Alex Kramm

Alex Kramm questioned the translation of Moody's Analytics' impressive AI statistics into ARR revenue, noting a softening in guidance and medium-term outlook, and asked about AI's actual contribution and potential underlying business issues.

Answer

President and CEO Robert Fauber clarified that Q4 ARR was in line with Q3, acknowledging varied growth across the portfolio. He highlighted that growth in the largest accounts (twice as fast) and AI-adopting customer cohorts (also twice as fast) are key leading indicators of AI-driven engagement and future revenue.

Alex Kramm from UBS Financial asked about the tangible revenue contribution of AI initiatives to Moody's Analytics' (MA) ARR, noting that impressive AI statistics don't yet seem to translate into accelerated ARR growth, and questioned if other business segments face challenges.

Answer

Robert Fauber, President and CEO of Moody's Corporation, clarified that Q4 ARR was in line with Q3, with varied growth across MA's portfolio. He highlighted that largest accounts are growing twice as fast due to AI-oriented engagement, and customers adopting AI solutions are also growing at double the rate, serving as leading indicators for future AI revenue contribution.

Alex Kramm questioned if Moody's Analytics' performance was tracking slower than initial expectations for the year, asking about negative surprises and the outlook for 2026.

Answer

Noémie Heuland, CFO of Moody's Corporation, stated that Q3 MA top-line performance was on expectation, despite an earlier slight downward revision for the full year due to attrition in U.S. government contracts. She noted consistent 8% ARR growth and a strong Q4 pipeline, emphasizing management's focus on achieving high single-digit growth through strategic investments.

Alex Kramm inquired about Moody's Analytics' performance relative to early-year expectations, specifically negative surprises and the outlook for 2026.

Answer

Noémie Heuland, CFO, stated that Q3 MA top-line was on expectations, noting that earlier guidance adjustments were due to attrition in U.S. government contracts affecting KYC and Data & Information. She highlighted consistent 8% ARR growth and a strong Q4 pipeline, confirming the business is managed for high single-digit growth. Rob Fauber, President and Chief Executive Officer, added that this aligns with investor feedback for high single-digit growth and margin expansion.

Alex Kramm asked about the risk of substitution from the private direct lending market, where large deals that might have previously been public are now happening privately, potentially causing Moody's to miss out on rating opportunities.

Answer

CEO Robert Fauber acknowledged that substitution occurs but framed it as a potential deferral, not a permanent loss, of rating opportunities, as issuers often move between public and private markets. He highlighted the strategic MSCI partnership as a key initiative to address this, aiming to condition private market investors to use and value third-party, model-implied ratings, which could eventually create investor pull for GPs to seek formal ratings.

Alex Kramm of UBS requested more detail on the seasonal pattern for MIS revenue, asking for specific expectations for the second and third quarters given the soft issuance activity observed in April.

Answer

CEO Robert Fauber provided specific quarterly expectations, noting the largest adjustment was made to Q2. He projected MIS revenue would be down mid-single-digits in Q2, down low-single-digits in Q3, and then recover to be up mid-single-digits in Q4. This cadence aligns with the full-year guidance of flat to mid-single-digit revenue growth.

Alex Kramm from UBS requested a deeper dive into the puts and takes for the 2025 Ratings outlook, asking about potential sources of upside, such as M&A, and the most significant risks to the forecast.

Answer

CEO Robert Fauber outlined key assumptions for 2025, including supportive economic growth and tight credit spreads. He identified refinancing and a projected 50% increase in M&A activity as key drivers. Fauber noted the forecast's sensitivity to M&A levels and highlighted a key risk: the outlook assumes 'virtually all blue-sky days' with no significant risk-off periods.

Alex Kramm asked about the Moody's Analytics margin outlook, noting the expected Q4 uptick seems counter-seasonal, and inquired about long-term margin expansion potential for the business.

Answer

CFO Noemie Heuland explained that the Q4 margin increase is driven by revenue seasonality, as Q4 is MA's largest quarter. She stated that the company is largely through its recent heavy investment cycle and will now focus on margin expansion through platform migrations and cost discipline. CEO Robert Fauber underscored the company's commitment to its medium-term margin targets for MA.

Alex Kramm asked about the expected pace of G&A and R&D expansion for 2026. He also inquired about eToro's appetite for M&A, particularly regarding global expansion, and the current landscape for target companies and purchase prices, considering the company's stock valuation.

Answer

Meron Shani, CFO of eToro, indicated that G&A and R&D expenses are expected to remain roughly at current levels with only minor growth, leveraging internal efficiencies. Yoni Assia, CEO, added that AI presents significant opportunities to scale the business without increasing the adjusted cost base, referencing a recent headcount adjustment. Regarding M&A, Yoni Assia anticipates several deals in 2026, expressing a high but selective appetite for accretive opportunities in crypto, the U.S., and global brokerage/wealth management, noting their strong balance sheet for sizable deals at the right price.

Alex Kramm inquired about the expected pace of G&A and R&D expansion for 2026. He also asked about eToro's M&A appetite and expectations for 2026, particularly regarding global expansion and target companies.

Answer

CFO Meron Shani stated that G&A and R&D are expected to remain roughly at current levels with minor growth, leveraging efficiencies. CEO Yoni Assia added that AI offers significant opportunities to scale the business without increasing adjusted cost basis. Assia confirmed a high appetite for selective, accretive M&A opportunities in 2026, focusing on crypto, the U.S., and global brokerage/wealth management spaces, leveraging their strong balance sheet.

Alex Kramm asked about the expansion of the local facilities management business, its pipeline, competitive dynamics, and how its margins compare to the overall BOE segment. He also inquired about data opportunities, potential savings from AI in external vendors and research, and external monetization opportunities with real estate clients.

Answer

Bob Sulentic (Chair and CEO) highlighted the local FM business's growth from $300 million to $800 million in 3.5 years, particularly in the US, driven by organic investment. Emma Giamartino (CFO) added that global local margins are slightly above BOE, but Americas local margins are lower due to ongoing build-out. Bob Sulentic (Chair and CEO) expects about 25% savings in research costs using AI this year and next, along with savings from data collection and purchasing, enabling more efficient data delivery to brokers, but did not detail external monetization.

Alex Kramm asked for more details on the local business within the BOE segment, including pipeline, competitive dynamics, and how its margins trend relative to BOE overall. He also followed up on the data opportunity, asking about potential savings from AI (e.g., external vendors, research organization reshaping) and external monetization opportunities for real estate clients.

