Okay, great. We'll get started with our next session. Thank you, everybody. Thank you for joining us. It's my pleasure to welcome Sarah Youngwood, CFO of Nasdaq. Over the course of 2025, Nasdaq continued to deliver on multiple fronts, sustaining a double-digit organic revenue growth, driving positive operating leverage and returning capital to shareholders. With capital markets showing improvement over the course of the year, Nasdaq is entering 2026 on a strong footing. Lots to discuss during our next 30 minutes or so, so why don't we just jump right into it? Sarah, thanks so much for being here.
Delighted to be here.
Always great to spend time with you. I would love to start with just priorities for next year. You guys are coming off of a clearly solid year for Nasdaq in 2025. Just to put some numbers around that, Solutions revenue tracking up 10% year over year, so well within your 8%-11% growth target. We've seen really healthy volumes. Perhaps that's outside of your control, but that's been helpful. Really good expense management and progress you're leveraging. So at a high level, how are you thinking about starting with Solutions growth into 2026? And maybe which of the businesses are showing the most growth momentum?
Yeah. So first of all, we do love all of our businesses. So if you take a step back, we're a Rule of 60 business. Rule of 60 means we both have strong growth. And you mentioned the Solutions revenue growth at 10%. And that was not just one quarter, but every single quarter this year we've been able to hit that. And our total revenue growth was also double-digit every single quarter this year. And on top of that, we've had very good operating leverage. And we've been able to have both our operating margin and our EBITDA margin up 2 percentage points year on year. So, so far, so good.
So looking now to the year ahead or to the years ahead, when we look at where that momentum is coming from, what I want to say is actually it's coming from all places, which is a very good thing. And so if I can give you some example, we've got Index, which has three legs of growth, both in terms of the new products, in terms of international, and in terms of institutional. That has been a big driver of alpha-generated growth. We also have Verafin, which also has three pillars. And that is the persistent strategy and execution with the SMB. And then you have the momentum, which I'm sure we'll come back to in terms of enterprise. And this year is really a year where that momentum is accelerating.
And then you've got what we are doing in terms of international, which is just getting started, but it's very promising. So another area which we'll feel great about, eVestment, which we sometimes don't talk as much about, but which is really very well established and used by many of you in terms of the database information that it provides to help you drive alpha and your strategies. And now we're adding privates. And since the beginning of 2025, we've now more than doubled the data on privates, which is now sitting above 60,000 funds. So very relevant and very complementary to what we already have there. And then GenAI, and I'm sure we'll talk about that again, but that is also fueling many of our products and of the growth that we have.
Yeah. And I don't want to steal any thunder from the investor day coming up, but I do want to talk about AI for a couple of minutes here. So the way you described it, it's a bit of a two-track strategy, both in products as well as on the business. So maybe we can unpack both of them separately. On the product side, maybe talk about how you think about greater AI utilization could impact kind of that 8%-11% revenue growth within solutions. Where do you see the biggest opportunities to accelerate revenue growth on the back of AI and just sort of the wider adoption there?
No, that's great. So we have great confidence in our medium-term outlook for solutions at 8%-11%. And certainly, GenAI is a part of it. And the reason why we have that confidence is because our clients are seeing that our data is unique, in many cases moated, and they turn to us for innovation. I'm just going to give you some examples, and I can't be exhaustive. Otherwise, we will take the whole fireside chat here, but more at Investor Day. So for example, if you take Verafin in Financial Crime Management, we now have our first digital worker that is an agentic worker. This is in sanctions. So we have, based on our testing, the ability to have four out of five of the screened alerts that basically do not need to be reviewed by a human. And that tool is in the hands of 150 customers.
We are coming on now with the next agent by the end of this year or beginning of next year, which will be enhanced due diligence. The more we add those digital workers, the more we give a great ROIC to our client for them to get past the free volume trial and into the paid contracts. That is really an important change for us that we're going in that direction in Financial Crime Management. This is just starting. In terms of the piece that I just described, it's complementary to what you already know about, which is that we've got 1,500 clients that are already using the Copilot. That one is the one that helps the human, but the human is still in the loop.
