trade with that like liquidity resting for half a second. Every day we see increased volume in this.
I think it's a utility and order type that we can use to leverage for our buy-side customers in more than just this platform. A lot of great feedback on this piece of functionality. Also in the buy-side institutional space, auction on demand with MiFID II, we'll talk more about MiFID II, is auction on demand in our equity platforms. This was a way to attract large in scale and order flow to an auction mechanism coming out of MiFID II. We've seen about 84% growth in this functionality, we'll have to watch since the caps have been put in place to see if we can get more growth in those functionalities. Of course, in Canada, like I said, it's a small platform, but we just recently got approval to be an exchange.
It allows us to put market maker programs in place, list different products, we also started, originally what I wanted to do with what Adena mentioned, Ocean, in the U.S., we pivoted and turned it to a market technology offering. In Canada, we were allowed to implement what I really wanted to implement in the U.S. and run our own dark pool. We're just under 1% market share there. I think we can grow this platform in Canada as well. Three nice offerings in Canada. A lot of talk about the Nasdaq Financial Framework.
When I look at all these businesses, you heard the group talk about what Nasdaq Financial Framework can bring to our institution and what it can bring to the businesses that I run, I'm really excited about using this technology because at my heart, I'm a geek technologist, and I know that we can leverage this technology to compete in the marketplace. I would say last summer, Adena asked me to run the fixed income businesses that we have. I looked at first started in the U.S. in our treasury platforms, looked at the Nordic businesses and fixed income, short-term, long-term interest rates, et cetera. What I found, and it really came out of, if you look at how we executed the ISE acquisition, took synergies out, re-platformed, used our teams, used our leverage and technology.
I looked at this treasury platform, and at the root of it, we did not have an integrated technology team. We had an outdated technology platform. I had customers telling me, "Tom, why are you not using the protocols that I'm used to in the Nasdaq stock market, in your options markets, in your Nordic equity markets?" What NFF will bring us here, so I get to be the first user of the NFF platform in the U.S. on this platform, which Brendan and their team are building, is to bring functionality, speed, determinism, reliability, resiliency to our fixed income platform, which we've never had. This will be our first instance for that. It will help us not just solely in the NFI platform, but using this technology across our platforms to deliver functionality and agility, new applications to our platforms and our customers.
We're looking forward to doing that, and that will be in September, October timeframe for our NFI platform. We've got to talk a little bit about new products. We got core, we've got some small expansion, some good ideas, and then we've got some product ideas, which I think could be significant. One is in the commodity derivatives area in our NFX platform. You know that we've got a pretty decent position in the oil products. As we looked at the freight business over in the Nordics, our customers weren't sure they were going to be able to, with MiFID II, stay in that business. We're moving that product to the U.S. on NFX, cleared OCC. When we announced that, we had three or four new FCMs say, "Hey, our customers want to be there.
We want to sign up for NFX, and we're going to deliver these contracts on that platform." That's one. There's also steel contracts, which we just listed, and they're trading about every other day, so that's good. We can list precious metal products on that platform. From the fixed income and derivatives area in the U.S., there is a, we call it a DV01 future, and we've got some people in the room that are more experts at this than I, but we will list this. It's a dollar value, one basis point, move of the interest rate on the run Treasury. We'll use our Treasury prices to create a future on NFX, cleared OCC to do basis trading between our cash and a future. This will launch in June, July of this year. We think it'll be of great interest to our customers.
We've talked to market makers in the institutional side of the business, we'll look to deliver that at the end of the year. Corporate bond listing. We've got a lot of great companies listed on Nasdaq. We don't list corporate bonds. We've had some of our big listed companies ask us to list corporate bonds. We've initiated a project, we'll deliver by the end of the year, a corporate bond listing and trading platform. In closing, I think you could see that we've got a great foundational business, great revenue producing. We've got plans to maintain the great margins that we have here. With that, I'll turn it back to Ed Ditmire.
Thanks. Now we're going to bring in a panel of Tom's team, some of the people that lead some of his biggest businesses, and we're going to ask, make sure we can get the highest quality answers to you guys on some of the most important topics. Let's try to get these guys some chairs. On format, here's what I'm going to do. I'm going to ask three or four questions on some of the biggest questions that we get all the time on the market services business that I want to make sure that we address today, and then we're going to open it up to the group for additional Q&A.
Thank you.
Okay, great.
Do you want to introduce?
First I'm going to introduce-
I can do it.
Yeah. Thanks.
Tal Cohen runs North American Equities for us. Tal comes from the Chi-X acquisition, he's been with us for two years it'll be next month. Walt Smith runs TMS, Trade Management Services for us, and BizDev. Been with us for a lot of years. Kevin Kennedy, who runs our equity options business for us.
Sorry, I put you on the hot seat, too.
I thought I was going to get into that. I was just on the hot seat.
Let's talk about equity trading first. Competitive dynamics are always front of mind when it comes to how investors look at our equity businesses. Today, the foremost example of this is potential new competition in the important closing cross trades in the U.S. equity markets. How are you addressing this?
In late January, the SEC, through delegated authority, approved the Bats proposal. In February, we saw fit to ensure that the full commission weighed in on this. What we did is we filed for a petition of review of the approval decision, and the SEC granted us that opportunity. Now we have until April 12th to submit additional comments. We and everybody else have the opportunity to weigh in. We did this principally for two reasons when it comes to the closing auction. One is we wanted to continue to advocate on behalf of our issuers and investors who, throughout the comment period, raised their concerns, noted how they felt, primarily around fragmentation and complexity. I'll just say as a side note, the closing auction is a really important part of the trading day. $ billions trade in our close.