Answer

Bob Sulentic, Chair and CEO, explained that local facilities management, which includes small project work, has been a key growth driver, expanding from $300 million to $800 million in revenue in the Americas over 3.5 years. He noted this model is working well, differentiating CBRE, and driving considerable growth. Emma Giamartino, CFO, added that global local margins are slightly above the overall BOE segment, with Americas margins lower due to organic build-out. Bob Sulentic also stated that CBRE expects to save about 25% of research costs using AI and data, and will save money on data collection and delivery to brokers, but did not elaborate on external monetization opportunities.

Alex Kramm asked about the Building Operations & Experience (BOE) segment's outlook and pipelines, specifically if trends have normalized and improved after earlier uncertainties. He also followed up on the potential EPS impact if a data center divestment, currently expected in Q4 2025, were to slip into 2026.

Answer

CFO Emma Giamartino confirmed that BOE pipelines have normalized and improved, with strong enterprise pipelines and an expectation for significantly elevated Q4 sales volume, which should impact revenue in the second half of next year. Regarding the data center divestment, Ms. Giamartino clarified that the full-year EPS guidance range of $6.25-$6.35 is dependent on the timing of development monetization.

Alex Kramm inquired about the Building Operations & Experience (BOE) segment's outlook and pipelines, specifically asking if conditions have normalized and improved following earlier uncertainties related to tariffs. He also sought clarification on the potential EPS impact if a data center divestment were to slip into 2026.

Answer

CFO Emma Giamartino confirmed that BOE pipelines are very strong and have normalized and improved, with expectations for significantly elevated Q4 sales volume to impact revenue in the second half of next year. She clarified that the full-year EPS guidance range of $6.25 to $6.35 is largely dependent on the timing of development monetizations, including data center site dispositions.

Alex Kramm from UBS Group AG requested an update on industrial leasing trends and asked if political uncertainty in New York City was affecting real estate activity.

Answer

President, CEO, and Chairman Robert Sulentic stated that the full-year outlook for industrial leasing has improved to roughly double-digit growth. He also noted that CBRE's pipelines do not show any slowdown related to NYC politics, as corporate focus on strategic use of office space remains a powerful driver.

Alex Kramm inquired about CBRE's exposure to the U.S. government following the J&J acquisition and asked for management's view on the ultimate long-term potential for the capital markets business.

Answer

CEO Bob Sulentic characterized the company's U.S. government exposure as minimal, viewing it as an expansion opportunity focused on stable sectors like defense and hospitals. CFO Emma Giamartino noted that while capital markets are recovering, it will take a few years to reach prior peak levels, after which the business should see steady mid-single-digit growth.

Alex Kramm asked for a specific number regarding how much of the previously communicated 8%-10% expense reduction from strategic realignment is now excluded from the 2026 cost guidance.

Answer

Jill Griebenow, CFO, stated that Cboe is not breaking out the expense reduction at that discrete level. She noted that the majority of savings from Cboe Canada and Australia would materialize later, but full-year benefits from Japan equities and a significant portion of the CEDEX wind-down are already reflected in the 2026 expense guidance range of 3.3%-5.1% growth.

Alex Kramm, a Managing Director and Senior Equity Research Analyst at UBS, asked for a specific number regarding how much of the previously communicated 8-10% expense reduction from strategic realignment is now excluded from the 2026 cost guidance.

Answer

CFO Jill Griebenow stated that Cboe is not breaking out the expense reduction at that discrete level. She noted that while some savings from the Japan equities business and a good portion of the CEDX component are expected, the majority of savings from Cboe Canada and Cboe Australia would come later. She reiterated comfort with the communicated 2026 adjusted operating expense guidance range of $864 million-$879 million.

Alex Kramm observed that Cboe's index volume growth in the second quarter appeared to lag other markets and asked if this was due to disciplined retail behavior or other institutional factors.

Answer

Global President David Howson clarified that April was Cboe's second-highest SPX volume month ever. He explained that institutional engagement increases significantly during extreme volatility for portfolio repositioning, and that Cboe maintained strong market share in SPX options versus other S&P complex products. He concluded the macro environment supports continued use of their hedging tools.

Alex Kramm of UBS questioned the company's capital allocation strategy, specifically asking why no shares were repurchased during the quarter and what the current thinking is on M&A.

Answer

CFO Jill Griebenow stated that share repurchases were paused due to the non-public nature of the CEO succession process but affirmed they remain a key part of the capital strategy. CEO Frederic Tomczyk reiterated that any M&A must be strategically and financially compelling, while emphasizing that return of capital to shareholders is a priority.

Alex Kramm from UBS requested an update on the recently launched VIX options on futures, noting the limited initial volume and asking about feedback from market participants and the progress on building liquidity.

Answer

Global President David Howson explained that new products like VIX options on futures and Variance Futures require time to 'season and germinate' through 2025. He stated the launch was timed to build a performance history through the election period. He confirmed that prices are on screen, the plumbing works, and there is a 'good pipeline' of customers engaging with the new products.

Alex Kramm requested more specifics on Cboe's international expansion, asking which customer segments and regions remain untapped and whether this focus would require a significant ramp-up in spending.

Answer

Global President Dave Howson stated that the spending would be incremental, leveraging the existing global footprint. He identified South Korea and Taiwan as key opportunity regions, building on the existing presence in Australia and Japan. He noted that while recent onboards were retail-focused, institutional access is a priority, with products like VIX options on futures being developed to serve that client base by overcoming access barriers.

Alex Kramm of UBS questioned Tradeweb's tokenization initiatives, their timing, and the biggest revenue opportunities, while also addressing concerns about potential disintermediation as underlying markets digitize.

Answer

CFO Sara Furber clarified that Tradeweb views tokenization as an infrastructure upgrade, not a disintermediation, as it doesn't replace market structure or impact price discovery. She highlighted Tradeweb's leadership in tokenized U.S. Treasuries, including on-chain repo trades, and its role in DTCC's pilot program for tokenizing trillions of assets, expected to launch in H2 2026. Furber sees revenue opportunities in both traditional trading and new areas like network development. CEO Billy Hult added that streamlined settlement through blockchain, particularly in the mortgage market, could onboard more participants and drive commercial outcomes.

Alex Kramm asked about Tradeweb's tokenization initiatives, their timing, potential revenue opportunities, and strategies to prevent disintermediation as underlying markets become digitized.