And so they got used to it through the Copilot, and now they are moving some parts of the process into full agent. If you go outside now of Financial Crime M anagement, we were talking, for example, about the Capital Access Platforms with eVestment. But now if you look at Boardv antage, also in Capital Access Platforms, that's the Board platform. And we have over 30% of our clients, which is a large number, 1,100 plus clients that are using the summarization tools and the GenAI tools that we have put inside the product. So again, those are not just concepts. They are adopted. A bit more recent, we have a POC in surveillance where we're using the GenAI capabilities to really greatly improve the product. And we had a successful POC. And so those are the type of things we do.
And so when I'm a client and I think about it from the point of view of a client, I'm seeing scale. We have 3,800 clients, 110 regulators we deal with. I'm seeing a lot of innovation. I am seeing data that's moated, contributed, that's not only embedded in workflows, but that is also adding connectivity layers. And therefore, those drive decisions by our clients to actually adopt our tools.
And to be clear, a lot of this has been rolled out in kind of a free, no-cost trial phase. And you're saying that's going to become a revenue opportunity over time.
Yeah. So for the Copilot, we are making them part of the net potentials. But for the agents, that is after a free volume trial. That becomes a paying part.
Got it. Interesting. Okay. And what about on the business side of things? So obviously, I'd imagine some of this is going to be used internally as well to make you guys also more efficient and produce savings that could be either deployed or kind of let that drop down to the bottom line. So any way to frame and quantify what that looks like and how much in savings you guys are seeing in the business today from some of the AI initiatives?
Yes. So we will speak more about it at Investor Day. But for what we have today, we have, first of all, if you go back to what we've already done, when we increased the $80 million synergies program to become $140 million, we said part of it is actually expanded what we did as part of an acquisition synergies opportunity into an efficiency program for all of the parts, not just what we did in the context of an acquisition. We also said at that point, we are starting to embed GenAI actual savings in the program. So that program is not entirely GenAI, but has a component where we have been able to deliver, according to our expectation, the portion GenAI that we wanted to deliver. So that is already contributing to the expense story that we have. And that will increase.
And we believe that there are tons of use cases, whether you are the biggest opportunities are going to be in the client's success as well as implementation, as well as in the Reg- to- Code, is what we call. We have a lot of regulatory regulation that we have to read and update and translating that easily into code. That works very well. And then, of course, the technology organization is using it, but the finance organization, the legal organization, the HR organization, literally, there is not a place in Nasdaq which is not very focused on changing the way we operate to leverage those excellent tools.
Great. Let's pivot to another important topic. I do want to spend a couple of minutes on tokenization and stablecoins. It's come up in almost every discussion, whether it's relevant or not, for whatever it's worth. For you guys, it's actually quite relevant. So let's talk about it. So you guys, I guess two-part questions. First, I would love to get your perspective on just the evolution of the digital asset ecosystem and the role Nasdaq would play in that, including how do you see the commercial model for some of the traditional venues evolving. And then more specifically, maybe you can hit also on the filing you guys did with the SEC to enable trading of tokenized equities and ETFs and how is that progressing?
Okay. A lot to unpack. So the first thing I would say is if you go back to the mandate of Nasdaq, we're here to promote capital formation with integrity, transparency, and liquidity as our pillars. And it's actually incredibly relevant today when you try to think about what could happen and how we can be very intentional about driving innovation and all of the benefits that we already have with the U.S. capital markets being extraordinarily high integrity, liquid, great protections for investors, great liquidity pools, great depth, and all of those things were behind the logic of all of the activities that we have. So we do believe that it's incredibly important, though, to embrace innovation and that tokenization will happen and therefore driving it in a way where it becomes optionality in addition to what we have rather than instead of what we have.
And so the proposal that we have filed follows those principles and effectively will give the opportunity to the investors at the time of the trade to choose whether they want to settle in traditional form or in tokenized form. And what's interesting about that is that it can use all of the attributes of the security. The security itself does not change. And you don't break the liquidity pool. You don't break all of the characteristics of the market, which enable you to have volume speed while actually benefiting of the technology, which we believe is very useful because you've got much better collateral mobility. You've got capital efficiency. And in a world where you are trying to think about the velocity, this is a very good framework to affect that.
And so we believe capital efficiency, mobility, velocity, and ability to give innovators as well as investors choices is going to be implemented, but that there is no reason to do that at the cost of equal access, of liquidity, of integrity, and especially breaking the size of the liquidity pool.
