OTC Markets Group Inc.

Good day and thank you for standing by. Welcome to the OTC Markets Group third quarter 2025 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 this session, you will need to press star 11 on your telephone. You will then hear an automated message, advise your hand is raised. To withdraw your question, please press star 11 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. Please go ahead, sir.

Thank you, Operator. Good morning, and welcome to the OTC Markets Group Third Quarter 2025 Earnings Conference Call. With me today are Framil 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 Factors section of our 2024 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 Coulson.

Thank you, Dan. Good morning, everyone, and thank you for joining us. I will discuss our third quarter 2025 results at a high level and share the status of our key initiatives before turning the call over to Antonia to review our financial results in greater detail. Gross and net revenues Each grew by 15% during the third quarter, and each metric was up 12% for the first nine months of the year. Our third consecutive quarter of double digit growth was due to strong revenue increases in all our business lines, highlighting the value of our interconnected business model. I want to thank all of my colleagues at OTC Markets for jointly delivering our market reliability and these quarterly results. Our business is a team sport. OTC Link was up 23% during the quarter. Market data increased 15% and corporate services was up 12%. Throughout 2025, OTC Link's strong revenue has been tied to increased trading volume across our markets. Market data price increases, effective January 1st of this year, have been the primary driver of revenue growth in this business line. The market data team, in conjunction with our OTC link group, continues to build the foundation of our overnight trading business, working to onboard current and prospective subscribers and educating the global trading community on the value of all our offerings. We were pleased to see our corporate services business achieve its second consecutive quarter of growth. The bulk of the growth in the third quarter resulted from increased sales of the OTCID basic market. Increased new sales of OTCQX and OTCQB coupled with price increases also contributed to the corporate services results this quarter. We continue to put strategic focus on client success, retention, and the reduction of churn. I would like to provide an update on our two primary strategic initiatives for the year, overnight trading and the OTC ID market. Overnight trading enables our broker dealer subscribers to access thousands of exchange listed in OTC securities during Asian market hours at European market open and overnight in the US. Momentum on Moon ATS for NMS securities continues to build. Following the recent end of South Korea's moratorium on retail investor participation in US overnight markets, we've seen early signs of growth in overnight trading. Moon ATS has onboarded a number of active broker-dealer subscribers, many of whom have more recently began engaging in this market. Market data users have also taken note, with firms already subscribing to our data feeds in preparation for increased activity on Moon ATS. As with our existing daytime markets, transparency is paramount. The availability of market data to interested overnight market participants around the world is key to the success of this endeavor. As financial markets evolve towards around-the-clock operations, we focus on ensuring our infrastructure and technology continue to meet the needs of our subscribers. Our view towards the overnight market matches our approach to the markets we have operated for many years. We will deliver elegant, reliable, and cost-effective solutions and work with our subscribers to enable their businesses to scale and grow. Our second priority initiative this year was the OTC ID basic market. OTC ID has seen a rapid uptake since its July 1st launch as qualifying companies use our services to publish a baseline of ongoing information. OTC ID enhances our offering for corporate clients, filling a gap below our premium OTCQX and OTCQB markets. OTCID companies provide basic disclosure for investors, which separates them from securities quoted on Pink Limited that have little to no issuer involvement in their trading market. With a disclosure and management certification-driven service, OTCID connects more companies without the price, float, or financial requirements of our higher-level markets. It is a simple entry point for companies to start streaming information, gain a foothold of liquidity, or test the waters. We have designed our premium markets to provide the functionality for connected companies to stream data that will improve the quality of the market for their securities. In comparison, Pink Limited Securities are identified with a yield sign to warn investors to proceed with caution. Our objective is to clearly flag the risks from Pink Limited companies. We all know investor-focused companies need to be actively connected to the market, consistently updating investors with management teams willing to certify compliance with regulations. Otherwise, it leads to information asymmetries and discounted valuations, as well as diminishes market quality. With OTCQX, OTCQB, and now OTCID, Our markets provide a digital platform for public companies to take ownership of their US symbols. Our most engaged corporate customers want the ability to perform the same IR, disclosure, and governance activities as companies listed on NYSE or NASDAQ with less complexity. These best practices, supported by our data processing and distribution capabilities, allow the informational, operational, and compliance experience for brokers and investors to be comparable to exchange listed securities. These connecting companies represent approximately 25% of all securities traded on our platforms at the end of September 2025 and contributed 31% of the dollar volume traded during the third quarter of 2025. As more public companies connect through our corporate services, actively publishing ongoing information, and demonstrate global governance standards, we will improve the quality of their individual trading market and expand overall investor interests. In addition to our two primary initiatives this year, we've placed significant focus on enhancing the customer experience for companies that choose to trade on our markets. Our revamped customer platform, otciq.com, was launched on August 28th and includes modernized functionality that has been well received by our customers. During the year, we used our EOL technology platform to integrate Canadian CDAR data into our system, streamlining the initial and ongoing disclosure process for the many Canadian listed trading companies on our market. We intend to integrate additional disclosure sources over time, bringing the same benefit to companies from other regulatory jurisdictions. Our focus on customer experience will extend into next year and even further as we move into the next phase of this initiative. which is better connecting companies to their trading markets and financial information networks for a future that is online and digital. We also continue to work on our regulatory priorities. As the government reopens, we will continue to engage with regulators and lawmakers on capital formation, market structure, and other key initiatives. As we look to the future, we are excited to explore the opportunities in digital assets and tokenization as emerging regulatory clarity allows market participants to legally and lawfully innovate around these new technologies. In closing, I am pleased to announce that on November 11th, our Board of Directors declared a special dividend of $1.75 per share. and a quarterly dividend of 18 cents per share, each payable in December. These dividends reflect our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.

