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Nasdaq, inc (NASDAQ:NDAQ)
Q2 2021 Earnings Call
Jul 21, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and thank you for standing by. Welcome to the Nasdaq Second Quarter 2021 Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Ed Ditmire, Senior Vice President of Investor Relations. Please go ahead.

Ed Ditmire -- Vice President, Head of Investor Relations

Good morning, everyone, and thank you for joining us today to discuss Nasdaq's second quarter 2021 financial results. On the line are Adena Friedman, our CEO; Ann Dennison, our CFO; John Zecca, our Chief Legal and Regulatory Officer, and other members of the management team. After prepared remarks, we'll open up to Q&A.

The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SEC Regulation FD.

I'd like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and periodic reports filed with the SEC.

I will now turn the call over to Adena.

Adena T. Friedman -- President and Chief Executive Officer

Thank you, Ed, and good morning, everyone, and thank you for joining us. My remarks today will focus on Nasdaq's second quarter 2021 financial and business performance, as well as the progress we've made to drive forward along our strategic direction.

I would like to begin by acknowledging the Nasdaq team's deep commitment and delivering results for our clients, while creating sustainable value for all of our stakeholders. Nasdaq's mission reflects our focus on becoming the premier platform and ecosystem for the global capital markets and beyond with unmatched technology, insights, and markets expertise, and we made important progress during the second quarter. Our financial results demonstrate our businesses ability to capture opportunity in a unique economic environment, even as we continue to strengthen its position for long-term growth.

We see strong demand for many of our products and services as corporate issuers, institutional investors, banks, brokers, and marketplace operators, all navigate today's rapidly changing world. Our core foundational marketplace is benefited from an active capital market backdrop that saw record setting industry, US equity and options trading volumes in the first half of 2021. Our client-first model has also driven our ability to win the majority of new listings and one of the strongest periods of industry activity in years. Meanwhile, expanding demand from institutional owners for index strategies, as well as asset allocation and portfolio management tools from banks for modern anti-financial crime solutions and from corporates for ESG and investor relations solutions underpinned our performance in the Solutions segment businesses. Our performance in these businesses is also a testament to our client-centric approach and strategically aligned offerings as we invest in and grow new and innovative technology to meet that demand.

We also achieved other important milestones against our corporate journey of this quarter. First, Nasdaq completed the sale of our US Fixed Income business to Tradeweb Markets at the end of the second quarter. Second, we announced our strategic investment in Puro.earth, a leading carbon removal marketplace, along with the launch of our new ESG Data Hub, these solutions further expand the ways that we can partner with our clients to support their unique sustainability efforts. And third, we announced yesterday that we are starting an exciting next chapter for the Nasdaq Private Market as part of our partnership with the group of leading banks in the private market space. It highlights both the success of the Private Market platform we developed at Nasdaq, and the growing interest in developing a robust ecosystem for private company liquidity. All of these actions underscore our commitment to our strategy and allow us to reprioritize elements of our unique business model to advance our focus on the most impactful secular opportunities.

I will now turn to our financial results from the second quarter of 2021. Overall, Nasdaq delivered net revenues of $846 million, an increase of $147 million, or 21% from the prior-year period, driven by 18% organic revenue growth in our Solutions segments and 10% organic growth in our Market Services businesses. We continue to execute against key secular growth opportunities as illustrated by strong momentum in our institutional investor, analytics and anti-financial crime solutions businesses, as well as the broad-based growth in total Company ARR of $1.8 billion. This equated to an increase of 22%, compared to the prior-year period, reflecting both the acquisition of Verafin and a 12% increase in our existing ARR.

Turning now to specific segment highlights from the second quarter, I'll begin with our foundational marketplace and corporate businesses. Our Market Services segment saw net revenues of $312 million, a 13% increase from the prior-year period. Market Services transactional revenues, the sum of our cash equity, equity derivative and fixed income and commodities trading businesses increased by 27% in total in the second quarter of 2021, compared to the prior-year period, with the largest contributor of this being our equity derivatives revenues, where we experienced strong increases in US options industry volume. Nasdaq's options markets specifically traded $782 million of multiply listed options contracts, an increase of 28% year-over-year.

Driven by an active dynamic equities market, we have also seen increased levels of activity from companies seeking to tap the public market to raise capital, which has resulted in a 13% increase in the overall number of operating companies listed on the US on Nasdaq in the last 12 months. Specifically, we have 352 more operating companies listed on Nasdaq in the US than we did in June of 2020. The increase in our number of listed companies naturally contributes to higher industry volumes and contributes to higher trading on Nasdaq in particular since we have approximately two times higher market share in our own listed stocks than we have in stocks listed on other markets.

I would also like to highlight for a moment another record-breaking Nasdaq Closing Cross during the annual Russell US Indexes reconstitution, which occurred in late June. The Closing Cross successfully executed 2.3 billion shares of Nasdaq listed securities, representing approximately $81 billion in market value and occurred in under two seconds. This Closing Cross was 760 million shares larger than our second largest Closing Cross ever, which occurred in March of this year with the triple witch [Phonetic] exploration. I'm incredibly proud of our team as this milestone underscores our leadership and operating the industry's most robust and resilient market infrastructure.

Next, our Corporate Platforms segment delivered revenues of $154 million, a 22% increase year-over-year. The business continues to thrive with elevated levels of new listings since the market recovery in the second half of 2020.

In our Listings business, Nasdaq again led US exchanges for IPOs during the period, welcoming 135 IPOs that raised $31.7 billion, including 88 operating company IPOs and 47 SPAC IPOs. The Nasdaq Stock Market led US exchanges with a 78% total win rate on IPOs, as well as executing the largest direct listing ever, Coinbase. In addition to new listings, we also welcomed 10 switches from the second -- in the second quarter 2021, representing a combined $183 billion in market value, including Honeywell, a Dow 30 company. The total market value of all companies transferring to Nasdaq since 2016 now exceeds $1 trillion.

Meanwhile, our Nordic listing platform hosted 62 IPOs in the second quarter, bringing the total to 86 in the first half of 2021, contributing to an 11% year-over-year increase in the Nordic listed issuer base, compared to the prior year quarter.