$ trillions of assets are tied to our closing price. It's a meaningful issue for our issuers and investors. Second, on the policy side, we felt very strongly around the impact to price discovery, the stability of our auction, and also in terms of manipulation. Could this lead to additional cases of manipulation? We put in this petition for review. The SEC is looking at it. To answer your question in terms of the impact, if the proposal ends up being approved, we don't feel like it will have a material impact on our business, and the reasons for that are twofold. One is we've continued to invest in our closing auction. For those that are our participants or know our closing auction, we just released new functionality that provides investors more flexibility in how they participate in our closing auction.
We also invested in the resiliency, hardening the resiliency of our auction to ensure that this really important mechanism doesn't fail. To the extent that there are use cases related to the Bats proposal that our customers find of value, we're in constant dialogue with our customers. We're constantly talking to them about our offering, what they'd like to see, what they want from us. We'll be quick to respond. We'll take action if necessary. We feel good about what we're doing. We think the closing auction is very well received. People think it functions really well, but there's always room for improvement, and we continue to focus on that.
Great. Let's go to equity options. This is the biggest trading revenue category for market services. How can Nasdaq maintain and hope to expand revenues in the face of a super competitive market and an industry volume pie that has struggled to grow over the past decade or so?
Thanks, Ed. It's great to be here today. I love answering questions about options. As we talk internally a lot about options, when we made the ISE acquisition, we liked options. Now that we have some tailwinds, we love options. It's really nice to see. I know that for three or four years, we struggled in that 14 million-15 million options a day in multi-listed equity options. All of a sudden, started really late fourth quarter, we started to see some bubbling up. I think some of that was driven by the volatility trades starting to sort of boil just a bit. Then early January, we saw significant volumes, even before the Fed meltdown. We're doing 19.5 million options a day, and it really is a great industry.
What we're seeing, this is where my team and our approach at Nasdaq, the partnership. We take a partnership approach with our clients. Adena referred to that earlier. We're closely engaged with them. Because we do that, I think we can pay really particular attention to meeting their needs, managing that balance of share and capture, go after constructive order flow, add value to the market, use our six venues now that we have with the ISE acquisition, the fact that it's also integrated. I think we can meet our clients' needs and take full advantage of the growing volume.
Great. Trade Management Services has some of the most consistent organic growth within Market Services. Is this growth sustainable in the context of a consolidating landscape of market participants, in particular, market makers, liquidity providers in the U.S. market?
I think, thanks, Ed, for that.
Referring to some of the consolidation we've had in the industry, Virtu bought KCG, and HRT purchased Sun, and the appearance of some shrinkage. I look at the business, and I have 20 years, thinking back to the Philadelphia Stock Exchange days when you had members on the floor, members would come and go. We've always seen kind of consistent new entrants come in the marketplace. I look at the numbers we've made over the last few months, especially around our data center services. I think we lost four or five clients, but we've gained about 11 to 15 new ones, and I expect to have some more new entrants around our connectivity services coming in the next two months, both in the U.S. and our Nordic data center in Väsby. It's kind of a very diversified business if you think.
We used to be very U.S. equity centric. That's not the case anymore. We have multiple asset classes. We have a significant options business. When I look at our top customers, I think that a lot of folks believe, well, it's going to be the HFT equity guys. Actually, it's your options market makers tend to be our largest clients, as they provide liquidity to investors to trade against. Also, you see the big banks who provide a variety of execution services to the buy side. Lastly, to mention again, it's like you constantly see growth, see new services, and I think as we expand our pops and grow our products, like the strength in our futures business, I think we'll continue to see growth.
Okay, great. Thank you. One last question from me. I'm going to ask Tom to answer this on behalf of Laurie, our head of European equities. Are you ready for MiFID II? What are you seeing? Are institutional brokerage customers going to consolidate in the face of a research revenue challenge? How fluid is the off-exchange trading dynamic with the new MiFID II rules? A lot of questions there.
It's a lot of questions, a mouthful. MiFID II, the rule set, on the bundling side, really has not had an effect on us. On the transparency side is one that, first of all, it was a tremendous amount of work by Brad and his development group to get our systems ready and work with the banks and brokers in Europe. There's a lot of pre-trade risk data on inbound consumption of data, and then production of outbound data that tied up a tremendous amount of our resources that at the end of the day, does not net revenue, but something that was done in the industry. I think the banks and brokers would tell you the same. They just spent a lot of money to work on this. Yes, we're ready. It's working. There were no big events and no negative events for us.
On more the commercial business side, when it comes to the bundling, unbundling, it really doesn't affect our business per se. The one that Laurie and I were looking at with the closest eye were these double volume caps. The intention was really to move some volume where there was a lot of volume off exchange, to move that back to the lit venues. They were in broker crossing networks in dark, literally, it was only two weeks ago where the caps went in place. It came in later than anticipated. It literally looks like there's been a shift from the BCNs to SIs, the SI internalizers, left hand, right hand. There is a little bit of difficulty in looking at the data that's produced to pinpoint it.
Our conversations with our customers, it looks like it's been a shift from the broker crossing networks into SIs.
Okay, great. Let's open it up to audience questions. Let's go first to Chris Allen.
Thanks. Excuse me. Two questions, actually. Two separate questions. One, Tom, you talked about launching corporate bond listing and trading venue later this year. Wondering where you see the long-term opportunity there. Is it more on the listing side, or is it more on trading, where only 20% of corporate bonds trade electronically? Two, you talked about launching a treasury future related product. Obviously, CME's in discussions with NEX Group right now. Wondering how you guys think about putting those two markets together, whether that creates opportunities or challenges for you guys moving forward.
