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Nasdaq, Inc. (NDAQ)

Q3 2021 Earnings Call· Wed, Oct 20, 2021

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Transcript

Operator

Operator

Good day, ladies and gentlemen and welcome to Nasdaq’s Third Quarter 2021 Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your host today, Ed Ditmire, Senior Vice President of Investor Relations. Please go ahead.

Ed Ditmire

Analyst

Good morning, everyone and thank you for joining us today to discuss Nasdaq’s third 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 will open up the line 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 Friedman

Analyst

Thank you, Ed and good morning everyone. Thank you for joining us. My remarks today will focus on Nasdaq’s third quarter 2021 performance, the progress we are making on our strategic repositioning and updates on areas where we are making significant investments to address large opportunities. I will also share brief remarks about the current operating environment before I turn the call over to Ann, who will provide further details about our results as well as an update on our guidance, our capital deployment and our corporate sustainability efforts before we move to Q&A. Let me begin by acknowledging the Nasdaq team’s dedication to our broader mission as we made notable progress in the third quarter. Their hard work has been critical to our success in delivering strong results for our clients. Together, we will continue our journey to become the leading provider of technology, data analytics, insights and marketplace excellence to the global capital markets and beyond. Now, turning to our financial results for the third quarter of 2021, Nasdaq delivered net revenues of $838 million, an increase of $123 million or 17% from the prior year period. Our growth was largely driven by 13% organic revenue growth in our Solutions segment, 14% organic growth in our Market Services business and contributions from our acquisition of Verafin. We continue to make notable progress across key secular growth opportunities as illustrated by total company annualized recurring revenue, or ARR, of $1.834 billion, an increase of 19% compared to the prior year period. Within our recurring revenue businesses, we are seeing some of our best performances from our SaaS-based solutions. Specifically, anti-financial crime technology is showing particularly strong results with revenues increasing 16%, excluding the impact of Verafin. Verafin will begin to be included in our organic growth calculations next year…

Ann Dennison

Analyst

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. Reconciliations of U.S. 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. I will start by reviewing third quarter performance beginning on Slide 11 of the presentation. The 17% increase in reported net revenue of $838 million is the net result of organic growth of 13%, including 13% organic increase in the Solutions segment and a 14% organic increase in Market Services and the contribution from Verafin as well as the impact from divestitures. Moving to operating profit and margins, non-GAAP operating income increased 20%, while the non-GAAP operating margin of 53% increased 1 percentage point compared to the prior year period. Non-GAAP net income attributable to Nasdaq for the third quarter of 2021 was $303 million or $1.78 per diluted share compared to $256 million or $1.53 per diluted share in the prior year period. Turning to Slide 12, as Adena mentioned earlier, ARR totaled $1.834 billion, an increase of 19% from the prior year period, while annualized SaaS revenues totaled $620 million, an increase of 42%. Excluding the impact of Verafin, ARR increased 10% year-over-year. I will now review quarterly segment results on Slides 13 through 16. Starting with Market Technology, revenue increased $28 million or 33%. The increase reflects the positive $29 million impact from the acquisition of Verafin and a $5 million increase in our existing anti-financial crime technology business partially offset by an organic revenue decline of $6 million in our market infrastructure technology business. Excluding a $3 million FX impact as well as the $7…

Operator

Operator

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

Rich Repetto

Analyst

Good morning, Adena and good morning Ann, and congrats on the strong results here.

Adena Friedman

Analyst

Thanks, Rich.

Rich Repetto

Analyst

I guess you’re having tremendous success with the annual growth of annual recurring revenues and the mix of SaaS revenues in there. And you did talk about – you said you focused on the critical capabilities of your clients and more client set. So the question is, looking back, how important is equity trading and equity market share even though, again, your revenues there are growing because volumes have grown. But looking – an old metric was equity market share and revenue capture, how important is that to Nasdaq as you make this transformation?