Thank you, Cromwell. Thank you all who've joined our call today. The third quarter of 2025 marked the launch of OTC ID And I would like to start by thanking our entire ROTC markets team for making this such a success. Following is a review of our results for the quarter ended September 30, 2025. Any reference made to prior period comparatives will refer to the third quarter of 2024. Turning to page seven for review of our third quarter revenues. We generated $31.6 million in gross revenues, up 15%, compared to the prior year period. Revenues less transaction-based expenses were up 13%. OTC Link's gross revenues increased 23%, driven by a 47% increase in transaction-based revenues from OTC Link ECN and OTC Link NQB, as we benefited from a higher number of shares traded on those platforms. As an offset, transaction-based expenses increased 50%. Additionally, OTC Link saw an increase in revenues from OTC Link ATS messages due to a higher number of messages in, quote, access payment service revenue due to the increased volume of trading activity and in certain connectivity revenue due to growth in the number of connection licenses. Trading volumes remain highly unpredictable and could decline in the future. OTC Link finished the third quarter with 114 subscribers to OTC Link ECN, unchanged from the prior year period, and 77 subscribers to OTC Link ATS compared to 80 at the end of the prior year period. OTC Link has 138 unique subscribers across our ATSs, as of September 30th, 2025, compared to 139 unique subscribers as of September 30th, 2024. Revenues from market data licensing increased 15% quarter over quarter, reflecting a 23% increase in redistributor-based revenues, 12% increase in revenues from direct sold licenses, and 3% increase in revenues from data and compliance solutions. Within the redistributor-based revenues, professional user revenues increased 30%, primarily due to price increases from the beginning of 2025, combined with a 2% increase in professional user counts. Nonprofessional user revenues declined 7% as a result of a 16% reduction in reported nonprofessional users which more than offset the impact of the price increases. Historically, and in the normal course of business, we have seen significant changes in the number of nonprofessional users as market volumes and retail participation on our markets fluctuate, and we may experience further decline in the future. Broker-dealer enterprise licenses and internal system licenses drove the growth in direct-sold licenses. Crocodile enterprise license revenues increased due to the combined effect of price increases and subscriber growth, while internal system licenses revenues increased due to subscriber growth. Increased revenues from data services in the Blue Sky Data product contributed to overall growth in data and compliance solutions revenue, partially offset by lower revenue from Edgar Online. Corporate services revenues increased 12% in the third quarter. The impact of annual incremental pricing adjustments effective January 1, 2025 and improved sales served to offset a lower number of OTCQX companies, resulting in a 3% increase in OTCQX revenues. OTCQB revenues increased 10% due to the same factors, combined with a higher number of companies on the OTCQB market. In the third quarter, we added 35 OTCQX companies compared to 18 in the prior quarter and finished the period with 553 OTCQX companies, down 2%. On OTCQB, we added 77 new companies in the third quarter compared to 46 in the prior year period and finished the quarter