Okay. Yeah, on the first part, it's a great question. It's 95% a listing opportunity. Like you said, when it comes to us, we will have a trading platform, but our first drive will be to get our listed company corporate bonds listed on our platform. Trading, I don't expect a lot of revenue and opportunity from the trading side of that equation. I did see a short blurb on that as we were leaving Boca last week on CME, NEX. I think there may have been a blurb again this morning. I don't know a lot of detail about it. We're really focused on the plans that I spoke about when it comes to our U.S. Treasury platform. I think we've got tremendous opportunity there.
I know we only sit at 19% market share, but I think in talking to our customers and our re-platforming efforts, that we can see growth there. The future product, it's been under development between Ted Bragg, who runs our Nasdaq Fixed Income business, and Walt, who's doing product development. There's been some super positive advancements, and they're interested to provide liquidity and order flow in this product. We're focused there. It's hard for me to speculate on what CME, NEX combo would look like right now.
Okay. Let's give the microphone to Vincent Hung.
Hi. You touched upon the growth drivers in Trade Management Services. What kind of organic revenue growth rates should we be thinking about going forward?
Question on organic growth expectations and Trade Management Services, I'll just remind everyone, we don't have a
An organic growth target for Market Services because it's largely trading related, which creates a lot of variability in the trading environment. We don't give organic growth expectations precisely to our sub-segments, but perhaps you can give some more color on what you expect?
Actually, I don't have color on an exact number. I think what I pointed to in my presentation, where there is opportunity, is when you build strong trading platforms, it gives you the opportunity to have co-location membership ports, applications, and those type of services which are in that TMS area. The obvious first part there is we charge none of those services for our futures platform in the U.S. right now. That's an obvious one for growth.
Yeah, that too. We're also looking at different regions for our connectivity business. We're also looking at ways of leveraging sort of new technologies to expand our client base. We'll have more to come on that in the coming months.
Okay, great. Can we get the microphone up here?
Thank you. This is Sherry from Goldman Sachs. Can you update us on your pricing philosophy for each of the products and probably mainly NFX options and equities business? Are you going to make any adjustments to kind of maintain your market share or grow your market share from here?
I will just repeat the question. Any thoughts on pricing in your major equities, options, or NFX platform?
I can address options. You want me to start with options?
Sure.
I know you and Walt, the three of us working together on NFX, you might be better off.
Yeah.
In the options space, I would say largely due to some consolidation over the last year and now increased volumes, I anticipate sort of a leveling off of how many changes we'll make and going after certain segments of flow. I think things have largely settled down, and we're focused largely even within the industry, on resiliency and risk mitigation. We're, again, like I said, we partner with our clients on this. What we're hearing from our clients isn't about an extra $0.01 here, an extra $0.01 there, but rather, "Where's my risk in the market? What can you do for me?" We are keenly focused on that.
Just from an equity perspective. We're looking to constantly try to grow the pie, even though it's a very mature, competitive marketplace. Tom mentioned M-ELO, which is our midpoint extended life order. That really gets us in the game for competing for order flow that otherwise would execute off exchange. We're actually able to charge a bit more than what we earn on Nasdaq and other exchanges today from a capture perspective, because OTC's price points are higher than ours, but still pass on the cost savings to customers. For us, it's a premium product, and it's a way to grow the pie, but we're still able to offer it at rates and fees that are lower than you otherwise would see if you executed off exchange on ATS.
That for us is part of our plan to not only compete for what we have and continuous in the close today, but think about things that we don't get today.
Great.
Just Nordic equities, that pricing has been fairly steady. [Nordic drift] has been fairly steady. There are no big plans. We are always, as a team, we've got our own internal quants who look at pricing for all segments of all these businesses almost on a weekly basis.
Yeah. Let's get a microphone here. Alex?
Yes. Thank you. Talk a little bit more about Canada. Tom, you had Canada on your slide as one of the core businesses. I know we don't hear about it a lot, core business seems a little bit, something I probably wouldn't call it. Is there any other bigger opportunity down the line other than what you outlined in terms of making little market structure changes, dark pool, things like that? I had this conversation with somebody in Toronto the other day. He said, "Nobody knows Nasdaq up here." Maybe that was a one-off comment, but it's like you don't really seem to have a real brand up there and recognition. Could there be a bigger play here at some point? It's a big market, right?
Yeah. Tom, let's make sure everyone's clear on what Nasdaq does in Canada today, and then what your ambitions are moving forward.
Okay. We had the two ATSs, that have been just recently converted to full-fledged exchanges up in Canada. We launched the dark pool. Do you want to talk a little bit about what we're doing Monday? Is that public on
Yeah. We can talk about that for sure.
Did you want to hit that real quick then? On the list of trading of the-
Yeah. On Monday, we'll be trading CSE names. For those that aren't familiar with Canada, you have the TMX, and TMX has essentially two listing markets, its senior market and its venture market. There's a third exchange called the Canadian Securities Exchange, that has about 350 listings that really nobody else trades. It's gained prominence. It's about 100 to 150 million shares a day. Its growth profile is probably more significant than anything on the venture market and senior market. We're going to start trading that on Monday. That will be accretive to our business. That will increase the denominator, if you will, for us in terms of what we can capture and what we can tap into in Canada. For people that don't know our market share from a trades perspective, we're about one out of every four trades.
When I go in Canada, in Toronto, I could be at a Tim Hortons, their version of Starbucks. Somebody will say to me, because they'll see that I'm part of Chi-X one reason or another and say, "I actually traded on Chi-X." We do get a lot of recognition from the trading community. I think people know who we are within the industry, but your point's well taken, and maybe you want to take that as a jumping off point.
Yes. I would agree that when you have it beside a big equities business, an options business, a Nordic business up on that slide, I agree with that. It's a launching point. We also will trade fixed income in Canada, we'll use that as a launching off point because our fixed income platform will be licensed under our Canadian exchange.
Could we get a microphone to Rich over here?