Answer

CFO Sara Furber clarified that Tradeweb views tokenization as an infrastructure upgrade, not a disintermediation, as it doesn't replace market structure or impact price discovery. She highlighted Tradeweb's leadership in tokenized U.S. Treasuries, including on-chain repo trades, and its role in DTCC's pilot program launching in H2 2026. CEO Billy Hult added that streamlined settlement via blockchain could particularly benefit the mortgage market by onboarding more participants.

Alex Kramm of UBS Group AG inquired about the recent decline in U.S. Treasuries market share, asking for clarification on whether the trend was driven by a mix shift to voice trading, wholesale versus institutional dynamics, or other underlying factors.

Answer

CEO Billy Hult explained that the market share decline was a temporary headwind caused by a mix shift toward more complex, voice-centric trades like basis and swap spreads, which increased during the quarter's volatility. He emphasized that Tradeweb's primary competition remains the telephone, not other electronic platforms. Hult highlighted investments in solutions like RateFin to electronify these complex workflows and noted that on a relative electronic basis, Tradeweb gained share against its main competitor for the fifth consecutive quarter.

Alex Kramm of UBS Group AG asked about the increased investment focus on the credit business for 2025, questioning if Tradeweb plans to be more disruptive and what role price will play in its strategy.

Answer

CEO William Hult affirmed that the company has an 'extreme focus on credit,' viewing it as a huge opportunity. He outlined continued investment in portfolio trading, the Aladdin partnership, and improving dealer inventory access. Hult explicitly stated that 'price is not the lead horse,' emphasizing that the strategy is to differentiate through innovation and value, not price adjustments, to gain market share.

Alex Kramm of UBS asked for clarification on whether the 30% October revenue growth was organic. He also questioned why credit market share gains seem concentrated in portfolio trading, with RFQ and AllTrade shares remaining flat, despite growth in new client sign-ups.

Answer

CFO Sara Furber clarified that the 30% October revenue growth was all-in, with the organic rate at a still-strong 25%. CEO Billy Hult addressed the credit question by stating that progress is not always linear and cautioned against over-reading short-term data. He acknowledged that a key focus for the company is to continue building out the responder network in the all-to-all market to drive further growth in that protocol, expressing confidence in their ability to succeed.

Alex Kramm asked for a broader overview of ICE's pricing strategy across all businesses, including transaction and data, and inquired about the sustainability and drivers behind the nice pickup in energy RPC seen in January.

Answer

Warren Gardiner, CFO of Intercontinental Exchange, stated that ICE's pricing approach remains consistent, focusing on areas where value has been created. He mentioned price increases on futures contracts (particularly financials) and exchange data, similar in aggregate to previous years. He noted similar price increases in the 'pits business' and mortgage. Regarding the January energy RPC pickup, he clarified it was due to a mix shift, specifically the strong performance of TTF natural gas contracts, which have a higher RPC, rather than contract changes, with this benefit seen in December and January.

Alex Kramm asked for a broader overview of ICE's pricing strategy across all businesses, including any notable changes on the transaction side. He also inquired about the January energy RPC pickup, asking if it was due to mix or contract changes and its sustainability.

Answer

Warren Gardiner, CFO of Intercontinental Exchange, stated that ICE's pricing approach remains consistent with prior years, focusing on areas where value has been created. This included price increases on futures contracts (especially financials) and exchange data, with the aggregate impact similar to previous years but in different segments. He confirmed that the January energy RPC pickup was primarily due to a mix shift, specifically the strong performance of TTF within the energy complex, which carries a higher RPC, rather than contract changes.

Alex Kramm asked about sales cycle trends in Fixed Income & Data and sought an explanation for why the segment's revenue declined sequentially despite strong ASV growth.

Answer

President Christopher Edmonds stated that sales cycles for individual products are not lengthening, though complex multi-product deals can take longer to implement. CFO Warren Gardiner attributed the sequential revenue dip to three factors: one fewer day in the quarter, fewer large one-off data sales than in Q4, and a minor impact from equity market performance on the index business. He noted the strong ASV was driven by improved net new business and retention.

Alex Kramm from UBS requested more color on the recent acquisition of the American Financial Exchange (AFX), ICE's plans for the asset, and its broader ambitions in U.S. interest rates.

Answer

President of Fixed Income & Data Services, Chris Edmonds, described AFX as a natural tuck-in acquisition that serves a similar regional and community bank customer base as their mortgage network, enhancing their ecosystem. CFO Warren Gardiner clarified that the revenue contribution is currently immaterial and will be reported within the Fixed Income & Data Services segment.

Alex Kramm asked about the sustainability of ICE's strong energy business performance, seeking to distinguish between structural growth drivers and cyclical market volatility, and how to assess its repeatability into 2025.

Answer

Chief Operating Officer Stuart Williams explained that open interest is a strong indicator of future volume. He noted that while short-term geopolitical volatility drives activity, it also creates new, durable supply chains that utilize ICE's diverse product set. Williams emphasized long-term secular trends, such as rising energy demand in non-OECD countries, as foundational drivers for growth across key benchmarks like Brent, TTF, and JKM.

Alex Kramm inquired about the prevailing market debate concerning tokenization, specifically addressing concerns that it might disintermediate Broadridge by enabling direct issuer-shareholder engagement or driving down pricing.

Answer

CEO Tim Gokey clarified that Broadridge views tokenized equities as a significant opportunity, representing the next wave of democratization and driving position growth. He emphasized that tokenized securities remain subject to regulatory principles, including governance, and that the vast majority will still be purchased through broker-dealers or digital trading platforms, which have asset servicing obligations. Gokey also highlighted the increased complexity for issuers managing various share types, presenting a new opportunity for Broadridge to simplify these processes. Alex Kramm then followed up on the proxy advisory business, noting Broadridge's work with JPMorgan Chase & Co. and Wells Fargo, and asked about the financial implications, pipeline, total addressable market (TAM), and ramp-up speed for this specific opportunity. CEO Tim Gokey stated that the collective opportunity in shareholder engagement, including data-driven and objective voting, represents a multi-hundred-million-dollar market. He projected that this could add as much as a point of growth to Broadridge's governance business over the next few years by increasing revenue per position. Gokey emphasized that Broadridge is deepening its role by addressing multiple industry issues, such as concerns about proxy advisory firms, concentration of power with passive asset managers, and low retail participation, through new technology solutions.

