管理層發言
Good day, and thank you for standing by. Welcome to Nasdaq's Second Quarter 2026 Results Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Ato Garrett, Senior Vice President and Investor Relations Officer. Please go ahead.
Good morning, everyone, and thank you for joining us today to discuss Nasdaq's Second Quarter 2026 Financial Results. On the line are Adena Friedman, our Chair and Chief Executive Officer; Sarah Youngwood, our Chief Financial Officer; and other members of the management team. After our prepared remarks, we will open the line for Q&A. The press release and earnings presentation accompanying this call can be found on our Investor Relations website. I would like to remind you that we will be making forward-looking statements on this call that involve risks. A summary of these risks is contained in our press release and in a more complete description in our annual report on Form 10-K. We will discuss our financial performance on a non-GAAP basis excluding the impact of acquisitions and divestitures, the impact of changes in FX and a $6 million one-time benefit to Index revenue related to a contract modification. Definition and reconciliations of U.S. GAAP to non-GAAP plus adjustments can be found in our earnings presentation as well as in a file located in the financial sections of our Investor Relations website at ir.nasdaq.com. And with that, I'll now turn the call over to Adena.
Thank you, Ato, and good morning, everyone. Today, I will start with a review of our second quarter financial results, and we'll then review the operating performance across our divisions. I will then hand the call over to Sarah to walk through the financial results in more detail. In the second quarter, Nasdaq delivered outstanding growth across each of our divisions, underpinned by our leadership in driving the transformation of the financial system and fueled by the continued demand for leading market infrastructure and mission-critical technology. Our leadership translated into a series of historic milestones this quarter. In our Index business, assets under management surpassed $1 trillion for the first time in our history, and we had our largest quarterly net inflows ever. Nasdaq Verafin crossed $13 trillion in combined assets across more than 2,800 financial institutions that rely on our platform to fight financial crime. We set new records in notional value traded during both the June Triple Witching and the Russell reconstitution. We welcomed SpaceX, the largest IPO in history, and are proud to have become the largest exchange in the world by market capitalization of our listed companies. We continue to operate in a constructive U.S. economic environment, supported by resilient corporate earnings, ongoing investment in AI and digital infrastructure, and healthy consumer spending. Within the capital markets industry, we're working constructively with regulators who are seeking to encourage innovation, including always-on markets and tokenization of assets. These emerging innovations have the potential to become durable market advancements that meaningfully expand investor access across the globe when paired with appropriate investor protections as well as with structures that drive institutional investor demand alongside that of retail investors. We look forward to continuing our efforts to engage regulators and legislators to define the future of markets. Now I'd like to turn to our results. In the second quarter, we delivered $1.5 billion in net revenue, up 15% and solutions revenue of $1.2 billion, up 17%. Our overall annualized recurring revenue, or ARR, grew 12% year-over-year to $3.3 billion. Expenses were $641 million, up 10%, and we delivered 25% diluted EPS growth, driven by 19% growth in operating income and strong capital returns. Within our divisions, Capital Access Platforms generated 18% revenue and 8% ARR growth. Financial Technology delivered 15% revenue growth and 16% ARR growth. And Market Services delivered 11% net revenue growth. These results reflect our expand, evolve and transform framework in action. Throughout the quarter, we deepened our client relationships through our One Nasdaq strategy, launched innovative products while enhancing existing solutions, and invested in strategic opportunities that will drive our next phase of growth. Now turning to the divisional results. I will start with Capital Access Platforms where I will first discuss Data and Listings. Our U.S. listings franchise delivered the strongest first half in U.S. exchange history with $111 billion in operating company proceeds raised. Our performance was underpinned by the historic IPO of SpaceX back on June 12, raising $86 billion, marking the largest IPO in history. We were also proud to dual list SpaceX on Nasdaq Texas, the region's premier listing venue. Other landmark listings in the second quarter included Cerebras, the largest semiconductor IPO of all time; Quantinuum, the largest pure-play quantum IPO of all time; and Parabilis Medicines, the largest biotech IPO of all time. In total, for the quarter, we welcomed 26 new operating companies raising $106 billion in proceeds, including 7 of the top 10 IPOs. Earlier this month, we also welcomed SK hynix, which raised $27 billion, the largest ADR listing in U.S. capital markets history. The IPO environment is robust, and we are in a strong position to capitalize as new companies look to join the public markets in the second half of the year. Nasdaq powers the innovation economy, connecting leaders from around the world with capital that turns their ambitions