Good day, ladies and gentlemen, and welcome to Nasdaq's Third Quarter 2021 Results Conference Call. At this time, all participant lines are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, today's call is being recorded. I would now like to hand the conference over to your host today, Ed Dittmeier, Senior Vice President of Investor Relations.
Please go ahead.
Good morning, everyone, and thank you for joining us today to discuss Nasdaq's Q3 2021 financial results. On the line are Adena Friedman, our CEO Ann Dennison, our CFO John Zaca, our Chief Legal and Regulatory Officer and other members of the management team. After prepared remarks, we'll open up the line to Q and A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material non public information and complying with disclosure obligations under SEC Regulation FD.
I'd like to remind you that certain statements in this presentation and during Q and A may relate to future events and expectations and as such constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward looking statements is contained in our press release and periodic reports filed with the SEC. I'll now turn the call over to Adena.
Thank you, Ed, and good morning, everyone. Thank you for joining us. My remarks today will focus on Nasdaq's Q3 2021 performance, the progress we're making on our strategic repositioning and updates on areas where we are making significant investments to address large opportunities. I'll also share brief remarks about the Before I turn the call over to Anne, who will provide further details about our results as well as an update on our guidance, our capital deployment and our corporate sustainability efforts before we move to Q and A. Let me begin by acknowledging the Nasdaq team's dedication to our broader mission as we made notable progress in the 3rd quarter.
Their hard work has been critical to our success in delivering strong results for our clients. Together, we will continue our journey to become the leading provider of technology, data analytics, insights and marketplace excellence to the global capital markets and beyond. Now turning to our financial results for the Q3 of 2021. Nasdaq delivered net revenues of $838,000,000 an increase of $123,000,000 or 17% from the prior year period. Our growth was largely driven by 13% organic revenue growth in our Solutions segment, 14% organic growth in our Market Services business and contributions from our acquisition of Arifin.
We continue to make notable progress across key secular growth opportunities As illustrated by total company annualized recurring revenue or ARR of $1,834,000,000 an increase of 19% compared to the prior year period. Within our recurring revenue businesses, we are seeing some of our best performances from our SaaS based solutions. Specifically, Anti Financial Crime Technology is showing particularly strong results with revenues increasing 16%, excluding the impact of Barafin. Barafin will begin to be included in our organic growth calculations next year and we saw an increase of over 30% versus prior year in that business. Additionally, in our Investment Intelligence business, our SaaS products, including the Nasdaq Asset Owner Solutions, which is the new name for the combined eVestment in Our 3rd quarter results underscore the continued progress we've made to advance our strategy And additionally demonstrate the value capture from the flywheel effect, which is our ability to leverage the momentum in one business area to drive success in other parts of the business.
For example, our success in attracting the majority of the quarter's new listings and capital raise to NASDAQ drives higher growth in equities and options trading And multiplies cross sell opportunities for our Investor Relations and ESG related services. It also contributes to the vitality of the our index business like the NASDAQ 100 and the NASDAQ Next Gen 100 Indexes and enhances the brand strength in other strategic growth areas of the company. As we continue to evolve Nasdaq into a high performance technology company, each quarter that passes gives us an opportunity to reflect on the progress we've made. A critical pillar of our success has been our ability to allocate capital towards our technology and analytics capabilities. Our acquisition of Verifin has established us as a leader in anti financial crime technology as we build upon our already strong foundation in that area of the market.
In the Q3, our legacy Trade Surveillance segment saw the largest quarterly order intake in the last several years, adding new business across all regions. While our market surveillance group signed 2 new clients for our SaaS based solutions, including a new crypto exchange client. Another pillar has been our ability to advance our leading corporate and marketplace positions. Corporate Platforms revenues increased 18% versus the prior year period, driven primarily by outstanding growth in the NASDAQ listed issuer base across our U. S.
And Nordic markets. It has been a record year so far for new listings in the Nordics and with over 132 new listings coming to NASDAQ year to date. Additionally, the U. S. Has experienced the best new issuance here in the past 2 decades and Nasdaq continues to demonstrate strength With a 75% win rate for IPOs in the quarter and a 72% win rate year to date.
As our listed issuer base Rose, we're seeing correlated demand for our suite of IR and ESG services. Within ESG specifically, We see continued interest in our NASDAQ One report and our ESG advisory solutions coming from companies at every stage of their ESG journey, including companies preparing to list on NASDAQ. I would like to acknowledge briefly here that we are pleased with the SEC's approval during the quarter of our proposal to enhance While there have been meaningful developments to advance board diversity across the governance ecosystem, we believe the Market Services is another area of our business where we are seeing that flywheel related success. Our expanded issuer base benefits Equity trading since our share of trading and average capture rate is significantly higher in NASDAQ listed stocks than it is in stocks listed on other venues. An expanded ecosystem of equity trading in turn brings positive impacts to the options industry where Nasdaq led all exchanges in the 3rd quarter and the U.