with 1,097 OTCQB companies, up 3%. The launch of OTC ID on July 1st, 2025 resulted in a substantial number of PIN companies upgrading to OTC ID. All OTC ID companies subscribe to DNS. In addition, select PIN limited companies also choose to use DNS and other corporate services offerings. The resulting growth in DNS subscribers combined with price increases from the beginning of the year drove a 48% increase in DNS revenues compared to the prior year period. As of September 30th, 2025, 1,077 companies traded on the OTC ID basic market, up from 1,035 companies at launch on July 1st, 2025. Overall, we had a combined 1,511 OTCID companies and Pink Limited subscribers to DNS and other products at the end of the third quarter, representing a 10% increase from 1,379 companies at the end of the prior year period. Month-to-month variability in our corporate services subscribers is driven by new sales offset by non-renewals, corporate events, and compliance downgrades. Turning now to expenses on page 8. On a quarter-over-quarter basis, operating expenses increased 8% to $17.9 million. A 6% increase in compensation and benefits expenses, 26% increase in professional and consulting fees, and 9% increase in IT infrastructure and information services costs were the primary contributors. The increase in compensation and benefits reflects higher base salaries and cash-based incentive compensation, as well as higher commissions related to increased sales and the updated commission plan in effect from January 1st, 2025. Compensation and benefits comprise 62% of our total operating expenses during the third quarter compared to 63% in the prior year period. Professional and consulting fees increased due to increased use of third-party consulting services related to our compliance efforts. Additionally, we saw higher regulatory and clearing costs related to OTC Link ECN and OTC Link NQB due to the increased trading activity. IT infrastructure and information services costs increased due to higher data center costs reflecting increased cloud services usage, as well as higher spending on information services and software licenses. Turning to page nine. In the third quarter, income from operations increased 23% and net income increased 15%. Operating profit margin expanded to 34.6% compared to 32.4% in the prior year quarter. Our diluted earnings per share increased to 71 cents per share compared to 61 cents per share or 16%. In addition to certain gap and other measures, management utilizes adjusted EBITDA, a non-gap measure, which excludes non-cash stock-based compensation expense. Our adjusted EBITDA was $12.8 million in the third quarter of 2025, and our adjusted diluted earnings per share were $1.06 per share, each up 19%. Cash provided by operating activities amounted to $13.3 million compared to $5.9 million in the prior quarter. Free cash flows for the quarter were also $13.3 million compared to $5.8 million in the prior quarter. Turning to page 10, during the third quarter of 2025, we returned a total of 2.2 million investors in the form of dividends, unchanged from the prior quarter. We remain focused on growing our business, operating as prudent stewards of shareholder capital, and delivering long-term value to our stockholders. With that, I would like to thank everyone for your time and pass it back to the operator for questions.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster. Our first question comes from the line of Steve Silver with Argus Research Corporation. Your line is open. Please go ahead.