into reality. The breadth and significance of the companies that list with us this quarter is a meaningful testament to that pillar of our strategy. Turning to our data business. We delivered strong growth driven by new bookings and increased usage. This includes a 34% year-over-year increase in the number of enterprise licenses across multiple geographies. The growing adoption of AI and rising demand from digital asset platforms continues to accelerate interest in our data solutions. Looking ahead, we're excited to support the transition to always-on trading with the launch of unique integrated data sets that will expand usage of Nasdaq's proprietary data among investors worldwide. Our Index franchise set new inflow records with $51 billion in net inflows for the quarter and $109 billion in net inflows over the last 12 months. Our quarter-end and average ETP AUM reached new milestones and exceeded $1 trillion for the first time ever. Product innovation remains a key driver of growth in our Index business with 38% of the trailing 12-month net inflows driven by products launched over the last 5 years and 22% driven by products launched over the last 3 years. We launched 34 new products in the quarter, including 11 insurance products, demonstrating the breadth of our innovation pipeline. We also continued to expand our global reach. Fifty percent of all new products introduced this quarter were launched outside the United States. We're pleased to introduce expanded access to the Nasdaq-100 with the recent launches of BlackRock's IQQ and State Street's QNDX ETFs in the United States. We also continued to grow our long-standing relationship with Invesco, expanding global investor access to QQQ ETFs, which we cross-listed in Japan in the second quarter. Turning to Workflow and Insights. Revenue grew 5% with continued momentum in Analytics. In Corporate Solutions, we continue to operate in a challenging environment. However, clients remain highly engaged with our AI-enabled capabilities with 65% of Boardvantage users and 79% of IR Insight clients leveraging our AI tools. Within Analytics, we delivered double-digit revenue growth from bookings and a higher retention rate in both eVestment and Data Link. Growth in eVestment has been driven in part by AI adoption. More than one quarter of new bookings to date are associated with AI use cases. We also continue to expand the reach of eVestment's data assets, which now include almost 91,000 private funds. Within Data Link, we see sustained demand for our unique data assets. This quarter, we are pleased to introduce the Data Link Model Context Protocol, or MCP, which will deliver frictionless client connectivity to power agentic workflows. This capability makes it easier for clients to integrate Nasdaq's trusted data, including our market data directly into AI-driven applications, enhancing the value and reach of our data assets across the AI ecosystem. Turning to Financial Technology, we achieved an outstanding quarter, delivering revenue growth of 15%. The performance was underpinned by strong engagement across our clients for solutions that address market modernization, the transition to always-on trading and the evolving regulatory landscape. Our sales cycles, our contract term lengths and our bookings mix between existing and new clients have remained consistent, reflecting the durable nature of our mission-critical solutions. In the quarter, we signed 58 new clients, 7 cross-sells and 107 upsells, driving 16% ARR growth. In Financial Crime Management Technology, Nasdaq Verafin delivered 22% revenue growth driven by significant expansions across key client segments. Our product suite now serves more than 2,800 clients, representing over $13 trillion in collective assets. During the quarter, we signed 47 new SMB clients and continue to see strong momentum in the enterprise clientele with two expansions, two renewals and two cross-sells. Early in the third quarter, we signed an additional enterprise expansion and a cross-sell totaling 11 enterprise signings so far in 2026, which already exceeds the total number of signings we had in all of 2025. Nasdaq Verafin continues to accelerate AI innovation in its business and across its platform. Our agentic AI workforce is now used by 750 clients. In the second quarter, we announced an expansion of the workforce, including two new agentic workers, which we've moved into beta, one for AML structuring alerts and the second for ACH fraud alert triage. The new role-based workers enable end-to-end automation of financial crime workloads from fraud and AML alert reviews to investigations and reporting. We also plan to introduce new auto dispositioning capabilities in Q3 and flexible deployment options that extend our AI solutions across third-party systems by the end of the year. Verafin's Agentic AI Workforce expansion reflects our broader AI-first development approach, which is transforming every stage of the product development life cycle, from design and development to testing and deployment. This enables us to increase innovation velocity, expand our product roadmap and bring new capabilities to clients faster than ever before. Regulatory Technology delivered sustained growth, driven by significant expansions to always-on markets and infrastructure modernization. Overall, we signed 9 new clients, including 2 cross-sells and 63 upsells. In AxiomSL, we deepened relationships with existing clients while expanding our global footprint with continued strength in our cloud bookings. During the quarter, a U.S. bank expanded its