Nasdaq is proud to be the exchange partner supporting companies throughout their corporate lifecycle with our commitment to providing issuers with an industry-leading market model and a full suite of investor relations, board engagement, and ESG solutions. Revenues in our IR & ESG Services increased $4 million, or 8% to $56 million in the second quarter, compared to the prior-year period. As we continue to see strong demand for our investor relations and advisory and ESG product offerings. The economic impacts of the pandemic, combined with the sudden and likely lasting this landscape of virtual or hybrid investor engagement, has increased corporates focus on investor relationships and has accelerated their professionalization of their ESG programs, both of which has intensified the demand for new data and tools to power their programs.

Now, let me take a minute to talk about the actions we've taken to advance the Nasdaq Private Market going forward. This week, we announced an agreement to contribute Nasdaq Private Market into a joint venture with Silicon Valley Bank, Citi, Goldman Sachs, and Morgan Stanley. This creates a new entity to build upon NPM success becoming the leading marketplace platform for issuer-led private company tender transactions. The partnership will enable increased investment in a broader set of capabilities designed to enhance NPM's position as the go-to marketplace for private company liquidity. Nasdaq Private Market will continue to expand from its foundation of facilitating private company tender programs to enhance and refine its buyside book building, auctions, investor block trades, and pre-direct listing continuous trading program. Additionally, the platform will provide end-to-end settlement, and through the new ownership structure, we'll create a unique and powerful distribution network serving private companies and institutional investors. Nasdaq's Market Technology business will be contracted to supply NPM with this as technology platform on a go-forward basis.

Nasdaq Private Markets talented team has made strong progress in the seven years since we established the business, as measured by the close relationships we've built with more than 250 leading private companies worldwide. And the more than $30 billion in transaction volume that they've executed for many of the world's largest private companies. This new entity will expand upon that success going forward. In the last 12 months, ended June 30, revenues for Nasdaq Private Market increased $30 million or approximately 200% over the prior-year period. Going forward with our partners, we expect to unlock significantly more value for our clients and shareholders by advancing the market for private company shares with a high integrity advanced platform that facilitates liquidity in new ways, and build on the momentum that we've developed over the past several years.

Now, let me turn to our Market Technology and Investment Intelligence segments. Our Market Technology segment delivered $117 million in revenues, a 39% increase year-over-year, including a 5% organic increase from our existing business and an additional $27 million contribution from Verafin. Revenues in the second quarter of 2021 also included a temporary $10 million purchase price adjustment on deferred revenue associated with the closing of the Verafin transaction.

In our Anti Financial Crime Technology business, revenues increased $29 million or 88% driven by the inclusion of revenues from our Verafin -- from Verafin, as well as the continued growth in surveillance solutions. With Verafin as part of Nasdaq for its first full quarter, we continue to find great opportunities working collaboratively with the Verafin team to open doors to new clients and expand their footprint. Verafin signed 36 new clients during the second quarter and we remain extremely pleased with the business and its growth potential as it achieves its mission of fighting financial crime.

In our Marketplace Infrastructure Technology business, revenues increased $4 million, or 8% in the second quarter of 2021, compared to the second quarter of 2020. New order intake for Market Technology hit a six-quarter high at $81 million, excluding Verafin. Technology -- Market Technology ARR increased 9% year-over-year also included -- excluding the impact of Verafin. If you include Verafin, Nasdaq Market Technology's ARR increased 61%.

Turning to our Investment Intelligence segment, we delivered net revenues of $263 million, up $50 million, or 23% from the prior-year period. Overall, assets under management in ETPs benchmarked to Nasdaq's Indexes totaled $415 billion at the end of the quarter, an increase of 53% from the prior-year period. We are pleased to expand our long-standing partnership with Invesco during the second quarter with the launch of two new thematic technology ETFs tracking the Nasdaq Biotech Index and the PHLX Semiconductor Sector Index. These two indexes are the longest-standing benchmarks for their respective sectors, and in the past year have increased in relevance for investors, given the recent pandemic-related events.

We also continue to see strong global interest in our index franchise, with 12 of 15 new license ETP launches in the second quarter occurring outside of the US. We are committed to bringing investment opportunities through our index partnerships and empower investors globally with access to diversified investment opportunities. For example, XP Inc., a technology-driven investment management platform in Brazil, launched one of the first locally listed Nasdaq-100 ETF offerings in Latin America during the second quarter, while Hashdex, also from Brazil, partnered with Nasdaq to launch the world's first ETF available in Brazil to investors utilizing the Nasdaq Crypto Index.

During the quarter, two ETP sponsors, BlackRock and Vanguard announced that they would be switching and consolidating their relationships with some index providers. And as a consequence, certain of their products would no longer be licensing Nasdaq indexes. While we're always disappointed to lose sponsors, the loss had a minimal financial impact, which Ann will touch on in her comments. And the continued expansion of our relationships with the broader sponsor universe, as well as the continued innovation and growth of the index product suite, gives us great cause for optimism going forward.

Turning next to our Analytics business, we delivered revenues of $50 million, a 14% increase from the prior-year period due to growth in eVestment and Solovis revenues from higher new sales and increased retention. Driven in part by the success of the enterprise license contracting initiative, which spreads usage of eVestments unique analytics to more users and more business areas of our client base.

Lastly, revenues in our Market Data business grow -- rose 5% as compared to the prior-year period to $106 million, driven primarily by expanding international demand for proprietary data products.

As our business, our clients and the broader markets begin to prepare to operate in a post-pandemic environment, we are excited to carry forward the strong momentum from the first half of 2021 and into the future. One increased area of focus for us is ESG, which we've seen growing interest from a range of clients in both the US and Europe. Nasdaq's position at the intersection of financial, corporate and regulatory communities, gives us a unique perspective on corporate sustainability. From this vantage point, we're actively engaging with clients to help them successfully navigate the complex and fast maturing ESG landscape. We were thrilled to have the opportunity in the second quarter to add Puro.earth marketplace for carbon removal solutions to help our corporate clients meet their emission reduction commitments. At the same time, as a public company ourselves, we engage with our employees and our communities to improve our own practices, performance and transparency on our own ESG journey. In that regard, I encourage our stakeholders to review our recently published an expanded Sustainability Report, which is available on our website.