Thanks, operator, and thanks so much for taking my questions, and congratulations on the quarter. So the operating margin in the quarter showed a nice uptick compared to, I guess, the most recent quarters. I'm curious as to your thoughts about the prospects for continued margin expansion as we start to look to 2026, obviously sensitive to small moves in operating expense and investments, those types of things. Just curious your thoughts on the operating margin profile as we start to look towards next year. Steve?

I get grumpy when it starts going below 30, otherwise we get spendy above 30 and you know, usually revenues come in and then you have an investment part. We're not, you know, we're not margin stuck, but we're also not trying to jam our margin compared to the exchange level margins because in the long run i believe that creates a toxic relationship with your clients and as a independent market operator in the wholesale markets the broker dealer community really wants to see us as a costco type business so you know we want to grow our revenues we want to be able to invest that in improving our services improving the value of our services launching new initiatives to help our client bases succeed, but we're not looking to max out financial engineering in the short term. At the end of the day, you know, this quarter is a nice one because, you know, we had really big trading markets four years ago, post COVID. And there was a lot of profitability from trading back then. And we're now, you know, moving past that as back to a higher level, and we can invest and we can grow, but we're not terribly margin-concerned, except we want to be profitable.

Great. That's helpful. Thanks. And one more, if I may. The prepared remarks sounded like a lot is being done in terms of really scaling the overnight product. especially with the integration with the market data licensing unit. So are there any really major initiatives left in terms of building the infrastructure for the overnight product, or is it more just blocking and tackling and just onboarding more broker-dealers at this point?

So the technology infrastructure is built. The network connectivity tentacles takes forever. And you're always working on it. You're expanding things out. And, you know, what's interesting is we have a, you know, we have an overnight conversation with a Paris based quantitative trading arbitrage firm, and they're highly interested in participating in that, but they're also going to go, wow, your daytime market has a bunch of opportunities for us. So, you know, it's been a great learning experience. The team very quickly build out the infrastructure, building the connectivity. and then expanding that over time takes work, but it also shows, you know, that it gives us for our core business, shows how hard it is to build out into all those processes.

Great. Thanks for the color and best of luck the rest of the year. Yeah. Thank you, Steve.

Thank you, and one moment for our next question. Our next question is going to come from the line of Ashish Alpish Shah with Sudodian Co. Your line is open. Please go ahead.

Thank you. I'm taking the question. I'm here on behalf of Brendan, and thank you so much. Congratulations on the quarter. Looking at the OTC ID market platform in a bit more detail, it looks like the revenue was up about $1 million in 2017. relative to Q2 of this year. Can you give us an additional detail on how much of that is from the PIN company upgrades paying the one-time application fee?

Ashley, thank you for the question.

The application fee is generally amortized over the service period, which is typically one year. in some cases shorter, so it doesn't impact disproportionately any given period or any given quarter. The overall uptick in OTC ID revenue this quarter is what we explained last quarter was due to a number of OTC ID companies choosing July 1 as the beginning of their service term. So even though our sales of the new OTC ID markets were happening throughout the first half of the year and continued in the third quarter, the revenue recognition or a number of those new customers began on July 1st. And you see that impact of the revenue being recognized in the third quarter, which was not the case to a large extent in the previous two quarters. But in terms of the application fee, again, that follows the annual fee in terms of how it is recognized.

Right, thank you. And then of the roughly 430 PIN companies subscribing to DNS, do you foresee perhaps all of them upgrading to OTC ID or will some not qualify?

Some won't qualify, and some will be getting services after they've been moved down. The ID process is incredibly automated. There's no cure periods. It's either you're in or you're out. So you're going to see over time, because these companies were DNS subscribers before, but as ID becomes its own entity and the companies settle in, we will, you know, there's always going to be a DNS where you've got access to put information there, but you may not be where you need to be. And, you know, there's a few companies that just want to publish once a year that, that may not be able to get up to a higher level. So that's still going to be there is as part of it. But of course, you know, if a company is doing the work to create public disclosure, they might as well stream it into the market where their stock is trading.