Adena Friedman

Analyst

Well, I would say every part of our business is important, Rich, and important to us. And so we do look at – we examine every element of our business. Our core marketplace business really serves as our foundation for our ability to serve our clients in a lot of other ways. So we’re extremely focused on it. I think that we’ve seen some shifts in market share as well as just in a couple of different dynamics. One has been the increase in retail, which has increased internalization and just – and decreased overall exchange’s share of trading. And I think that within that, that’s an area that obviously we’re seeing some more work done by the regulators just to understand that dynamic. I think that the second is, of course, the launch of some new exchanges that have come forward. And they have actually primarily focused on gathering some of that retail order flow and trying to compete for it. So we have really taken a very balanced approach in terms of being strategic in how we serve our clients. We want to make sure that we provide kind of a sustainable marketplace, that we do things in a competitive way, but also creates a sustainable advantage for our markets and for our clients that operate in our markets. And so we’ve taken, I would say, a very measured and balanced approach to managing share, managing capture and evaluating kind of the composition of trading in the markets to make sure that we’re kind of balanced there. And that I would say that applies to both our equities and options markets and how we’re looking at our share and capture and the dynamics there.

Rich Repetto

Analyst

Okay. And then – thanks, Adena. And then the one follow-up would be on Market Tech, you certainly explained the quarter-over-quarter decline and the pandemic impact. Could you give more color on sort of the pipeline and how long do you think this impact – I guess if you could forecast that or just color going forward in the current – if the environment stayed roughly the same, I guess?

Adena Friedman

Analyst

Yes. Well, first of all, I do think the environment is starting to generally improve in terms of being able to travel a bit now. But we’re still doing most of our client interactions on Zoom, and that makes it harder. It’s also harder to develop the kind of what I would call the top end of the pipeline, the top end of the funnel in terms of identifying new clients. But I do think we’ve done a good job of adapting there to try to make sure that we know which new marketplaces are starting to consider launching and how we can serve them. So you’re seeing that we are still signing up new clients, for sure. They are taking our SaaS-based marketplace solutions, which we’re also pretty excited about. I think more than 90% of our new clients, any new clients that’s signing up for us across all of Market Tech, and that includes Market Infrastructure Technology clients as well as anti-fin crime. Actually, it’s well more than 90% are taking our SaaS-based solutions, and that includes new markets launching in the cloud and taking our next-gen trading system. So we see a good pipeline, I would say, Rich. And we also see that we could do more, and we definitely want to be able to identify client opportunities a little earlier and travel will help with that. But I also would say that on the post-trade side, which is where we’ve really experienced most of our delivery challenges, those are harder to implement. They take – they are multiyear programs. They always have been. But they are definitely lengthening out in time with our inability to be on site. We are starting to get on site now with some of our clients, and that’s helping, definitely helping to accelerate things. And I also think that it’s keeping us from being able to meet all the demands that our clients have. So we do see good strong client demand there, but we have to make sure that we have the resources to be able to meet the demand. So we’ve been working with our clients to kind of stage that over time. And that’s what I think is going to is what we really were referring to in our comments around 2021 and 2022 is just that we see the need for us to manage through those capacity constraints before we can really meet all the demands that our clients have.

Rich Repettos

Analyst

Got it and congrats on the continued transformation, Adena. Thank you.

Adena Friedman

Analyst

Thanks a lot, Rich.

Operator

Operator

Our next question comes from the line of Dan Fannon with Jefferies. Your line is now open.

Dan Fannon

Analyst · Jefferies. Your line is now open.

Thanks. Good morning. Wanted to follow-up on the Market Tech component and just thinking, I think you mentioned some increased costs around some of the implementations as well. So the longer term kind of margin opportunity within this business, has that changed at all or is that also just kind of part of the temporary revenue slowdown more of a factor than necessarily cost on a go-forward basis?

Adena Friedman

Analyst · Jefferies. Your line is now open.

Sure. I think that there are two metrics that we’ve provided to our investor base to kind of measure our progress in the business. One is just our overall medium to long-term growth outlook on revenues and then the other is this notion of the rule of 40, which is really a combination of the growth in the revenues and the EBITDA margin of the business. And so what our outlook is, is that we expect to be able to deliver 13% to 16% annualized growth over the coming 3 to 5-year period across Market Technology. And that includes the Market Infrastructure Technology business and the anti-financial crime business together. And we do continue to believe that, that is an appropriate expectation of growth for the business going forward. I think that the – on the rule of 40, what we’ve communicated is that we wanted to get to a rule of 40, which is, as I said, the combination of growth in EBITDA by 2023, and we continue to see ourselves on track for that. So you have to think about this as a shorter term or at least a near-term challenge that we’re having to work our way through that part of the business that is most impacted to be able to get ourselves to a better growth state and more scalability as we sign more of our clients to SaaS clients instead of on-prem clients.

