TMX Group Limited

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Limited first quarter 2026 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 one 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, Vassilios, and good morning, everyone. We join you today to discuss the 2026 first quarter results for TMX Group. We announced our results for another outstanding quarter, highlighting double digit revenue growth across all of our segments. 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'll 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 the 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, before I turn the call over, I want to take a moment to acknowledge a significant milestone. Today marks John's 40th quarterly earnings call, representing almost an even split between his current tenure as CEO and his former role as Chief Financial Officer. As those of you who've been following us along are aware, our company has evolved into a global enterprise in 10 years since John's first broadcast, building on a track record of strategic execution and achieving impressive growth, including more than doubling our top line, more than tripling our income from operations, driving a margin expansion of over 1,000 basis points and a 10-year total shareholder return of over 800%. It's been a remarkable decade, and while he would never say it, the marked success of this period in TMX Group's history stands a testament to John's leadership acumen and the purpose-driven vision he has instilled across organizations. And now I'll turn the call over to John.

Well, thank you, Amin, and this is a good testament to why I don't get to review your remarks in advance when we do these calls. Thank you very much. It's much appreciated. As a massive baseball fan myself, I will remind everyone it's not the number of innings that are pitched, it's the number of times the team wins when you're on the mound. And this team has done exceptionally well over those 10 years, and I'm proud of everyone in it. So thank you. Good morning, everyone. Thank you for joining the call today. This is a very big day on our annual calendar. So as Amin mentioned, we announced results for the first quarter last night, and our annual shareholder meeting takes place this afternoon in our market center. And we've already got a lot going on this year, both across the enterprise and around the world, and while we all collectively live through a very interesting point in time for TMX, for the exchange sector, and for the global finance industry. So this morning, I want to cover off some of the key Q1 performance highlights and the progress we have made in our global strategy to accelerate growth. And I will close my remarks on a couple of important new near-term initiatives. So turning to the results. By all measures, TMX delivered excellent results in the first quarter of 2026, generating record revenue and outstanding year-over-year growth in income from operations and earnings per share. Overall, revenue grew by 16 percent compared with the first quarter of 2025, including increases across the enterprise from transactional and recurring sources core businesses, and areas of recent expansion. Organic revenue, excluding last year's Global Insights acquisitions, bond indices, ETF Stream, Verity, and nuclear sector indices increased by 14 percent, and adjusted diluting earnings per share increased by 33 percent from the first quarter of 2025. Total expenses increased compared to last year, reflecting the inclusion of operating expenses related to recent acquisitions. and partially offset by the strategic realignment costs incurred in Q1 of 2025. And David will take a closer look at these expenses in his remarks to follow. Moving now to the Q1 highlights across our business areas. Revenue from capital formation increased 28 percent compared to Q1 2025 due to higher revenue from additional listing fees and TSX Trust. On the listing side, strong performance in the quarter was driven by increased financing activity on both TSX and TSX Venture, including $4.2 billion in equity capital raised on TSX Venture and $6.4 on TSX. In March, we welcomed a number of new listings to market, a positive signal for our pipeline and go public prospects, including Xanadu Quantum Technologies, a quantum computing developer, AGT Food and Ingredients, a globally diversified food company based in Regina, Saskatchewan, and Meditech Group, a UK-based provider of geophysical survey and data services for resource exploration. At the same time, we are seeing signs of renewal in corporates and continued momentum in financing on our market, and Canada's ETF industry continues to grow at a record pace. Q1 total net inflows surpassed $60 billion, nearly double the amount last year, and assets under management increased more than 40%, topping $800 billion in the first quarter. Now I'd like to turn to trading. Q1 was marked by very strong activity across our equities and derivatives markets as investors reacted to global volatility and geopolitical uncertainty. In equities markets, Q1 revenue from equities and fixed income trading increased by 34% over 2025, largely due to a 50% year-over-year increase in combined volumes on TSX, TSX Venture, and Alpha. Derivatives trading and clearing revenue, excluding box, increased 28 percent compared to the first quarter of last year, driven by record activity as investors looked to derivatives strategies to hedge against risk. MX average daily volume reached an all-time high of 1.1 million contracts in Q1, and overall open interest was 12 percent higher at the end of March than at the same point last year. Other MX activity highlights included record volumes across our interest