S. Equity options Contracts traded. We're also excited by the early progress we're seeing in the growing suite of ESG related capital market solutions within market services. These include the Nasdaq Sustainable Bond Network, our European Green Bond Listing Service, our carbon removal marketplace, PRO Earth, As well as the expansion of our Nordic ESG derivatives offering. Overall, our Market Services segment saw revenues increase 15% In the Q3 versus the prior year, and this was largely driven by increases in equity derivatives and cash equity net revenues, although all sub segments of Market Services delivered year over year increases.
Our Investment Intelligence business saw revenues increase 30% during the Q3 compared to the prior year period. I'm sorry, our Investment Intelligence businesses Cell revenues increased 15% in the Q3 compared to the prior year period. This was driven by a combination of geographic expansion in our market data business, Higher assets under management and the exchange traded products linked to the Nasdaq indexes as well as strong new sales, higher client retention and take up of new capabilities across Our index business continued its strong 2021 performance in the 3rd quarter with revenues up 38% versus the prior year on a combination of both strong market performance of our most important thematic indexes as well as very material net inflows. We're especially pleased to see positive responses from the market to some of our newer products in our index franchise, with notable AUM growth in the Invesco InnovationSuite, the new Mirae ETF tracking, the Fillex Semiconductor Index and the Hashdex products linked to the NASDAQ Crypto Index. More broadly, AUM and NASDAQ licensed ETPs launched since 2019 reached $13,000,000,000 at the end of the 3rd quarter.
We are also unlocking new areas of innovation in our analytics business to bring more data and transparency to the institutional marketplace. This includes a significant partnership announced in July with Mercer, a leading consultant for institutional asset owners that gives our asset owner clients broader access to high quality research on investment managers and their various investment strategies through a simplified workflow, Enabling deeper due diligence. We expect this partnership to expand our clients usage of our asset owner solutions going forward. While we continue our strategic journey, I would like to highlight next how we are measuring our progress in evolving the company at the highest level using 2 key metrics. First, our year to date organic revenue growth across the Solutions segments continues to meet or exceed the medium term outlook of 6% to 9% annualized growth that we initiated after adding Verafin.
Our 2021 year to date organic growth across the Solutions segment is 15%. Secondly, because we are growing our SaaS revenues even more quickly than the 19% increase in ARR year over year, The total percentage of ARR that we are generating from our SaaS businesses rose to 34% at the end of the 3rd quarter. This is up from 28% in the prior year period continues to move us closer to our medium term objective of 40% to 50% by 2025. We are very pleased with the progress that our teams continue to make regarding SaaS contributions to our revenues, both organically and inorganically. Here are two brief examples that demonstrate our progress and innovation to support this growth.
It has been 8 months since we completed the acquisition of Verafin And our collaboration to date affirms our belief that this combination can accelerate new opportunities. This is particularly the case with larger Tier 1 and Tier 2 banks And those international banks from outside of Verifin's traditional customer franchise in North America. The Verifin team is executing on its strategy to further penetrate Tier 2 banks, which we define as banks holding total assets of over $50,000,000,000 and we secured another significant win during the quarter through our joint efforts. While we are still have significant developments in progress to unlock broader adoption among new customer groups, Our early milestones certainly validate the potential that we have identified together. Additionally, we continue to evolve our cloud based data offerings with the launch of the NASDAQ Datalink in September.
This new platform includes a comprehensive suite of core data covering financial markets, Investment fund information and alternative data to every segment of the investment landscape. It's the perfect illustration of our SaaS evolution in a key growth area at NASDAQ, And it underscores our ability to give clients an efficient means to consume and manage market related datasets in the cloud, which is becoming a standard practice for many users. Initial interest in Nasdaq Datalink is encouraging. The platform has seen daily average of 3,000 new visitors And 200 new account activations in the weeks following the launch. Next, I will briefly address areas of our business where factors impacting the current operating While there has been slow progress to enable in person activities and on-site client visits, it remains far from the environment in which we operated prior to March of 2020.
We are, however, fortunate that our diversified business model allows us to be executing at a very high level across our operations despite the prolonged backdrop of the pandemic. The logistical challenges of COVID-nineteen to travel, intense collaboration and on-site installation and integration Have had their highest impact on the Market Infrastructure Technology business within our Market Technology segment. We have had several complex clearing and post implementation projects that have experienced longer timelines and have required more resources to progress. These challenges have slowed revenue recognition End of increased near term implementation expenses, impacting near term margins and creating short term capacity constraints despite growing demand from clients. The second half of twenty twenty one continues to be heavily impacted by this dynamic.
