I would say the foundation is very strong and remains consistent with what we expected.
Operator: Thank you. And I show our next question comes from the line of Dan Fannon from Jefferies. Please go ahead.
Dan Fannon: Thanks. Good morning. Was hoping to expand upon that a little bit and maybe incorporate pricing in terms of what pricing contributed to revenue growth and/or ARR growth in 2023 and how you think about that for the Adenza business prospectively?
Adena Friedman: Yeah. So actually, I mean, we’re not going to get very specific on that particular year. But as a general dynamic, when we look at ARR growth, we basically attribute about half the ARR growth to upsells actually. And we upsold a lot of clients and I can’t remember the exact number, but we upsold over 100, almost 150 clients, I think or 120 clients in 2023. And then the other half comes from a combination of pricing increases and new bookings. We don’t break that out in terms of that half. But I would just say it is a combination of both. And the way that it works is, obviously, we add a lot of value across the products as we go through the year. And so as we go into both annualized increases that are contractually stated but also renewal cycles, we definitely show that the value of what we’re providing to them corresponds with an increase and/or their assets are increasing.
And therefore, they’re using this across a larger part of their business and that also warrants an increase. But those are — that dynamic is consistent.
Dan Fannon: Understood. And then just as a follow-up, based on, I think, some of the factors that were mentioned for listings, revenue in fourth quarter, as you think about the first half of this year and/or the full year with the roll-off of initial fees from prior years plus a hopeful recovery and new listings, how should we think about the revenue dynamics here in 2024?
Adena Friedman: Yeah, sure. Well, just by the way, just to be very precise, we had 142 upsells, including three cross-sells in Adenza in 2023. I just wanted to make sure we get the facts out there. But in terms of the listings dynamics, it definitely has been a more challenging environment listings. And as you know, as you point out, the amortization of the initial listing fees is an important dynamic within the listings revenues. It benefits — it means when we have a really strong year of listings, like we had in 2020 and 2021, we don’t recognize all the initial listing fees that year, it kind of gives us a lift in the following years because those fees are amortized over two to four years, depending on the size of the listing.
But then it means that when we have two more challenging years, it takes time for that to also filter through. And so we will have kind of residual impact of these lower years in 2024 and 2025 as the initial listing fees from the higher years roll off and we don’t have, as you’ve noticed, kind of a net reduction in listings in 2023. So we would expect that 2024 will be a challenging year for listings. Within the data and listings business, though, we basically are saying that it’s a low to mid-single digit grower, and we would anticipate that we can still achieve that, even with the more muted listing revenue that we would expect in 2024.
Operator: Thank you. And I show our next question comes from the line of Kyle Voigt from KBW. Please go ahead.
Kyle Voigt: Hi, good morning. I mean, maybe first question on sales cycles. You noted that you saw early signs of normalization of sales cycles for your IR and asset owner solutions. Can you speak a bit more about those early signs and give some examples? And in terms of what that means for revenue growth, should we think about the Workflow & Insights organic growth potentially being near a floor type level at 5% organic in the fourth quarter and gradually improving from here or any other commentary you could provide in terms of the timing and what that improvement means around the sales cycles?
Adena Friedman: Sure. So all of the solutions within Workflow & Insights are SaaS solutions. So how you end the year really determines a lot about the following year. And so we definitely saw a more challenging environment with corporates last year. The listing environment was more muted, but also they were just not as focused on investing across IR in a more challenging market backdrop. That improved in the fourth quarter. And so we did start to have a more, I would say, more normalized environment for conversations and signings of corporate clients for our IR solutions in the fourth quarter, but it was against the backdrop of a harder year overall. So it will take time for that improved environment to actually flow through and show up in the actual SaaS revenues because we obviously have to continue to see that and it will kind of build on itself.
But I would expect that 2024 will continue to kind of have some overhang from the weaker environment in ‘23, even with a more normalized sales environment. With analytics, it’s actually what’s interesting, our overall analytics growth was quite strong in the fourth quarter at 9%. And I think that, that really reflects demand for our data across the buy side and the analytic solutions we have that serve the buy side. But our asset owner solutions, this is a very specific software capability that we offer to endowments and pensions and others. That actually did have an uptick in demand and signing in the fourth quarter, but it was an overall difficult year. So that again, I think will create a headwind as we go through 2024 with the hope that we can start to show some pick-up as we go through the year.
Kyle Voigt: Understood. And maybe a follow up on Adenza. You mentioned the strong cloud uptake. I guess I’m not trying to front run the Investor Day, but can you just remind us what the cloud adoption will mean with respect to EBITDA margins over the long term, at least directionally? And given the length of these contracts and given the level of uptake in cloud that you’re seeing on renewals, is there a rough timeframe as to how quickly that cloud migration might happen over the next few years?
Adena Friedman: I would say we will provide at least more color on that in Investor Day. But if we think about it, I think, Sarah, it’s like 14% of overall revenue?
Sarah Youngwood: 14% of revenue is currently cloud and [50%] (ph) of new ACV bookings.
Adena Friedman: And then in ARR, it’s 21%?
Sarah Youngwood: 21%.
Adena Friedman: Yeah, 21% of ARR is cloud. So we have a lot of runway here. So as we renew clients, moving them into the cloud modules, as we sign new clients, sign them for new modules. But recognizing that we can sign a client just on a new module in cloud, like it doesn’t have to be that they’re signing for Calypso and they’re adding new functionality, just that new functionality we can deliver in cloud. That’s how flexible the platform is. They don’t have to kind of redo the whole platform implementation on cloud. But that also means that as we work with clients on renewals and changes, is they’re going to have different timelines for how they want to bring that cloud capabilities in. Some banks are marching very fast into cloud and they have like actually top down mandates to move to cloud and that can obviously be a huge catalyst for us.
But other banks are marching quite slowly towards it. So we want to be flexible. We expect this to be, as we said, very much a multi-year transition, going from 21% of ARR and growing and growing. But I have to say, it will be a slow moving train. In terms of the economics, it is both an opportunity for us to be a true managed service provider, which gives us more revenue opportunity, and also provide it with a very nice margin for both them and us. So that’s an opportunity for uplift, but again, a slow moving train. So we’ll want to make sure that we give you a little more color on that at Investor Day.