Right. Thank you. And lastly, I have one question on the recent blog post on blockchain and tokenization of securities. I'm curious to hear your thoughts on equity securities eventually being tokenized and whether OTC markets has made any capital expenditure investment in that initiative or explored integrating some of these technologies into the business at this point?

Thank you.

We've spent a lot of human capital thinking about it and talking to regulators about it and talking to our clients about it and talking to other players in the space about it. But let's be straightforward. Tokenized securities, and I mean real tokenized securities, which your ownership interest can move around on one of the blockchains, are not legal to issue or lawful for broker dealers to trade yet. We did a blog post, which I suggest you read, is and on the ways we see these types of securities coming into the market. And we believe that there is going to be a lot of excitement and energy and some new technology to use. But we also, because we serve the broker-dealer community, we need to be able to bring these securities in and have there be a level of compliance that broker dealers are comfortable trading these. And the regulations are going to move rather quickly over the next three years. And when that happens, we want to be ready. And I think it was over two years ago, we got a license on one of our ATSs to be able to trade digital asset securities. And that was a preparation move We made changes to our system back then, and we're making other changes to be ready to serve our broker dealers as they bring parts of this technology and securities issued this way into the TradFi infrastructure.

Thank you.

And one moment for our next question. Our next question comes from the line of Jonathan Isaac with Quilt Investment Management. Your line is open. Please go ahead.

Hi. Can you hear me okay?

Yes. How's your dad, Jonathan? Great. Good. Send him my best.

I will. Thank you. Yeah, thanks for taking my somewhat meandering but hopefully insightful question, and many congrats on the quarter. From what I understand, OTC markets gained thousands of securities from the fall of the OTC bulletin board going back to the late 1990s. You were a default option or a natural home to many of these securities if they were no longer on the OTC bulletin board, and they flowed in your direction. I wonder if a similar situation is on deck with digital asset securities. Two and a half years ago, Cass Sanford from your firm wrote, quote, if certain digital assets are in fact securities, they would be classified as over-the-counter equity securities, subject to Rule 15C-211, end quote. If I look at coinmarketcap.com, there appears to be a few thousand crypto assets with a market cap over $1 million. Presumably, stock exchanges or other exchanges might lay claim to some of the larger cryptoassets once we know which are securities. But for smaller cryptoassets, what we might even eventually call OTC cryptoassets, Is OTC markets positioned yet again to be a default option or a natural home for these securities, like you were for OTC Bulletin Board securities years ago, by virtue of your regulatory position in the accumulated industry economic goodwill? If so... Could we see a crypto version of OTC markets emerge with crypto assets intermingled in your market data, corporate services, and OTC link segments, adding even more business momentum to your corporate flywheel?

Thank you. Jonathan, first, I have to correct your version of history.

Okay. Okay.

We didn't just benefit from the OTC bulletin board. We, we competed it out of existence. We better serve the broker dealer communities and they had a choice where they could quote and trade. And we brought better technology, better customer service, and we kept innovating forward. So that's how we got it. And, you know, the OTC bulletin board had a more established brand, but we compete on functionality. And that, that is always going to be, if we, if we can offer either broker dealers or public companies, all the core and critical functionality they need without any of the frills or fluff will be fine. So now the hard part is, and the previous regime at the SEC, we thought was going to bring crypto into the regulated world. And we thought securities law was applicable, but it needed to be fit in. And they were not willing to remove the parts where it doesn't work. You know, crypto doesn't have a balance sheet, can't file a 10K. But bringing it in of the regulation of issuers, intermediaries, and insiders, we thought it was a great structure to work with. We were completely wrong because what happened was they use regulation by enforcement and the majority of those coins you see on coin market cap are going to be CFTC regulated. Their currency is in their commodities, which is a bummer because we would have loved to help make those issuers more compliant is because those are core skills we have. Now there is a chunk which is going to be securities, which is using the technology. And that like any emerging technology or business, there are a lot of people predicting the future and saying, this is how it's going to happen. This is fantastic technology. Everything should be atomic settlement. Everyone is going to want to have their own wallet for their crypto. And there are people in TradFi saying, what's the big thing? Our technology is better, and at scale, it's cheaper. And guess what? Both things are going to happen in different ways, and we're going to have more use cases. We're going to have more tools for financial markets. We're going to have more technology, more transparency. And we want to be part of that conversation with regulated broker-dealers And we believe the core tools of what we do is provide a trading platform for regulated broker dealers as a wholesale market, distribute the data out to the world. So there's transparency. So everybody can see what's happening on the playing field and engaging issuers to stream information and demonstrate good governance and compliance. Those core skills are still going to exist. And we, We don't really care whether it's atomic settlement, T plus one, T zero, you know, whatever it is, we will be part of it as the regulations move along because we see that overall the core functionality we do is going to apply to the tokens that are securities. Okay.