And with this business having relatively high revenue visibility and clear capacity constraints, We know now that in the near term, Market Infrastructure Technology revenue growth within the broader Market Technology segment We'll continue to be impacted in 2022 even if the underlying logistical challenges of the pandemic improve. On the other hand, in our Corporate Platforms business, the pandemic period has created some efficiencies on to the go public process. Notably, IPO roadshows have turned virtual, making them more efficient for companies and investors. The new efficiencies have contributed to investors' ability evaluate the multitude of new issuers and have increased bankers capacity to support companies going through the IPO process. As of today, the pipeline for new listings remains robust based on the number of active S-one registrations on file with the SEC.
Assuming current market conditions persist, we have a strong visibility into the upcoming 6 months and we anticipate this momentum to continue as We enter the final months of the year and into at least the Q1 of 2022. Turning to how we envision our ability to sustain sizable growth in the long term, I see 2 key elements to our potential future sorry, our future potential. First, we've evolved Nasdaq's businesses to focus on critical capabilities That are strategically important to our clients and we have become more client centric than ever. This evolution has allowed us to focus on providing the right data, insights and technology that our clients need to be successful across the capital markets today and tomorrow. 2nd, we have strong competitive positions in very sizable markets in the key areas of growth for NASDAQ.
It is a combined serviceable addressable market of $20,000,000,000 across our anti financial crime and trade surveillance technologies, our indexes and investment analytics solutions as well as our Investor Relations Governance and ESG Services. Based on our traction in these growth businesses today, we are incredibly excited about the opportunities that lie ahead of us. As I wrap up, I want to reiterate that we are entering the final months of 2021 with remarkable momentum as we make steady and consistent progress across our Key growth areas and our foundational marketplace businesses. Combined with a favorable capital markets and macroeconomic backdrop, We remain well positioned to advance our strategy into 2022 and beyond. And with that, I will turn it over to Ann to review the financial results in greater detail.
Thank you, Adena, and good morning, everyone. My commentary will primarily focus on our non GAAP results, and all comparisons will be to the prior year period, unless otherwise noted. Reconciliations of U. S. GAAP to non GAAP results can be found in our press release as well as in a file located in the Financial section of our Investor Relations website at ir.nasdaq.com.
I will start by reviewing 3rd quarter performance beginning on Slide 11 of the presentation. The 17% increase in reported net revenue of $838,000,000 is the net result of Organic growth of 13%, including 13% organic increase in the Solutions segment and a 14% organic increase in Market Services and the contribution from Barafin as well as the impact from divestitures. Moving to operating profit and margins. Non GAAP operating income increased 20%, while the non GAAP operating margin of 53% increased 1 percentage point compared to the prior year period. Non GAAP net income attributable to Nasdaq for the Q3 of 2021 was $303,000,000 or $1.78 per diluted share compared to $256,000,000 or 1 point $0.53 per diluted share in the prior year period.
Turning to Slide 12. As Adena mentioned earlier, ARR totaled 1.8 $3,000,000,000 an increase of 19% from the prior year period, while annualized SaaS revenues totaled $620,000,000 an increase of 42%. Excluding the impact of Verafin, ARR increased 10% year over year. I will now review quarterly segment results on Slides 13 through 16. Starting with Market Technology.
Revenue increased $28,000,000 or 33 percent. The increase reflects the positive $29,000,000 impact from the acquisition of Verafin And a $5,000,000 increase in our existing anti financial crime technology business, partially offset by an organic revenue decline of $6,000,000 in our Market Infrastructure Technology business. Excluding a $3,000,000 FX impact as well as the $7,000,000 purchase price adjustment On deferred revenue associated with the closing of the Verafin transaction, Verafin revenues would have been $39,000,000 in the 3rd quarter period And anti financial crime technology would have been $73,000,000 with both our existing surveillance and Verafin's Framo solution Continuing to exhibit strong momentum. The revenue decline within the market infrastructure technology business was driven primarily by the planned roll off of a sizable maintenance and support licensing contract with a customer who will continue to use our technology under our license agreement as well as a decrease more broadly in change request and installation revenues, a consequence of both the strong comparison period in the Q3 of 2020 And capacity constraints we're working through due to logistical implications of the pandemic. ARR for market technology was $428,000,000 in the Q3 of 2021, an increase of 54% compared to the prior year period.
The Market Technology segment operating margin was 9% in the period. Excluding the impact of the previously mentioned $7,000,000 purchase price adjustment related to Verafin, The operating margin would have been 14%. Investment Intelligence revenue increased $36,000,000 or 15%, all of which was organic. Organic revenue growth during the period reflects very strong growth in our index business as well as a meaningful contribution from analytics. Annualized recurring revenue, or ARR, was $555,000,000 an increase of 9% compared to the prior year period.