footprint with AxiomSL as the client grew through acquisition and faced more significant regulatory requirements. Additionally, a top 4 Australian bank expanded their relationship with us to leverage our cloud-enabled regulatory reporting solution, reinforcing the global demand for our platform. In Surveillance, we delivered strong growth while experiencing significant demand from clients expanding into new markets, including energy and digital assets. This demand included a significant renewal and expansion with a global broker-dealer as well as a renewal with a key global financial institution. We signed 3 upsells for our cross-product surveillance capability, which we launched earlier this year. The new solution enables our clients to detect complex market abuse tactics across multiple markets and asset classes, highlighting the power of our new signals-based detection. We also secured a Tier 1 client for our newest AI solutions, Calibration Copilot and GenAI news copilot in July, reflecting growing demand for AI-powered workflows and positioning us for broader adoption over time. Capital Markets Technology continued to deliver strong performance, highlighted by significant new clients and excellent revenue growth in Trade Management Services. In the quarter, we signed 7 new clients, including 3 cross-sells and 42 upsells. In Market Technology, we maintained momentum while advancing key infrastructure modernization initiatives. We made further progress in the rollout of our Eqlipse product suite with 2 existing clients committing to the migration of their market platforms to Eqlipse. We also completed 3 modernization programs, including going live with clearing for BYMA, the Argentina stock exchange; and with trading for Nuam, a regional market operator that integrates the Peru, Chile and Colombia stock exchanges. In Calypso, we signed several new clients that expand the reach of our products to new countries, institutions and asset classes including our first U.S. treasury clearing deals with two large financial institutions. Additionally, earlier this week, we announced a deal with the Georgian Financial Markets Treasury Association to modernize the country's treasury and financial markets infrastructure. As part of this deal, five leading commercial banks in the country of Georgia will adopt the Calypso platform with opportunities to onboard more banks over time. With this deal, Calypso now operates in more than 70 countries. Additionally, we piloted tokenized collateral trades on the Canton Network in July alongside two of the world's leading asset managers. Specifically, tokenized money market funds were successfully transmitted as collateral through Calypso, leveraging the Canton Network. Now turning to Market Services. The division delivered 11% organic net revenue growth against the backdrop of record industry volumes in U.S. options and U.S. cash equities. We also achieved record volumes for Index options, doubling year-over-year revenue for the fourth consecutive quarter. In European cash equities, we experienced higher industry volumes and delivered a 3 percentage point increase in lit market share, bringing us to 74%. On June 18, we achieved a record Triple Witching event recording $296 billion, the largest ever in notional value traded. That date also marked a record date for U.S. equity industry volumes with 34.6 billion shares traded on the day. The Russell reconstitution on June 26 set new records across the board, achieving our highest ever revenue, our highest ever share volume in the cross at 4.6 billion shares and a record notional value traded of $334 billion, more than triple the prior Russell rebalance record set last year. Looking ahead to near-term milestones. We remain on track for a projected launch of 23/5 trading on December 6, 2026. Additionally, we received SEC approval to list event options and remain on track for launch in the fourth quarter. Overall, our results demonstrate the strength of a business increasingly driven by recurring revenue from deeply integrated platforms and long-term growth trends that are still in the early innings, such as AI adoption and market modernization, including tokenization and always-on markets. Markets are evolving rapidly as new technologies, asset classes, market structures and resiliency requirements reshape the financial system. Nasdaq continues to be a leader in this transformation by building the trusted, resilient infrastructure that enables institutions and market operators to modernize responsibly to serve both institutional and retail investors. Our role is to help design a durable investor experience with the goal to increase investor access while also protecting investors and the broader financial system through the markets we operate and the technology we provide to other markets, our Index and Analytics products and our risk management solutions. Our competitive position reflects decades of investment in a deep client community, gold standard data, mission-critical technology platforms and exceptional technical talent. Together, these advantages have created powerful network effects across our ecosystem. AI is enabling us to strengthen these advantages by enhancing the pace and scope of product capabilities that we can deliver to our clientele. Looking ahead, we're energized not only by the strength of our performance but the breadth and depth of the dialogues we have with clients and the scale of the opportunity in front of us. With that, I'll turn the call over to Sarah to walk through the financial results in more detail.