As I wrap up, I want to highlight how each of our businesses has expanded the diversity and depth of their client base in recent years, which underpins the strength and resiliency of the Nasdaq platform as we move through each quarter. Our strong engine of talent and technology is allowing us to expand our position in the capital markets in ways that can capitalize on the powerful secular tailwinds in a post-pandemic period. We're leading Nasdaq into the second half of 2021 with incredible momentum and I look forward to updating all of you on our progress in the months to come.

And with that, I will turn it over to Ann to review our financial results in detail.

Ann Dennison -- Executive Vice President and Chief Financial Officer

Thank you, Adena, and good morning, everyone. My commentary will primarily focus on our non-GAAP results and all comparisons will be to the prior-year period, unless otherwise noted. Reconciliation of US GAAP to non-GAAP results can be found in our press release, as well as in a file located in the Financials section of our Investor Relations website at ir.nasdaq.com.

Before we review the financial comparisons and developments, I want to cover some reporting changes going forward related specifically to some of the strategic developments within the business portfolio that Adena mentioned previously. First, with regards to the Nasdaq Private Market, or NPM, as recently announced, we have contributed this business to a newly formed joint venture for which we will own a minority interest. As a result, we will no longer consolidate the results, instead we'll be recognizing our share of net income as a non-operating item consistent with how we treat other unconsolidated investees.

Second, with regards to both NPM and Nasdaq Fixed Income, or NFI, beginning in the third quarter of 2021 we will reclassify the revenue and operating expenses of these two businesses out of the Corporate Platforms, Market Services and Investment Intelligence segment results for all prior periods and move them into corporate items, so that the business results of each of these segments can be compared to prior periods on a like-for-like basis. On Slide 12, we provide a table previewing the reclassified operating segment results.

Now, I will start by reviewing second quarter revenue performance. The 21% increase in reported net revenue of $846 million is the result of organic growth of 15%, including 18 organic increase in the Solutions segments and a 10% organic increase in Market Services, a 4% positive impact from acquisitions and a 2% positive impact from changes in FX rates.

I will now review the quarterly highlights within each of our reporting segments as shown on pages 5 through 8 of the slide presentation. I will start with Investment Intelligence revenue, which increased $50 million, or 23%. Organic revenue growth totaled $47 million, or 22%, and there was a $3 million positive impact from changes in FX rates. Organic revenue growth during the period reflects very strong growth in our Index business, as well as strong contributions from both the Analytics and Market Data businesses. Annualized Recurring Revenue, or ARR, was $547 million, an increase of 11%, compared to the prior-year period. AUM in ETPs licensed to Nasdaq indices rose 53%, compared to the prior-year period to $415 billion, including $47 billion from net inflows and $113 billion net increase from market appreciation, partially offset by $17 billion in negative net impact related to an ETP sponsor switching its index provider.

The Investment Intelligence segment operating margin of 65% increased 3 percentage points, compared to the prior-year period. As Adena mentioned earlier, we will see an additional impact to AUM in the third quarter of 2021 related to previously announced ETP sponsor index switches. The total revenue impact of all of the 2021 switches announced to date is estimated to be approximately $3 million per quarter.

Market Technology revenue increased $33 million, or 39%. The increase reflects organic revenue growth of $4 million, or 5%, $27 million from the acquisition of Verafin and a $2 million positive impact from changes in FX rates. Excluding a temporary $10 million purchase price adjustment on deferred revenues associated with the Verafin transaction, Verafin revenues would have been $37 million. The organic revenue increase, which excludes revenue generated from Verafin during the first 12 months after the acquisition close, was driven primarily by higher support and licensing revenues and higher SaaS-based surveillance solutions revenues. ARR for Market Technology was $432 million in the second quarter of 2021, an increase of 9%, compared to the prior period, excluding the impact of Verafin. Including Verafin, Market Technology ARR increased 61% in the period. The Market Technology segment operating margin was 15% in the period. Market Technology expenses include a partial reversal of the reserve recorded in the fourth quarter of 2020 of approximately $6 million as we finalize client negotiations and updated our estimate of cost to service our client agreements.

Corporate Platforms revenues increased $28 million, or 22%. Organic revenue growth totaled $25 million, or 20%, and there was a $3 million impact from changes in FX rates. The organic revenue increase was primarily driven by higher US listings revenues due to the expansion in our listed issuer base together with an increase in IR advisory services and ESG product offering. Corporate Platforms ARR was $509 million and increased 16%, compared to the prior-year period. The Corporate Platforms segment operating margin of 42% increased 3 percentage points, compared to the prior-year period and it was driven by both the continued increase in the listed issuer base and strong activity on the Nasdaq Private Market.

Market Services net revenues increased $36 million, or 13%. The organic revenue increase was $28 million, or 10% and there was an $8 million impact from changes in FX rates. The organic increase during the period primarily reflects increases in equity derivatives and trade management services revenues. The segment operating margin of 65% increased 1 percentage point from the prior-year period, reflecting strong operating leverage on trading revenues.

Turning to pages 9 and 10 to review both expenses and 2021 guidance. Non-GAAP operating expenses increased $65 million to $392 million. The increase reflects a $24 million, or 7% organic increase, a $26 million increase from the impact of acquisitions, as well as a $15 million increase from the impact of changes in FX rates due to a weaker US dollar. The organic expense increase was two main drivers. First, higher variable performance linked compensation expense reflecting our outstanding revenue growth. And second, increased costs related to what has been a very active capital markets backdrop, including expenses related to increased trading capacity and marketing commitments supporting our listing clients.

We are narrowing our 2021 non-GAAP operating expense guidance to a range of $1.59 billion to $1.62 billion to reflect that our strong and broad-based organic revenue growth in the first half of 2021 has impacted variable expenses like performance-based compensations and marketing commitments. As we look forward to the remainder of the year, if performance continues to be strong in relation to our medium-term growth objectives. We would, as we said last quarter, expect to come in near the high-end of this updated expense guidance range.