Alex Kramm asked why Broadridge did not raise its full-year guidance despite a very strong second-quarter performance and whether post-election optimism in the financial services industry is leading to more positive sales conversations.

Answer

CFO Ashima Ghei explained that while results are strong, the decision to reaffirm guidance reflects a balance of factors. Positives like strong equity position growth are offset by expectations for lower event-driven revenue in the second half, foreign exchange headwinds, and a strategic decision to reinvest performance upside into the business. CEO Tim Gokey added that while the sales pipeline is at a record level, it is too early for market optimism to materially impact the company's long sales cycles.

Alex Kramm inquired about Nasdaq's perspective on the proxy market, referencing previous discussions and a November op-ed that highlighted rising processing costs and suggested better solutions, potentially involving blockchain. He asked if Nasdaq sees a role for itself in this market, has any ambitions, and what it might be doing to assist its listed clients.

Answer

Adena Friedman, Chair and Chief Executive Officer of Nasdaq, stated that Nasdaq's focus on proxy is primarily on policy and regulatory reform, as well as modernizing the proxy infrastructure. This engagement is on behalf of listed clients, addressing their pain points as public companies. Nasdaq is working with regulators and established providers to streamline technology, modernize voting processes (including new apps and proxy plumbing for retail and pass-through voting), and advocate for regulatory changes to reduce the burden on companies. She clarified that this is not primarily viewed as a business opportunity for Nasdaq.

Alex Kramm inquired about the fin-crime business, noting it was lagging expectations, and asked for details on the drivers of slower growth, confidence in Q4 acceleration, and an update on the European bank proof of concept.

Answer

Adena Friedman, Chair and CEO of Nasdaq, explained that while SMB sales remain robust, variability in enterprise ARR growth is due to implementation cycles for new clients, with three times more enterprise clients signed this year. International expansion is early, but the BioCatch partnership and Agentic AI capabilities are expected to drive future growth. The European proof of concept is encouraging, with engagement across several clients.

Alex Kramm from UBS Group highlighted the strong sequential ARR growth in Capital Markets Technology and asked what specifically drove the chunky number and if any of it was pulled forward from future quarters.

Answer

Chair & CEO Adena Friedman attributed the strong performance to broad-based strength across the subdivision's three areas: 1) higher demand for Connectivity Services due to market volumes, 2) strong new and upsell activity in Calypso, and 3) significant new managed service deals for the Market Tech Eclipse platform. She indicated it was not a pull-forward but rather strong execution.

Alex Kramm noted that Q1 ARR additions in Capital Markets Technology were respectable despite earlier comments about Calypso sales delays, and asked for clarification on the quarter's performance drivers.

Answer

CEO Adena Friedman clarified that her previous comments on Calypso related to ongoing sales conversations that would affect future quarters, not Q1 results. She attributed the solid Q1 performance to strong trends in market modernization driving the Market Tech business and high demand for connectivity (TMS), which was aided by last year's data center expansion. She reiterated that the Calypso pipeline remains robust, despite some decision-making delays.

Alex Kramm asked about the potential for increased bank M&A and whether related uncertainty could lead to a lengthening of sales cycles for Nasdaq's FinTech solutions.

Answer

Adena Friedman, Chair and CEO, stated that bank M&A is often a net opportunity. For smaller banks, Verafin contracts have asset-based pricing tiers that protect revenue. For larger mergers, new regulatory requirements can create sales opportunities for more sophisticated solutions. She expressed no concern about sales cycle paralysis, citing a healthy and geographically diverse pipeline.

Alex Kramm followed up on pricing power, requesting more details on the expected contribution from pricing across different segments for 2026.

Answer

Andy Wiechmann, CFO of MSCI, stated that the contribution from price increases has been relatively stable, influenced by innovations, service enhancements, client health, and tool usage. He noted that MSCI monetizes enhancements through price increases, which supports both upsells and pricing. He also highlighted AI's potential to further unlock commercial value through price increases by enabling clients to derive more value from MSCI's services.

Alex Kramm from UBS followed up on Henry Fernandez's suggestion of increased pricing power, asking Andy Wiechmann for more details on the contribution from pricing and expectations for 2026 across different segments.

Answer

Andy Wiechmann, CFO of MSCI, stated that the contribution from price increases has been relatively stable, with puts and takes based on innovations, service enhancements, client health, and tool usage. He reiterated that enhancements are monetized through price increases, supporting both upsales and price increases. He highlighted AI as particularly exciting for enabling clients to do more and operate more efficiently, which should allow MSCI to continue unlocking commercial value through price increases over time.

Alex Kramm asked about the potential for accelerating subscription revenue in the Index segment, driven by asset flows into international markets, similar to the boost seen in asset-based fees (ABF).

Answer

Chairman & CEO Henry Fernandez acknowledged the significant boost to ABF from the rotation of assets to non-U.S. markets. However, he explained that the impact on the subscription side would be more gradual and incremental, not a sharp acceleration, because MSCI already has a high installed base of data and analytics with its global client base.

Alex Kramm asked if the recent trend of asset flows toward international markets and away from the U.S. is beginning to impact MSCI's subscription business.

Answer

Chairman and CEO Henry Fernandez confirmed a 'marked change' in global asset allocation, with clients increasing bets on Europe and Japan. He described this as a significant positive for MSCI, as its business is predicated on global investing and had faced headwinds from U.S.-centric flows in recent years. He expects this trend to benefit both asset-based fees and the subscription business, as clients require more data, models, and transparency for international portfolios.

Alex Kramm questioned the outlook for pricing conversations and their impact in the coming year, asking for a comparison to competitors and details on segment-specific dynamics, especially in ESG.

Answer

CFO Andrew Wiechmann noted that the contribution from price increases in 2024 was slightly below the elevated levels of 2023. He stressed that pricing is linked to the value delivered through broader access and product enhancements. While avoiding segment specifics, he stated that MSCI is well-positioned against competitors due to its strong value proposition and has seen competitive wins in areas like ESG.

Alex Kramm sought more specific details on the short-term outlook, particularly for Q4 cancellations and sales, noting previous suggestions that conditions might improve.

Answer

CFO Andrew Wiechmann confirmed that Q4 cancellations are expected to remain elevated year-over-year, though the decline in the retention rate should be less pronounced than in Q3. Regarding sales, he mentioned that while budgets remain tight, there are encouraging signs driven by improved client AUMs, leading to cautious optimism for building momentum.

