Adena T. Friedman
President and Chief Executive Officer at Nasdaq
Thank you, Ed, and good morning, everyone, and thank you for joining us. I'd like to begin my remarks today by addressing the current market landscape. As I've noted in past calls, the Nasdaq team has become familiar with how unpredictable today's operating environment can be. The first quarter of 2022 was certainly no different given the dynamic geopolitical and economic factors we experienced during the period.
As I've noted in prior public comments, the war in Ukraine is a terrible tragedy and we stand with the greater business community, urgently calling for peace. Nasdaq has a proud and long-standing position in Europe, which includes seven markets we operate across the Nordic and Baltic countries, specifically Denmark, Estonia, Finland, Iceland, Latvia, Lithuania and Sweden. We've been extremely diligent in monitoring the threat environment in Europe and across our global operations to protect our employees and to ensure the resiliency of our markets and client solutions.
Our revenue exposure to Russian clients was de minimis, and we remain committed to ensuring full compliance with all relevant sanctions. In addition, our global workforce is highly engaged in humanitarian and philanthropic efforts to support the needs of those impacted by the senseless war. It fills me with immense pride to see the outpouring of support across our employee base.
Regarding the backdrop we operate -- we are operating against, our corporate clients and our investor clients are navigating through a very dynamic environment where strong economic growth has been accompanied with significant inflation, continued supply chain and labor shortage challenges, and increasing geopolitical impacts. This environment creates volatility in markets which tends to be a volume driver and we have continued to experience strong volumes across our U.S. and European markets. It also creates an uncertain landscape for investors to navigate, resulting in a slowdown in capital raising activities including IPOs. And depending on the way the markets are moving, it creates interesting dynamics for our index business.
This quarter, the drop in market cap was offset partially by inflows into our index products and strong index futures line. Looking beyond the direct market impacts, because we offer solutions that help our clients navigate through these uncertain times, it's actually increased our client engagement in three key areas where we have secular growth. Our bank clients are managing increasingly complex geopolitical risks, which results in strong demand for advanced Anti Financial Crime Solutions, which we offer with Verafin. Asset owners, including pensions, sovereign wealth funds and endowments are making quick asset allocation changes and must manage their portfolios very carefully, which increases their reliance on our eVestment and Solovis offerings.
On the corporate side, our clients are navigating through a dynamic ESG environment which drives demand for our ESG advisory and reporting solutions. Overall, our diversified business model gives us the means to be able to manage successfully in this environment, recognizing of course that there are a lot of different forces at play. And in that context, let me briefly address the inflation related pressures which are certainly factors we are navigating, as is the broader corporate community.
On the revenue side, we are fortunate to benefit from a highly diversified revenue mix, based on providing mission critical solutions that support our clients and the broader financial system around the world. We take a long-term approach to value creation for our shareholders in the context of serving our clients and we will continue to manage that balance thoughtfully. In addition, we are actively managing the evolution of inflationary pressures across our expense base. Our current expense guidance reflects the near-term actions we have taken to address the challenges of recruiting and retaining a highly skilled team in today's economy, and we'll continue to monitor the situation over time.
Our teams focus on secular opportunities to drive organic growth as well as our business models reliance on recurring revenue components has enabled Nasdaq to continue our track record of growth as we execute against our longer term objectives. The record net revenue we achieved in the quarter against this very dynamic backdrop illustrates the strength of Nasdaq's business model.
Next, I'd like to take a brief moment to thank two of our senior leaders for their years of impactful contributions to Nasdaq, following the announcements that they will be moving onto new chapters in their lives. First, I want to congratulate Lars Ottersgard for his 16 years of leading our Market Technology business. During his tenure, he led a dramatic expansion in the capabilities and client network for the business and help to advance our ongoing transition to a more scalable SaaS focused orientation. I also want to thank Lauren Dillard, who in her three years at Nasdaq delivered tremendous impact and strategically repositioning the Investment Intelligence business that now features a majority of revenue contribution from higher growth index and analytics products.
We are incredibly excited about the strong successors we announced during the quarter for the Market Technology and Investment and Intelligence segments. Specifically, Jamie King who joined us from Verafin, will lead the Anti Financial Crime Technology business; Roland Chai, who joined Nasdaq in 2020 will lead the Market Infrastructure Technology business. Those two businesses will continue to roll up to form the Market Technology segment. Oliver Albers, a longstanding Nasdaq Executive will lead our Investment Intelligence segment. All three are respected leaders in their fields with deep industry expertise and a proven track records of success.
