Bragg Gaming Group Inc.

Good morning, ladies and gentlemen, and welcome to TMX Group Limited Q3 2021 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, November 9, 2021. And I would like to turn the conference over to Paul Malcolmson. Please go ahead.

Thank you, Operator, and good morning, everyone. I hope that you and all of your families are staying well and safe. Thank you for joining us this morning for the third quarter 2021 conference call for TMX Group. As you know, we announced our results late yesterday, and a copy of our press release is available on TMX.com under Investor Relations. This morning, we have with us John McKenzie, our Chief Executive Officer, and David Arnold, our Chief Financial Officer. Following opening remarks, we will have a question and answer session. Before we start, I want to remind you that certain statements made on today's call may be considered forward-looking. I refer you to the risk factors contained in our press release and reports that we have filed with regulatory authorities. With that, I'd like to turn the call over to John.

Well, thank you, Paul, and thank you, everyone, for dialing in today to discuss TMX Group's financial performance for the third quarter and the first nine months of 2021. And first, on behalf of all of us at TMX, I do want to wish the very best of health to everyone listening this morning. I'm happy to report today that I'm actually transmitting to you from the TMX headquarters here in Toronto and that the transition to back to office for TMX employees is underway here in Ontario and in our offices across the country and around the world. In fact, our trade port office in London has served as our pilot project as they've been now back in the office for some time. And while our return to the office is voluntary and many of our employees continue to work from home during this early stage, it is very encouraging to finally reach the point where we can safely resume a work-from-office life. And personally, I am grateful for the opportunity to interact with some of our people within the TMX environment, walk our halls and offices once again, and get those face-to-face interactions. We also have a brand new space to explore here as well, the TMX Market Center at 120 Adelaide Street West in Toronto. It's our state-of-the-art event destination and broadcast facility, and it stands as a prominent new Toronto business landmark and a fresh, distinctive presence at the core of the city's financial district, ready to be discovered. Two weeks ago, we held our first in-person market open ceremony in the new TMX Market Centre, welcoming Q4 Inc. to Toronto Stock Exchange. And our market open ceremony is a proud, long-standing tradition. The ability for us now to do that safely... and host for our clients at the exchange to celebrate important milestones in their company's history and to kick off a new trading day is a clear sign of a progress and return to normal. Now, as Paul mentioned, we announced results for the third quarter in the first nine months of 2021 last night. And David will walk you through the third quarter numbers in a few moments in more detail. But I'm going to focus my comments this morning on providing context as we reflect on the year to date through September 30th. Specifically, TMX's performance for the first nine months of 2021. Secondly, some key accomplishments and significant progress we have made in executing our long-term growth strategy as we strive to continue to make our markets better. And also importantly, how the shifting market dynamics over the past few years have served to reshape our client offerings in meaningful ways, while also helping to inform our perspective as we move through the last weeks of the year and beyond. Now, turning now to our results for the first nine months of the year. Revenue was $728 million, an increase of 13% from the first nine months of 2020. And diluted earnings per share grew 21%, or 20% on an adjusted basis compared with the same period in 2020, and continuing the pace of our strongest year on record. TMX's positive performance for the first nine months reflects significant contributions from across our diverse franchise, including capital formation, derivatives trading and clearing, and trade port. Our total operating expenses increased 5% from the first nine months of 2020, largely due to the inclusion of expenses related to AST Canada, including transaction and integration costs. The increase in expenses also reflects higher headcount and payroll costs, higher costs related to our short-term employee incentive plan, and increased severance as compared to a year ago. Now turning to our business areas, revenue for capital formation was $190.5 million. an increase of 38% from the first nine months of 2020, largely driven by an increase in the number of issuer financings and financing dollars raised on Toronto Stock Exchange and TSX Venture Exchange and higher initial listing fees. Our issuers raised a combined total of $43.3 billion, a 50% increase over the first nine months of last year, and more than the total raised during the entirety of 2020. Our largest sectors, technology and mining, continued to lead the way in terms of financing dollars. Technology issuers raised more than $11.4 billion in the first nine months, an 86% increase over the same period last year, and 42% higher than the full-year record set just last year as well. Companies in the mining sector raised almost $8 billion, a 45% increase year over year. And TMX's unique two-tiered ecosystem continues to serve as an effective proving ground for businesses in all sectors to pursue the next steps in their growth trajectory. TSX Venture graduated 27 companies to Toronto Stock Exchange through September 30th, more than any full year since 2011. The graduate companies represent a broad range of industries, including technology, clean tech, consumer products and services, mining and life sciences, And despite a normal slower pace during the summer months, overall 2021 has been a very robust year for IPOs. We welcomed 38 corporate IPOs to Toronto Stock Exchange and TSX Venture Exchange in the first nine months of the year, more than any full year since 2012. And over the past few weeks, we've seen activity pick up significantly, particularly in tech IPOs with Copperleaf, D2L, Propel Holdings, and Q4 all launching since the end of September. In total, we've had 309 new listings year-to-date, excluding those graduates, through