Alex Kramm (UBS) inquired about the future hiring landscape for FactSet's customer base, specifically how AI-driven efficiencies might impact client headcount and desktop-related businesses, and which client types are most likely to see reductions in force.

Answer

Sanoke Viswanathan, CEO of FactSet, stated that while clients are experimenting with AI, there's no current evidence of headcount reductions, even in banking, where M&A recovery is driving increased hiring and digital tool usage. He anticipates consumption growth and increased headcount, with efficiencies being reinvested by clients to gain market share.

Alex Kramm inquired about the potential impact of AI on FactSet's customer base hiring, specifically asking which client types might see reductions in force due to AI-driven efficiencies and how this could affect FactSet's desktop-related businesses, which constitute 50% of its operations.

Answer

CEO Sanoke Viswanathan stated that despite widespread AI experimentation, FactSet has not observed any real headcount reductions among clients, even in banking. He noted a strong recovery in M&A driving increased hiring of bankers and higher usage of digital tools, including FactSet's AI products, which saw over 100% usage growth quarter-on-quarter in banking. He anticipates consumption growth and potentially increased headcount, with efficiencies being reinvested into market share gains.

Alex Kramm asked about the drivers of FactSet's margin decline, distinguishing between incremental investing and cost inflation, the allocation of these investments, and whether this represents a one-time investment phase or a new normal for margins.

Answer

Helen Shan, Chief Financial Officer, explained that the margin decline in fiscal 2025 was primarily due to bonus normalization, acquisition dilution, and additional hiring. For fiscal 2026, she detailed that approximately 250 basis points of investment are planned, with two-thirds allocated to growth areas like AI, data, and portfolio lifecycle solutions, and one-third to structural improvements such as cybersecurity and internal AI. She anticipates operating leverage from structural investments and top-line growth from strategic investments.

Alex Kramm inquired about the factors contributing to FactSet's margin decline, specifically differentiating between incremental investments and general cost inflation. He also asked about the specific areas of new project investments and whether the current investment phase is temporary, with expectations for margin expansion in fiscal year 2027.

Answer

Helen Shan, CFO, FactSet, explained that the fiscal 2025 margin impact was primarily due to bonus normalization and additional hiring supporting investments, noting that without acquisition dilution, margins would have been higher. For fiscal 2026, she detailed that approximately two-thirds of the 250 basis points in investment are for growth (AI, data, PLC) and one-third for structural improvements (cyber, internal AI), expecting operating leverage from structural investments and top-line growth from others.

Alex Kramm asked about the drivers of FactSet's margin decline, distinguishing between incremental investing and cost inflation, the allocation of these investments to new projects, and whether the current investment phase is a one-time event or indicative of a new normal for margins in fiscal 2027 and beyond.

Answer

Helen Shan, Chief Financial Officer, explained that the 2025 margin decline was primarily due to bonus normalization and absorption of acquisition dilution. For 2026, she detailed that approximately 250 basis points are allocated to growth investments (AI, data, portfolio lifecycle), with the remaining third for structural investments (cybersecurity, internal AI) aimed at driving operating leverage and top-line growth.

Alex Kramm from UBS requested more detail on the Q4 outlook, asking for a comparison of growth drivers versus last year to understand the potential for upside or downside to the guidance.

Answer

CEO Philip Snow confirmed that FactSet is significantly ahead of the last two years, with growth driven by the Americas and EMEA, especially in enterprise solutions and the buy-side. Chief Revenue Officer Goran Skoko added that booked ASV is well ahead of last year, retention is improving, and the pipeline is diverse, reducing dependency on any single large deal.

Alex Kramm followed up on the banking outlook, asking for more specificity on where the potential for a banking recovery fits within the narrowed ASV guidance range.

Answer

CEO Phil Snow and Chief Revenue Officer Goran Skoko clarified their conservative stance. Skoko explained that the midpoint of their guidance assumes flat to slightly lower headcount in the banking sector. Therefore, any significant pickup in capital markets activity or hiring would represent a potential tailwind that could push results toward the high end of the guidance range.

Alex Kramm asked about the cadence of Annual Subscription Value (ASV) growth, questioning why an acceleration shouldn't be expected in Q2 given management's commentary on 'green shoots' and momentum.

Answer

CEO Frederick Snow confirmed the positive momentum, highlighting a strong wealth management pipeline, growth in private equity and hedge funds, and favorable client feedback on the new 'Pitch Creator' generative AI product. Chief Revenue Officer Goran Skoko added that client trials increased 23% in the Americas and 13% in Europe, with RFPs up 30% year-over-year, fueling optimism for the second half.

Alex Kramm of UBS Group AG questioned the short-term ASV growth cadence, asking if an acceleration should be expected in Q2 given management's optimistic "green shoots" commentary.

Answer

CEO Frederick Snow acknowledged the momentum, highlighting a strong wealth pipeline, growth in PE/VC and hedge funds, and positive feedback on the new 'Pitch Creator' product for banking. Chief Revenue Officer Goran Skoko added that trials and RFPs have increased significantly year-over-year, supporting the optimism for the rest of the year.

Alex Kramm asked for more details on the buy-side segment, specifically about a large asset management cancellation and whether hiring trends in the sector are stabilizing.

Answer

Executive Frederick Snow attributed the large cancellation to a firm needing to consolidate under cost pressure. He contrasted this by highlighting that 9 of FactSet's top 10 wins for the year were competitive displacements. Anecdotally, he noted the buy-side environment is becoming more constructive, with an appetite for transformation despite cost pressures. CFO Helen Shan added that demand for managed services, an enterprise solution, remains a source of strength on the buy-side.

Alex Kramm requested more details on U.S. block trading, acknowledging its slower progress compared to international markets. He sought insights into the timing for increased dealer liquidity and expected uptake.

Answer

CEO Chris Concannon emphasized the block market as the biggest opportunity, noting global block growth rates of 10% in Q3 and 21% in October, with U.S. IG block activity up 30% in October. He highlighted the need for more content and new features, including upcoming offerings to enable bank partners to share Axx content directly with clients and improved workflow through the Expro rollout in Europe.

Alex Kramm requested more details on U.S. block trading, specifically regarding the timing of increased dealer liquidity and expectations for uptake, given its slower progress compared to international block trading.

Answer

CEO Chris Concannon identified the block market as the company's biggest global opportunity, noting 10% block growth in Q3 and 21% in October across all products, with U.S. IG block activity up 30% in October. He emphasized the importance of content and new features, including upcoming offerings to allow bank partners to share Axe content directly with clients, and improvements to workflow with the X-Pro rollout in Europe and regular changes to the U.S. block solution.