I guess one quick follow-up on the Canadian market. You just got exchange approval. Is the listing business up there impenetrable? Because I guess your competitor, if you're not listed on the TMX, then you won't be included in a TMX index. Is that a barrier to entry? Second question is just, and I know this could go on forever, but just quick comments on the access fee pilot, how that could impact you and your clients, I guess.
On the listing side, I think it gets down to could it be? We've got a great platform. It's a Nasdaq brand. Could we list in Canada? Absolutely. The question for us is: where do we deploy these resources? Where's the best opportunity for us to get cash to earn more money? I think ETFs would be an easy place. We've had requests to do that. It's a matter of priorities for us internally. We just have to get through that. On the access fee pilot, I have to say that I was really surprised with the way the SEC came out with the construct of that pilot, with 1,000 names in each one of these buckets. That doesn't feel like a controlled pilot to me.
We spent a lot of time at the SEC talking about Revitalize, which we started last year, and the need for liquidity in small and mid-size companies. I think that with this pilot has been completely ignored, which is of concern of us. We want to make sure that we comment on that and make sure that we reemphasize that. When you take a look at a pilot this size, along with a tick pilot, I think it's going to take a long time for this to get down the road and to be implemented. It probably calls into question, everyone knows you've got certain rebate structures. You've got tiers that you have to hit. It's going to really turn that entire tier structure and rebate structure upside down.
Where we have rebates that are in excess of 30, 31, 32, 33, do they become 15, 16, 17? Can you even do that with the dispersion of trading in these three different buckets? I actually think it could create some good opportunity for us. We have to balance that with our listed companies and liquefying small, mid-size companies and everything else that we've talked about in Revitalize. Anything else you want to add?
Yeah, just four quick observations. They released a 267-page paper, small paper, on Monday for all of us to read. Clearly, you've read it. There's four observations I'll leave you with. One is, it's early days, as Tom said, and I think there's going to be an active and healthy comment period. I think everybody in the industry is going to be engaged because this has been a longstanding discussion in the industry, and this is our opportunity to make progress. One. Two is, having looked through it, based on the construct that we went through, we don't necessarily see this as material to our business, like revenue capture and market share. We're still going through the details, but we think we'll be able to manage it, as Tom said, because of the different buckets and the latitude provided.
Third is, it's actually an opportunity for us. It's an opportunity to work with the SEC on things that are important to us with regards to small cap issuances, helping them trade better. It's a real tie-in for us to Revitalize. Fourth is the issuer voice hasn't yet been fully reflected in the initial proposal. We'd like to see that. Kind of the overarching theme for us is rebates are a good thing for small cap, illiquid names. Let's make sure the debate is focused on what we're trying to yield and find out, because there's the ETF community in terms of new issuances and illiquid names that need support for execution quality. There are a lot of small cap companies that will benefit from rebates. This doesn't have to turn into an anti-rebate conversation.
This should be about what can we glean from the incentives provided in the market? How does it help us in terms of execution quality and liquidity?
Great. I think we have time for one more question. Alex? All right, you're up. He's so shy.
Tom, you had this little bullet on the slide about the Nasdaq Financial Framework and how that could help reduce expense, and you gave the example on the fixed side. When you look at your business today, do you actually think there's opportunities for efficiencies, too? Is that an opportunity to reduce the overall cost base in your business? Is that more like, "Hey, let's allocate costs somewhere else and invest in other areas?
I think at the end of the day, it can go either way. One thing that I wanted to mention, there are probably 100 different things that I could tell you that we do in all our markets, from when market makers, they don't want to trade with themselves, different market models. You don't want to build that separately for NFI and one for options and one for equity. It's going to give us the opportunity to have a set of these services and functionality that we can reuse anywhere in any one of our platforms. Yes, I think that we can gain efficiencies. Take a look at those resources become available, do we want to utilize them in other areas?
All right. Great. I want to thank Tom, Kevin, Walt, and Tal for joining us today. Thanks, everyone. Now we're going to move to Michael Ptasznik, our CFO, for the finance and capital section.
Thanks, Ed. Hello, everyone. For those of you who don't know me, my name is Michael Ptasznik. I'm the CFO of Nasdaq. I'm the most recent addition to the Nasdaq management team. I've been with Nasdaq now for coming up on seven quarters, which, as you know, is how CFOs count time. We do it in quarters. I've been in the industry for about 87 quarters altogether by spending about 20 years at TMX, or the Toronto Stock Exchange. I don't know where Tal is, but so that he knows, Starbucks is the Starbucks of Canada. Tim Hortons is the Dunkin' Donuts of Canada, for the record.
My job here today is really to bring together everything that you've heard throughout the day, recap some of those key items, review the financial implications of the strategic pivot that we've been talking about, talk about how we will both invest our capital and how we'll return that capital to shareholders, then look at how we're going to measure our success over the coming years. As Adena said this morning, just a quick recap. We are building off of a very strong financial base. Revenue has grown at 6% CAGR over the last four years. We have continued with our disciplined expense management, and that has resulted in a 300 basis point increase in our non-GAAP operating margin. Ultimately, we've resulted in non-GAAP diluted EPS growth of 9%. From a strategic standpoint, one of the key elements is the reallocation of our resources.
We've identified the strategy, as Adena said again earlier, it is really important that we put our money where our mouth is. As you can see, we've been talking about reallocating those resources and capital towards those highest growth opportunities, sustaining the core business, those core foundational businesses in market services and corporate solutions, de-emphasizing some of those slower growth businesses. The actions that we've taken already, the investment in eVestment, the ultimate divestiture that is coming, hopefully in this quarter, which will be coming this quarter, of the multimedia solutions and our PR business. Those have already resulted in, if you look at the business on a pro forma basis for 2007, excluding those businesses and adding eVestment, results in about a 200 basis point margin increase.