Moving to operating profit and margins, non-GAAP operating income increased $82 million in the second quarter of 2021. Our non-GAAP operating margin of 54% increased 1 percentage point, compared to the prior-year period. Net interest expense was $33 million in the second quarter of 2021, an increase of $8 million, compared to the prior-year period due to incremental interest expense related to the financing of the Verafin acquisition. The non-GAAP effective tax rate was 25% for the second quarter of 2021. For full-year 2021, we still expect our non-GAAP effective tax rate to be in the range of 25% to 27%. And barring any changes in the corporate tax landscape, we expect to come in near the bottom end of the range for the year. Non-GAAP net income attributable to Nasdaq for the second quarter of 2021 was $316 million, or $1.90 per diluted share, compared to $256 million, or a $1.54 per diluted share in the prior-year period.

Turning to Slide 11, debt decreased by $189 million versus the first quarter of 2021, primarily due to a net reduction of $214 million of commercial paper, partially offset by $24 million increase in euro bonds book values caused by a stronger euro. Our total debt to trailing 12 months EBITDA ratio ended the period at 3.2 times, a decrease from 3.4 times in the first quarter of 2021. During the second quarter of 2021, the Company paid common stock dividends in the aggregate of $88 million and repurchased common stock in the amount of $248 million. As of June 30, 2021, there was $1.46 billion remaining under the share repurchase authorization.

As previously communicated, upon the consummation of the sale of our US Fixed Income business, we issued approximately 6.2 million shares to a third-party. We intend to use the proceeds from the sale, as well as available tax benefits, working and clearing capital of this business and other sources to repurchase shares in order to offset the EPS dilution from the sale. This week, we plan to execute an accelerated share repurchase program for approximately $470 million.

Let me talk for a moment about share count expectations. Our average diluted shares outstanding for the second quarter were $166 million. Due to timing, this average reflected only a minimal impact of the $6.2 million NFI-related share issuance. At the end of the second quarter, however, diluted shares outstanding were approximately $172 million. With our plan to execute the accelerated share repurchase program in the third quarter of 2021, at the current share price we would retire approximately 2 million shares in the third quarter and roughly 0.5 million additional shares in the fourth quarter. We plan to execute additional repurchases to offset the remaining NFI dilution in 2022 and 2023. We continue to expect EPS dilution from the sale of NFI to be about 2% in the first 12 months following the June 25 close, but to diminished immaterial levels after that.

I'll wrap up by saying that this capital reallocation actions, both in terms of the sale of NFI and the related capital return program support Nasdaq's acceleration of our strategy and allow the Company to further concentrate our resources on strategic opportunities.

Thank you for your time. And I'll turn it back over to the operator for Q&A.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Rich Repetto with Piper Sandler. Your line is open.

Richard Repetto -- Piper Sandler -- Analyst

Good morning, Adena, and Ann. First, congrats on the sort of the sale or spin of the Private Markets. So, I guess, my question is, can you give us a better feel for the minority interest and what the valuation was? And then a little bit on the background of how it develop? Because you do have some significant players, some others aren't in it. And I'm backing into, I guess, $20 million in revenue. Is that right for sort of what it would contribute fully last year?

Adena T. Friedman -- President and Chief Executive Officer

Great. Thanks, Rich. So, first of all, we are really, really excited about the partnership we created and we basically, recontributed the Nasdaq Private Market asset. The other firms contributed investment dollars, so that we can continue to build out the platform and grow and expand the footprint of Nasdaq Private Market going forward. We have a large minority stake. So, we are the largest shareholder and we will retain that.

In terms of the revenue for the last 12 months, you did the math right, so it's $20 million for -- on an LTM basis. So -- but I would say that that we are -- we do think that this is an opportunity for us to really accelerate our progress in the private company share liquidity programs and we're seeing a lot of interesting and additional programs are interest from institutional investors, from other shareholders to really use the Nasdaq Private Market for price discovery, may be continuous trading programs and other things like that and we think that with the partners that we have between the West Coast with Silicon Valley Bank, and their relationships with the venture community and early stage private companies, the institutional connections that the Citi and Morgan Stanley and Goldman have.

And then us as a marketplace operator and our expertise and our relationships with later stage private companies, it's kind of like this great coming together of talent and network and distribution capabilities that we think that we can really, really accelerate the progress and create a lot of value for our shareholders even with a large minority interest as opposed to a 100% interest. So, that is the thesis, and we're really excited to get going with them and it should actually close pretty quickly. We've gotten a lot of approvals, so we should be able to get this going very quickly.

Richard Repetto -- Piper Sandler -- Analyst

Okay. And then the related follow-up would be on Nasdaq Fixed Income. If I'm looking at Slide 12 that means it was about $10 million in revenue or so. Can you talk about the profitability of Nasdaq Fixed Income?

Adena T. Friedman -- President and Chief Executive Officer

So, it's $10 million for Market Services and then there's also revenue coming out of the Investment Intelligence business, which is the data part of those NFI. So those two together, that make up the revenues that are coming out.

In terms of profitability, it was profitable. I mean, it is profitable, but not to the same degree as the rest of our business.

Richard Repetto -- Piper Sandler -- Analyst

Understood. And congrats on a moving to strategic pivot forward here.

Adena T. Friedman -- President and Chief Executive Officer

Yeah. Great. Thank you.

Operator

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Alex Kramm -- UBS -- Analyst

Yeah. Hey. Good morning, everyone.

Adena T. Friedman -- President and Chief Executive Officer

Hey, Alex.

Alex Kramm -- UBS -- Analyst

Yes, hi. Maybe starting with Market Tech. There were some logistical challenges, obviously, with COVID. So maybe you can give us an update? How things are looking there? Very strong order intake number. So maybe you can talk about that specifically? Where is that coming from? Is it very long-term contracts or how much of that $100 million-plus number should hit the income statement here pretty soon? Thanks.

