Adena Friedman: Yeah, thanks, Craig. Yeah, you’re right. So we have a great opportunity there, and we’ve been putting a lot of focus on that. It’s been a good collaboration between our index team and the options team. So what’s nice is we have all of that within Nasdaq. So together, they’re working on building a really good robust trading ecosystem for the NDX options platform, as well as building on an institutional demand for our index products, which then drives interest in hedging and other things that would then drive interest in the index, options. So it’s definitely taking — kind of taking hold. I think we had a really strong uptick in volumes in the index options year-over-year. It was like 80% increase and then a like 15% quarter-over-quarter increase in the volumes in the index options. So it’s definitely been a really great bright spot and we agree we’re just at the beginning of what we can achieve there.
Craig Siegenthaler: Thank you, Adena. And just for my follow-up, it’s on the comparison between ARR and revenues, given the growing focus you have on ARR. As you move into more subscription and [recurring] (ph) businesses, should we see more of a delta between these two metrics on a quarterly basis?
Adena Friedman: I would actually say that as we move more towards cloud there should be less of a delta but that’s a long transition. I think we have to recognize that for the AxiomSL, Calypso and Market Tech businesses, those are still primarily an on-prem delivered solution with transitions to cloud. Whereas for the Financial Crime Management business, it’s entirely cloud as well as [NTF] (ph) now, that’s a SaaS business. So the majority of those revenues, you’ll see more of the ARR looking closer to total revenue. So that delta, I would say, will persist for a while, but we are trying to give you enough transparency so that you can understand the difference and you understand the trends that are driving the differences. But when we look at our business, we say what’s the underlying health of our business, we are focusing on ARR. That to us — is a better reflection of the overall client demand as opposed to like individual deliveries and professional services.
Craig Siegenthaler: Thank you, Adena.
Operator: Thank you. And I show our next question comes from the line of Benjamin Budish from Barclays. Please go ahead.
Benjamin Budish: Hi, good morning. Thanks for taking the question. Just following up on that last question from Craig, is there anything you can share about sort of the upcoming pipeline in 2024 in terms of on-prem versus cloud implementations? Just I know you’re kind of guiding and talking about the business on an ARR basis, but just as we think about our models, is there anything specific we can think about quarter-by-quarter?
Adena Friedman: Yeah, quarter-by-quarter, I think we’re not going to provide that level of detail. I would say if we look over the last year and we kind of looked at Calypso and AxiomSL over the last year, I think it was around 40%, is that right? 40% new bookings.
Sarah Youngwood: Yeah, almost half.
Adena Friedman: Yeah, so almost half of the new bookings were cloud last year. I think that as we’re starting this year, we saw 50% of the new bookings for AxiomSL were cloud this year, with Calypso being lower, around 18%. But as we said before, it’s more of a timing issue. So we would hope that we would get around the same level over the course of the year, but we’re not able to provide you kind of quarter-by-quarter. I think, we just start giving you a little bit more overall color for the quarter in AxiomSL and Calypso just to help you model, but not to that level of precision.
Benjamin Budish: Got it. Understood. And then for my follow-up, I just wanted to ask on the IPO win rate, just Q1 looks a little bit lower than what you reported in the past, but is that sort of just a function of the quarter itself and based on the pipeline for the rest of the year do you have any expectations on should that sort of trend back upwards what are your thoughts there? Thank you.
Adena Friedman: Yeah sure — so I think every quarter, is a little bit of a different story and based on the nature of the companies are going public. But our overall view is that we have a great strong pipeline, we have a great platform, we’re very confident in our ability to keep our win rate high, and we’re really excited about the companies that are looking to go public in the next, hopefully in the next quarters. And also — I would also mention that over the last year, our win rate was 80%. So we have to look at it a little bit over a longer period of time. But we have 80 companies in the pipeline to go public on Nasdaq, and we’re really hopeful that they feel good about being able to tap the markets in the coming quarters.
Benjamin Budish: Got it. Thank you.
Operator: Thank you. And I show our next question comes from the line of Simon Clinch from Redburn Atlantic. Please go ahead.
Simon Clinch: Hi, everyone. Thanks for taking my question. I was wondering if you could — just going back to the cross-selling opportunities. At the Investor Day, you mentioned you’re starting to build an enterprise sales team. That’s something relatively new to the Nasdaq stories. I understand that. I was wondering if you could update us on how that’s progressing. You know, have you already built it? Is this now a fully functioning team and driving the cross-sells or is that momentum still to come now for [indiscernible]?