Alex Kramm of UBS Group requested more detail on the U.S. Blocks initiative, which he noted is the biggest for the year, asking about the timeline for it to gain traction and how learnings from successful rollouts in EM and Eurobonds are being applied.

Answer

CEO Christopher Concannon stated that success in EM and Eurobonds, where block volume is up over 20% year-to-date, has been driven by robust dealer content. He described the U.S. rollout as being in its 'early days' and emphasized that the key to success is onboarding more dealer content, which he expects will lead to similar positive outcomes in the U.S. credit market.

Alex Kramm asked for an analysis of trading activity within April, seeking to understand which client behaviors and market share trends persisted after the initial volatility spike versus those that normalized.

Answer

CEO Christopher Concannon noted that while peak volatility from early April subsided, it settled at a heightened level compared to January and February, with spreads remaining wide. He confirmed that this environment continues to be attractive for their business, as clients' sustained need for liquidity drives activity, particularly towards their Open Trading alternative liquidity pool.

Alex Kramm inquired about the drivers of recent portfolio trading market share gains and the specifics of the new S&P Global data partnership, including its strategic benefits.

Answer

CEO Christopher Concannon stated that MarketAxess is gaining share in portfolio trading despite not yet having a feature-complete product, which he views as a significant opportunity. He expects to surpass competitors with new features in Q1 2025. Regarding the S&P partnership, he explained MarketAxess will provide its CP+ data to enhance S&P's evaluated pricing, while receiving valuable reference data in return, with full integration expected by early Q2.

Alex Kramm sought clarification on the U.S. property management growth rate, questioning if it was 2% and if the strategic changes were impacting it, as well as the ultimate growth potential for the business post-restructuring. He also asked about industrial leasing trends, noting they were still below prior years and what JLL observed to return to normal levels.

Answer

CEO Christian Ulbrich clarified that U.S. property management growth was mid-single digits, not 2%, with the overall decline stemming solely from Asia Pacific. He stated that JLL has higher ambitions for property management growth post-restructuring, emphasizing a focus on delivering exceptional client service during the transition. CFO Kelly Howe added that industrial leasing performed better than expected, with global revenue up 6% and U.S. up 9%, noting strong growth in the first half and a healthy pipeline, feeling good about the two-year stacked performance relative to the market.

Alex Kramm asked for clarification on Property Management growth, specifically the U.S. versus APAC performance, the long-term growth potential for the business, and current trends in industrial leasing.

Answer

Christian Ulbrich (CEO) clarified that U.S. Property Management experienced mid-single-digit growth, with the overall decline stemming solely from Asia Pacific. He expressed higher long-term growth ambitions for the Property Management business post-restructuring. Kelly Howe (CFO) reported that industrial leasing revenue grew 6% globally and 9% in the U.S., outperforming expectations, with a healthy pipeline and strong two-year stacked performance relative to the market.

Alex Kramm asked about future growth expectations and the competitive landscape for the Work Dynamics segment. He also questioned why incremental margins in Capital Markets appeared soft despite strong revenue performance.

Answer

Global CEO Christian Ulbrich described the Work Dynamics outlook as very positive, citing a limited number of global competitors and strong ongoing demand. CFO Karen Brennan explained that quarterly Capital Markets margins can be affected by business mix and expense timing, noting that the year-to-date incremental margin of over 40% (adjusted) is in line with historical averages.

Alex Kramm sought more detail on S&P Global's AI discussion, specifically the breakdown of Market Intelligence (12% not proprietary), and the company's comfort with the AI defensiveness of the remaining 90% given potential changes from AI and insourcing by large customers.

Answer

Eric Aboaf, CFO and EVP, detailed MI's composition: Credit & Risk Solutions (proprietary), Enterprise Solutions (workflow/software tools, deeply embedded, proprietary data). Data, Analytics & Insights is mixed: ~half proprietary/curated data, ~quarter workflow tools/benchmark models (Capital IQ), and ~quarter "undifferentiated" public data (e.g., 13F ownership data, directories), totaling ~12% of MI. He emphasized continuous enhancement of proprietary data and workflow integration as key to differentiation and defensibility.

Alex Kramm sought more detail on S&P Global's AI defensiveness, specifically regarding the 12% of Market Intelligence business identified as less proprietary, and how the company maintains its competitive edge against changing workflows and potential insourcing by large customers.

Answer

Eric Aboaf, CFO and EVP, elaborated that Credit and Risk Solutions and Enterprise Solutions are largely proprietary due to benchmarks, models, and embedded workflow tools. He explained that half of Data, Analytics and Insights is proprietary (curated data, advisory), a quarter is workflow tools (Cap IQ), and the remaining quarter (12% of MI, 5% of total company) consists of undifferentiated, publicly available data. He emphasized continuous enhancement of proprietary data and workflow integration to maintain differentiation.

Alex Kramm asked about S&P Global's traction and competitive positioning in the private credit market, particularly in relation to smaller, more active rating agencies in that space.

Answer

President & CEO Martina Cheung emphasized that S&P Global competes on quality, not outcomes, and uses a consistent methodology across public and private markets, which investors value. She noted the company has been investing for years in areas like ABS and structured finance, has strong relationships with major sponsors, and sees issuers moving fluidly between public and private markets, reinforcing the value of a comparable S&P Global rating.

Alex Kramm asked about S&P Global's traction and competitive positioning in the private credit market, particularly in relation to smaller, more active rating agencies in the space.

Answer

President & CEO Martina Cheung emphasized that S&P Global competes on quality, not outcomes, and uses a consistent methodology across public and private markets, which investors value. She highlighted deep engagement with sponsors and investments in high-growth private credit areas like ABS. She also noted that the movement of issuers between public and private markets reinforces the value of a comparable S&P Global rating.

Alex Kramm asked for a holistic view on the cost base, questioning if there is room for a more significant cost program beyond tactical adjustments, particularly given the margin profile of some divisions like Market Intelligence.

Answer

CFO Eric Aboaf acknowledged that beyond tactical levers, systemic efforts are already underway, such as simplifying operations in Market Intelligence and leveraging GenAI for productivity in Commodity Insights. He affirmed that 'there's always more to do' and that continuous cost discipline is part of the management team's ongoing planning process for future years.