Adena T. Friedman -- President and Chief Executive Officer

Sure. So, first of all, yeah, we are definitely seeing progress in terms of growth in demand from clients in Market Tech. So if we talk specifically about the Market Infrastructure Technology side of Market Tech, we are definitely finding new clients to serve, which is exciting. We are continuing to grow the number of crypto markets that we're providing technology to, digital asset markets providing technology to, but also our core clients. After a year of a lot of volatility and a lot of focus just on the here and now they're definitely now focused again on, what does it means for their infrastructure and for the future. And our next-gen system is kind of front and center in our clients -- a lot of clients mind. So the order intake is reflecting, Alex, both some reupping from existing clients, as well as some new clients that have come in. And so, it's a really healthy mix. And the conversations that we're seeing around the world are just much more longer-term driven and more focused on the future. So, we're excited to see that progressing.

And now, the fact of the matter is, we're still not traveling, right? So, we're still having to -- we've adjusted, I think, pretty well to a remote environment in terms of delivering for clients and that was a big adjustment and, obviously, we had challenges associated with that. But we're still delivering in a remote environment and we're still selling in a remote environment. And so, we still think that it will be kind of improvements over time but not something where you're going to see kind of this huge surge in one period of time. I think that we expected to be steady improvement in demand in our ability to deliver over time.

But -- on the Anti-Fin Crime side, I should mention, the Anti Financial Crime side, we're doing really well and selling our Market Surveillance SaaS solution to new clients still, that was something we launched beginning of 2020 and has had a really nice demand curve there. In terms of our Trade Surveillance solution, we continue to find ways to expand our client relationships, and then, of course, on Verafin we mentioned the fact that they had 36 new customers come in and that business is going really well.

Alex Kramm -- UBS -- Analyst

Okay, great. And then just very quick follow-up. The equity revenue capture continues to surprise me, I mean, this quarter. Again, I don't know if it's been as high in many years. So, can you just talk about the puts and takes and expectations? I know it's very dynamic, but would be helpful to understand the trends and what's driving the strength there? Thank you.

Adena T. Friedman -- President and Chief Executive Officer

Yeah. Sure. I think the first thing to mention is, events like the Russell and the triple witch in June, those are two very large trading events that do contribute to capture. I think that -- but then, in general, we are basically calibrating caputre and share. We might do some programs to try to make sure that we do kind of draw in more order flow into the platforms going forward. So that will ebb and flow a bit. But you're right, it's at a level that we're excited that we're able to provide such a great platform or the go-to platform for clients and kind of the mix of the types of trading that are happening on the platform resulting in that type of capture. But as I said, we're going to do what we do always in terms of balancing kind of share and capture to make sure that we're doing the best thing for our clients, but also managing the business really successfully. So that might ebb and flow a bit in the coming quarters.

Alex Kramm -- UBS -- Analyst

Great. Thank you very much.

Operator

Thank you. Our next question comes from Dan Fannon with Jefferies. Your line is open.

Daniel Fannon -- Jefferies & Company -- Analyst

Thanks. Good morning. My question is on Corporate Platforms. You highlight EFG as -- for some time as a huge growth area or large growth opportunity. I look at the IR & ESG kind of revenue contribution. They've been flat to down the last couple of quarters. So, could you let us know or kind of lay out the growth profile from here and how we should think about kind of the growth opportunity going forward?

Adena T. Friedman -- President and Chief Executive Officer

Sure. Well, actually our IR & ESG Services revenues grew 8% in the quarter and year-to-date are up 7%. So, I would actually say that we're -- I'm not quite -- and maybe you could let us know what specifically you're looking at and saying it's flat. But generally, we actually are seeing, as you know, that business has -- in the past years has been a relatively low grower. But what we've been finding is that, more demand for our IR advisory services, more demand for our governance advisory services and more demand for the tools, both in IR & ESG just to manage their ESG reporting capabilities, as well as to understand changes in investors. So, we actually have seen it as being kind of a healthier environment for that business. But maybe there is something specific you are looking at.

Daniel Fannon -- Jefferies & Company -- Analyst

I'm just looking at Slide 7 where you've had $56 million in revenues this quarter, $57 million last and $56 million in the fourth quarter.

Adena T. Friedman -- President and Chief Executive Officer

Yeah. So I think that we tend to look at this kind of year-over-year, but there are certain one of the things to note is that, the -- it's a relatively cyclical business. So there are certain things that might come in, let's say, in the end of the year for sure tends to be a high quarter. But generally, on a year-over-year basis, we look at is $52 million growing to $56 million.

Daniel Fannon -- Jefferies & Company -- Analyst

Okay. Thank you.

Operator

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Alexander Blostein -- Goldman Sachs -- Analyst

Good morning. Thanks for taking the question. I was hoping to get your thoughts on some of the market structure developments, obviously, Chairman Gensler laid out a fairly ambitious agenda recently with respect to specifically both payment for order flow and the exchange rebate. Obviously, early days still but curious to get your take on how this could be a potential opportunity maybe in some ways for Nasdaq or some things that could be more problematic?

Adena T. Friedman -- President and Chief Executive Officer

Sure. Well, I think the first thing is, I believe that we seem to be relatively aligned at least with the overarching agenda of the SEC right now in terms of thinking about how do you maximize competition, how do you maximize price transparency, and how do you maximize market access, right? So -- and make it sure it's fair across both institutional investors and individual investors. And so, if you kind of take that as kind of the principles that they're operating under certainly the principles we operate under, I think that as they look at all the various components of market structure, I -- our view is that, we -- while our solutions maybe slightly different, our ideas maybe slightly different, there's general alignment. In terms of that, that means things like tick size regimes also different incentive programs that might exist are going to be examined.

I also would say, as we -- kind of we all know, the markets are working and operating relatively well. So, to the extent that -- we think that there could be constant improvement that's absolutely the case, but our view is, it's better to try incremental iterative improvements than to try something big bang because the law of unintended consequences are so high. If you make changes to incentive programs, then you have to understand what all the consequences might be from that in terms of retail investors getting access to free trading and making sure, at the same time, that the quotes reflect the supply and -- the actual supply and demand in the market. So, a lot of pushes and pulls.

So, Alex, I think that it is still early days. We are certainly in active dialogue with the SEC staff as they come out with their papers, we'll be there to comment and be a part of that debate. But I -- my -- our view is that, right now at least there is a general alignment of principles, which we think is -- we, obviously, have some optimism around that.