Further evidence that we are actively executing on the strategy can be seen by the reallocation of our discretionary investment dollars. You can see by this picture here, we have a much more balanced approach with respect to how we are going to be spending our dollars. That's important. It allows us to increase substantially the investments that we're making towards those higher growth businesses, also, we continue to be able to reinvest in those foundational platforms and maintain the total investment dollars that we spend as an organization fairly stable with where it was last year. What does this mean from a capital deployment standpoint? How are we going to invest our capital, how are we look to return it to shareholders?
Starting from a very strong base, that earnings growth and earnings has resulted in strong cash flow conversion. You can see 102% conversion over that period of time. With that, we have a very healthy 6.4% free cash flow yield. However, there's still a gap or an opportunity to close that, between us and where the S&P 500 is trading at 5.3%. Turning to the question of how we are going to invest our capital. We are first and foremost applying a very disciplined approach, whether it's to organic or inorganic initiatives. As Adena mentioned, we now have a new target of a 10% or greater ROIC for those investments over a three to five-year timeframe. Again, that applies to inorganic and organic investments. How we plan on investing, first priority for us is to fund organic growth.
That is where the majority of our effort is spent, is on how we're going to look for organic growth opportunities in the business. What we've done now is we've talked in the past about our R&D budget, we have about 3% of our revenue is applied towards our new growth initiatives. That's what we call Nasdaq Next, Adena highlighted some of those. Plus, it's also over half of our CapEx, which is roughly in the $130 million to $140 million range, has been towards those growth initiatives. Secondly, we will still continue to look for acquisitions, consider those if they are able to accelerate or catalyze and further our strategy going forward. We've broken them into 2 categories. We have our tactical acquisitions, what we think about that is something more like an ISE.
Much more synergy focused, and we will be looking to achieve the ROIC on those types of acquisitions on the shorter end of the timeframe. Then we also have what we identify as our strategic acquisitions. What we think about that is more like an eVestment. Something that really fits in with the trends and with the growth opportunities that we have identified as an organization. That ROIC objective would be hit more towards the medium to longer term end of the timeframe. Then lastly, we also have our venture investing program, Nasdaq Ventures, that we launched last year, although we have had some other investments over a period of time. The Nasdaq Venture investing program is really intended for us to make small minority investments in new technology-based companies. You heard about all the great technology efforts that we have internally.
We cannot obviously cover the entire landscape, and this gives us the ability to reach out to some of these smaller companies that are on some of the leading edge capabilities, and bring those internally. That is the key to this, is that we have to have a business connection in order to make these investments. We are not doing this on a purely financial basis. We looked at this total amount of investment would be in sort of the, say, $40 million-$50 million range over, say, a three-year period. Not a very significant amount of our capital, but we do think it is very important, very strategic. Now, how will we look at the capital? How are we going to return the capital that is not being used in the business?
We think it is really important that we have a much more clear and transparent way in which we are talking about our capital. First, we intend on maintaining our investment grade status. We have also said that we are looking to pay down our debt to achieve a debt-to-EBITDA leverage ratio of mid-2s by mid-2019, and we are on track to achieve that. Secondly, last year, in 2017, for the first time, we implemented a dividend policy. The policy says that we will look to grow our dividends as earnings and cash flow grow. As Adena mentioned, we have a new dividend increase today, 16% increase versus our previous dividend. Then third, our share repurchases. From a share repurchase standpoint, it is primarily to offset the dilution that we have from any of our equity programs.
If at the end of the day, we have additional capital that we do not have uses for the foreseeable future, we will look to use our buyback program in order to buy back additional shares and return that to shareholders. Recapping everything that you have heard today with respect to the individual businesses, how will we look to measure our success? From a revenue perspective, what you heard today was increased growth outlook for each of our individual business areas on the non-trading side. We have also put numerical ranges around these numbers as opposed to just the words that we had in the past. This has resulted in an overall increase in the outlook for our non-trading segments from the mid-single digits to the 5%-7% range over the next 3- to 5-year period.
Continuing on, in addition to the organic revenue growth, we will continue to focus on our cost management as an organization. What we're suggesting is a proximate 3% organic increase in our cost base. This remains our target going forward. It's been where we've been roughly over the last number of years from a historical standpoint. It's been our organic cost growth. This may fluctuate in any individual period of time. If we are more towards the higher end of the growth target, closer to the 7% or above, then we may need to invest in additional, we could go above that 3%. If we're in a period where there's an economic pullback and things are tighter, then we would look to be below that 3%. This is a general number, but it could fluctuate, plus or minus.
We've talked about the return on capital greater than or equal to 10%. I should note, when we are analyzing our investments, we will be using the return on capital, but we will continue to use DCF as well as EPS accretion, et cetera, when we're looking at our investments. We'll continue to look at the other measures. This is one of the other key measures that we're adding to the suite that we already use. Lastly, if we bring all these things together and everything that you heard today, we do believe that we can enhance our ability to deliver on that double-digit total shareholder return objective. To summarize, we're building on a very strong, resilient foundation that we have as an organization.
The strategic pivot should allow us to increase our revenue growth, increase our ability to generate strong earnings and cash flow, which we can then invest in the business or return to shareholders. With that, I'm going to turn it back to Ed for the Q&A.
Great. Why don't we do this? Why don't we bring Adena and Michael up to the stage, we have our other managers here, give the audience a chance to ask you two guys questions, but also, if you have questions for any of the business presenters, the business leaders, we can get those answered by passing the microphone around as well. Sound good?
Okay.
Okay, great. Let's start over here. Thank you. Kyle?