Dan Fannon

Analyst · Jefferies. Your line is now open.

Thank you. That’s helpful. And then as a follow-up on the index business, just to clarify, the switches that has not yet to impact the revenue for – as we think about the fourth quarter. And could you maybe talk about the difference in the fees associated with what’s coming in, in terms of net inflows? I think you gave a stat around inflows since, I think, 2019. Maybe discuss kind of the different kind of fee thresholds as we think about the AUM mix.

Ann Dennison

Analyst · Jefferies. Your line is now open.

So Dan, on your first question, we saw about half – roughly half of the impact around the switches coming in the third quarter. And we will see the full run rate in the fourth quarter.

Adena Friedman

Analyst · Jefferies. Your line is now open.

Yes. And on the second part of your question, the fee base for the switches that we experienced particularly, one of them was very low. And so therefore, that $3 million impact was – is a low revenue impact against the AUM that was switched. I think going – with regard to the new products we are launching, the fees that we are able to attract with regard to kind of what some of our innovative products like the Nasdaq Next Generation 100, the crypto index and the semiconductor indexes are to me more in line with our normal – our kind of historical norms. So they do carry a higher fee base than the AUM that we lost.

Dan Fannon

Analyst · Jefferies. Your line is now open.

Got it. Thank you.

Operator

Operator

Our next question comes from the line of Owen Lau with Oppenheimer. Your line is now open.

Owen Lau

Analyst · Oppenheimer. Your line is now open.

Good morning. Thank you for taking my question. I have a question about your partnership with Sporttrade and the sports betting industry overall. Could you please talk about maybe the potential market size such as how many similar sports betting companies out there that you can provide your surveillance technology? And then broadly speaking, could you please talk about your recent traction in the non-financial space? It looks like we haven’t talked about this for a while. Thank you.

Adena Friedman

Analyst · Oppenheimer. Your line is now open.

Sure. Great. Hi, Owen. So, on Sporttrade, there is a combination of what we are doing there. One is we have taken an investment in the business itself through our venture portfolio. And then we also are providing them the surveillance technology. And what’s interesting about Sporttrade and the market model that they are creating is they are definitely creating more what I would call like a marketplace model where they are going to have market makers, they are going to have a bit of spreads for different in-game betting opportunities. And it’s going to be really an interesting market model. Our surveillance technology absolutely applies to that type of market model. But actually the module that we have created around sports surveillance applies to multiple – the traditional model as well in terms of having a kind of your own book and then betting against the house kind of thing. So, I think that we can apply the technology to a traditional sports book or to these new marketplaces. And we have created a module that’s specific to that segment. So, we are pretty excited about that. And we don’t have a TAM or a SAM yet. And that’s actually a good question, Owen. So, we will come back and think through how do we look at that SAM developing, particularly for our surveillance and trading technologies for that segment going forward. But it’s obviously very early days here in the U.S. for that. In terms of other new markets and non-financial markets, we are continuing to support the crypto exchanges. I think we have eight exchanges leveraging our trading technology, nine leveraging our surveillance technology today. And then we also are seeing kind of fractionalized markets like fractionalized real estate markets and others coming up. And there are actually several really interesting new marketplaces launching. And they are all coming on to what we are calling our Nasdaq Marketplace Services Platform, which is really a SaaS-based cloud, and it can be delivered in the cloud or we can host it. But it’s a managed service platform where we provide the technology, but also the infrastructure so that markets can spin up a lot faster. So, I would say though, Owen as you know, this is an early part of our strategy and but we are definitely seeing nice progress. And we can provide you some more stats going forward on kind of new markets that we are launching there.

Owen Lau

Analyst · Oppenheimer. Your line is now open.

Got it. That’s very helpful. And then could you please also explain a little bit more on how Nasdaq Data Link can expand, what you have in Quandl? Is it related to like integrating the data in Quandl and provide clients with a more holistic view of data from different sources? Thank you.

