OTC Markets Group Inc.

Good day and thank you for standing by. Welcome to the OTC Markets Group fourth quarter and full year 2022 earnings conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Zinn, General Counsel. You may begin.

Thank you, operator. Good morning, and welcome to the OTC Markets Group fourth quarter and year-end 2022 earnings conference call. With me today are Cromwell Coulson, our President and Chief Executive Officer, and Antonia Georgieva, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and, as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factor section of our 2022 Annual Report, which is also available on our website. For more information, please refer to the Safe Harbor Statement on slide three of the earnings presentation. With that, I'd like to turn the call over to Cromwell Folsom.

Thank you, Dan. Good morning, everyone. Thank you for joining us today. I will discuss our year-end 2022 results and focus on how we performed on each of our strategic initiatives during the year. I will then discuss our strategic outlook for 2023. Our business continued its trend of top-line growth as gross revenues surpassed $105 million for the first time in our history. We experienced growth in our corporate services and market data licensing businesses, tempered by a significant decline in transaction-based revenue in our OTC Link business, following what was record trading volume during 2021. Through the first two months of 2023, trading volumes have been consistent and broker-dealer engagement across our ATS platforms continues to be strong with over 100 combined subscribers. Corporate services delivered outstanding revenue growth of more than 20% during the year. We ended the year with more than 600 companies on OTCQX and more than 1,200 companies on OTCQB, highlighting the value of our premium markets for public companies. The market data licensing business performed well, growing revenue by 8% while integrating Blue Sky Data Corp into our platform and closing the EDGAR online purchase. Our integration efforts continue, and the full impact of both acquisitions will be reflected in our market data licensing results this year. As a result of business lines trending in different directions, corporate services now represents approximately 45% of our overall revenue. Market data licensing accounts for 35%, and OTC Link accounts for 20%. As I have said, this was a year of investment in assets and operations with two acquisitions and continued enhancements to our people and platform. As a result, our operating profit margin for the year contracted and earnings per share remained essentially flat. Antonia will cover our financial results in more detail in a few moments. We focused on four strategic initiatives structured around serving our clients and shareholders. First, drive sustainable revenue growth across each of our business lines that increases long-term per share earnings power. Second, commercialize our enhanced regulatory status under Rule 211 to create new opportunities for public companies and broker-dealers. Third, advocate for additional regulatory recognition of our markets to increase the value of being public. pursue corporate development efforts to grow and diversify our product suite and client base. With respect to the first initiative, our focus is always over the long term, and our track record of revenue growth has been a direct result of providing unique value to our clients. The Blue Sky Data Corp and Edgar Online Acquisitions position us to further develop our capabilities. each of these businesses strengthens our ability to add value to our subscribers trading disclosure and compliance processes the acquisitions also extend our coverage beyond otc equity securities build our product suite and expand our client base we see tremendous value in these data sets and are focused on turning the edgar online assets into a cash flow positive contributor to our overall operations in the short term our priority is moving the edgar online application stack into the cloud and retaining subscribers then we can shift our focus to the longer term projects that will enhance our data offerings, find operational efficiencies, and grow the enterprise customer base with a stronger, integrated product suite. As OTC-Link trading volumes normalized, the business focused on building its subscriber base, improving compliance processes, and strengthening operational resilience. We are also pleased to have delivered consistent, reliable service to our broker dealer community on our core SCI regulated trading system. Security and uptime of OTC Link ATS will always be a top priority. Our subscribers demand and deserve our best. Our second strategic initiative commercializing our regulatory status under Rule 211 starts with a commitment to our compliance process. Our broker-dealer subscribers rely on our publicly available determinations to know when they can quote a security. The EDGAR online services are a vital component of our 211 compliance process, allowing us to leverage structured SEC filing data to perform our current information checks. Bringing these services in-house allows us to enhance and deploy them for the benefit of other clients and public companies. The September 2021 amendments to Rule 211 also provided a springboard for our corporate services businesses heading into 2022. That business delivered strong revenue results. However, we believe we can continue to commercialize our new regulatory role. Identifying new opportunities for companies, broker dealers, and market data subscribers, such as our fixed income 211 data product, will continue to be a priority moving forward. We finished the year on a high note with respect to our third strategic priority, gaining regulatory recognition for our markets. The ESOP Fairness Act was part of a package of bills signed by President Biden in late December. The law includes a provision that will modernize the rules governing employee stock ownership plans. This will put qualified OTC-traded companies that meet established financial and disclosure standards, such as those traded on the OTCQX market, on par with exchange-listed companies when offering ESOP plans. With the ESOP Fairness Act and the addition of South Carolina and Puerto Rico to our blue sky map, we are poised to continue achieving additional regulatory recognitions. Our Blue Sky Data Corp and EDGAR Online acquisitions demonstrate our commitment to our fourth strategic priority, pursuing growth through corporate development initiatives. I look forward to the continued integration of those businesses and employees and to identifying additional corporate development opportunities. As we turn to 2023, we seek to build on our progress last year and focus on the following five strategic initiatives. First, coming together as one team on one platform to build the value of one share. We will work to further leverage Blue Sky data and integrate Edgar Online technology and personnel. Second, commercializing our role as a regulated market operator and delivering visible client value. We will continue to scale our infrastructure and introduce cost-effective technology-enabled solutions that are useful for clients. Third, prioritizing client-facing application development and improving our data. We will dedicate resources to enhance the customer experience through modernized interfaces and enriched data for external and internal users. Fourth, improving OTC link functionality and reducing operational exposure and business risk. We intend to invest in our core trading infrastructure to strengthen its resilience and to enhance its value to subscribers, including by adding new asset classes. Finally, because we operate as owners and capitalists, creating strong net revenue growth and delivering sustainable profitability that increases long-term per share earnings. I look forward to discussing our progress on these initiatives throughout the course of the year. In closing, I'm pleased to announce that on March 6, our Board of Directors declared a quarterly dividend of 18 cents per share, payable later this month. This dividend reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.