Hi. Kyle Voigt, KBW. I think your dividend payout ratio was below 30% just a few years ago. I'm just wondering, how do you weigh a continued increase in the payout ratio over the coming years versus the flexibility that a lower payout ratio gives you in terms of M&A? The second part of that question is really around the types of acquisitions. I think you laid out tactical versus strategic. Just given the strategic pivot and what you spoke about regarding capital allocation, is it fair to think that over the coming years, investors should expect more in the way of strategic acquisitions, such as eVestment, versus tactical, such as ISE?
I'm just going to reiterate the question.
Yep.
The first question is how you think about the dividend payout ratio and balancing between dividend payments and investments you want to make. Second, is there more of a taste for tactical versus strategic acquisitions in light of the fact that there's a heightened focus on the strategic direction?
Do you want to cover the dividend first?
Yeah. From a dividend standpoint, I would say we're in the range of where we think the dividend payout ratio should be. We're not pegging a specific number, but like you said, we've been in the 30s to high 30s, and now, depending on how you calculate it, the 42% that we showed earlier. We're in that range. Really what the new policy suggests is that we're going to look to increase that dividend as earnings and cash flow grow. You'll see that. You won't see a major shift in the overall dividend policy. We'll continue to analyze it over time as we look at our different opportunities. For the next period of time, we're going to keep it in that range.
Yeah. I think that we have a nice balance right now in terms of the dividend payout and the retained cash. I think also recognize that with the tax change, we wanted to make sure, the increase in the dividend really reflected our increase in our earnings and then the impact of the tax change. It kind of gave us an ability to give a little bit more back In this, with this change, the $0.44. In terms of strategic and tactical acquisitions, I would say that we are going to continue to remain flexible to look at what's going to drive growth for our clients, what's going to drive growth for our shareholders. There will be always kind of strategic and tactical acquisitions that are out there on the horizon.
What I have had the team do is be more proactive in really evaluating the space that they're in, the strategy we're undertaking, and think more holistically around where are there possibly, over the next several years, opportunities for us to grow and expand our business and maybe kind of catalyze growth in certain areas. I'm not going to give you an answer of we're only going to do these, we're not going to do these. We're just going to be looking more holistically around what's going to drive the best value for our customers and our shareholders, and we are telling you that we have more of a structured approach to that today than we've had in the past.
Great. Let's go to Brian.
Great. Thanks. Maybe just if you can talk, Adena, about Mike also.
It's okay. I'm not afraid of anything, it's okay.
I was just thinking of the, bifurcating the question. The sort of the timing of the organic revenue growth, outlook between segments. First of all, your guidance implies about 300 basis points of operating leverage per annum on average. I know that's going to change obviously depending on conditions. If you can talk about where you think it is over the, say, the next one to three years versus the three to five years. Again, I appreciate these are long-term targets, but we're trying to get a sense of the investment that all your leaders have been talking about in the different segments, especially in the technology segment.
Sure
near-term, whether there is a longer tail to that revenue growth outlook, or do you see that?
Sure. Can we put the slide up that shows the past performance versus the former guidance versus the current?
Yes.
Okay, go back. Go. Okay. No, there we go. As you can see, what we've been able to perform today is not outside of the range of what we're necessarily suggesting as the long-term outlook for the business, other than in corporate services, where we've had a material change because of the divestiture. Right? The question is, how do we get them to continue to go up to the top end of that scale? I think that what we're probably trying to say here is that this isn't going to take three to five years before we can get here. It has to do with over the coming three to five years, how do we try to achieve the range that is up available here? Hopefully, over time, we continue to catalyze it so it continues to move up in the range.
I just want to say, in any given year, there's going to be slightly different dynamics. There might be a year where we have a pricing move in a certain part of our business that allows us to catalyze some growth and that kind of drives us up to the top. It could be that within Market Tech, for instance, it takes a little while for us to build on the momentum that Nasdaq Financial Framework builds for us, but we already have been delivering 9%. Right? I do want to make sure that people understand this is an evolution. This is a way for us to continue to grow. We're not saying it's going to take time before we get to these. We're saying that within any given year, there's probably going to be a range of outcomes, and we want to give you the right expectations.
Just to follow on that.
What she said.
Just on the operating leverage side, just in thinking about next year, for example, the pro forma operating margin of 49.6%, should we be thinking about expanding that into 2018 based on the 300 basis points, or is the investment in some of these areas, specifically in Market Tech, going to restrain that near-term?
Yeah. Well, let me just be clear. The operating leverage on that slide was a pro forma on 2017, also using eVestment. You have to look at some of the footnotes there, but it's using the historical numbers eVestment. As we talked about, as you know, in 2018, eVestment is impacted by the amortization or the write-off of some of the deferred revenue. That has an impact in there. That was really more for illustrative purposes. Then on a go-forward basis, you'll start to see the impact of that. You have an impact of that in 2018. We talked about there is some initial investment in there will be a mix. We're not saying that there's going to be an automatic increase in that. We aren't targeting a specific margin that we're providing.
It's not one of the items that we've had up on the page. That will shift and get affected by a number of things, the growth rates of these different opportunities we have, and also obviously what happens in the transactional services business has a major impact on that. That's part of the reason why we're not providing that.
We don't want to try to I would say a lot of people ask us, "Can you give us a specific margin target?" Okay? I know that makes life really easy, but the fact of the matter is we want to have the flexibility to be able to invest in our biggest opportunities and to manage ourselves appropriately against any sort of economic or other changes that might be happening in the industry. As Michael said, our market services business does not give us the level of predictability for us to be able to target a specific margin. I can tell you internally, we are very tight in how we manage our expenses. We have been very focused on making sure we're allocating our resources to the things that we think we can grow and becoming more efficient in the areas that we think are lower growth.