Thank you.

Great. Thank you. Yeah, I have one more question.

Sure.

Yes. Your market integrity initiatives and the growth of corporate services are, we could say, aligned. As companies choose to display their compliance standards, fees are paid for providing the stamp of OTCQX, OTCQB, or OTCID. But a vast territory of your markets remains unmonetized and sometimes barely transparent. What is the path forward for monetizing these unengaged firms who, one could say, are free riding on your market infrastructure and aspects of your compliance systems without paying a fee to corporate services? Could you, for instance, charge an annual access fee for the services you provide, much like a municipality might assess a homeowner for removing roots from underneath the public sidewalk, or a public utility might build constituents within their franchise territory to recoup expenses which have benefited all but only been borne by some. How do you think about the continued subsidization of the unmonetized portion of your markets and also the limits of their potential monetization.

Thank you. Well, that's a nice dream. And, you know, since your dad and I both came from the same Bible of fundamental value investing that Ben Graham wrote, you know, the classic world was the old pink sheets investors had to dig around for information. What kind of companies did you find there? Well, you found disconnected companies from their public market. Why were they disconnected? Some of the businesses were distressed. Some of the businesses were declining. Some of the businesses, the management team was dismissive of shareholder needs. Some companies, international companies, are fearful of litigation for any distribution of their information to the market. But what connected all those companies is they traded a discount. And our job is to have the imperfections in Pink Limited be the responsibility and blame of the issuers. They're not the ones, and the managers as fiduciaries, I have a belief that managements of public companies have a duty to disclose and inform their investors in a consistent manner wherever they are. But we are not God. And we are something else that is really important. We serve our broker-dealer clients in trading whatever security they need to deliver best execution in. Whether the issuer is willing or not, we are the wholesale marketplace for best execution, for them to run their businesses efficiently using whatever trading model they believe best serves their client's base and their technology stack and their business model. And we want to help them be successful. And I often meet people who have that view, these companies are free riding. I actually think it's kind of fantastic because we can suck in all these companies to be trading and we do seem to make a little bit of money from trading services and we have a nice business around selling market data. So it's not the end of the world. That said, the more companies that engage, the harder for the easy wins of the old school value investors who used to dig around for the information because companies that are connected will improve their market quality. And we want to focus, you know, people hear a lot of our market integrity issues because we're dealing with problems, but really the companies we want to serve and what we build OTCQX for was the companies that want to do the right thing all the same IR compliance and governance and shareholder relations activities as a company that is listed on the New York stock exchange or in the NASDAQ stock market is however, they want it with less complexity and they want to do it in a digital manner. And that's what we do. So very simply, but we are not going to force that pink companies are have to pay us something. but we are going to make it very clear to investors of what type of company they are.

Thank you.

And just a final follow-up. If one day you were acquired or you merged into a larger company, do you think an acquirer would charge an access fee or might harness some of this latent pricing power?

I would no longer be CEO. So that decision would be above my pay grade. Thank you.