Alex Kramm of UBS requested specific figures for Market Intelligence's ACV growth and asked about tangible changes to the go-to-market strategy under the segment's new leadership.

Answer

President and CEO Martina Cheung explained the new leadership is focused on simplification, eliminating silos, and accelerating go-to-market for new products. Executive Mark Grant clarified that MI's ACV growth was about 1-2 points faster than its revenue growth. Interim CFO Chris Craig added that subscription revenue grew about 4% while recurring variable revenue increased about 20%.

Alex Kramm asked about the Commodity Insights business, probing the balance between cyclical market strength and secular growth drivers like the energy transition, and what this implies for future performance.

Answer

Incoming President and CEO Martina Cheung expressed excitement about the segment's performance, attributing it to the breadth and diversification of its offerings. She highlighted that alongside strong core product performance, newer investment areas like energy transition, clean energy tech, and voluntary carbon markets are seeing rapid growth, suggesting a durable, long-term growth story.

Alex Kramm inquired about Verisk's general M&A outlook, asking if capacity exists for other deals beyond AccuLynx, how prices have changed, and if client C-suite engagements reveal specific workflows where M&A could provide solutions.

Answer

Lee Shavel, Verisk's President and Chief Executive Officer, stated that Verisk is highly focused on the AccuLynx transaction and its effective execution. While monitoring the market for additive opportunities, the primary focus is on delivering value from current deals. He noted that clients desire centralized efficiency and connectivity, with M&A like Insurance Pay and AccuLynx augmenting data sets and improving industry utilization.

Alex Kramm inquired about Verisk's general M&A outlook, its capacity for additional deals, trends in acquisition prices, and whether client feedback points to specific workflows that M&A could address.

Answer

President and CEO Lee Shavel stated that Verisk is primarily focused on the AccuLynx and closed Insurance Pay transactions, while continuously monitoring the market. He noted that client feedback often emphasizes centralized efficiency and connectivity, citing Insurance Pay and AccuLynx as examples of deals that augment data sets and improve industry utilization.

Alex Kramm of UBS Group AG questioned the updated revenue guidance, observing that the increase appeared to only account for M&A, and asked for clarification on underlying business trends given the strong first-half performance.

Answer

CFO Elizabeth Mann clarified that the outlook reflects a balance of factors. These include difficult comparisons to strong 2024 results, known headwinds from federal government spending cuts starting in Q3, and some softness in the auto business. She affirmed that the full-year organic growth outlook remains consistent with their long-term targets.

Alex Kramm from UBS asked about the impact of the uncertain macroeconomic environment, including tariffs, on Verisk's business and whether any delays in client decision-making were being observed.

Answer

CFO Elizabeth Mann responded that Verisk does not have material direct exposure to tariffs. She noted that for the broader insurance industry, higher costs could impact claims and profitability, a trend clients are monitoring closely with the support of Verisk's data and analytics.

Alex Kramm asked for the key swing factors that would determine whether Verisk lands at the low or high end of its 6% to 8% revenue growth guidance for 2025.

Answer

CFO Elizabeth Mann identified potential customer attrition as a low-end driver and faster-than-expected adoption of new products as a high-end driver. She also cited transactional volatility in auto, weather, and ILS markets as a key variable. CEO Lee Shavel added that broader factors like the regulatory and economic environment could also influence results.

Alex Kramm noted that auto shopping trends have turned into a headwind and asked for an outlook on this trend and its potential impact on growth over the next year.

Answer

Chief Financial Officer Elizabeth Mann acknowledged the shift from a tailwind to a headwind after several quarters of strength in auto shopping activity. While declining to quantify the future impact, she confirmed that the year-over-year comparisons for the transactional auto business will continue to be challenging in the coming quarters.

Alex Kramm from UBS Group AG asked for a more specific Q3 outlook given declining exchange volumes, sought feedback on client reactions to the recent short-seller report, and inquired about the sustainability of margins in the Agency and Execution segment.

Answer

Group CEO Ian Lowitt stated that July's performance was strong and comparable to Q2, with market share gains offsetting softer market volumes. He described client reaction to the short report as 'modest,' citing stable balances and new mandates from large hedge funds. Chief Strategist Paolo Tonucci affirmed that the improved Agency and Execution margins are sustainable, driven by the high-margin Prime business, with further room for improvement.

Alex Kramm of UBS Group AG asked about the market environment and client health during the recent period of volatility, probing for any signs of underlying client stress. He also followed up on the Clearing segment's performance, noting a sequential decline in front-office headcount and asking if certain markets were being de-emphasized.

Answer

Executive Ian Lowitt stated he was 'extremely pleased' with how clients absorbed the recent volatility, noting that the absence of a sharp price increase in a single commodity prevented the liquidity pressures seen in past events. He confirmed there were almost no missed margin calls and minimal client stress. Regarding headcount, Ian Lowitt and Crispin Robert Irvin clarified that the change was due to a 'remapping of headcount' in the agricultural business, which straddles multiple segments, and not a loss of teams or a change in strategy for the clearing business, which remains a key growth area.

In a follow-up, Alex Kramm of UBS sought clarification on the Q4 net interest income (NII) outlook, noting that recent acquisitions and a debt offering seemed to complicate the picture for the quarter.

Answer

CFO Rob Irvin acknowledged several moving parts for Q4 NII, including resilient customer balances, an expected rate cut, and the new debt issuance. CEO Ian Lowitt added that some of the new debt capital will be deployed to support clients, generating NII. He concluded that Q4 NII is expected to be 'somewhat lower than the third quarter, but not dramatically lower.'

Alex Kramm of UBS Group asked for CME's perspective on the emerging topics of stablecoins and tokenization, inquiring about the opportunities, potential risks, and where the company is focusing its efforts.

Answer

COO & Global Head of Clearing Suzanne Sprague detailed the partnership with Google on a Universal Ledger initiative to enable 24/7 movement of value via tokenization, with a target launch in 2026. Chairman & CEO Terrence Duffy added that the primary goal is to create additional efficiencies for clients, particularly around tokenizing cash for risk management. He emphasized a long-term, prudent approach rather than rushing a product to market.

Alex Kramm from UBS Group inquired about CME's perspective on the emerging topics of stablecoins and tokenization, asking about the company's focus, perceived opportunities, and potential risks.