I think that we also, we're trying to give you a framework for you to be able to look at the operating leverage that we can deliver on our business if we achieve these growth targets against the overall estimated expense growth that we have put on the slide. I think also 2018 is a specific year because we've got two things going on. We've got the kind of the burn-in of eVestment and the deferred revenue impact of that this year. We also have the divestiture and our ability to make sure that we're managing through the stranded costs. We've talked specifically about that in terms of getting through the stranded costs against that divestiture. Both of those things will have some impact on this year, but it positions us really well as we exit the year and going into 2019.
Thank you.
Great. Next question, Rich.
Actually, that was just my question, Adena. If you look at good, higher growth rate. If you look at 2018, like you said, you get a slight dilution from eVestment, the slight dilution from the sale of the business, and you got Market Technology that at least you're guiding to maybe a little drop in margin. I apologize for the short-term outlook, but is this really a 2019 and beyond, but you have strong markets here in 2018, I guess?
Yeah. Do you want to repeat? We haven't been repeating the questions.
Yeah. Let me repeat the question. Rich, in 2018, we could have some initial dilution from eVestment, maybe a little bit of an EPS drag from the partial year impact and the removal of cost from the divestiture. Even in Market Tech, you guys are investing a little bit more.
Low, lower margins. Is this story about performing starting in 2019 and beyond, or do you think you can put together a good year in 2018 as well?
I think the first thing is we have provided expense guidance for this year, and we are obviously focused on operating within it. As we complete the divestiture of the DMS and PR businesses, we'll continue to upgrade that or update that. I think that in terms of this year, there are some elements to that that you talked about in terms of the burning in of eVestment, the managing down of the divestiture, but also, again, to the very strong backdrop on the Market side. I think that there's going to be a lot of blending there in terms of what we can do. In terms of this three- to five-year outlook, though, we wouldn't have put it out there if we don't think that we have the opportunity to work within it in the businesses that we're operating in the short and long term.
It's just a matter of us making sure that we're optimizing every opportunity we have and continue to drive our business forward. Investor Day is about the future. Investor Day is about how do you drive this business going forward. A lot of what we've been talking about is how do we make sure we're using all of our levers to build to a stronger and more successful financial future.
Thank you.
Roger.
Thanks. Two quick questions. Michael, just on the expenses, when you look at by segment, is there any color or granularity on what we should be expecting, where you're investing versus maybe where we'll see more operating leverage? Just on the revenue side, given that the high end is pretty attractive, where do you expect to see more competition versus where do you feel like you have some pricing power across the businesses?
Do you want to repeat it, Michael?
Great. The first question, Michael, any color on where the investment dollars are going by segments and any color on those profitability levels? A question, we talk about getting to higher organic growth. What areas do you think you might see higher competition that could make it tougher to get there?
Yeah. Just to go over some of the things we talked about. Clearly, there's a big focus on investment in the Market Technology area, that's one of the areas where you'll see, from their standpoint, there's going to be some additional spending in that part of the business because of the great growth opportunities that we see going forward. When you look at the Information Services business, you have to take into account the full year impact of eVestment, that's going to have to flow through that. We had roughly two and a half months in the last quarter for eVestment in that business.
When we look at the Corporate Solutions or the Corporate Services area, clearly that's one that we talked about, and as Adena just mentioned, the removal of those businesses is going to take some time to get all the costs out, all the overhead that are charged to that. That will take, we said, it'll take 12 months from the date of acquisition. That'll have an impact on that business. Really on the Market Services side, we've been optimizing that business. When you look at the overall R&D spend, and that's the comment we're trying to make here, is that we have been trying to manage within the total spend that we had last year. You're not going to see a major increase in that part of the business.
We have been looking to reduce some of the spending that we had there. We did a lot of expenditures on MiFID II last year and getting prepared the last couple of years. We've been able to take those resources and apply it to the Market Tech business and others. That's hopefully helpful to how the cost breakdown will flow through.
I just want to say, we purposely don't give you a cost per segment or profitability per segment because we are Nasdaq. The whole point of having everything within an organization that is synergistic across the organization, shared experiences, shared investment, shared opportunity, is to make sure that overall, we're allocating our capital towards the biggest opportunities and we're managing our capital spend in those that have a lower short-term opportunity and coming up with an overall approach. I think that you heard that there's some kind of trends within the businesses, we're not going to sit there and try to break it up. We're looking at it holistically to how it all grows together to create operating leverage, to create greater profitability opportunity, and to continue to grow the business. What was your second question? Sorry.
Just the revenue opportunity is potentially in that 5% to 7% range, if it's on the higher end, you would expect that attracts more competition.
Oh, right.
Where there is, you have power versus-
Yeah, the competition. I think that 90% of our revenues, we are either one or two in the market. I think that the good news is that we've been operating in a competitive environment forever. I think that we do an extraordinarily good job of being a very strong competitor in the businesses that we run. As we continue to drive more growth in those businesses, the question is, do we pull away from our competitors with the investments we're making to make it so that really we are the clear number one and a sustainable leader in our space, and that's certainly our goal. I think in Market Tech, we have a real opportunity to continue to really differentiate ourselves completely from every other competitor in that space. It's taken us 20 years to build up to where we are.
It's going to take us, I think it's going to take anyone else, a long time to be able to drive to the level of scale and success that we have in our Market Tech business. A lot of our clients are long-term clients, long-term contracts, high retention, I think we have the opportunity to continue to grow that in a pretty greenfield way, as Lars described. I think in our corporate services business, it's a highly competitive business. It's highly competitive in our listings business. It's highly competitive in our corporate solutions business. I think we continue to differentiate ourselves, first of all, by bringing them together, second of all, by having that full suite, in terms of what we offer our clients.
