Nasdaq CEO Adena Friedman on the Future of 23-5 Trading

**SPEAKER_1** (0:00)
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**Andy Serwer** (0:18)
Hello, everyone, and welcome to At Barrons. I'm Andy Serwer, and welcome to our guest, Adena Friedman, CEO of Nasdaq. Adena, great to see you.

**Adena Friedman** (0:26)
It's great to be here, and thank you so much for coming our way.

**Andy Serwer** (0:29)
Thank you for having us here, Adena.
A lot of people think of Nasdaq still maybe as just a stock exchange, an electronic stock exchange, but it's a lot more than that. You really transform the company. What is Nasdaq today, and where are you taking it?

**Adena Friedman** (0:43)
Well, we are very proud of our foundation as a world leading exchange, and that continues to be kind of the center of our strategy. But we haven't been able to expand our business today. And today, we really are an advanced technology company that powers the capital markets and the broader financial system. We say our vision is to be the trusted fabric of the world's financial system. So we think about that in terms of being kind of the center of the economy from a markets perspective. Not only do we provide our markets to our US equities and options markets, but also to the Nordic markets that we own and operate. But then we also sell our technology to about 130 other markets and regulators around the world, so that we really focus on architecting the world's most modern markets. And we also then power the innovation economy. So we think about how we list incredible innovators on Nasdaq. We make those innovative companies accessible to billions of investors who are index products. And then we give a lot of tools over to investors and corporates to help them interact and find each other more successfully.
And then the third pillar is to build trust in the financial system. And we do that through anti-financial crime technology, compliance and regulatory reporting technology, to make sure that the entire ecosystem is strong and secure as we're managing people's money and managing the capital markets successfully. So it's become a bigger part of the ecosystem, and we're really excited about that.

**Andy Serwer** (2:08)
I mean, if the solutions revenue continues to outstrip the trading revenue by so much, does the nature of the company change? Does it need a new name or anything like that?

**Adena Friedman** (2:19)
Well, we love Nasdaq as being just a brand that kind of transcends just the market, but you're right that our solutions revenue today, it really goes, it's a little bit more than 75 percent of our revenues.
And the trading business is the other 22 to 25 percent, depending on the quarter. And our solutions businesses are growing really well. What's interesting is our trading revenue is also growing really well. So we've had a lot of success across our franchise. The index business, as you know, has been just a really fast growing part of our business, in terms of we have about $850 billion of assets under management today. That's part of solutions. And then our software businesses and all the things we do to really build the mission critical infrastructure to support the capital markets and the financial system has become a really big part of our franchise. In our financial technology division, which really is the infrastructure that powers markets and powers the economy here really had great performance in the first quarter. So we really are showing that we can grow across the entire franchise.

**Andy Serwer** (3:19)
Nasdaq is a publicly traded company that tickers NDAQ about $51 billion market cap.
The stock has outperformed the S&P 500 during your 10 year tenure.
And I'm wondering though, Adena, why should investors buy the stock right now? And that's sort of the core question for our audience.

**Adena Friedman** (3:37)
Well, as we think about how we can grow and expand our business, we provide both very resilient business in terms of the markets, the index business and the technology that underpins the financial system. We also are really ready for the next era of technology. So of course, AI has become a huge part of the future of technology across the world. And we are really well positioned to support the ecosystem to bring that AI technology and into the enterprise. We think about it both on the business and in our products. And we've been developing a lot of capabilities to automate workflows for our clients to make sure that they can have a more efficient and effective way of managing risk, managing the interactions with markets, rooting out criminals, all the things that are really important to really underpin a successful financial system. We also, when we think about our solutions, we have a great embedded client base. 5,000 asset managers, 10,000 corporate clients, as well as 3,800 banks and brokers that work with us.