Thank you, Adena, and good morning, everyone. In the second quarter of 2026, Nasdaq delivered exceptional results, headlined by Solutions revenue growth of 17%, including the second straight quarter of double-digit revenue growth in all three Financial Technology subdivisions. We had diluted EPS growth of 25%, exceeding $1 in quarterly EPS for the first time in the company's history. Let's start with quarterly results on Slide 11. We reported net revenue of $1.5 billion, up 15%, with Solutions revenue of $1.2 billion, up 17%. Operating expense was $641 million, up 10%, leading to an operating margin of 57% and an EBITDA margin of 60%, both up 2 percentage points over the prior year period. This resulted in net income of $605 million and diluted EPS of $1.07, up 25%. Slide 12 shows the drivers of our 15% net revenue growth for the quarter. We generated 11 percentage points of alpha, the second consecutive quarter of double-digit alpha growth, driven by new and existing clients and product innovation. Meanwhile, data factories contributed 4 percentage points of growth this quarter, driven by higher valuations in Nasdaq indices and higher derivatives volumes in Index and higher overall volumes in Market Services. Let's review divisional results, starting on Slide 14. In Capital Access Platforms, we delivered revenue of $621 million, up 18% with ARR growth of 8%. Data and Listings was up 9% for both revenue and ARR. Data revenue growth was strong and driven primarily by upsells, new sales and usage. Listings revenue benefited from the improving IPO environment and pricing increases, partially offset by delistings and lower amortization of prior period initial listing fees, which were marginally better than our expectations. Index revenue was up 35%, and ARR, which covers a very small portion of revenue, increased 8%. Revenue growth was primarily driven by record average ETP AUM surpassing $1 trillion in the second quarter, bolstered by record net inflows of $109 billion over the last 12 months, including a record $51 billion in the second quarter. Volume-based revenue also contributed to growth with record derivatives contract volumes up 33% in the quarter. Notably, volume growth outside of the U.S. was very similar to growth in the U.S., reflecting the strength of the product ecosystem in regions around the world, where perpetual-style derivatives are already available. The volume growth was partially offset by the continued mix shift in derivatives volumes from higher-priced E-mini contracts to lower-priced micro E-mini contracts. In Workflow and Insights, revenue was up 5% in the quarter, with ARR growth up 6%. The revenue increase was driven primarily by Analytics, mainly from eVestment and Data Link. Corporate Solutions revenue was essentially flat. Excluding the one-time revenue item related to a contract modification in our Index business, quarterly operating margin for the CAP division was 63%, up 4 percentage points versus the prior year period. Before we wrap on Capital Access Platforms, we are continuing to optimize our portfolio with two transactions. Earlier this week, we announced an agreement to sell Nasdaq Fund Secondaries to Nasdaq Private Market, where we remain an investor and strategic partner. This transaction brings together two highly complementary businesses and strongly positions Nasdaq Private Market to capitalize on the significant opportunity to provide secondary liquidity infrastructure for both private company shares and private fund interests. And today, we are announcing that we have entered into an agreement to acquire Dasseti, an AI-powered due diligence platform used by institutional asset allocators and managers across public and private markets. Dasseti will be integrated into Nasdaq eVestment to provide a seamless experience across eVestment's institutional network. On a pro forma basis for the last 12 months, these two transactions would have combined to result in a net increase in revenue of approximately $4 million to Nasdaq, and both companies are still early stage. We did not provide purchase or disposition prices for the transactions as neither of them is material. Moving to Financial Technology on Slide 15. Revenue was $539 million, up 15%, driven by double-digit growth across all three subdivisions. ARR growth was 16%. Our business continues to see strong demand across all FinTech subdivisions and high levels of client engagement. The division signed 58 new clients, 107 upsells and 7 cross-sells in the quarter, while sales continue to represent over 15% of the FinTech pipeline. Financial Crime Management Technology revenue grew 22% in the quarter with ARR growth of 17% and net revenue retention of 110%. We signed 47 new SMB clients in the second quarter, reflecting continued momentum in the SMB client cohort. In enterprise, we signed two cross-sells, two expansions and two renewals in the quarter as well as one additional cross-sell and an expansion early in the third quarter. Regulatory Technology delivered revenue growth of 13% and ARR growth of 14%, reflecting strong performance across both surveillance and AxiomSL. The subdivision delivered 9 new clients, including 3 cross-sells and 63 upsells in the quarter. Capital Markets Technology revenue grew 14% with an ARR growth of 17%. The subdivision delivered 7 new clients, including 3 cross-sells and 42 upsells. The quarter's strong performance reflects demand for data-centric services as well as a pricing increase in Trade Management Services and continued execution at Calypso, including a strategic long-term renewal with a large global bank. Performance in the quarter was partially offset by lower professional services revenue. As a note, Capital Markets Technology revenue growth in the third and fourth quarter