Got it. Away from the trading side, Calypso is another area where you guys are spending time on that. So maybe it's worthwhile just touching on that as well. I guess Calypso is being enhanced to kind of integrate on-chain capabilities for some of the more dynamic collateral mobility across different asset classes. How could tokenization reshape collateral management revenue pool for Nasdaq over time there? And at the same time, you could envision a scenario where there will be just less need for collateral in the ecosystem if things become more efficient. Why has that not been a negative potentially for that business?
Yeah, so what we think is going to happen is you still are going to have a hybrid world where you've got now the integration of the digital assets into the real economy, and so if you take a bank balance sheet, you end up now needing to have a place where all of those assets and liabilities meet and are treated in the same way so that you can now optimize your collateral, and so what we're doing is Calypso is our capital markets part of our platform, which trades post-trade collateral management, treasury management, and so instead of having this done for traditional assets and then something else done for tokens and then something else needing to do the bridge, we can actually be already the traditional asset one, and then we can integrate.
And we've done a POC on the Canton Network to show that you can actually do collateral management on a digital asset network. And the POC was very successful. And we did that with Canton and with DTCC. And so if you show that, then the banks naturally can use a solution which is already embedded in their infrastructure, or if they don't have it, can take that solution to connect the two things. And you asked about is it going to be relevant to still do collateral management in the world of immediate everything. Well, we think that you're going to have different forms of cash, different form of, for example, the stablecoin, different form of capital, different form of liabilities, different forms of assets. And we are probably not going to end up in a world where 100% of everything ends up being tokenized.
And so the value that we provide is the ability to do the optimization because it becomes more and more important to do so when you're competing with this immutable framework. But it enables the rest of the assets to be part of the story. And so we believe that as the banks embrace it, we will be very well positioned. And we are spending a bunch of time in making sure that we have effective digital asset-ready infrastructure, whether it's the one we just described or whether it's other parts of capital markets where we can provide the capital markets infrastructure for the digital asset players themselves or surveillance because all of those pieces become needed around.
We also have in our Calypso product some digital assets ready parts of the framework so that the players are able to use our technology to build what they want to run this digital space.
Got it. Understood. Okay. Another area of innovation has been around 24-hour trading, and Nasdaq aims to launch a 24-hour trading on Nasdaq markets in, I think, second half of 2026, if I'm not mistaken, so really kind of looking to broaden the global investor access. I think Asia in particular is a focus there for you guys. How are these plans progressing? Is that still sort of the timeline, and maybe you can help us frame potential revenue uplift both on the trading side, but also knock-on effect on data and connectivity that that might have on your franchise.
Yeah. So yes, second half of 2026. So first of all, there needs to be the approval so that we can all go forward. Then there is some technology uplift for us and, for example, DTCC and others that needs to happen. But all of that should be able to happen between now and the second half of 2026. Once it starts, I will say the first most meaningful part is probably the amount of trading that changes. I think that will be gradual. Although if we are able to now extend the U.S. capital market to be in the daylight of investors all over the world, that continues to increase the relevance of this wonderful market that has that depth, integrity, liquidity that we talked about.
So we are seeing actually one of the first impacts of it is the rest of the world preparing for it and buying data. And that's starting to happen now. You have seen some good results from our data business. And 24/5 is one of the supportive trends because we have a very high-quality, very differentiated data offering that can serve them so that they can be ready to trade in their hours in the U.S. market. So that's one of the elements. But then over time, and especially now when you combine that with the fact that you haven't broken the liquidity pool, you've got the tokenization, you start really seeing the potential for additional opportunities for the trading businesses over time.
Yeah. That's great. Now we'll stay tuned for that. Okay. Let's turn to page to a couple of other businesses. I'd love to talk to you about FinTech and Capital Markets Tech. We could probably combine them, but if you would like to break it up, we could do that as well. Despite some of the headwinds from slower sales cycles, really in the beginning of the year, there was a Integration Day disruption. Implementation revenues early in the year created some tough comps dynamics as well for really both of these businesses. But the reality, it's still growing 9%-10% year to date. So really nice results. Maybe unpack the sources of growth between new sales and pricing increases because I do think price was part of that growth.