Adena Friedman

Analyst · Oppenheimer. Your line is now open.

You actually hit the nail on the head. So, we think about Quandl now is like one component of Nasdaq Data Link. The Quandl Data, like the alternative data that we provide to investment managers are integrated into Nasdaq Data Link. The technology that underpins Quandl is actually the underpinning of Nasdaq Data Link technology. But it also includes our market information. It includes some investment information. Now we are calling Nasdaq Asset Owner Solutions data, like on investment management funds and trends there. It actually, you can – a client could choose to put their own third-party managed data into this system and we can basically become their technology provider to making it to all of their data is managed and available to them in a really, really nice modern API structure. And so it’s really an umbrella way for us to deliver market information, fund information, alternative information in a modern API and cloud-based infrastructure. So, it’s really easy to use, by the way. And it’s really easy to take the data sets and integrate them into Excel or anything else that you want to use internally.

Owen Lau

Analyst · Oppenheimer. Your line is now open.

Got it. That’s very helpful. Thank you very much.

Adena Friedman

Analyst · Oppenheimer. Your line is now open.

Thank you.

Operator

Operator

Our next question comes from the line of Chris Allen with Compass Point. Your line is now open.

Chris Allen

Analyst · Compass Point. Your line is now open.

Good morning everyone. I was wondering if you could give a little bit more color on the index business. I apologies if I missed it. I am just kind of curious on the sequential growth that we saw in the quarter. Maybe you can give us kind of an updated framework on how it’s breaking down between what’s AUM-driven subscription and transaction?

Adena Friedman

Analyst · Compass Point. Your line is now open.

In terms of the futures versus the AUM?

Chris Allen

Analyst · Compass Point. Your line is now open.

Yes.

Adena Friedman

Analyst · Compass Point. Your line is now open.

I think that it’s a good question. So, I don’t know if you have an…

Ann Dennison

Analyst · Compass Point. Your line is now open.

Yes. We usually – we don’t give the specifics on it. It’s about – you could think about the assets, the AUM portion being about two-thirds of the index line, and then the rest will include the futures portion.

Adena Friedman

Analyst · Compass Point. Your line is now open.

Yes. And in general, though I think what we have been doing now is in our statistics that we send out. We provide you all an update on AUM both in terms of net inflows as well as market appreciation. And as we have said, it’s really been a combination of inflows and market appreciation that have driven up the assets under management. I think it’s 15% for the quarter and then our revenues has been even better than that for the quarter based on a combination of these things.

Chris Allen

Analyst · Compass Point. Your line is now open.

And any color on the $12 million sequential increase from 2Q to 3Q in revenues? Just it’s a pretty big number, particularly in – I know there is – you had a little bit of the $1.5 million from the switches coming out.

Adena Friedman

Analyst · Compass Point. Your line is now open.

Yes. I mean it’s really been – I would say it’s really largely inflows and market-appreciation driven more so than futures driven for the quarter.

Chris Allen

Analyst · Compass Point. Your line is now open.

Okay. Thank you.

Operator

Operator

Our next question comes from the line of Brian Bedell with Deutsche Bank. Your line is now open.

Brian Bedell

Analyst · Deutsche Bank. Your line is now open.

Great. Thanks. Good morning folks. Just start off with a question on – it’s kind of a broader question on crypto, but also anti-financial crime. So, just the question would be – the broader question is, are you able to measure yet, and I know it’s early days, your contribution from crypto broadly because it does touch a lot of different segments between the index licensing, potentially anti-financial crime mandates and then also, obviously, Market Technology. And then if it’s too early to size that, maybe just give some perspective on how you see that developing across the segments and especially anti-financial crime, whether you are actually seeing mandates that are based on crypto surveillance in that?

Adena Friedman

Analyst · Deutsche Bank. Your line is now open.