Alexander Blostein -- Goldman Sachs -- Analyst

Great. And the quick follow-up for, Ann, just around the expense guidance. Just want to make sure that the guide that you guys updated today it's performer for both the NFI sale and the JV transaction later in the year?

Ann Dennison -- Executive Vice President and Chief Financial Officer

Yes, it is.

Alexander Blostein -- Goldman Sachs -- Analyst

Great. Thanks very much.

Ann Dennison -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

Thank you. Our next question comes from Michael Cyprys with Morgan Stanley. Your line is open.

Michael Cyprys -- Morgan Stanley -- Analyst

Hey. Good morning. Thanks for taking the question. Just wanted to ask about Verafin. I was hoping you might be able to elaborate a bit on how the revenue growth compared to in that part of the business versus the underlying new customer growth. I heard you mentioned about 36 new customers coming through on the Verafin side just hope you can elaborate a bit on the rate -- growth rate there of new customers versus revenue. And also, you could just talk us a little bit about the sales strategy on the Verafin part of the business? How you see that evolving? What changes have you made? And how is that getting integrated within the broader Nasdaq?

Adena T. Friedman -- President and Chief Executive Officer

Sure. Yeah. I mean, I think that when it comes to the growth within Verafin, there is a really nice balance between new logos or new clients and then reupping and expanding relationships with existing clients. So, Verafin is an interesting model, they do weekly release cycles and they enter into these multi-year agreements with clients, but they are literally enhancing the system every single week and bringing a lot of new capabilities in under the existing contract. But when they renew the contract, they kind of point to all these improvements and all the value they've created over the prior several years. And so, when they do renew, they tend to renew at a higher rate and often also a broader user base. So, when we look at the growth of revenue, they look at new bookings and then they look at existing client renewals because that also drives revenue growth. And it's actually been quite balanced. It always has been and it continues to be quite balanced in both areas.

In terms of the sales strategy, they have an incredible kind of sales approach and sales discipline. They are incredibly metrics-driven and KPI-driven. It's amazing to see kind of how they -- they are very disciplined in the way that they do it. They do most of their sales remotely. They always have. They always would like to able to have conferences and other ways to meet new clients, but they have the ability to do sales successfully in a remote environment. And they've -- I think luckily that muscle is quite mature. So, they haven't had to make a ton of change through the pandemic.

And in terms of our impact on that, where we've been focused is opening doors to larger clients or to -- maybe they're trying to nurture a new relationship but they're already a listed customer on Nasdaq. So, therefore, we can leverage our relationship manager to open more doors and maybe accelerate the sale process. Or they're very large banking relationships and so we can kind of get them in front of higher level executive to pitch their services. But their platform itself is a superior platform. So, we feel very confident and bring them to customers and saying, we know that they can do better than whatever the client has existing in their system. And we've been -- that's the one area we've been collaborating on the most. We have a regular meeting where we go through the pipeline and we examine where we have relationships, where we can stretch them to go to a larger clients and then strategically how are we going to move them up the value chain and then move them over into Europe.

Michael Cyprys -- Morgan Stanley -- Analyst

Great. Thank you.

Adena T. Friedman -- President and Chief Executive Officer

Thank you, Michael.

Operator

Thank you. Our next question comes from Owen Lau with Oppenheimer. Your line is open.

Owen Lau -- Oppenheimer & Co. -- Analyst

Good morning and thank you for taking my questions. So, you mentioned that eVestment and Solovis, like previously you mentioned that these two segments were impacted by COVID. Given the roll-out of vaccine and the strong equities market, do you see an acceleration of the demand in this workforce solution and analytics compared to maybe last quarter and last year? Thank you.

Adena T. Friedman -- President and Chief Executive Officer

Sure. Yeah. We actually have seen a really nice recovery of demand, Owen. So, the reason why eVestment and Solovis were impacted by COVID was, first of all, and we bought Solovis right at the beginning of the pandemic. So, the integration took longer than we wanted it to just because we couldn't get together and getting to know people on Zoom is different than getting to know people in the room. So -- but then also kind of thinking about the integrated platform and kind of what -- how do we demonstrate an integrated solution to our clients, that took a little bit longer too, because of -- again, the integration took a little longer.

But now, in the fourth quarter of 2020 and into 2021 you're starting to see that demand pickup in terms of asset owners really understanding the intersection between making an asset allocation decision and then managing their portfolio. Once they make that decision and we have solutions that provide and kind of bridge that. So, I think that we've definitely seen a nice acceleration of demand and you're seeing that in the growth numbers in first quarter and second quarter and we definitely are -- I think that -- we feel like also investment managers and investment -- and asset owners are definitely more willing to put money to work to advance their own platforms. And I think that also took a little while for them to realize that they had -- it's a very active capital markets backdrop. So, bringing in these solutions can make their lives a lot more efficient. And I think that that demand is also come back.

Owen Lau -- Oppenheimer & Co. -- Analyst

Got it. That's very helpful. Just a quick follow-up. A quick one on NPM, the Nasdaq Private Market. Do you expect to add more strategic partners, add more banks to the platform? And also longer-term, can you expand this platform to maybe international companies? What are the regulations there? Thank you.

Adena T. Friedman -- President and Chief Executive Officer

Sure. Over time we'll examine the idea of bringing in additional banks. I think that we are extremely excited about the group that we have and what they can do and what they can bring just kind of really immediate value they can provide. But over time, certainly, we'll look at whether or not there is a value creative way to do that.

In terms of international, there are regulations associated with that. And -- but it is an area that we would say that over time we should be able to globalize the platform. We do bring some foreign issuers into the platform, but it's then they have to kind of go through -- it's the FINRA broker/dealer, so they have to go through and make sure that all the institutional investors are accredited it in a way and are registered appropriately. So it's definitely isn't completely open as a global platform at this point, but it's certainly something we have on the agenda.

Owen Lau -- Oppenheimer & Co. -- Analyst

That's very helpful. Thank you very much.

Operator

Thank you. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Brian Bedell -- Deutsche Bank -- Analyst

Great. Thanks very much for taking my questions. Just first one on Verafin. Adena, if you can talk a little bit about the opportunity you see in decentralized finance for demand for Verafin services, especially in AML and other compliance functions? Or is -- are you seeing an opportunity for new business there incremental to when you initially did the deal? And is that coming from -- are you seeing that from larger institutions that, obviously, you've been laying out synergy expectations for?

