TMX Group Limited

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Limited fourth quarter 2025 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. Following prepared remarks, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Amin Mousavian, Vice President of Investor Relations and Treasury and Interim Chief Risk Officer. Please go ahead, Mr. Mousavian.

Thank you, Drew, and good morning, everyone. We join you today to discuss the 2025 four-quarter results for TMX Group. We announced our results for another outstanding quarter and our sixth consecutive double-digit revenue growth, highlighting strong performance across all of our business units last night. Copies of our press release and MD&A are 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 the opening remarks, we will have a question-and-answer session. Before we begin, let's cover our forward-looking legal disclosure. Certain statements made during this call may relate to future events and expectations and constitute forward-looking information within the meaning of Canadian securities law. Actual results may differ materially from these expectations, and additional information is contained in our press release and periodic reports that we have filed with the regulatory authorities. Now I will turn the call over to John.

Well, thanks, Amin, and good morning, everyone. Thank you for joining us on the call this morning. And as Amin mentioned, last night we released our Q4 financial results, and I am very, very proud to report that we finished 2025 on a high note by every measure, delivering excellent results for each quarter of 2025 with strong increases in revenue, including 15% higher organic revenue compared to 2024, as well as record adjusted earnings per share and operating income. And we'll turn it over to David in just a few minutes to talk you through the quarter in details. Now looking back, and although it only ended six weeks ago, 2025 already seems like a distant memory as it's been a very eventful six weeks. And importantly, as we discuss what went right in 2025, the key contributing factors to our best year ever, we're not talking about standalone achievements. The success of 2025 reflect an adaptive high performance business model. and the benefits of adhering to a consistent growth strategy. And market activity in 2025 surged, fueled by macroeconomic forces, ongoing volatility, and as we continue to build TMX ever stronger for the future, more innovative, more global, more essential to our clients and stakeholders all across the vital capital markets ecosystem. Now turning to these 2025 results. Overall revenue increased 18% compared to 2024, reflecting strong performances across the enterprise, including double-digit revenue growth from derivatives trading and clearing, equity trading, TMX Tradeport, and TMX Vetify. And we were also encouraged by a 9% increase in capital formation revenue due to strength in additional financings in the second half of the year as listed companies of all sizes on TSX and TSX Venture increasingly turned to the proven public market ecosystem to fund their growth plans. Organic revenue, excluding those recent acquisitions, increased 15%, and adjusted diluting earnings per share increased 25% compared to last year. Overall, operating expenses increased 16% year-over-year, largely as a result of acquisition-related expenses and continued investment in organic growth, as well as some box costs related to the SEC's mandated consolidated audit trail and some increased litigation costs. David will discuss these expenses in more detail following my comments this morning. Now, moving to highlights from our business areas. Activity remains strong across our core domestic markets through the fourth quarter, capping off a tremendous year. Derivatives trading and clearing revenue excluding box increased 31% compared to 2024, driven by pronounced activity growth and the success of recent product initiatives to address client demand. MX 2025 year-over-year activity highlights include 80% growth in ETF option volume, double-digit growth on volumes across our expanded bond futures offering, and record-breaking performances in our fixed income suite, specifically the three-month CORA futures contract, or CRA, which replaced the BACs in mid-2024. The CRA surpassed all-time BACs daily volume records and open interest levels in December. Similarly, in equity markets, sustained volatility drove higher activity. On a combined basis, TSX, TSX Venture, and Alpha volumes increased 27% when compared to 2024, highlighted by a 45% gain in volume traded on TSX Venture Exchange. And our markets stood tall amongst our peers. The benchmark S&P TSX Composite Index broke through the 30,000 mark for the first time in September, and the S&P TSX Venture Composite increase index increased 60% compared to 2024, outperforming major global indices. Overall revenue from equities and fixed income trading and clearing increased 12% year-over-year due to higher volumes and higher yields on premium products. And the successes of 2025 extend beyond our more traditional marketplaces and, candidly, beyond our borders. AlphaX US, our U.S. equity trading venue, just celebrated its first anniversary last month. It has been a fantastic inaugural year in terms of volume traded and participant sign-ons and engagement. And following TMX's strong tradition of leadership and exchange technology, the Alphax U.S. team was recognized with two prestigious industry awards for innovation and alternative trading systems by the trade and for most innovative third-party technology vendor trading risk and compliance by Waters Technology. Now I'd like to turn over to Global Insights. Revenue here increased 16% compared to 2024, led by double-digit increases from TMX TradePort and TMX Vetify. TMX TradePort's powerful and dynamic network plays an essential role at the heart of European energy trading ecosystem. Revenue grew 18% year-over-year, or 12% in pounds sterling, driven by a number of factors, primarily an increase in the number of licensees and increased adoption of analytics and other trade products. TMX's Tradeport strategy is rooted in client-centric approach to serving the needs of new and existing clients, investing in continuous innovation in our core market offering to deliver performance, reliability, and security while supporting advanced capabilities, products, and services, and expanding into new asset classes and geographies, targeting opportunities to apply proven expertise in markets around the world. And that includes introducing digitized solutions to voice-brokered markets and capitalizing on shifting dynamics and increased demand for modern trading products in transition markets. Now with TMX Vetify, revenue increased 24% year over year, or 21% in US dollars due to higher indexing revenue driven by organic growth in assets under management and recent acquisitions. A relative upstart among our deep and diverse set of business areas, the team continued to execute against an opportunistic strategy in 2025. with three new acquisitions, the Credit Suites Bond Indices in February, ETF Stream in June, and a set of Nuclear Energy Indices in October. These latest additions enhance TMX Vetify's diverse product suite while growing our presence in targeted regions. Next month, TMX