AUM and ETPs licensed to Nasdaq's indices rose 15% compared to the prior year period to $361,000,000,000 including $53,000,000,000 from net inflows and an $87,000,000,000 net increase from market appreciation, partially offset by a $92,000,000,000 is a negative impact related to the previously discussed ETP sponsor switches. These switches collectively were associated with about a $3,000,000 and run rate quarterly revenues, which will be fully reflected in our revenues for the first time in the Q4 of 2021. The Investment Intelligence segment operating margin of 65% is unchanged compared to the prior year period as we continue to make strategic investments in index and analytics to support sustained growth. Corporate Platforms revenues increased $24,000,000 or 18%, reflecting organic growth. The increase was primarily driven by Higher U.
S. Listings revenues due to the expansion in our listed issuer base as well as higher adoption across the breadth of our Investor Relations and newer ESG advisory and reporting offerings. Corporate Platforms ARR was $529,000,000 and increased 17% compared to the prior year period. The Corporate Platform segment operating margin of 42% increased 3 percentage points compared to the prior year period. Market Services net revenues increased $39,000,000 or 15%.
The organic revenue increase was $37,000,000 or 14%, and there was a $2,000,000 positive impact from changes in FX rates. The organic increase reflects higher equity derivatives, cash equities and trade management services revenues. The segment operating margin of 63% increased 3 percentage points from the prior year period, reflecting strong operating leverage on higher trading revenues. One modeling item to note is that for the Q4 of 2021 January 2022, We have waived the collection of certain regulatory fees for 4 of our U. S.
Equity options markets. This is in order to ensure that Collection of the fees in combination with other regulatory fees in Vines does not exceed our regulatory costs. Holding all else equal, the removal of the fee is expected to reduce our reported capture rate by approximately $0.015 per contract in the Q4 of 2021 and approximately 0.5 $0.005 per contract in the Q1 of 2022. Turning to Page 17 to review both expenses and guidance. Non GAAP operating expenses increased $51,000,000 to $397,000,000 The increase reflects a $26,000,000 or 8 percent organic increase, A $21,000,000 increase from the net impact of acquisition and divestitures as well as a $4,000,000 increase from the impact of changes in FX rates due to a weaker U.
S. Dollar. The organic expense increase has 2 main drivers. 1st, Higher compensation expense reflecting our continued investment to drive growth and an increase in variable performance linked compensation due to our outstanding results And second, increased costs related to what has been a very active capital markets backdrop, including expenses related to increased trading capacity and marketing commitments supporting our listing clients. Consistent with what we said last quarter about expenses coming in near the high end of the range, If performance continues to be strong in relation to our medium term growth objectives, we are narrowing our 2021 non GAAP operating expense guidance to a range of $1,605,000,000 to $1,620,000,000 from $1,590,000,000 to $1,620,000,000 previously.
The updated range reflects the impact of strong and broad based organic revenue growth in the 1st 9 months of 2021 on variable expenses. Turning to Slide 18. Debt increased by $226,000,000 versus 2Q 2021, primarily due to net Issuances of $259,000,000 of commercial paper, primarily used to fund the accelerated share repurchase program or ASR, And the net increase of $19,000,000 of eurobonds from refinancing our 2023 eurobond with the 2,033 Eurobond during the quarter. This is partially offset by a $52,000,000 decrease in Eurobond book values caused by a weaker euro. Our total debt to trailing 12 month EBITDA ratio ended the period at 3.2 times, unchanged from the Q2 of 2021.
During the Q3 of 2021, the company paid common stock dividends in the aggregate of $90,000,000 and repurchased common stock in the amount of $475,000,000 including the initial delivery of approximately 2,000,000 shares of common stock related to the ASR agreement we entered into in July. We expect to receive the remaining shares related to the ASR in the Q4 of 2021 and for additional planned repurchases related to the sale of our U. S. Fixed income business to resume in 2022. As of September 30, 2021, there was $984,000,000 remaining under the share repurchase authorization.
We continue to expect EPS dilution from the sale of Nasdaq fixed income to be about 2% in the 1st 12 months following the June 25 close, But to diminish immaterial levels after that. Turning to Slide 19. I want to Begin regularly addressing our focus on ESG elements of our business, both internally and externally, because we believe Nasdaq has an important set of opportunities In terms of our sustainability and external impact, and we have a strong momentum in executing against them. We're committed to the highest level of sustainability in terms of how we run our businesses and serve all of our stakeholders, but also have positioned ourselves to develop high impact outside the organization through our anti FinCrime Solutions, our Carbon Removal Marketplace Bureau and our unique ESG products and services offered to our corporate clients as well as our efforts to further our Our purpose is to champion inclusive growth and prosperity, and we have chosen to emphasize financial literacy and extensive entrepreneurship education and support within underserved communities throughout the U. S.