of 2025 benefited from the contribution from Calypso upfront revenue, which will create a tougher comp for Capital Markets Technology in the upcoming two quarters. Financial Technology quarterly operating margin was 46%, in line with the prior year period. Turning to Market Services on Slide 16. We had record quarterly net revenue of $340 million, up 11%. Growth in the quarter was driven by record industry volumes across U.S. equities and U.S. options and strong volumes across European equities and fixed income. We also continued to deliver alpha as reflected in higher market share and higher capture in U.S. equities, Index options revenue more than doubling versus the prior year period for the fourth straight quarter, strong adoption of newly launched short-dated options products, and higher market share in European equities. This performance was partially offset by lower capture in U.S. options driven by a continued mix shift in the composition of order flow as new consolidators have entered our markets and lower U.S. tape plan revenue, primarily driven by lower audit revenue, following an industry-wide adjustment in the prior year period, which we had called out last year. Quarterly operating margin for this division was 64%, up 1 percentage point versus the prior year period. The financial system is undergoing one of its most significant periods of modernization in decades. The shift is visible across multiple dimensions in the move towards 23/5 trading, the adoption of tokenized assets, the use of AI across financial infrastructure and the development of new instruments, such as perpetual-style derivatives and prediction markets. This market evolution enables Nasdaq to expand its role across the financial ecosystem. Perpetual-style derivatives are the latest example of a potential product innovation being considered by U.S. regulators. Today, U.S. regulatory approval has been limited to instruments outside the scope of Nasdaq's U.S. markets. Should there be a consideration by the SEC and the CFTC to expand U.S. approval across equity products, including options and equity-linked Index products, even in an extreme case, we would still expect minimal crossover, representing less than 1% of our total revenue. Over time, however, such innovation to the extent they are durable can create opportunities for us as they expand market access and increase demand for trusted and resilient market infrastructure. Nasdaq thrives in an environment that enables responsible innovation while remaining focused on protecting investors. Moving to expense on Slide 17. We had operating expense of $641 million in the second quarter, an increase of 10%, driven by employee compensation reflecting the timing of our annual compensation cycle as well as incentive compensation driven by our strong revenue execution, increased marketing expense due to a strengthening IPO environment, investment in technology to support revenue and drive innovation and growth and severance costs. The second quarter operating margin was 57% and the EBITDA margin was 60%, both up 2 percentage points versus the prior year period. We are updating our non-GAAP expense guidance for the year to a range of $2.530 billion to $2.570 billion from $2.485 billion to $2.545 billion, with two primary drivers of the increase, higher employee compensation given the strong revenue performance we have experienced year-to-date and increased marketing expense due to a strengthening IPO environment with marketing expense having a larger effect within the quarter of the planned IPO. To note, in the third quarter of 2025, we collected a $5 million regulatory fine, which was recorded as a contra expense. As a result, we expect a tougher expense comparison in the upcoming quarter. We maintain our 2026 non-GAAP tax rate guidance of 22.5% to 24.5%. Turning to capital allocation on Slide 18. Nasdaq generated free cash flow of $477 million in the second quarter. Over the last 12 months, Nasdaq generated $2.2 billion in free cash flow at a conversion ratio of 97%. We paid a dividend of $0.31 per share or $174 million in the quarter, representing a 31% annualized payout ratio. During the quarter, we repurchased a total of 4.1 million shares of our common stock for $356 million. In combination with the dividend, Nasdaq returned over $530 million to shareholders in the second quarter. In the first half, we have repurchased $903 million compared to $616 million of repurchases in all of 2025. In July, we launched a $200 million to $250 million variable accelerated share repurchase plan, which will be completed in the third quarter. We finished the quarter with a gross leverage ratio of 2.6x driven by EBITDA growth and a net repayment of approximately $162 million of gross debt. In closing, Nasdaq delivered another quarter of excellent execution. Our results reflect the strength of our business model highlighted by broad-based revenue growth across all three divisions, expanding margins, rigorous capital allocation and mid-20s EPS growth. As we enter the second half of the year, we are extremely confident in our opportunity, and we are focused on executing on our ambitious strategic objectives to deliver long-term value for shareholders. With that, I will turn the call over for Q&A.
分析師問答
I show our first question comes from the line of Ashish Sabadra from RBC Capital Markets.
Really solid results. Adena, you mentioned several AI initiatives across all segments and significant client adoption of your AI solutions. How has your thinking evolved on AI monetization? Are you primarily focused on driving better sales momentum, retention and pricing power? Or do you also see opportunities to charge separately for AI capabilities? And then how do you envision AI monetization over the midterm?