Yes. No, it’s a great question. So, I would say it is probably – it’s a little early. But it’s a good question, so let’s take that back and see whether that’s something we want to start to think about how we communicate to you guys. But you are right, so we have the Crypto Index product that has about, as we mentioned, it’s about $600 million of assets under management there. We have the surveillance and the Market Tech solutions. And so we will come back to you Brian, just to kind of think about how we want to start to provide you more clarity there. But it is early days. And on the surveillance side and actually the broader anti-financial crime side, that’s an area that we are really spending a lot of time on to try to figure out how we can provide broader services across our bank clients as well as our brokerage clients, because right now, the surveillance capabilities is really driven by marketplaces. But over time, as crypto becomes more integrated into the financial system, we want to make sure that we can provide solutions that meet the needs across all of our customers. So, that’s actually an area of active evaluation right now and we are looking at that. It’s a great – to have 2,000 banks as our clients across the U.S. and Canada really does give us a much broader opportunity to think about how to serve their evolving needs there.

Brian Bedell

Analyst · Deutsche Bank. Your line is now open.

Yes. That sounds like an exciting growth opportunity. And then maybe just switching over to just a question on market structure. Obviously, with the new administration, we are not so new now. But with talk about different views on working on market structure, especially payment for order flow. And I guess what’s your view on – if you have a view on what you think would be a good solution to that. Obviously, we have talked about sub-$0.01 pricing being allowed on exchanges, if that’s a potential remedy for the order flow situation? And then also any other commentary on Market Data where that stands given that the prior administration had put that rule in place?

Adena Friedman

Analyst · Deutsche Bank. Your line is now open.

Sure. So, I think that with regard to the market structure discussions, and I think the SEC’s paper was, to me, an early first step in a long process of evaluating how to continuously improve the market. So, I think what we were happy about with that report, well, a few things. One, they did a really nice job of dissecting the activity and understanding that there wasn’t anything there that that had, I would say, that there was nothing there that really signified that there is any significant manipulation in the markets. I think the second thing is that they really did note that the markets were really resilient and very efficient. And that obviously is a good thing for us. But they also did point out a few key areas of focus. One is the quality of the national best offer. And the fact that so much more of the activity is happening in the dark, is there an impact on the quality of the national investment offer. And that’s an area that we have been doing some work on. I think our Chief Economist published a report on that last week. And that then ties to what are the incentive structures that underpin the markets. And so are we finding that order flow is being moved off exchange and brought into these darker venues because of incentive structures. And I think I don’t think that the SEC necessarily drew a definitive conclusion there, but it’s an area that I think that they will be focused on. All we can say is we really believe in taking kind of iterative, smaller steps, iterative change rather than big bang changes to market structure because it’s such an intricately woven system that it’s really – the law of unintended consequences are high. But if they look at disclosures around PFA or they look at making some measured changes to the PFA structure as well as making it so we can compete more for order flow like sub-$0.01 pricing or other rules that encourage orders to come on to exchange and be lit. I think that those are all things that would be positive for us. But recognizing that we like innovation, we like variety and competition. We think that those are all good for investors. And so we have to make sure we are taking measured steps there. And I got the sense that they weren’t looking at draconian steps and that they were going to take a pretty measured approach.

Brian Bedell

Analyst · Deutsche Bank. Your line is now open.

That’s great color. Thank you.

Operator

Operator

[Operator Instructions] Our next question comes from the line of Alex Blostein with Goldman Sachs. Your line is now open.

Alex Blostein

Analyst · Goldman Sachs. Your line is now open.

Hi, good morning. Thanks for taking the question. I wanted to ask you around just the thoughts on sort of inflationary pressures we kind of hear in a number of different corners of financial services, but obviously markets broadly, I guess particularly when it comes to technology and technology capital. I know you guys don’t have a 2022 budget yet, but as you are thinking about where your growth focus is and where you are investing and where you sort of make incremental investments, how do you think about that as a potential headwind? What are the sort of things you can do to maybe upset or reengineer it and I guess to some extent? Just curious to get your thoughts on what you are seeing in the marketplace?

Adena Friedman

Analyst · Goldman Sachs. Your line is now open.

Sure. Yes. I definitely think that there has been – I think that we all know that the competition for talent is pretty – at a pretty heightened level right now. And so we are – we have honestly benefited from the ability for us to attract talent from all over the world. The benefit is that we have tech talent in the U.S., in Canada, in Europe and Asia and Australia. We have tech talent kind of spread throughout different economies in different markets, which gives us more flexibility to seek out talent in markets where we think that we can do that efficiently. But at the same time, it is a competitive environment. We do think that there is going to be increases in wage in – I would say, wage increases as we go into 2022. But as you said, we haven’t yet finalized our budget and our planning. So, we will be able to talk more about that on our fourth quarter call as we provide you with our 2022 guidance. But we are evaluating that as part of the needs for us to compete for talent, but also recognize we have some benefits from having such a global workforce.