Let's now turn to our results. I'm very pleased to report Nasdaq's strong financial performance for the first quarter of 2022. We achieved a record $892 million in net revenues, a 5% increase compared to what was itself a very strong prior-year period, when the company previously set a quarterly record on trading -- on trading revenues. Our total annualized recurring revenue or ARR increased 9% to $1.91 billion, annualized SaaS revenues totaled $655 million in the first quarter of 2022, representing a 34% of our total company ARR, reflecting particularly strong growth in our Anti Financial Crime and Investment Analytics businesses. Our recurring revenues and their consistent growth provide a powerful starting point for our overall performance. But we also delivered strong results across both index licensing and trading revenues. This solid start to the year positions us well to address the geopolitical and economic uncertainties that may persist as we move forward in 2022.
Turning next to specific highlights from our business segments. Our Solutions segment businesses delivered combined total revenue of $576 million in the first quarter, a 15% increase from the prior year period, driven from several of our businesses, including our Anti Financial Crime offerings, our Index and Investment Analytics offerings, the expansion of our listed -- our listed issuer base as well as strong demand for our IR & ESG Services. Excluding FX and the partial quarter impact of the Verafin acquisition, we achieved organic growth of 13% across our Solutions segments.
In our Investment Intelligence segment, we delivered $284 million in total net revenue in the first quarter, an 11% increase from the prior year period, with contributions across the business during the quarter. Revenue -- revenue in our Market Data business grew by 2% versus the prior year period. Our strategy for geographic expansion, particularly in the APAC region remains strong.
In our Index business, we saw revenue growth of $20 million or 20% versus the prior year period, driven principally by growth in ETP assets, which saw positive net flows of $75 billion over the last 12 months, including meaningful inflows during the especially volatile first quarter itself. We launched 55 ETFs tracking Nasdaq Indexes over the last 12 months, which in turn accumulated to $0.5 billion [Phonetic] in assets through the end of the quarter.
Notable launches outside the U.S. include the Mara PHLX [Phonetic] semiconductor index ETP and the Samsung Nasdaq 100 ETP. In addition, we created and launched the first index representing the pricing of carbon removal credits during the first quarter based on our activity on our Puro.earth carbon removal marketplace.
Moving from the asset-based index revenues to transactional, the volumes of Nasdaq licensed index futures were particularly strong with a record of over $147 million [Phonetic] futured contracts tied to the Nasdaq 100 traded in the quarter. And in our Investment Analytics business, revenues grew 13% from the prior year period, driven by the sequential impact of strong sales across asset owners, asset managers and private markets throughout 2021.
We are excited about the appointment of Oliver Albers to the Executive Vice President of Investment Intelligence. As a 20 plus year veteran of Nasdaq, Oliver is an experienced result oriented leader who was instrumental in supporting Lauren and strategically repositioning Nasdaq's Investment Intelligence segment into the higher growth, more technology enabled business you see today.
Turning next to our Market Technology segment, we delivered $124 million in total net revenues in the first quarter, a 24% increase from the prior year period. This is primarily driven by the inclusion of revenues from Verafin in our results year-over-year, and more broadly continued organic growth in the broader Anti Financial Crime Technology business. Our Anti Financial Crime Technology business had a very strong first quarter, achieving 71% increase in revenues versus the prior year period, partially driven by the partial quarter inclusion of Verafin in in the prior year period, the phasing out of revenue write-down associated with the acquisition, as well as by strong organic growth, with the majority of that coming from the fraud and anti-money laundering which we call FRAML Solutions.
The growth was driven by by both new sales and expanded relationships within our existing client base. We have made meaningful progress in the last 12 months on our objective of helping Verafin expand its client franchise into larger Tier 1 and Tier 2 banks, as well as to innovative fintech companies, all of which account for half of the industry spend. Since we closed on the acquisition, we have signed 10 new fintech clients and two new Tier 1 and Tier 2 banks, with several proof of concepts currently underway at major Tier 1 banks. We also launched our first digital assets module for traditional banks and virtual asset service providers or otherwise known as VASPs, including crypto exchanges to detect and investigate fraud and money laundering within digital wallets and in transactions between traditional Fiat and digital currencies.