Great. Thank you. We actually take an approach that's product by product and capability by capability. So in some cases, we are integrating the AI capabilities into the core product and we evaluate the pricing of that product over time based on the value we're providing to our clients. That would be the case for Calibration Copilot and some of the work we're doing in Boardvantage and IR Insight. But then we also have other capabilities where we are charging as a new module, and we are taking a freemium approach. For instance, in anti-financial crime, in Verafin and Surveillance, the GenAI news copilot within Surveillance and all of the digital workers within Verafin, we're offering a certain number of alerts for free. If clients want to have the ability to have an unlimited number of alerts that they're working through the digital workers, then they pay a subscription fee. It's basically an upsell. Our clients are definitely signing up for the upsell. We're in the process of contracting many clients for the upsell, but we also want to make sure we're driving usage because it's the best way for them to prove value to themselves and for us to prove that we can charge successfully for these capabilities. We're in the very early innings of monetizing our AI capabilities, but we're very encouraged by the way that clients are moving from free to a paid subscription. In terms of monetization overall, we're not providing any detailed guidance yet, but over time, we'll make sure that we continue to update you on the progress of our AI strategy.
And I show our next question comes from the line of Eli Abboud from Bank of America.
I was hoping to unpack the strong results in Trade Management Services. I think you flagged Trade Management Services as the strongest performer in your Capital Markets Tech business for a couple of quarters in a row now. To what extent are you seeing new trading firms come into your data center versus existing clients demanding more bandwidth? And how much of this do you think is tied to the use of generative AI in trading?
Sure. It is really coming from new and existing clients, and it is definitely demand for connectivity, power and the ability for them to drive their trading strategies. I would not say that it's primarily GenAI-driven. A lot of trading strategies are algorithmic AI, and that's been in the markets for a long time. But it's more driven by the fact that there's more trading and more strategies being deployed. Clients are looking at multi-asset class strategies and other approaches that drive usage of our connectivity services. We also had a pricing increase earlier this year that is flowing through the financials and benefiting us. One other thing to mention on the AI strategy is data. We have been intentional about making sure that our data is AI-ready to be integrated into AI workflows. That includes our investment data as well as our Data Link data, which includes our market data. By offering our data into these AI workflows, we are increasing demand for our data assets. That is all part of our AI strategy.
And I show our next question comes from the line of Alex Kramm from UBS.
I found it interesting that you mentioned perps proactively, I think, three times if I counted correctly on this call. So considering that you're pretty far away from that topic, although you've gotten caught up in this narrative a little bit, just wondering when you talk to regulators, how you think it's going to evolve, where you could potentially lend technology, offer some products yourself. And then maybe at the very least, are you getting some interest to maybe license the Nasdaq Index to some overseas perps providers? How do you feel about that in general?
All right. Thanks, Alex. Perpetuals are definitely a topic that has come up. We tried to address how we see the overlap with our existing business today from a trading perspective and what perpetual derivatives are and where they exist today. They are really outside the scope of the Nasdaq world today. If they were to come into the equities world, it would require joint regulatory approval from both the SEC and the CFTC, which is a different bar to pass. Even if they were to be approved in the equity space, we still see very little overlap with our existing products. The qualities of perpetuals are different than options and futures in our space. Perpetuals in the crypto ecosystem solve the ability for investors to trade on margin and provide an elegant way to short crypto assets. Those two things are already accessible in equities through options, which provide convexity of return and generally lower carrying costs. When we look at the opportunity for us, there are multiple angles. From a technology standpoint, we provide surveillance technology and trading technology relevant to firms or markets that might launch or trade perpetuals. Our market technology and surveillance technology are relevant, and risk management and other technologies that Calypso offers could also be relevant, as could regulatory reporting. We see it as an opportunity to expand our FinTech division. In terms of licensing the Nasdaq-100 or QQQ, those are conversations we would have with our partners, including CME and others, as we move forward.
And I show our next question comes from the line of Owen Lau from Clear Street.
Do you have more color on the roadmap of asset managers leveraging tokenized funds or assets as collateral? I think in the third quarter, you mentioned there are two large asset managers completed tokenized collateral trades on the Canton Network. I'm wondering how Calypso can monetize it incrementally and the pace of adoption there.
Yes. We want to make sure Calypso's collateral management capability, which is used by hundreds of firms, can facilitate the movement of collateral in tokenized form. We executed a proof of concept with two major asset managers that demonstrated a tokenized money market fund being put into the collateral network through Calypso and transferred using Canton. Essentially, it shows how we can turn Calypso from collateral management into a collateral network that handles tokenized movement. Over time, we would charge for that as a new module—an upsell that offers the ability to manage collateral movement in addition to collateral management. This is still early, but we are excited about being part of the tokenization effort with buy-side and sell-side participants going forward.
And I show our next question comes from the line of Patrick Moley from Piper Sandler.
Adena, I would love to get your thoughts on the IPO environment here. And then as you look out to the back half of 2027, how much of your IPO pipeline today is idiosyncratic megadeals versus what you would maybe view as a more durable broadening of the pipeline?