More importantly, what are some of the leading indicators on how we should think about 2026 revenue outlook for both of them?
Yeah. So if I go back to our revenue formula, I will say in those two businesses, we certainly have some pricing impacts, but it's a lot of upsells and then some new clients that generates the growth formula. So as a general statement. So if you look at it now in more detail, in Capital Markets Tech, we had, first of all, Trade Management Services, which did have some pricing, which also had an increase in volume because we had a larger data center and more power that came online. And in Market Tech, we also had several new clients and upsells that contributed to that. And then Calypso, we had, I believe, 39 upsells and four new clients. So quite a lot and also a contribution from an upfront as part of this is like the third quarter. So a little bit of everything really.
And that was a little bit the theme of my first answer, which was, I'm going to give you some examples, but what's working is that a lot of things are working. And that's very reassuring as a CFO. When you look at it for Reg Tech, you also have, and we talked about it through the digital assets conversation, but our main business and also GenAI surveillance has really been refreshed and doing very well this year with, I mentioned now a new GenAI contribution to the platform as well as the adaptation of the offering across different asset classes and geographies. So that has done very well. AxiomSL, whereas there was at the beginning of the year, I will say the little bit of like pause for a second, we have seen great continued execution and momentum.
Now we are seeing signs from the government that they are going back into not full deregulation, but smart regulation. We do expect that there will be a Basel III End game probably at some point in the beginning of the year. Any type of clarity as we got, for example, for SLR or what enables our clients to do more with us. We've been also able as cross-sell to go down market with the AxiomSL offering as well as to sign, like we announced in the third quarter, a very large international client, which took a cloud solution. That's a showcase of the type of mandate that we're able to secure for that offering.
I gotcha. Yeah. No, I guess a change in regulation either direction probably prompts more agreement.
Exactly. Any change is change.
Yeah. I hear you. All right. Any financial crime, Verafin, that was one of the points you made in the beginning of our conversation as far as businesses that are showing lots of momentum into 2026. You've clearly made very good progress there going up market to tier one, tier two banks, I think with more than 3X more kind of enterprise signings year to date versus 2024. So really good momentum. Help us see, walk us through how that sort of translates into revenue momentum into next year. And then maybe you could also speak to the pipeline broadly along with the partnership with BioCatch that you announced, which could further accelerate things.
Yeah. So when we look at it, we have the three tenets that I mentioned. So the first one is you've got those 2,700 small and medium-sized banks that use us as their platform. And those are the core. We call it core. And those core banks have continued to drive the net retention that we have, which has been 111, 112, but very strong net retention, which really shows you a good and sticky pricing and upsell go very much together. And when I talked about the Copilot, for example, we didn't charge separately for it, but to be able to drive that type of net retention, you need to have a lot of innovation that you provide to your clients. Then you add to that now what we discussed as the agentic workers as well as BioCatch, which BioCatch is they look at your device behavior.
So the way you hold your iPhone, do you bring it to your ear to take a wire instruction if it's flawed? Do you type with the left hand, but you were righty? All of those different 3,000 behaviors end up being analyzed. And if you combine this in the moment, behavioral science with our data on 2,700 banks that represents over $10 trillion of total assets, you end up having extraordinarily good information to make the right decision to prevent the fraud. So not surprisingly, 2,700 banks are quite interested in A, what we have to start with, and B, being able to see in the same workflow now just behavioral data without having to have a different system because you're dealing with real-time information. So you need it in the workflow. And that's the partnership that we were able to secure with BioCatch.
So you've got this first engine, which is driving the current activity and which has good areas of continued persistent growth. Then you have the 3X that you just mentioned, which is enterprises signing, including Goldman Sachs. Thank you very much. And we do appreciate the ability to use the name because it's a good one. So we had three times the number of deals in enterprise for financial crime management year to date than we had in all of last year. So acceleration clearly of the momentum with great names and other great names that we don't have the authorization to share. And initially, the first leg in the time to value, which is about 9-12 months, you first see professional services revenue. So that doesn't count in your ARR. It counts in your total revenue. And that starts to accelerate a bit.