Thank you. And as a reminder, to ask a question, please press star 1-1 on your telephone. And our next question comes from the line of Walter Hopkins with 18th Square. Your line is open. Please go ahead.

Congrats on a great quarter, and thanks for these wholesome answers. Thank you, Walter. Oh, thanks.

Another fellow value investor. So, you know, I'm incredibly happy when the value investors start asking questions.

Oh, great. Yeah, we'll keep digging around. Right now, roughly what percentage of OTC markets expenses are fixed versus variable? And also, to the extent possible, Could you give some color on the driving factors of each going forward, both the fixed and variable size of the expense base?

Also, certainly, we do not have, we have not shared publicly that specific percentages, but I'm happy to walk you through the elements that comprise various variable and fixed items, starting with the distribution fees and rebates. that you can find as a contra revenue leading to our net revenues on the P&L. Those are variable to and usually pay to the redistributors of our market data. They are linked to the users that generate the professional user, nonprofessional user revenues. Next item is transaction-based expenses. Those vary with the transaction-based revenue. Those are the fees we pay to the providers of liquidity on our ECN and NQB markets. Within comp and benefits, the variable component is the commission. that we called out this quarter as a key driver of the increase in compensation and benefits. The additional change there to commissions was a change we introduced to the commission plan, meaning increasing the level of commissions from the beginning of this year, but a meaningful component of the variability in commissions comes from the number of sales. Within IT and information services, we have a variable component related to trading activity. Within professional and consulting, the variable components are the regulatory and clearing fees, which we now, per GAAP, call out explicitly in the segment reporting, which you can find in the notes to the financial statements. The rest of the expenses are largely fixed.

Okay, thank you. And if you have time for just one more. I've recently been studying some of the financial data providers like LSEG, FACSAT, S&G Global, and so forth. And one of the big takeaways seems to be that these companies tend to have three forms of data. Proprietary data, like index data, real-time seeds, credit ratings, semi-proprietary data that's hard or impractical to replicate, risk intelligence data, scrubbed financial data. And then there's a commodity data portion, which is comprised of like raw regulatory filings, end of day prices, basic news. Could you discuss OTC markets and market data licensing products sort of in the context of those three categories? And maybe speaking how much falls into each bucket.

I mean, I'll give you a high level of review and then I'll pass to Antonia. You know, I look at the data world is there's core data, which you're the unique source. There's competitive data where others offer it, but there's uniqueness in data. your data quality level, your depth of data, what's included in the set, your licensing agreements. So there's places where things, things go up and down, you know, Bloomberg can charge a premium for a market data terminal versus, versus someone else. And then there's commodity data. All of those data's are great to sell if you can make a margin and is, And it, you know, core data is if you read the book, the set, uh, the seven powers, it's a cornered resource. It's really hard to get those though. So you have to be, there's lots of real time market data where it is, where you're not the price setting market. And those, those, those players will have a rent seeking fee. is, you know, we are the price setting market in OTC securities and we focus a lot on being, you know, collecting in that data. And I think the model of operating in OTC equity securities, three different ATS models, you know, really opens up for whatever type broker dealer wants to be doing business with us. And, and that's a great product is the, the, But we don't have, you know, there's exchanges in the U.S. The SIP has the vendor display rule, which is really a monopoly of the government. Broker dealers can choose to turn on and off. There's a negotiation we have. That's why we have per user licenses for real time market data. We have enterprise licenses and where our per user licenses, we try to be just comparable to the, to, to what other markets charge our enterprise licenses are because they go to broker dealers. We want to still be in our Costco pricing model. And, and that's a, and that's, that's a part. All of these two types of real-time data, we want to fill in with as much different types of content as possible to widen the viewership. And as many different types of securities to have that. But that's hard because there's lots of other electronic platforms that want to trade these things. And then we've got our non-real-time data products. which, you know, our Edgar online fundamental data set from, of sec filings is could be commodity could be competitive depending on where we are in the quality, what we add in extra. There's other ones like our compliance files where I put in the competitive world because we're taking unique information, we're creating unique information, which is from us taking different data sets and applying our internal expertise so it can be easier for broker dealers. And we're adding some unique pieces. But at the end of the day, it's very complicated. And every piece of it as you create it, when you've got the problem with a core data is you have to go out and educate the world they want to buy it. And if you've got something unique, you're educating an unwilling buyer Until they understand the uniqueness and the value it can add to their to their process. So that's the high level. And I will let Antonia give a little bit of color on it. But just, you know, you can kind of take that look and go through and read our product descriptions and make your own choices and come back and say, hey, that's really. Hey, Cromwell. you really could add this in, and then you'd have a much more competitive data set, or you'd have a core data, which you could turn into a cornered resources in the seven powers framework.