During 2021, we've expanded our ESG disclosures with new climate reporting and task force on climate related financial commitments. Additionally, we have substantially expanded our anti financial crime and ESG products and services capabilities, And we've received SEC approval for our listing rule promoting increased transparency on board diversity. We have much to do to continue on our ESG opportunities, but we were very encouraged to see Sustainalytics, a leading provider of ESG research and ratings, We recently recognized our progress in these areas. Our latest Sustainalytics ESG risk rating improved to a level that puts NASDAQ in the top 3 percentile of all rated companies. We look forward to updating you on a regular basis as we progress our ESG initiatives going forward.
Thank you for your time and I'll turn it back over to the operator for Q and A.
Thank you. Our first question comes from the line of Rich Repetto with Piper Sandler. Your line is now open.
Good morning, Adena, and good morning, Anne, and congrats on the strong results here. Thanks, Rich. I guess, you're having tremendous success With the annual growth of annual recurring revenues and the mix of SaaS revenues in there, and you did talk about you said You focus on the critical capabilities of your clients and more clients. So the question is, looking back, How important is equity trading and equity market share, even though Again, your revenues here have grown because volumes have grown. But looking, an old metric was Equity market share and revenue capture, how important is that to NASDAQ as you make this transformation?
Well, I would say every part of our business is important, Rich and important to us. And so we do look at we examine every element of our business. Our Core marketplace business really serves as our foundation for our ability to serve our clients in a lot of other ways. So we're extremely focused on it. I think that we've seen some shifts in market share as well as just in a couple of different dynamics.
One has been The increase in retail, which has increased internalization and decreased overall exchange's share of trading. And I think that within that, that's an area that obviously We're seeing some more work done by the regulators just to understand that dynamic. I think that the second is, of course, The launch of some new exchanges that have come forward and they have actually primarily focused on gathering some of that retail order flow and trying to Pete, for it. So we have really taken a very balanced approach in terms of being strategic in how we serve our clients. We want to make sure that we provide kind of a sustainable marketplace that we do things in a competitive way that but also creates a sustainable advantage For our markets and for our clients that operate in our markets.
And so we've taken, I would say, a very measured and balanced approach to Managing share, managing capture and evaluating kind of the composition of trading in the markets to make sure that we're kind of balanced there. And I would say that applies to both our equities and options markets and how we're looking at our share and capture and the dynamics there.
Okay. And then thanks, Adena. And then the one follow-up would be on Market Tech, you certainly explained that the quarter over quarter decline in Pandemic impact. Could you give more color on sort of the pipeline? And How long do you think this impact, I guess, if you could forecast that or just color going forward In the current and if the environment stayed roughly the same, I guess.
Yes. Well, first of all, I do think the environment is starting to generally improve in terms of being able to travel a bit now. But we're still doing most of our client interactions on Zoom, and that makes it harder. It's also harder to develop the kind of what I would call Top end of the pipeline, that's the top end of the funnel, in terms of identifying new clients. But I do think we've done a good job of adapting there to try to make sure that we know which New marketplaces are starting to consider launching and how we can serve them.
So you're seeing that we are still signing up new clients for sure. They are taking Our SaaS based marketplace solutions, which we're also pretty excited about, I think more than 90% of our new clients, any new clients that's signing up for us Across all of Market Tech and that includes market infrastructure, technology clients as well as anti FinCrime, Well, actually it's well more than 90% are taking our SaaS based solutions and that includes new markets launching in the cloud and taking our next gen trading system. So we see a good pipeline, I would say, Rich, and we also see that We could do more and we definitely want to be able to identify client opportunities a little earlier and travel will help with that. But I also would say that on the post trade side, which is where we've really experienced most of our delivery challenges, those are harder to implement. They take they're multi year programs, they always have been, but they are definitely lengthening out in time with our inability to be on-site.
We are starting to get on-site now with some of our clients and that's helping definitely helping to accelerate things. And I also think that it's Keeping us from being able to meet all the demands that our clients have. So we do see good strong client demand there, But we have to make sure that we have the resources to be able to meet the demand. So we've been working with our clients to kind of stage that over time. And that's what I think is going to Is what we really were referring to in our comments around 2021 2022 is just that we see Yes, the need for us to manage through those capacity constraints before we can really meet all the demands that our clients have.
Got it. And congrats on the continued transformation, Adena. Thank you.
Great. Thanks a lot, Rich.
Our next question comes from the line of Dan Fannon with Jefferies. Your line is now open.
Thanks. Good morning. I wanted to follow-up on The Market Tech component and just thinking, I think you mentioned some increased costs around some of the implementations as well. So the longer term kind of margin Opportunity in this business, has that changed at all? Or is that also just kind of part of the temporary revenue Slow down more of a factor than necessarily costs on a go forward basis.