Sure. Actually, it really is a broadening of the pipeline. We're seeing a lot of great companies across themes. There are marquee listings like SpaceX, Cerebras, Parabilis and Quantinuum, and also many other sizable raises like SK hynix. The pipeline is broad across AI infrastructure and build-out—including power and components that drive compute capabilities—health care and biotech listings, defense-related companies and more consumer companies. It's becoming more broad-based, and we're very excited about that.
And I show our next question comes from the line of Alexander Blostein from Goldman Sachs.
I was hoping to zoom out and maybe talk about profitability in the business as a whole. Nasdaq has put out a couple of quarters of really good operating leverage now. I understand there are some low-hanging fruit and higher incremental margin tailwinds in certain areas like trading or Index. How do you think about margins as a whole over the next couple of years? Where do you think they can ultimately go?
Thank you, Alex. We've seen for the first half of this year very strong performance. You noted the gap we are creating between our revenue, especially in solutions, and operating expense. We've been consistent in funding our investments while pursuing efficiencies. We will continue to invest to be on the front foot in delivering additional return and opportunities to clients, and we will also pursue efficiencies, including leveraging GenAI over time.
And I show our next question comes from the line of Simon Clinch from Rothschild & Co.
Adena, with all the AI tools you're rolling out to your clients and the good uptick you're getting from clients, could you give us a sense of how rapidly and how sophisticated your clients are at the outset of using these products and how to think about the momentum in that usage? Is it something that's going to build over time, or are they coming at it with a fairly sophisticated approach already and getting stuck in straight away?
It's interesting. Clients are eager to take advantage of the automations because for them it's a direct return on investment and efficiency gains. We design the AI capabilities to be easy to adopt within products, so automating an investigation workflow or generating a report and letting users review and submit it is straightforward. Clients recognize these tools can save up to 80% of their time, so adoption is an easy sell. We also bring clients together—for example, we recently hosted 150 anti-financial crime clients to walk them through upcoming agentic workers. Instead of asking to pace adoption, they're asking for the capabilities and to help demonstrate clear ROI to their CFOs and CTOs so they can adopt faster. We're mindful of security and resiliency in how we deploy these tools, and clients perform diligence before adoption. So far, adoption has been smooth and enthusiastic.
And I show our next question comes from the line of Brian Bedell from Deutsche Bank.
Great to see the strong revenue progress across the solutions businesses. I wanted to talk about the markets business and the future of Reg NMS given the SEC proposals and evolving market structure. How do you view strengthening the NBBO, allowing exchanges to sub-penny price, for example? How would that interact with tokenizing securities trading alongside certificated form? And you said you're rolling your plan to start that in the first quarter of next year—could you talk about timing?
It's a big topic. Regarding Reg NMS and the order protection rule (OPR), it's been in place for 20 years. There are benefits, including resiliency from interconnected markets, but it has also contributed to fragmentation and limited certain kinds of innovation because it enforces price-time priority and constrains other models like price-size. Loosening OPR could allow more experimentation with market models to better serve client needs, but we must preserve the transparency and investor protections OPR provides. It's a significant body of work we will pursue with the SEC and clients. On tokenized equities, we have two projects. One is collaboration with DTCC on settlement of tokenized shares, which is post-trade. The other is working with Kraken to explore a model leveraging the Nasdaq token design with flow-through tokens for instantaneous settlement and conveying investor rights. We expect that work with Kraken to launch early next year, though Kraken is not exclusive and we can distribute that to other trading venues. Combined with 23/5 trading, this expands accessibility to equities and we see it as a net positive for us and the industry.
And I show our next question comes from the line of Dan Fannon from Jefferies.
I wanted to follow up on Verafin and the momentum in that business. Curious about progress outside the U.S. And then as you think about the medium-term target of mid-20s growth, what do you think is a reasonable time period to hit those numbers?
Outside the U.S., we continue to engage marquee clients in Europe and prove our solution through proofs of concept. Sales cycles are slower when entering new jurisdictions as large banks have internal processes and regulatory considerations, but we have proved value and expect to land and expand, though it takes time to build beachhead clients. On the medium-term outlook, recall many enterprise signings in the second half of last year take around a year to fully onboard and recognize recurring revenue, so benefits from those signings began to flow in the second half of this year. We also have 11 new signings so far this year, and upsells generally implement faster than new sales, which supports our medium-term underwrite for the business.
And I show our next question comes from the line of Michael Cyprys from Morgan Stanley.
I wanted to ask about Market Tech. How are you thinking about new and emerging opportunities for Market Tech in the world of DeFi where firms like Hyperliquid enable third-party builders and developers to deploy their own exchange and markets on their protocol? What's the opportunity for a Nasdaq chain and blockchain-native market tech offering?