Alex Blostein

Analyst · Goldman Sachs. Your line is now open.

Alright. Thanks.

Adena Friedman

Analyst · Goldman Sachs. Your line is now open.

Great. Thanks a lot Alex.

Operator

Operator

Our next question comes from the line of Michael Cyprys with Morgan Stanley. Your line is now open.

Michael Cyprys

Analyst · Morgan Stanley. Your line is now open.

Hi, good morning. Thanks for taking for taking the question. Just wanted to circle back to the Nasdaq Data Link that you were talking about a little earlier, just how might ESG data become a component or captured in the Data Link? And what’s the opportunity more broadly for Nasdaq to become a driver of ESG standards and scoring in the industry? And maybe you could talk a little bit about how you see that developing in the marketplace more broadly?

Adena Friedman

Analyst · Morgan Stanley. Your line is now open.

Yes. Actually, part of Data Link is something called the Nasdaq ESG Data Hub. So, it’s basically information that we have gathered from third-party sources that allow buy-side institutions to get information that they need, whether it’s climate-related information or other structured data that helps them evaluate companies and industries. So, I think that we actually are serving that up very successfully within Data Link. So, that’s one of the modules of battling. But the one thing that we don’t have and what we don’t intend to do is become a rating agency ourselves. That’s just not our role. We are here – we look at it as we have an ecosystem that includes 4,000 corporate clients. They have a lot of information that they need to be able to provide to investors, and we want to support them in providing that information to investors. We then have thousands of institutional managers that receive our information and we can deliver data to them either through ESG Data Link or through our Nasdaq asset owner solutions where they can gather up information they need to make better informed investment decisions. And that over time, we hope that the data that we are helping our corporate clients collect and distribute can actually be served up through our Nasdaq asset owner solutions and not just to the rating agencies, so that they can also control the information that they are providing to investors. But I think that we are just not in the mode of actually being a rating agency ourselves. I think there are many of them out there right now. We have actually partnered with Sustainalytics to start to develop some index strategies that we think will be really interesting in the space. But that’s kind of the role that we are playing as opposed to trying to be that rating agency ourselves.

Michael Cyprys

Analyst · Morgan Stanley. Your line is now open.

Great. Thanks.

Operator

Operator

Thank you. Our last question comes from the line of Kyle Voigt with KBW. Your line is now open.

Kyle Voigt

Analyst

Hi, good morning. Thanks for taking my question. So, earlier in the call, you reiterated that expectation for the 13% to 16% annual revenue growth range for the Market Tech segment as a whole. But if we just narrow in on the market infrastructure business specifically, it’s a business that has been able to grow quite strongly in the years before the pandemic. I understand there are some near-term challenges, but I am just wondering if your medium term revenue growth expectations for that infrastructure business has changed at all over the last 18 months or whether or not they are – I guess expectations are relatively similar and we are just trying to get through this kind of near-term headwinds?

Adena Friedman

Analyst

Yes. I mean I would say our expectations are over the medium term are similar to where we have been. And it’s really just getting ourselves through these the immediate term issues that we are having, kind of managing our way through a more challenging delivery environment. So – and I think that the client demand is definitely there. Our engagements with our clients are excellent. I think our clients are excited to be able to leverage the next-gen technology we have. And we are delivering that to a lot of our clients. But we just have to work our way through some of these near-term challenges, but the medium term outlook remains the same.

Kyle Voigt

Analyst

Got it. Thank you very much.

Operator

Operator

Thank you. There are no further questions. I will now turn the call back to Adena Friedman for closing remarks.

Adena Friedman

Analyst

Alright. Well, thank you all very much. I am so happy to have you on the call. We are very pleased to see that our business is continuing to deliver strong organic revenue growth. And as you know, we are really guided by our strategic direction. And we have a clear focus as to how we want to continue to re-imagine markets to realize the potential of tomorrow. So, thank you all very much. We look forward to talking to you next quarter.

Operator

Operator

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.