Adena T. Friedman -- President and Chief Executive Officer

Yeah. It's a great question. And yes, I think that the answer is that, as we've seen a lot of change, both in terms of the growth of fintechs and the emergence of DFI, we do see that those two parts of the sector is being really interesting growth opportunities for Verafin. Verafin has been focused on banks. And -- but the fact is some fintechs have been leveraging banks in order to manage their fraud and AML detection programs. And so, what Verafin will do is build -- put the platform into the bank and then the bank will then kind of become a subcontractor to the fintech. While over time, I think the Verafin understands that really they could become, obviously, a direct provider to this fintechs. I mean, that would be the case, of course, with the DFI providers as well.

And some -- I think that they have a really truly a superior, particularly on fraud detection and AML detection as well, there is a network effect that they have, because they have 2,000 banks in their network that allows for them to, frankly, just be better at eliminating false positives and focusing in on real potential fraud issues. So, we do think that we have a chance to expand there. And they're very excited about that as a near-term opportunity. And it may be that we choose to prioritize that a little bit more in the near-term and take a longer-term view toward some of the global expansion. But right now we're frankly examining all of those elements and making sure we're prioritizing their time and attention.

Brian Bedell -- Deutsche Bank -- Analyst

Okay. Great. Thank you. And then maybe just a follow-up on the market structure. Some have mentioned sub-penny pricing would be one solution to bring more volume on to listed markets. Maybe just your thoughts on whether you think that would be one good approach to at least solve for that problem?

Adena T. Friedman -- President and Chief Executive Officer

Yeah. I mean, it's certainly is an issue of not having a level playing field between us and dark pools and internalizers. So, we certainly think it gives us an opportunity to be able to draw in more flow. I think though that when you look at the internalization, there are multiple factors that drive our retail broker to a specific internalizer and, obviously, painful part of that the ability for internalizers to make good unbroken trades is another area that they focus on. There are a range of services that internalizers provide. But if we could make it so that -- I mean, the fact is they really just can't put a lot of orders into our platform, because we don't have the ability to offer sub-penny pricing and that is where they're getting executed. So that is a -- that will break down a barrier.

But we have to look holistically on the range of things that we do and what we can do to attract more retail flow in. One point is, in Europe, actually most retail orders actually come to the Nasdaq Nordic platform. It's -- we have great relationships, direct relationships with the retail brokers and they execute their trades. They placed orders in our book. They are visible. And so, that they get more order interaction and they have a great execution experience. So, we do think that if you level the playing field we can compete for that order flow.

Brian Bedell -- Deutsche Bank -- Analyst

Yeah. That's great color. Thank you.

Operator

Thank you. Our next question comes from Kyle Voigt with KBW. Your line is open.

Kyle Voigt -- Keefe, Bruyette & Woods, Inc. -- Analyst

Hi. So just a few questions on the ETP, the sponsor switches. First, just a clarification question regarding the $3 million revenue impact per quarter. Is that solely the impact moving forward or was some of that impact already felt in the 2Q index revenues?

And then as a follow-up to that. Historically, can you remind us if there is -- if you've seen many sponsor switches historically or is this more of a one-off event?

And then lastly, will these Vanguard and BlackRock decisions at all impact broader pricing decisions or pricing strategy for the index business moving forward?

Adena T. Friedman -- President and Chief Executive Officer

I'll have Ann answer the first question. Go ahead.

Ann Dennison -- Executive Vice President and Chief Financial Officer

Sure. So, on the $3 million that I referenced at the start, we haven't seen any of that impact yet. The $17 billion in assets moved at the end of the second quarter. And so, we'd expect to see some of the $3 million impact, you could think about it as maybe roughly half in the third quarter and then the full run rate in the fourth quarter.

Adena T. Friedman -- President and Chief Executive Officer

With regard to sponsor switches in the past, we do not -- it's not something that we've seen. It's really -- this is an unusual event and it's something that we see as kind of a one-off type of situation. We've had a lot of a dialogue with all of the remaining clients that we have and frankly, BlackRock and Vanguard remain clients, just smaller ones. And so, we feel very good about all of the partnerships we have with our clients. I think that, obviously, anytime a sponsor switches, you do self reflection and you want to make sure that we're doing -- we're giving them absolutely the best service possible. And so, we will continue to make improvements across our business just to make sure that we are the ones they switched to and we have certainly been the ones the index provider that other sponsors have switched to in the past. So, we feel very good about our platform, but we can always improve. And so -- but I would say this is not something that's frequent.

The other thing is, if some of the sponsors have also made other switches. So it's not -- we're not the only ones that they've made the decision around. They've made decisions around other providers as well.

In terms of pricing, we don't see this as a reason to examine pricing. It really has -- it has to do with -- we feel very good about the way that we price our products. We do that based on the complexity of an index, the uniqueness of the index, the types of investors are trying to attract into the index and what's the size and scope of the opportunity. So, we will continue to do our pricing the way we always have.

Kyle Voigt -- Keefe, Bruyette & Woods, Inc. -- Analyst

Very helpful. Thank you.

Operator

Thank you. Our next question comes from Patrick O'Shaughnessy with Raymond James. Your line is open.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Hey. Good morning. Curious if you can talk about some of the previous challenges that may have limited Nasdaq Private Markets traction in the marketplace. And then, I guess, along with that, how do you see the long-term addressable market? How would you size that and the opportunity that you're trying to go after with this joint venture?

Adena T. Friedman -- President and Chief Executive Officer

Great. So, challenges in the past have been -- there is a lot of them. So, one is just the inefficiency that exists in the system and as well as kind of the hesitancy in the past for private companies to offer liquidity options. I think that's been frankly the biggest impediment in the past. In private companies, I would say, when they bring in invest -- early stage investors, they want them to be in there for a long time. When they issue equity to their employees, they want their employees to be locked up for a long time. However, today, it's a very, very vibrant environment and private companies are staying private longer, and over time, they realize that unlocking liquidity is actually can be value accretive because, number one, their employees over time they want to buy houses and send their kids to school and be able to use their equity in ways that help manage their lives. And so, offering a fair way and in a high integrity way to offer that liquidity is really important. The second -- and to attract talent to these days, to have some sort of liquidity program as part of talent acquisition for private companies becoming more interesting and something that we are seeing.