Vetify hosts Exchange, our marquee event and the premier gathering of ETF and wealth management community in Las Vegas. Now onto capital formation. As I mentioned earlier, revenue increased 9% year-over-year, primarily due to higher revenue from additional listing fee and the inclusion of a full year of news file revenue. Now, in a year clouded by economic uncertainty and headline disruption, the signature strength of public markets shone brightly, providing stakeholders with critical resiliency and an opportunity for growth. and our pledge to serve the evolving needs of this powerful interconnected ecosystem of companies, participants, and investors remains firm. We saw a surge in financing dollars raised by issuers listed on both TSX and TSX Venture, particularly in the second half of the year, including a 44% increase in the number of transactions that we bill at the maximum fee threshold at TSX. Now, big financing deals don't capture the same headlines as IPOs, but they are the clear indicators of the health and vitality of the market. And these transactions highlight the key role the exchange network plays in helping companies fund their growth throughout their life cycle. And 2025 features some game-changing deals. In September, RFA and Artis Reit announced a business combination through a share exchange transaction to form RFI Financial, a more diversified financial services platform. On October 1st, Maple Leaf Foods completed the spinoff of Canada Packers Inc as an independent public company. In November, TSX Venture listed Carcetti Capital completed the acquisition of Hemlo Goldmine and via reverse takeover emerged as Hemlo Mining Corp, a new mid-tier gold producer trading on the Venture Exchange. And there were many more. Now, as many of you listening this morning are aware, Toronto Stock Exchange and TSX Venture Exchange are home to almost 50% of the world's public mining companies. The industry is vital to our markets, vital to Canada's economy, and vital to the country's global competitive prospects. And the mining sector is thriving. Financing dollars have increased 53% when compared to 2024. Mining sector surpassed a trillion dollars in overall market capitalization in 2025. And of the 11 companies to graduate from TSX Venture Exchange to the senior market in 2025, Ten of these were mining companies. So looking more broadly across the marketplace ecosystem, it was also a stellar year for Canada's ETF industry, with over $125.8 billion in net inflows. We welcomed 239 new ETFs to Toronto Stock Exchange during 2025, surpassing the all-time record of 127 set just last year. TSX is now also the market of choice for Canadian depository receipts with 116 new CDRs coming to our market last year. Our pipeline of new issuer prospects is also strong, and our business development team is as busy as ever, with all signs pointing to a very active 2026 in terms of potential IPOs. Now, as I said in the opening remarks, a lot went right in 2025. It's our best year ever. But always, our focus is always on what comes next. And at no time in my 25 years here, including six years leading TMX, have we had so many immediate and potentially impactful trends pushing the pace of change in our global environment, including AI adoption, tokenization, 24-hour trading, and the rise of private markets. There is no denying that there are areas across the finance sector that are due for modernization. But the truth is that the traditional finance industry, as it's been called, has been continuously evolving over the past 100 plus years, reshaping and transforming many times over, paced by advances in technology. And Canada's markets have long stood at the forefront of industry progress. TSX was actually the first fully electronic exchange in North America. It was the birthplace of the exchange-traded fund, and it should come as no surprise that TMX is actively pursuing client-driven solutions to build on this proud history of innovation. Today, public markets trading is a hyper-efficient connected digital ecosystem. And our approach is to seek out purpose-driven innovation, measures that make markets better rather than innovation for innovation's sake. And necessarily our next steps are rooted in a commitment to preserving the core capital markets principles of market integrity, fairness, and transparency. And tokenization of public assets is a headline topic right now in the exchange industry. And while it may prove to be transformative in the long run, there are hurdles to clear yet in moving toward a broad market adoption, including defining an appropriate regulatory framework and operating standardization. It is the next evolution of blockchain, and we've explored any potential use cases for blockchain technology for more than 15 years, including in the early stages of developing our game-changing post-trade modernization program, which we delivered in 2025. And we see promise in near-term opportunities emerging on the clearing side, including the tokenization of collateral management, which could allow collateral to move between accounts and even different clearinghouses fluidly and more efficiently. And we continue to assess the client demand for things like 24-hour trading. Round-the-clock trading is not a new concept for us. Montreal Exchange introduced extended hours trading for derivatives to sync with the Asia-Pacific markets in 2021 to support growing investor demand. And the current push for 24-hour equity trading is driven by a global appetite, but primarily for major U.S. stocks. So our forward strategy includes gauging client needs as well as a full consideration of the ecosystem impacts. And an important stakeholder not often mentioned in this discussion of either 24-hour trading or tokenization is the listed issuer. Two-thirds of the public companies on TSX and TSX Venture are small or medium enterprises. And our public venture market is the bedrock of our two-tiered ecosystem. small issuers and their investors would not necessarily see a benefit of further diluting their liquidity over an extended trading venue. And so our commitment remains to making markets better, and that extends beyond public markets. So over the past two years, we have also continued to build out new capabilities and solutions for serving private companies. TMX Corporate Solutions provides end-to-end services to private as well as public companies through all of their capital raising activities and all stages of evolution. Market Ventures, a joint venture with Canaccord Genuity to digitize and streamline the private placement process and improve investor access, was just launched this last year. So in closing today, as always, I want to thank our team of employees around the world. This is the engine of TMX success last year, this year, and every year. And in considering each of our milestones and recent accomplishments, I am most encouraged by the progress we have made and continue to make in preparing for the future. with a focus on accelerating growth and fulfilling our purpose to make markets better and empower bold ideas. I have tremendous confidence in our organization that it is well equipped to tackle near and long-term challenges and capitalize on the exciting opportunities and transformation in front of us. And with that, I'll pass the call over to you, David.