There's kind of no other competitor that has all of those assets in one organization, where we can deliver more holistic solutions to our customers. Can we drive pricing power on that? I would say it's more likely that we're going to just be able to drive more success in being able to get more client acquisition in a very efficient way. In the information services business, there's a lot of different dynamics to it. I think that our market data business is definitely competitive. I think that we do a very good job of managing that business and making sure that we are listening to our customers in terms of pricing moves and not doing things that will make it so that they look to our competitors. In eVestment, it's a wonderful contained ecosystem.
I think they've done a great job of managing that, and they again, are very client-focused in how they manage that pricing, but it does give them the opportunities to look at adding more value and therefore, charging new things to their customers. In market services, I think that you heard pretty specifically that there's a lot of different dynamics there, but it's a competitive business. We have, as Tom mentioned, we look at every single week, we look at how we can use pricing to gain advantages in our marketplaces. That's much more of a hand-to-hand combat type of model.
Great. Thank you. Let's go to Brian.
Okay. If I can focus on NFX and just the broad futures initiative generally. I mean, over many years, you spent almost, I think, $100 million on NLX Legacy and shut that down now. If we're calculating it right around $50 million from an operating earnings drag, pre-tax drag on NFX, what's the long-term game plan for that business? It's obviously a very difficult business to penetrate given the dynamics of how the futures market works. Pricing really doesn't do much to it. If you can articulate, first of all, is it going to turn profitable in the near to intermediate term? Second of all, what is the longer-term game plan for where you want to be in that business?
Sure. Do you want to go ahead?
I'm just going to repeat the question. The question was on NFX. What are the expectations, opportunities, and plan as you move forward with that platform?
Yeah. NFX has been a good growth opportunity for us, and you're right about NLX. I think that we've spent a fair amount of time trying to make that thing work. There's a key distinction between NLX and NFX. I think the first thing is that we learned a lot from the NLX experience. We waited to launch until we had a critical mass of clients. We continued to listen to our clients. We created kind of this market advisory committee, where we have trusted and very loyal customers working with us to make sure we're driving to the growth and introducing new products. We have 40 participants in our market at any given day, and we have over 100 clients connected. It's a much bigger ecosystem.
I would say the market makers and the market participants were more motivated to work with us in NFX, in the model that we've created. They have some of the core market participants who launched with us and some that have come in, also have the benefit of being able to participate in the upside, as we continue to develop the platform. We've also been able to achieve open interest, significant open interest. We have a very strong partner in OCC, whereas with NLX, we were really highly reliant on LCH, and they just weren't motivated to work with us, honestly. I think we have a lot of distinguishing elements to it, but it is still an investment area, and we'd love to see it continue to grow. It is an important strategy for us.
If I think about the U.S. markets and I think about our position in how strong we are in equities, how strong we are in options, our position in fixed income, we should be a great futures franchise in the U.S. We have a great partner in OCC, where we've got margin offsets, you've got capabilities to be able to leverage that as a clearinghouse and a clearing partner to us. We should be able to continue to grow and expand in that business and learn from our past attempts. I'm continuing to be very committed to it.
In terms of the, I would say, the medium-term outlook for that business, our goal and Tom's goal is to get it to a state of what I call sustainability, which means that it's at least break-even for Nasdaq, so that we can then have that as a really nice area for us to continue to grow in. That's over the, kind of, I would say, short to medium term, is making sure we get to that sustainable state.
Great. I think we have time for just one last question.
This is a really quick one. Sorry if this was already disclosed before, but, on the stranded cost you brought up, maybe this is more for Mike. Can you quantify that for us again? How big is it? How long will it take to get this out? Is this a situation where maybe you can just take a bunch of one-time charges at the beginning and be done with it and just carry it at below the line items?
I'll just summarize. A little color on fully removing the cost related to the divestiture of the press release and multimedia businesses.
Yeah. What we said last quarter was that, assuming, and we gave an example, we said that assuming the deal closed on June 30th, just for simplicity, we said the business itself has about $170 million in run rate costs, and that the second quarter of the year would have roughly $65 million, I think it was, $65 million-$75 million of costs in there, on a run rate basis. Say roughly $30 million-$40 million of stranded costs that will take, we'd say, about 12 months from the time of acquisition to fully eliminate. That's roughly the number that we said, that roughly the 30 to 40 would be the time, and it would take a year for us to be able to get that out.
We'll look at how we do the accounting and all that as we get closer to the transaction.
Great. Thank you. At this point, why don't I turn it over to Adena, to kind of end where we started and just wrap things up with the most important messages.
Sure. Well, first of all, I really want to thank you for staying and listening. I have to say, the time passed really quickly for me. I don't know if it did for you. We have lunch next, and we have some demos that we can provide to you, and obviously, all of the people who've been speaking today are here to continue to talk with you. I think that Nasdaq is really positioned to continue to accelerate our growth, to drive to our strengths in technology, analytics, and our market structure expertise, to make sure that we are continuing to grow the clients that rely on us in the capital markets and help take them into the future of what the capital markets and the potential that the markets have to offer.
I'm really excited about the organic opportunities we have here and the composition of our businesses and the leadership that you were able to see today. I really believe that we will succeed in being able to continue to improve our organic growth across our non-trading businesses, continue to succeed in driving our market share and sustainability of our trading businesses. In terms of managing our expenses well so that we can deliver to you operating leverage off of that growth, we are definitely going to be focused on targeting that 10%+ ROIC across our investments, both organic and inorganic, and ultimately, to continue to provide to you a great double-digit total shareholder return. We're a great business and a great franchise, and I'm incredibly fortunate to be able to lead this organization.
We're excited that hopefully you'll take the journey with us as we continue to drive and expand and accelerate our growth. Thank you.
Thanks, everyone. I look forward to talking to you more at the lunch, showing you some of the interesting product demos and finding ways to answer more of your questions. Thank you.