We do not operate a Layer 1 and have not chosen to invest in one. We work with multiple Layer 1s and build for interoperability. We are a horizontal market operator and want to maximize accessibility to investors across Layer 1s. We have engaged more with centralized limit order book-style digital asset ecosystem players and provided surveillance for those participants. Native DeFi peer-to-peer venues are nascent and have structural differences that limit their current use case for us. Right now, we're focused on working with more established markets and new exchanges that take an established approach to digital asset market infrastructure.
And I show our next question comes from the line of Benjamin Budish from Barclays.
I was wondering if you could talk a little more about the strength you're seeing in the data sales side. What are you seeing in terms of customer types? You mentioned there are usage-based components—can you unpack how big that is? And you mentioned advantages to the data business from always-on markets. How do you see that as another catalyst and where Nasdaq may be uniquely positioned to benefit?
There are three trends driving demand for our data: AI use cases, digital assets and 23/5 trading. AI use cases include integration of our data into AI-driven applications—note we license data into applications rather than to core training models—and we have visibility and the ability to monitor usage. We launched the MCP protocol to smooth AI-driven workflow integration; there will be an upcharge for the MCP layer in addition to the data license fee. Second, digital assets and tokenized equities drive demand to integrate market data into new ecosystems. Third, 23/5 trading increases international demand for our data, particularly in Asia and increasingly in the Middle East and other regions preparing to trade U.S. equities in local hours. Retail brokers are signing up to make real-time data available to end users. All three trends are driving sales today.
And I show our next question comes from the line of Michael Cho from JPMorgan.
Sarah, quick modeling question. You called out some tough comps for Capital Markets Tech in the second half. Can you flesh that out? I recall some Calypso upfront contributions in 2025 and a price increase in Trade Management—how should we think about how these offset in the second half? And on Verafin, is the ARR uplift from the large deals signed late last year still yet to come?
Yes. To your last question, yes, those enterprise deals signed in the second half of last year generally take about 12 months to implement, so we expect the revenue recognition to flow as we onboard through the year. Regarding the tougher comps for Capital Markets Tech, in 3Q and 4Q of 2025 we had some Calypso upfront revenue which can be lumpy, and that creates a tougher year-over-year comparison. We've had very strong Calypso upfront in the first half of this year, but as you model, be mindful that the timing of upfront contribution creates phasing effects. The Trade Management Services pricing increase continues to accrue and benefit us going forward as it's an annual increase.
And I show our next question comes from the line of Alex Kramm from UBS.
Just one quick follow-up. Over the last few weeks, there's been more headlines around how AI is driving financial crime higher. To what degree are you hearing that from your clients as you engage with them around Verafin? Does what you offer today address these new types of financial crime and could we see uplift in demand?
We are hearing concerns from clients and have been focused on these issues. Deepfakes are improving and being used in romance scams and elder fraud, so we are enhancing the alerting engine. Leveraging GenAI lets us look through data in new ways and capture different signals. We're using AI to root out new forms of financial crime and to connect data across the Verafin consortia, which includes data from 2,800 financial institutions and processes roughly 1 to 1.5 billion transactions a week. Using AI to mine this data lets us identify emerging behaviors and patterns across the network. We're also developing cross-asset class capabilities in SMARTS that use signals-based detection rather than purely rules-based approaches, which helps detect more sophisticated criminal behavior in capital markets. It's a changing landscape and we will continue to evolve our tools to support clients.
And I show our last question in the queue comes from the line of Eli Abboud from Bank of America.
I wanted to dig into the impact of 24/7 trading on your FinTech businesses and the runway that's left there. How many of your clients are already taking the 24/7 version of your solution across Regulatory and Capital Markets Tech? And what does the ASV uplift look like when a client transitions to 24/7 trading?
We have a very small handful of clients using our 24/7 architecture. Eqlipse was built to support 24/7 markets. Some clients operate 23/7, some 24/5, and some with small maintenance windows. Only a few use it on a full 24/7 basis today. Moving mainstream markets to 24/7 is a major lift: the architecture must be replicated to operate without a maintenance window, and it's a fundamental architectural difference. That said, there's a growing pipeline of demand for moving to 24/5 and up to 24/7. We can deliver it and have delivered it; the key is working with clients on the investments required for them and their clients.
That concludes our Q&A session. At this time, I would like to turn the conference back over to Adena Friedman, President and CEO, for closing remarks.
Our second quarter results reflect the disciplined execution of our strategy and reinforce our role as a trusted transformation partner to the global financial system. I want to thank you all for joining today, and have a great day.
Thank you. This concludes today's conference call. Thank you for attending. You may all disconnect.