Sure. I think that there are 2 metrics that we've provided To our investor base to kind of measure our progress in the business. One is just our overall medium to long term growth outlook on revenues And then the other is this notion of the rule of 40, which is really a combination of the growth in the revenues and the EBITDA margin of the business. And so, what our outlook is, is that we expect to be able to deliver 13% to 16% Annualized growth over the coming 3 to 5 year period across market technology and that includes the market infrastructure technology business and the anti financial crime business Together, and we do continue to believe that that is an appropriate expectation of growth for the business going forward. I think that the on the rule of 40, what we've communicated is that we wanted to get to a rule of 40, which is, As I said, the combination of growth in EBITDA by 2023 and we continue to see ourselves on track for that.
So you have to think about this as a shorter term or at least a nearer Term challenge that we're having to work our way through that part of the business that is most impacted to be able to get ourselves to a better growth state And more scalability as we sign more of our clients as SaaS clients instead of, on prem clients.
Thank you. That's helpful. And then as a follow-up on the index business, just to clarify the switches that has not yet to impact the revenue for as we think about the Q4. And could you maybe talk about the difference in the fees associated with what's coming in In terms of net inflows, I think you gave a stat around inflows since I think 2019. Maybe discuss kind of the different kind of Fee threshold as we think about the AUM mix.
So, Jan, on your first question, we saw about half roughly half of the impact Around the switches coming in the 3rd quarter and we'll see the full run rate in the Q4. Yes. And on the second part
of your question, The fee base for the switches that we experienced, particularly one of them was very low. And so therefore that $3,000,000 impact was is a low revenue impact against the AUM that was switched. I think going with regard to the new price we're launching, the fees that we are able to attract With regard to kind of what some of our innovative products like the NASDAQ Next Gen 100, the crypto index, and the semiconductor indexes are To me more in line with our normal, our kind of our historical norms. So they do carry a higher fee base than the AUM that we lost.
Got it. Thank you.
Our next question comes from the line of Owen Lau with Oppenheimer. Your line is now open.
Good morning. Thank you for taking my question. I have a question about your partnership with Spot tray and the sports betting industry overall, could you please talk about maybe the potential market size, such as how many similar sports betting Companies out there that you can provide your surveillance technology. And then broadly speaking, could you please talk about your recent traction in the non financial space? Looks like we haven't talked about this for a while.
Thank you.
Sure. Great. Hey, Eun. So on Sportrade, there's a combination of what we're doing there. One is we have taken an investment In the business itself through our venture portfolio and then we also were providing them the surveillance technology.
And what's interesting about sport trade And the market model that they're creating is they're definitely creating more of what I would call like a marketplace model where they're going to have market makers, they're going to have A bit of spreads for different in game betting opportunities. And, it's going to be really an interesting market model. Our surveillance technology absolutely applies to that type of market model, but actually the module that we created around sports Surveillance applies to multiple like the traditional model as well in terms of having a kind of Your own book and then betting against the house kind of thing. So I think that we can apply the technology to a traditional sports book or to these new marketplaces And we have created a module that's specific to that segment. So we're pretty excited about that.
And we don't have a TAM or a Sam yet? I know that's actually a good question, Ellen. So we'll come back and think through how do we look at that Sam developing, Particularly for our surveillance and trading technologies for that segment going forward, but it's obviously very early days here in the U. S. For that.
In terms of other new markets and non financial markets, we are continuing to support the crypto exchanges. I think we have 8 exchanges leveraging our trading technology and 9 leveraging our surveillance technology today. And then we also are Seeing kind of fractionalized markets like fractionalized real estate markets and others coming up and we actually have several really interesting new marketplaces Launching and they're all coming on to what we're calling our NASDAQ Marketplace Services platform, which is really a SaaS based And it can be delivered in the cloud or we can host it, but it's a managed service platform where we provide the technology, but also the infrastructure So that markets can spin up a lot faster. So I would say though, Owen, as you know, this is an early part of our strategy and But we are definitely seeing nice progress and we can provide you some more stats going forward on kind of new markets that we're launching there.
Got it. That's very helpful. And then, could you please also explain a little bit more on How NASDAQ Datalink can expand what you have in Quando? Is it related to like integrating the data in Quando and provide clients with a More holistic view of data from different sources? Thank you.
You actually hit the nail on the head. So think about Clondal now is like one component of Nasdaq Datalink. The Clondal data like the alternative data that we provide to investment Managers are integrated into Nasdaq Datalink. The technology that underpins Quandl is actually the underpinning of Nasdaq Datalink technology, but it also includes Our market information, it includes some investment information, now we're calling Nasdaq Asset Owner Solutions data like on investment Management funds and trends there. It actually you can a client could choose to put their own, third party managed data into the system and we can basically Become their technology provider to making it to all of their data is managed and available to them in a really, really nice modern API structure.
And so it's really an umbrella way for us to deliver market information, fund information, alternative information In a modern API and cloud based infrastructure. So it's really easy to use by the way and it's really easy to take the data sets and integrate them into Excel or anything else that you want to use internally.
Got it. That's very helpful. Thank you very much.
Sure. Thank you.