Adena Friedman: Yeah, actually — we had just had a meeting about it across the management committee last week where we talked about how we’re going to approach enterprise sales and making sure that we have — across Nasdaq, we have good connective tissue to make sure that we can deliver for the enterprises. And we’re doing a lot in blocking and tackling. So first is making sure we have kind of an enterprise sales organization. The second thing is we’re doing a lot in the data management of our client data to make sure we can look at our data — our client data across the franchise and be able to have line of sight across the franchise so that we can actually talk to the clients on an enterprise basis. And then in terms of the sales commissions to the way the enterprise sales team, works with the product sales teams.
We’ve designed a commission plan around that — that I think really helps on drive behaviors in alignment. So all of that’s actually just, that enterprise sales team is being built within FinTech, but the collaboration across the FinTech division, the Cap division of market services is really, really strong. And we hope to be able to demonstrate really good strength there going forward. That’s a big part of our ability to achieve the cross-sell target, but we definitely have made a lot of progress already.
Simon Clinch: Okay, that’s great. Thank you. And then I think just lastly, I was wondering if you could perhaps expand a little bit more on the very strong flows we’ve had in the index business and in particular interest outside of the Nasdaq 100 franchise. I mean, could you give us a little bit more detail about that and just have to think about the momentum and sustainability.
Adena Friedman: Yeah, so you’re right. We’ve given us — that at Investor Day that I think is worth mentioning. So about 70% of our revenue comes from the Nasdaq 100 franchise, but another 30% comes from other indices that we have in terms of innovative indexes around AI, cloud, cyber, as well as momentum and other factor indices that we have around the world. So it actually is a pretty diversified platform. And in the terms of the inflows, it’s pretty mixed, meaning that it’s coming from all of our index products, with probably strength coming in on some of the innovation indexes, the Nasdaq 100 as well, and on global distribution. So we’ve definitely been really focused on globalizing the distribution of our products and bringing in investment and inflows across the world.
So those are probably the ones that are getting the most inflows but it — isn’t just the Nasdaq 100. And what’s really interesting is — it’s been very consistent. Whether or not the markets are up or down, we’re seeing inflows. And so I think, that — that’s also showing that investors are kind of seeing through a quarter and reflecting on the future of the economy, and they want to be a part of that. So that’s what we’re seeing in terms of inflows.
Simon Clinch: Thank you so much, that’s great. Thanks.
Operator: Thank you. And I show next question comes from the line of Kyle Voigt from KBW. Please go ahead.
Kyle Voigt: Hi, good morning. Maybe just a couple of follow-ups. So first is a follow-up on Dan’s earlier question on the Workflow and Insights business. It still sounds like the analytics business is posting high-single digit, solid growth. I think the corporate solutions that likely implies kind of flattish and you [noted] (ph) the elongated sales cycles. I guess can you just talk about the average sales cycle for that business and kind of the lag time that you’d expect between when the IPO environment ramps and when you ultimately expect to see an acceleration in revenues in that Corporate Solutions business?
Adena Friedman: I think that the reason why we wanted to give you that level of disclosure this quarter is just to help you understand kind of how we see the year. I think that if the IPO environment ramps up, and that’s an if — and obviously it’s a when at some point, but in terms of looking at it within the year, if we see improvement there, we tend to have, I would say, probably an average kind of a six-month sales cycle would probably be a good average, around maybe four months to six months in terms of an average on sales cycle for clients. But then of course, they also have to understand that they need the product. So if they go public they start to recognize that they really want more intelligence about their investors.
They really want to make sure they have the right ESG reporting and they start to work with us more holistically kind of as they season. And then there, I would say maybe like, sometimes it can be very quick sales cycle, but we’ll say like four months to six months is a general view. So you’re talking about more going into 2025 to start to see momentum if we have a recovery in the IPO environment.
Kyle Voigt: That makes sense, thank you. Then just to follow up on kind of capital priorities, It sounds like over the near-term number one priority still remains deleveraging. I guess with — the Thoma Bravo unlock coming later this quarter can you just talk about any willingness to restart buybacks or start to deploy some capital towards buybacks this quarter? Should we really expect that to be 100% allocated towards deleveraging near-term?
Adena Friedman: Thanks, Kyle. So in terms of the capital prioritization, we’re super consistent with what we said at the Investor Day. We were really glad to be able to pay down the term loan this quarter and to end the quarter at 4.1 times. We are totally committed to all of the timelines that we have given at Investor Day. So the 9 months to 12 months ahead, you can consider that to be something that we will deliver and within that we’re keeping some flexibility to consider share repurchases if it makes sense and that would be in particular related to the employee issuance. So offsetting the issuance we think is important, but when we look at it comprehensively, we are very, very focused on the deleveraging in particular, because when you look at the EPS accretion dilution, given some of the higher debt costs that we can repay, even at our current stock price, it’s still a really attractive proposition to do that.