September 30th, a 44% increase from last year. And as we pause to examine the impact of market conditions and short-term trends on IPOs, financing, and levels of overall ongoing public activity in our business, it's always important to consider the effects these developments have on the complexion of our markets over the long term. The rise of the innovation economy in this country over the past decade has helped to change the face of our equity markets and redefine what an investment in Canada means. The influx of great companies and visionary entrepreneurs builds our ecosystem stronger, growing and diversifying our stock list to the benefit of investors here in Canada and all around the world. And global investors are increasingly turning into our story and seeking exposure to these Canadian markets. According to the latest data from StatsCan, through August, net inflows into Canada equities were $28 billion, on pace to reach the highest levels since 2017. And today, Canada presents a powerful, globally competitive value proposition. And we need to continuously strive to create the conditions for that enduring success, to support the businesses at the foundation of this vital ecosystem to ensure that today's wins are indicative of a long-term, sustainable trend and not just an anomaly. Now, turning now to derivatives. Revenue from trading and clearing was $104.3 million, up 9% from the first nine months of 2020, including an 11% increase in revenue from the Montreal Exchange and CDCC. MX's total volumes increased 24% compared to the same period of last year. And the revenue growth, while somewhat offset by lower revenue per contract due to a change in product mix and incentives, designed to build long-term sustainable liquidity. Performance over the first nine months included strength in some of MX's signature products, as well as developing growth areas. Average daily volume in the BAX contract, Canada's benchmark short-term interest rate futures product, was up 12% in the first nine months compared to last year, following the recent resurgence in global demand to deploy and manage risk. Single share futures continued to gain significant traction with domestic and international clients, with 65% growth in average daily volumes compared to the first nine months of 2020. And equity options were up 34% year-to-date, compared to the same period last year, with energy sector names spurring increased interest and activity from both institutional and retail traders. Across the board, overall open interest was up 46% at September 30, 2021 from last year, a strong indication of volumes to come. And the month of September also marked another important milestone, achievement in Montreal Exchange's proud history of innovation and the next phase of our globalization strategy, the successful launch of trading on Asia-Pacific hours. Extended trading hours syncs us to the world's premier financial centers, enabling sophisticated modern investors in all time zones to trade Canada to execute cross-market trading strategies and manage exposure on their time. Running our derivatives markets for 20 plus hours a day is no small feat. And the Extended Hours Asia Pacific Initiative is the culmination of a ton of hard work by our teams in partnership with our stakeholders, including clients, as well as regulators and government officials here in Canada, Hong Kong, and elsewhere in Asia. In the weeks and months that led up to this launch, we've seen strong engagement from investors and participants in the region. And while we are very much still in the early days, the initial response to the launch has been very positive, with average volumes over 6,000 contracts during the new session. Now, combined, MX's European and Asian Pacific extended hours accounted for approximately 6% of total volumes during the first nine months of 2021. Now, moving on to Tradeport. We are pleased to report double-digit growth with revenue of $111.7 million, a 10% increase compared to the first nine months of 2020. Growth was driven by a 7% increase in the average number of subscribers and also included 1.3 million of revenue from TradeSignal. Acquired in June, TradeSignal provides advanced analytics and charting capabilities to our clients. And as the world emerges from pandemic conditions and economic recovery gains momentum, global energy markets are clearly in a state of flux. Gas supply shortages have driven a dramatic surge in energy prices, across Europe and around the world. And Tradeport's product suite, tailored to meet the data and analytic needs of traders, portfolio managers, and analysts, is as vital as ever, providing opportunities for clients with analytics and insights to make informed decisions and to pursue their short and long-term strategies. Now, in closing my comments, as we move to the final weeks of 2021, I want to thank our teams across TMX and in every facet of our business, for continuing to deliver for our clients through this busy and challenging year. Our people have demonstrated time and again their commitment to serving clients across our businesses, throughout the market ecosystem and around the world with excellence. And along with the stress tested ability to adapt to whatever the market throws our way, while continuing to push us forward. And with that, we are so excited to add a new group of high performing professionals to our ranks. In August, we completed the acquisition of AST Canada, a leading provider of transfer agency, corporate trust, and related services, and our integration is fully underway. This acquisition represents an exciting addition to our TSX Trust offering and our capital formation business more broadly, broadening out the range of services and solutions that we provide to listed issuers. Also on the people front, I am delighted to share news that we have named Michelle Tran the new president of TMX DataLinks, effective November 1st. a well-respected TMX veteran who I've had the privilege of working with for the past 20 years, who is highly regarded by her colleagues and across our client community. Michelle's mandate is to lead the growth, market development, and commercialization of TMX's data solutions. Her ongoing focus will be on client-centric innovation to lead the strategic direction of the business, including the pursuit of additional revenue opportunities resulting from new client offerings, potential partnerships, and expanding global sales. And with that, let me turn the call over to David.