Once again, while that detailed mix of type of market data revenue is not something we have consistently disclosed in the past, but I'll give you a directional sense. Majority of our market data revenue is generated from the real-time proprietary data that Cromwell described, whether on a per-user basis. That's why we tend to talk about professional user, non-professional user contribution, as that is a meaningful component. Also, broker-dealer licenses, the same data only delivered as a fixed enterprise license as opposed to a per-user. And we have additional products for that incorporate that real-time data into broker machines directly or on a delayed basis or certain derived data that all comprise that proprietary data component. That is by far the majority of our market data revenue. In terms of the competitive data, again, data services, blue sky data, we call those out as meaningful contributors to market data revenue as well. They are a minority of the market data revenue, but a meaningful piece. And the commodity data is predominantly our retail portal-based Edgar Online piece. That would be the most commoditized part because you have large data vendors such as FactSet, Capital IQ within S&P 500 and others delivering similar data. Some of the Edgar Online enterprise um, contracts deliver unique data as well. That's why I'm distinguishing specifically what we call at their pro as being the most commoditized of pieces. And it's a really small part of the total.

And Walter, I also though often have to correct externally and internally, because if you're looking at all these companies, there's a lot of companies. In financial markets, you'll look at an exchange group, which has core data, but you have fact set who's built a fantastic business with competitive and commodity data. And people have a belief that, oh, we only want to focus on where we've got a monopoly, but your real secret sauce is serving your customers. And I'm a believer and our resources wise of how we get the structure going forward of that, you know, in the nine months is about seven and a half million in revenue, 7.6 billion in revenue, uh, of the, what I call the non real time data, which has compliance and Edgar online and other things. I believe that client base, who is a superb client base in, in the broker dealer bank clearing, and data distributor world, there's real opportunities for us to grow those revenue streams with quite boring data sets that are not a captured resource.

Thank you for the terrific explanation. That's incredibly helpful. Have you seen any demand from AI-focused startups that are trying to suck in data? That was something that came up a lot when I was when I was researching this area.

Yeah, there's going to be a robot that comes and drills into our brains and sucks it all out. I mean, it's a real concern for everyone. And, you know, the stack for AI has been building the chips, the data centers, the AI software, as it's showing up into the applications that we use, will take a bit of time. But yes, I'm a believer that AI will make data more valuable. but we have to be careful in how we license it. And, and, you know, that's, that's going to be the challenge for every business. You know, you're going to have AI capital versus human capital and what walks out the door and how do you keep moving forward your value quotient to participants in the market? Understood. Thank you. And just a quick piece is machine learning. is not a new idea to all the electronic trading firms, which we have been so lucky to be able to serve in the analog to digital transformation of financial markets.

Thank you, and I am showing no further questions at this time, and I would like to hand the conference back over to Cromwell Coulson for closing remarks.

Thank you, Operator. I want to thank each of you for joining us today. I would encourage you to read our full quarterly report for the third quarter of 2025 and the earnings press release for more information. Links to both are available on the investor relations page of our website. On behalf of the entire team, we look forward to updating you on our key initiatives that will continue to shape the integrity and the competitiveness of the public markets.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.