We're committed -- we are committed to supporting the financial ecosystem through its digital transformation by innovating quickly to deliver digital ready versions of our advanced crime fighting solutions. And as a recent example, we responded quickly to the Russian invasion of Ukraine by expanding our sanctions product to include new sanctions agents for our bank clients.
Verafin is meeting the high expectations we set at the time of the acquisition, while at the same time the broader Nasdaq team is learning from Verafin in important ways. Their operational expertise as an all SaaS provider is invaluable to us as we build upon and improve our effectiveness and offering our expanded suite of other SaaS offerings. By bringing together all of Nasdaq's Anti Financial Crime solutions, including Verafin, and our Market and Trade Surveillance solutions under Jamie King, the CEO and Co-Founder of Verafin, we have an incredible opportunity to maximize those cross product synergies. We're excited to have Jamie as the new Executive Vice President of Nasdaq's AFC business as he leads the future of Nasdaq's high impact, high growth solutions that focus on fighting crime and ensuring the integrity of the financial industry.
Within our Market Infrastructure Technology business, the first-quarter results continue to reflect the revenue headwinds that we have communicated to investors over the past two years since COVID began. As we discussed on prior calls, these headwinds have stemmed from factors that include logistical challenges the pandemic presented to sales, installation and changed progressed work that often occurred on site as well as some specific client delivery challenges in the post-trade space. We are pleased that two of our post-trade clients successfully went live in the beginning of the second quarter with the first phase of their implementations, and we continue to make good progress in all of our major implementation projects.
As I said last quarter, as we re-engage in person with our clients, we're starting to see these revenue headwinds recede. With the healthy order intake trends in both 2021 and early 2022, we entered 2022 with an opportunity to improve the organic growth of our Market Infrastructure solutions as we progress through the year and into 2023.
We have appointed Roland Chai as the new Executive Vice President and Leader of our Market Infrastructure Technology business. Roland has been serving as our Chief Risk Officer, and just as importantly, he spent more than a decade leading key technology product areas at several of the world's leading exchange businesses, and was in fact the customer himself of Nasdaq's marketplace technology. Roland has very specific mandates to strengthen, deepen and progress our client relationships and to continue to innovate across our product suite. I'm excited about this transition as it comes at a time when Nasdaq has never had more to offer to our technology clients, including our next-generation Cloud Native Trade Lifecycle solutions and newly built cloud-based trade -- our Trading Risk Management solution, and as well as solutions to meet the needs of digital asset marketplaces.
Moving to our foundational marketplace businesses, our Market Services segment delivered net revenues of $315 million during the first quarter, its second highest quarter ever, second only to Q1 2021. Our market share in U.S. equities saw year-over-year and sequential quarterly improvement, which resulted from an industry uptick and on exchange trading, as well as early success increase in the demand for some of our unique functionalities. Equity derivative set a new quarterly net revenue high, up 6%, maintaining our market share in U.S. options in a very busy period while realizing improved capture.
Our US Options business saw average daily number of contracts traded of $12.8 million during the first quarter and let exchanges with a 32% market share. And in our Nordic and Baltic markets, equities market saw robust volumes during the period with the value of shares traded, setting a decade high of EUR289 billion. Finally, our Corporate Platforms segment delivered record net revenue of $168 million in the first quarter, a 15% increase from the prior year period, driven primarily by our continued leadership in new listings across our U.S. and European markets, as well as growth in demand for our IR & ESG Services. We saw particularly strong growth in Nasdaq IR Insight, in IR advisory offerings, as well as across our governance solution suite, including our Board meeting management in advisory offerings and Nasdaq-1 report, our ESG reporting workflow solution.
Despite the slower start to the year for IPOs, Nasdaq continued its competitive leadership and attracting 70 total listings in the U.S. during the quarter, raising $9 billion for an 86% win rate. We listed a 100% of all operating company IPOs during the quarter and 80% of SPAC listings. In Europe, our Nordic, Baltic and First North exchanges welcomed 19 new listings.
As I wrap up, I will summarize by saying that our first quarter results demonstrate how Nasdaq's performance-driven culture and diversified business model enables the company to perform well in different data-driven environment. As a result, we will continue to make focused investments in our businesses to support sustainable growth and expansion of our impact to the financial industry, while also positioning us well as we work towards our medium-term goals. We remain relentlessly focused on advancing our strategy and we believe that Nasdaq is well positioned to address the geopolitical and economic uncertainties that may persist as we move forward in 2022.
With that, I will now turn the call over to Ann to review the financial details.