rate products including a 38% increase in volumes in the three-month CORA Futures Contract, or CRA, record volumes in bond futures, highlighted by 30% growth in volumes in the CGZ, or Two-Year Government of Canada Bond Future, and open interest and ETF options hit a new high mark of 22.6 million contracts in mid-March. In a record-setting period, we also made important progress on growing MX's product suite, In early April, we launched a new tool designed to help investors manage Canadian credit spread risk, the FTSE Canada Bank Credit Index Future, or BCS. Initial client response has been positive in terms of open interest development, with market makers providing trading opportunities via tight liquidity. Now, turning to our global insights pillar. Revenue in global insights increased 13% compared to the first quarter of 2025. reflecting higher revenue from all three components of the business, TMX Trayport, TMX Vetify, and TMX Data Links. Q1 revenue from TMX Trayport grew 9% compared to last year, or 8% in pounds sterling, largely due to an increase in the number of licensees. TMX Trayport continues to invest in advancing and evolving our technology and our products and services to ensure we deliver an unparalleled client experience across our European energy network. Revenue from TMX Vetify increased 10% year-over-year, or 15% in U.S. dollars. Increased revenue was driven by higher indexing revenue reflecting organic growth in assets under indexing, as well as revenue from three 2025 acquisitions, bond indices, ETF stream, and the nuclear sector indices. And looking beyond the core market, TMX Trayport and TMX Vetify remain in pursuit of expansion opportunities across geographies and asset classes. And while we're proud of the milestone accomplishments and record set in the first quarter, the context is important. We didn't do this alone. Canada's capital markets are best in the world, deep and liquid, fair and transparent, responsive and resilient. And what sets our markets apart, what makes them unique and formidable and world class and capable of so much more is the commitment and partnership with our stakeholders. At the center of this powerful ecosystem, TMX's focus is where it needs to be. on what comes next. Because making markets better and empowering bold ideas is our purpose, guiding our decisions and emboldening our forward steps. And the most exciting thing about the work we've done to build the high-performance TMX today is what it means in terms of those building blocks for tomorrow. So with the future in sight, I want to close with some details around important initiatives that we have undertaken here in Canada and around the world. One of those initiatives is the one we announced a couple of short weeks ago. the agreement to acquire CBOE Australia and CBOE Canada. This transaction is designed to expand our presence in Australia, a region we are well familiar with and where we see significant growth potential, and also to strengthen our domestic markets to create an even more competitive Canadian champion on the world stage. We are excited about the opportunities in front of us, and most of all, we look forward to partnering with clients to identify ways to build on the unique strength of these ecosystems to better serve in both regions. And another initiative, which we haven't discussed publicly yet prior to this morning, is our extended hours project. So, TMX is deeply engaged in a proposal to operationalize extended trading hours in Canadian equities. This has been a hot-button industry topic, of course, and one we've discussed on previously quarter calls and investor meetings. And we've had many discussions with our clients and stakeholders to solicit their input and feedback on how to get this right. Quite frankly, with the largest and most competitive market in the world at our border, we've got a responsibility to closely examine the potential impacts on transformative developments stirring in their marketplace. And for Canada, this is not a single venue proposition. It's an ecosystem undertaking. Canada's markets have unique attributes that need to be taken into consideration in any such plan. And we are well along the process of scoping a proposed extended hours model, taking into account the potential impacts, benefits, challenges, opportunities, and risks. And these important stakeholder discussions are ongoing, and it will be a focused topic at next week's annual TMX Equities Trading Conference. Now, our country's collaborative approach to moving markets forward has proven successful over time. And whatever forward path that we choose, we have some great examples of executing game-changing marketplace projects, including the overhaul of our market on close facility, the transition to T plus one settlement, and the implementation of post-trade modernization. These are all actually recent initiatives. In fact, last week marked the one-year anniversary of the launch of PTM. And we recognize that making investments in upgrades to critical infrastructure components won't generate the headlines, but when done right, they do make markets better for all. So in terms of the extended hours proposal, we look forward to working with our constituents and our regulators to drive a conversation about what is right for participants, investors, and issuers, and determine together what works best for Canada. In closing today, I want to thank our employees around the world for your commitment to the company and your commitment to our clients and for bringing our purpose to life in your work every day. Your contributions are vital to TMX's success and our winning edge. With that, thank you, and I will turn the call over to David.