The second is that, obviously, getting early stage investors some returns and then bringing in later stage investors who can carry firms over time into the public markets is highly interesting. And so, there has just been this really steady increase in corporate interests and liquidity and we see an acceleration of that in the last couple of years. Private companies are really balancing, do we go public, do we stay private? If we stay private, how do we make sure that we have a nice liquidity capability within the company? And then, of course, with direct listings there is, what we call, the continuous trading programs that are being developed in advance of those companies tapping public markets. So, I think all of those things have accelerated the interest and now it's a matter of us really bringing together the institutional community, the venture community, and the private company community to -- and our -- obviously, our technology capabilities and our market know-how to say, OK, how do we catalyze this into a really robust and efficient liquidity marketplace. So, we see this as being just a huge opportunity.

In terms of the total market opportunity, it's hard to measure something that doesn't exist, but when we look at it and say, what do we think the liquidity could be and what kind of revenue opportunity could there be? We actually size it anywhere between kind of $500 million to $1.5 billion. So, it's a big opportunity that we're going after and over the next five to 10 years.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Got it. Very helpful. Thank you. And then my quick related follow-up, does the current expense guidance reflect pushing the Nasdaq Private Market expenses into the JV?

Ann Dennison -- Executive Vice President and Chief Financial Officer

Yes, it does.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Great. Thank you.

Operator

Thank you. And we have a question from Simon Clinch with Atlantic Equities. Your line is open.

Simon Clinch -- Atlantic Equities -- Analyst

Hi. Thanks for taking my question. I wanted to follow-up on the Verafin opportunity. I mean, it's not quite on notice to me and others that the growth this quarter was pretty astonishing. I think it was around 37% on a organic basis, which -- and you've talked about in the past your ability to help accelerate the revenue growth there. So I'm kind of interested in how you think about the expense side and the investment requirements should Verafin continue to see this level of heightened growth over the next few years. And how you've accounted for that in your sort of longer-term model? Just wondering if there is any considerations we need to think about on the plus or minus side of that.

Adena T. Friedman -- President and Chief Executive Officer

So, I would say that, the growth has been -- it continues to be a really should say quite robust. And so, your math, it seems pretty accurate. I think that in terms of the way that we are approaching this business is, we see a very long-term high-growth opportunity. Right? So the overall Anti Financial Crime space is growing at like 17% a year. It's a huge, huge opportunity $6 billion to $8 billion TAM or SAM, frankly, not -- the TAM is much bigger but the SAM is in that range. And so, if we invest in the platform, we are actively investing and we will continue actively to invest in the platform to make sure we can continue the kind of growth that they are exhibiting today.

And so, we've talked about this when -- we've actually been pretty clear as to the fact that we're not getting maximizing margin, right now we're getting maximizing growth. And the EBITDA, when we talked about it upon acquisitions in the range of 25% and we expect that we will try to kind of maintain that kind of margin while we're growing as fast as we can. But over time, obviously, as the space matures we have -- with there certainly is way -- are ways that we can scale it, but right now we're going to maintain that growth mode and still be able to deliver really nice bottom line in a high-growth business to our shareholders.

Simon Clinch -- Atlantic Equities -- Analyst

Okay. That's pretty usable. And just as a follow-up. In terms of your capacity for growing your capital for other inorganic opportunities. Could you talk about sort of where you feel you've got the most capacity both financially and also from a personnel perspective to digest and sort of execute on deals?

Adena T. Friedman -- President and Chief Executive Officer

Well, in terms of -- yeah. So I think that the way that we look at it from a disciplined perspective -- a capital discipline perspective, as we said for, we are an investment-grade Company and we generally seek to maintain our investment-grade status. And at the same time, we want to make sure that we have the opportunity to capture new growth and expansion opportunities with some areas of particular focus. One is in the Anti Financial Crime space. The second is in the eVestment, Solovis kind of space in terms of asset owner, asset management, workflow solutions, and particularly focused on the Private Markets there. And then the third is in ESG. But we also do look at things that are in Corporate Services like Puro.earth is a marketplace that really serves corporates for carbon removals. We continue to find ways that we want to serve our corporate clients in our Marketplace Solutions. And so, we will always -- we look holistically at acquisition opportunities, but we have these three focus areas that I mentioned. But I also would say this, we are incredibly focused on our organic growth and I think we're delivering really strong growth and we want to continue to deliver really strong growth for our clients and our shareholders through our organic means, but when we look at acquisitions, we have this focus areas that I mentioned.

Simon Clinch -- Atlantic Equities -- Analyst

Fantastic. Thanks so much.

Adena T. Friedman -- President and Chief Executive Officer

Sure. Okay. Well, I think that we're going to close it out. So, thank you very much for your time today. And we're really pleased to see that our business is delivering strong revenue growth for the quarter and for the year. Guided by our strategic direction, we have a clear focus for the remainder of 2021 as we reimagine markets to realize the potential of tomorrow. And I look forward to updating you all on our progress in the months to come. So thank you and have a great day.

Operator

[Operator Closing Remarks]

Duration: 63 minutes

Call participants:

Ed Ditmire -- Vice President, Head of Investor Relations

Adena T. Friedman -- President and Chief Executive Officer

Ann Dennison -- Executive Vice President and Chief Financial Officer

Richard Repetto -- Piper Sandler -- Analyst

Alex Kramm -- UBS -- Analyst

Daniel Fannon -- Jefferies & Company -- Analyst

Alexander Blostein -- Goldman Sachs -- Analyst

Michael Cyprys -- Morgan Stanley -- Analyst

Owen Lau -- Oppenheimer & Co. -- Analyst

Brian Bedell -- Deutsche Bank -- Analyst

Kyle Voigt -- Keefe, Bruyette & Woods, Inc. -- Analyst

Patrick O'Shaughnessy -- Raymond James -- Analyst

Simon Clinch -- Atlantic Equities -- Analyst

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