And then at some point, you get to the end of the nine-to-12 months and you're fully implemented and you're now into the subscription revenue, which is also the ARR. That's going to be the pattern. In the meanwhile, we also have a pipeline of other ones that we're continuing to bring to market. The third leg international is just starting, but we have a POC, which is successful. Now we need to translate that into our first contract in Europe. Then we get to that time to value and the same story as I just mentioned for enterprise. It's just starting. BioCatch can also be helpful. We have some joint marketing efforts that have started in some geographies.
But we really see that those three legs of the SMBs, the enterprise, and then international supplemented by the partnerships that we've put in place and GenAI really give us a good breadth for our growth.
Yeah. It sounds like it's, yeah, progressing really nicely. So I'm going a little bit of a reverse order here. So I want to talk about Index, which is actually, I think it was one of the first kind of things you started with when you talked about 2026. So also lots of nice momentum. The thing that stood out to us is 93 new launches year to date and really growing the proportion of inflows from non-NDX products. That's been important. So how much of the index revenue base is non-NDX today? I don't know if you can help us frame that a bit. And where do you see, I guess, the evolution of that non-core part of the business evolving to over the next few years?
Yeah. So I'll give you some data. So first of all, to calibrate, this is now about, call it $800 million in revenue, $800 billion in ETP AUM. And we've greatly, greatly diversified from the time when it was not to say just the Q because the Q is super, super important, the Triple Qs. But we now have a full suite of products. Of the $91 billion of LTM inflows, $17 billion last quarter, we had 38% that were in non-NDX products. So that's actually really a good proportion. We also have now about $150 billion international. I'm hitting on the legs of growth. And that $150 billion was growing, I would say, even higher than the core. So we've been very satisfied to be able to progress that from very little to $150 billion over time.
And then, institutional. When you hear us talking about our products, last quarter we had seven institutional out of 27. And you had also seven, I believe, the quarter before. And so that enables us to capture really a different distribution. And so overall, this has been a business where we told you at Investor Day two years ago, we've got those three avenues of growth. And we are executing, I would say, methodically in each of them. And that's driving what has been tremendous growth and tremendous growth that has been really alpha generated in a supportive beta environment, but more than half is alpha every single quarter this year.
Yeah. No, that's great. Okay. Pivoting a little bit to some of the cyclical things. One of the things we've talked a bunch about over the course of the last two days is obviously a much healthier IPO environment. You guys probably have a couple of things to say about that, but talk to us a little bit about what that looks like, what your pipelines look like. Obviously, not all of that translates into revenues immediately, but hopefully we sort of turn the corner on the pace of growth and your listings business in general. So what does that kind of outlook look like for you for 2026?
Sure, so we've had a good year so far, really the most productive year since 2021 and more to come. More to come this year and more to come next year, and we see a level of engagement, and of course, you are all well positioned to have a view on that. That is persistent. We've seen that there is a good level of execution that has met, I would say, the sell and the buy in those. We feel that we're very well positioned. We have a very strong pipeline, and there are some very large deals which have been, I would say, on the sidelines for a long time, which are now thinking that 2026 could be the one.
Got it. Great. All right. A couple of minutes on the clock. I would love to get your perspective on capital management. So a little more CFO-related questions as well here. The leveraging has been a really important part of the story. You guys have done a great job with that. I think you're basically at your target of around three times. So nice progress there. What are your expectations for share repurchases now that you probably are close to, if not, where you want to be from a leverage perspective? Buybacks over the next kind of 12-18 months, how are you thinking about the capital allocation generally?
Yeah. So what you've heard from us is a focus on organic growth, but also very strong free cash flow stories. So very part of the Rule of 60 and of the operating leverage that we have. And that translates into our free cash flow being above 100%, 110% last quarter. And that's about $2 billion of free cash flow after we have fully funded our very strong level of organic growth. And so now what do we do with that? Start with a progressive dividend. We've been very predictable in that progressive dividend. We've always done the repurchases associated with the employee dilution. You've seen us doing more than that.
Whether it's the ASR that we did in the fourth quarter announced in the last 10-Q, whether it is some debt tenders that we were also able to do beyond the maturities that we had seen, we've been able to really do opportunistically a little bit of all. In terms of beyond that, we certainly would look at bolt-ons to the extent that it made sense in a build versus buy situation.
Got it. Okay. Well, I think we're at time, so I think we'll leave it there. Sarah, thank you so much. Really appreciate you making the time to be with us today.
Excellent.