Answer

Suzanne Sprague (COO & Global Head of Clearing) and Terrence Duffy (Chairman & CEO) addressed this. Sprague highlighted the partnership with Google on a Universal Ledger initiative to enable 24/7 value movement, with a target for a 2026 solution. Duffy emphasized that the primary goal of these efforts is to create greater efficiencies for clients, particularly around cash management, and that CME will proceed in a thoughtful, long-term manner.

Alex Kramm of UBS requested a breakdown of the strong market data revenue growth, asking about the contribution from price increases, core subscription growth, and any one-time items, and specifically where new subscribers are coming from.

Answer

Lynne Fitzpatrick, CFO, confirmed a 3.5% price increase effective in January. Julie Winkler, Chief Commercial Officer, added that growth was driven by an uptick in professional subscribers and outperformance from non-professional (retail) users. She also noted about $3.5 million in non-recurring audit revenue and true-ups.

Inquired about the company's capital allocation strategy, specifically the plans and approach for the newly authorized $3 billion share buyback program.

Answer

The dividend remains a primary use of capital. The new share repurchase program is viewed as a third, opportunistic lever for returning capital to shareholders, complementing the regular and variable dividends. The variable dividend for the prior year was just paid out in mid-January.

Alex Kramm asked for details on the Energy business, focusing on how CME is capturing structural changes like the energy transition and where new customer growth is originating globally. He also asked if the new, lower tax rate guidance of around 23% is a good baseline for 2025.

Answer

Derek Sammann, Global Head of Commodities, Metals & Options, reported record year-to-date revenues in Energy, with Q3 volumes up 21%. He highlighted outsized growth from outside the U.S., with European business up 37% and LATAM up 30%, driven by physical flows of U.S. benchmarks. CFO Lynne Fitzpatrick added that it is premature to provide 2025 tax guidance, citing uncertainties like potential political and administrative changes, despite the current trend of strong international growth lowering the rate.

Asked for an update on the progress of cost-cutting initiatives and for views on the competitive landscape, particularly concerning the new Nasdaq Private Market platform.

Answer

The company is realizing cost savings from its reduction plan, though this is partially offset by near-term investments in offshore tech resources. They remain confident in their competitive position against new entrants like Nasdaq Private Market, citing their established network, deep liquidity, broad product suite, and brand reputation as significant moats.

Alex Kramm requested details on the margin improvement focus within the Services business and asked if M&A would be considered for Capital Markets in addition to Services.

Answer

CFO Neil Johnston explained the margin focus involved restructuring the fixed-price design and build business in EMEA and improving contract profitability in the U.S., noting this work is now largely complete. CEO Michelle MacKay confirmed that the door is always open for M&A in both advisory and services, but the current investment focus in advisory is on talent, data, and analytics.

Questioned the cause of the steep decline in the implied fee rate in Q2 guidance, asking if it was solely due to the specific flow events mentioned or other mix shifts. Also asked why first-party managed products growth wasn't accelerating faster than overall AUM/AUA and what was needed to improve its traction.

Answer

The decline in the blended fee rate was attributed to mix, specifically clients holding more assets in cash and the onboarding of a large block of low-fee reporting assets (AUA). For first-party products, it was explained that while newer solutions like high-net-worth, direct indexing, and tax overlay are growing very strongly (38%+), this growth is being offset by outflows from older, less competitive proprietary models. The launch of new proprietary ETFs is intended to help capture these assets and allow the underlying growth to become more apparent.

The analyst inquired about recent pricing actions on the subscription side, the apparent fee rate deterioration in the Q4 guide, and a bigger-picture question for the incoming CFO about restoring market confidence given the stock's poor performance.

Answer

The fee rate decline in Q4 is not due to pricing but to mix shift: a large, low-fee client conversion ($17B in reporting-only assets) and a broader industry trend of clients moving assets to cash (AUA). Pricing on the subscription side is actually increasing for RIAs through bundling more services like insights and analytics. The incoming CFO, Josh Warren, responded to the stock performance question by emphasizing his belief in Envestnet's unique and core position in the ecosystem, which he knows from his experience at partner firms like BlackRock and iCapital.

Alex Kramm from UBS asked for clarification on ongoing cost-saving measures and sought more detail on the specific metrics that improved in Q2, questioning what stood out for new and existing investors beyond general market strength.

Answer

CEO Amber Mason stated that future cost efficiencies will be iterative, focusing on central operations and bringing some functions in-house, while direct marketing spend will scale up or down based on efficiency. She noted that retail investors often lag institutional trends and that hot topics like AI create an 'echo chamber effect' driving engagement. SVP Lee Harris added that daily orders for lower-priced products, a key top-of-funnel indicator, are showing a positive trend.

Alex Kramm from UBS requested more details on ongoing cost-saving actions and asked management to highlight key metrics from Q2 that stood out for both new and existing investors, particularly in the context of the strong market performance during the quarter.

Answer

CEO Amber Mason explained that future cost efficiencies will be iterative, focusing on central operations and insourcing functions, while direct marketing spend will increase based on efficiency. She noted that retail investors often lag institutional trends and that hot topics like AI create an "echo chamber effect" driving engagement. Interim CFO Stephen Park added that daily orders for lower-priced products are accelerating, which is a positive leading indicator for the sales funnel, though it's too early to see the impact on billings.

Alex Kramm of UBS inquired about the specifics of ongoing cost-cutting measures and asked for more detail on what metrics indicated a return of retail investors during the strong second quarter.

Answer

CEO Amber Mason stated that future cost savings will be iterative and focus on operational efficiencies rather than large cuts, while direct marketing spend will increase as performance improves. SVP Lee Harris noted that a key positive indicator is an acceleration in daily orders for lower-priced, top-of-the-funnel products, which historically precedes broader growth in billings.

Alex Kramm requested more specific Q1 guidance, asked about the full-year outlook for minimum margins or cash flow, and questioned if churn from the large 2020-2021 cohorts has stabilized. He also followed up on the size of the bonus payment moved to Q1 and the strategy to improve upselling to 'high value' subscribers.

Answer

SVP Lee Harris and Interim CFO Stephen Park indicated Q1 would be impacted by weak conversion but that they remain focused on profitability. CEO Amber Mason stated that while she couldn't commit to a number, the business remains cash-flow positive and they are working to improve on 2022 results. Harris confirmed that churn from large prior-year cohorts has normalized. On follow-ups, Harris noted the Q1 bonus payment was a timing shift and would be lower than the prior year, and Park explained the slowdown in upselling is due to macro-driven hesitation from customers to purchase higher-priced subscriptions.