Our next question comes from the line of Chris Allen with Compass Point. Your line is now open.
Good morning, everyone. I was wondering if you could get a little bit more color on the index business. Apologies if I missed it. I'm just kind of Curious on the sequential growth that we saw in the quarter. Maybe give us kind of an updated framework on how it's breaking down between What's AUM driven subscription and transaction?
In terms of the futures versus the AUM? I think that it's a good question. So I don't know if you have an easy answer. Yes.
We don't give the The FX on it, it's about you could think about the assets, the AUM portion being about 2 thirds of the index line and then the rest We'll include the futures portion.
Yes. And in general though, I think what we have been doing now is in our statistics that we send out, We provide you all an update on AUM both in terms of net inflows as well as market appreciation. And as we said, it's really been Combination of inflows and market appreciation that have driven up, the assets under management, I think it's 15% for the quarter. And then our revenues It has been even better than that for the quarter based on a combination of those things.
And any color on the $12,000,000 sequential increase from 2Q to 3Q in revenues? Just It's a pretty big number, particularly in the I know there's a little bit of the $1,500,000 from the switches coming out.
Yes. I mean, it's really been I would say it's really largely inflows and market appreciation driven more so than futures driven for the quarter.
Okay. Thank you.
Our next question comes from the line of Brian Bedell with Deutsche Bank. Your line is now open.
Great. Thanks. Good morning folks. Let me just start off with a question on it's kind of a broader question on crypto, but Also anti financial crime. So just the question would be the broader question is, are you able to measure yet, and I know it's early days, Your contribution from crypto broadly because it does touch a lot of different segments between The index licensing, potentially anti financial crime mandates and also obviously market technology.
And then, if it's too early to size that, maybe just give some perspective on how you see That developing across those segments and especially anti financial crime, whether you're actually seeing mandates that are based on crypto
Yes. No, it's a great question. So I would say it is probably it's a little early, but it's a good question. So let's take that back and see whether that's Something we want to start to think about how we communicate to you guys. But you are right.
So we have the crypto index product That has about as we mentioned, it's about $600,000,000 of assets under management there. We have the surveillance and the Market Tech Solutions. And so we will come back to you, Brian, just to kind of think about how we want to start to Provide you more clarity there, but it is early days. And on the surveillance side and actually the broader anti financial crime side, that's an area that we are Really spending a lot of time on to try to figure out how we can provide broader services across, our bank clients As well as our brokerage clients, because right now the surveillance capabilities is really driven by marketplaces. But over time, as Crypto becomes more integrated into the financial system.
We want to make sure that we can provide solutions that meet the needs across all of our customers. So That's actually an area of active evaluation right now and we're looking at that. It's a great, to have 2,000 banks as our clients across the U. S. And Canada, really does give us a much broader opportunity to think about how to serve their evolving needs there.
Yes. That sounds like an exciting growth opportunity. And then maybe just switching over to just a question on market structure. Obviously, with the new administration, We're not sending you now, but we've talked about different views on working on market structure, Especially on payment for order flow. And I guess what's your view on if you have a view on what you think would be A good solution to that.
Obviously, we've talked about sub penny pricing being allowed on exchanges, if that's a potential remedy For the order flow situation and then also any other commentary on market data where that stands given The prior administration had put that rule in place.
Sure. So I think that with regard to the market structure Discussions and I think the SEC's paper was to me an early first step in a long process of evaluating how to continuously I think what we were happy about with that report, well, a few things. One, they did a really nice job of dissecting the activity and understanding that Yes, there wasn't anything there that had I would say that there was nothing there that really signify that there was any significant manipulation in the market. I think the second thing is that they really did note that the markets were really resilient and very efficient, and that obviously is a good thing for us. But they also did point out a few key areas of focus.
One is the quality of the National Best Buy and Offer And the fact that so much more of the activity is happening in the dark, is there an impact on the quality of the national best bid offer? And that's an area that we've been doing some work on. I think our Chief Economist published a report on that last week. And that then tees to what are the incentive structures that underpin the markets. And so are we finding that That order flow is being moved off exchange and brought into these darker venues because of incentive structures.
And I think I don't think that the SEC necessarily drew a definitive conclusion there, but it's an area that I think that they will be focused on. All we can say is we really believe in taking kind of iterative, smaller steps, iterative change rather than big bang changes to market structure because It's such an intricately woven system that it's really the law of unintended consequences are high. But if they look at disclosures around PFOF or they look at making some measured changes to the PFOF structure as well as making it so we can compete more for order flow like sub penny pricing or other rules that encourage orders to come on to exchange And be lit, I think that those are all things that would be positive for us. But recognizing that we like innovation, we like Variety and competition, we think that those are all good for investors. And so we have to make sure we're taking measured steps there.
And I got the sense that they weren't looking at it looking at draconian steps and that they were going to take a pretty measured approach.
That's good color. Thank you.
Thank you. In the interest of time, we ask that you please limit yourself to one question. Our next question comes from the line of Alex Blostein with Goldman Sachs. Your line is now open.
Hey, good morning. Thanks for taking the question. I wanted to ask you around just the thoughts On sort of inflationary pressures, we kind of hear in a number of different corners of financial services, but obviously markets broadly, I guess, particularly when it comes to technology and technology talent. I know you guys don't have a 2022 budget yet, but as you're thinking about where your growth focus is and where you're investing and where you sort of make incremental investments, How do you think about that as a potential headwind? What is the sort of things you can do to maybe offset or reengineer it, I guess, to some extent?
Just Curious to get your thoughts on what you're seeing in the marketplace.
Sure. Yes. I mean, I definitely think that there has been I think that we all know that the competition for talent is Pretty, at a pretty heightened level right now. And so we are we've honestly benefited from the ability for us to attract talent The benefits is that we have tech talent in the U. S, in Canada, in Europe and Asia and Australia.
We have tech talent Kind of spreads throughout different economies in different markets, which gives us more flexibility to Seek out talent in markets where we think that we can do that efficiently. But at the same time, it is a competitive environment. We do think that there's going to be Increases in wage I would say wage increases as we go into 2022. But as you said, we haven't yet finalized our budget and our Planning, so we'll be able to talk more about that on our Q4 call as we provide you with our 2022 guidance. But We are evaluating that as part of our part of the needs for us to compete for talent, but also recognize we have some benefits from having such a global workforce.
All right. Thanks. I'll stick with my one question.
Great. Thanks a lot, Alex.
Our next question comes from the line of Michael Cyprys with Morgan Stanley. Your line is now open.
Hey, good morning. Thanks for taking the question. Just wanted to circle back to the NASDAQ data link that you were talking about a little Earlier, just how might ESG data become a component or captured in the data link? And what's the opportunity more broadly for NASDAQ to become a driver Of ESG standards and scoring in the industry. And maybe you could talk a little bit about how you see that developing in the marketplace more broadly?
Yes. Actually part of NASDAQ Datalink is something called The Nasdaq ESG Data Hub. So it's basically information that we've gathered from third party sources that allow buy side institutions to get information that they need, whether it's climate related information or other structured data that helps them Evaluate Companies and Industries. So, I think that we actually are serving that up very successfully within Datalink. So that's one of the modules of Datalink.
But the one thing that we don't have and what we don't intend to do is become what a rating agency ourselves. That's just Not our role. We are here we look at it as we have an ecosystem that includes 4,000 corporate clients. They have a lot of information that they need to be able to provide to investors and we want to support them in providing that information to investors. We then have Thousands of institutional managers that receive our information and we can deliver data to them either through ESG Datalink or through Our Nasdaq Asset Owner Solutions, where they can gather up information they need to make better informed investment decisions.
And that over time, we hope that the data that we're helping our corporate clients collect and Distributed can actually be served up through our NASDAQ Asset Owner Solutions, and not just to the rating agencies, so that they can also control the information that they're providing to But I think that we're just not in the mode of actually being a rating agency ourselves. I think there are many of them out there right now. We have actually partnered with Sustainalytics to start to develop some index strategies that we think will be really interesting in the space. But that's kind of the role that we're playing, as opposed to trying to be that rating agency ourselves.
Great. Thanks.
Thank you. Our last question comes from the line of Kyle Voigt with KBW. Your line is now open.
Hi, good morning. Thanks for taking my question. So earlier in the call, You reiterated that expectation for the 13% to 16% annual revenue growth range for the Market Tech segment as a whole. But If we just narrow in on the market infrastructure business specifically, it's a business that has been able to grow quite strongly in the years Before the pandemic, I understand there's some near term challenges, but I'm just wondering if your medium term revenue growth expectations for that infrastructure Business has changed at all over the last 18 months, or whether or not there I guess expectations are relatively similar and we're just trying to Get through this kind of near term headwinds.
Yes. I mean, I would say our expectations are over the medium term are similar to where we have been and it's really just Getting ourselves through these immediate term issues that we're having, kind of managing our way through A more challenging delivery environment. So and I think that the client demand is definitely there. Our engagements with our clients are excellent. I think our clients are excited to be able to leverage the next gen technology we have and we are delivering that to a lot of our clients.
But we just have to work our way through some of these near term challenges, but the medium term outlook remains the same.
Got it. Thank you very much.
Thank you. There are no further questions. I will now turn the call back to Adena Friedman for closing remarks.
All right. Well, thank you all very much and so happy to have you on the call. We're very pleased to see that our business is continuing to deliver strong organic revenue growth. And as you know, we are really guided by our strategic direction and we have a clear focus as to, how we want to continue to reimagine markets to realize the potential of tomorrow. Thank you all very much.
We look forward to talking to you next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.