TMX Group Stock

[Audio Gap] And that's really been fueled across all of our business segments, as opposed to just 1 or 2. And then the second one is really accelerating the growth that we've spoken about, where we have a strategy to be more global than local. And we announced 3 transactions. It represented roughly $2 billion in inorganic investment. And we're firing on all cylinders right now. Looking ahead, we're excited. We're hoping to continue building this momentum into the second half of this year and then, quite frankly, into 2027.

Excellent. Listen, the TM2X vision really targets $2 billion of revenue at twice the speed it took to double the revenue to $1 billion in 2021 -- sorry, 2022. And that effectively targets a $2 billion top line, I think, by the end of 2029. And David, by my numbers, I think you're on track to getting there 1 year early organically. And I think with the recent Cboe and MEMX deals, it looks like you'll exceed that target by roughly 2 years' time, in 2027. Am I getting ahead of myself, or does that...

No, Phil, I actually think your math is directionally there, and maybe you've been a little conservative. If we look at the first half of this year, organically, we did $975 million in revenue, right? So if you just look at the exit run rate out of the first half of the year, it's going to be touch and go as to whether we actually get there by the end of this fiscal year, which would be a couple of years ahead of the target.

So obviously, it's been fueled, as I said, by those 8 quarters and, obviously, the 2 quarters into this year of double-digit revenue growth, which well outstrips our long-term guidance of high-single digits or mid-single digits for revenue growth. So obviously, the organic transactions -- which you touched on -- they do help, but they really help to accelerate it. But on an organic basis, we're literally within spitting distance.

Excellent. And Loui, welcome. We're going to dig in deeper to the listing business a bit later in the conversation. But maybe start off and give us a sense for how the IPO pipeline is shaping up and really what you think we need to see for a more robust IPO recovery in Canadian markets.

Yes, sure. Thanks, Phil. I'd say we're having a pretty strong year. I think historically, when we look at IPO activity, a good year would be 10 large IPOs, right? And I think year-to-date, we're roughly at 6, with a few more in the pipeline before the end of the year. So with that being said, I think this is shaping up to be a pretty strong year.

Now, we often focus on IPOs, but the reality is we have -- we're close to 300 listings this year. So a lot of activity that happens on the market comes in different ways, whether it's a reverse takeover or whether it's a direct listing. So listings activity is actually very, very strong aside from just the traditional IPO.

The other thing we often miss is when we look at our venture market, year to date, I think we're at 15 graduates from TSX Venture to TSX. In our view, we view those as IPOs as well -- much smaller, but those don't really get captured as an IPO.

So I think we've had a very good year. Obviously, Apotex was a big one, Alliance Grain Traders and a few others in the mining sector. When we look at our pipeline, it's still very, very strong. As I mentioned, we have a few more that are in the pipe that hopefully will close before the end of the year. Obviously, lots of different variables will drive whether those deals come to market or not, but we're pretty confident that we'll see at least 2 or 3 more strong IPOs before year-end.

When we look at our broader pipeline, we have more than 2,000 companies in our long-term pipeline, a lot of private companies that we engage with. Our short-term pipeline, I would say -- so when we say short term, that's in the next 3 years -- is roughly about 500 companies that we're in active dialog with. And then when we get shorter -- to the next 12 months, at least another 85 to 90 companies that we're in active dialog with. So things are looking really, really strong. Financing activity continues to be very, very strong. So we're very, very positive going into year-end and into 2027.

What can we do to drive even more activity? Obviously, we spent a lot of time lobbying the federal government for tax change, tax policy. We spent a lot of time with the CSA trying to reduce burden and doing a lot of things internally to blur the lines between public and private, so making it very, very easy for these private companies to consider the public markets. And I think a lot of the rule changes that we've done over the last 3 to 4 years have really, really accomplished a lot of that.

Excellent. And David, I think the last 5 years have been strong, double-digit EPS growth. So what gives you the confidence that you can repeat that over the next 5 years?

Yes. So there are a couple of points here, Phil. I think the first one is we set a long-term financial objective to grow earnings per share double digits. And it's always good when you set out an objective and you deliver upon it, and we continue to do so. So while the last 5 years isn't the long term, it really bodes well for not just the last 5 years, but what goes into the next 5.

I think I've got to call it out: We have a really strong, dedicated team at TMX. They are very, very focused on organic growth initiatives. We bring together our top sales individuals for forums and seminars through the year, but it culminates in a conference that Loui actually hosts with a number of other colleagues to really figure out all the cross-sell opportunities and to really accelerate growth.

We typically -- because some of those folks are some of our more senior leaders in the firm, we then follow up with the leadership team meeting the very next day, and we really focus on organic growth and really how we can accelerate the strategy at TMX. So I think you have to call it out. It's a really, really good team of individuals.

And then the second one is really we're becoming more global than purely local, right? And so we've shifted to more recurring revenues than, let's say, transactional revenue. We have an objective to roughly get to 2/3. We haven't quite got close to that number yet, so there's a lot of runway, if you will, for us to go there.

But what's really, really fascinating to me when I analyze the numbers, which I love to do, the high-growth businesses that we -- the businesses where we classify them as having high-single-digit to double-digit growth -- combined are contributing more than 50% of the revenue of the franchise. And so, that, I think, is part of the growth acceleration for us over the last 5 years, and I think bodes well for the next 5.

Excellent. So a lot's going on at TMX Group. Maybe talk about strategic priorities for the year ahead?

Execution, execution and execution. And then John said to me yesterday, "Execution." So really, it's execution of our global growth strategy. And then I think completing the integration of the recently announced initiatives is the most important thing.

A number of them are still subject to regulatory approval. So we've announced and signed, but we haven't yet closed. But we were successful in closing Cboe Australia. So our TMX Australia franchise is now part of the family. And it was really nice to welcome them to our all-employee meeting recently. And really, it's -- we had a couple of our senior team members visit them in Australia recently, and it's an energetic team of individuals that really feel like they've been part of TMX forever. So we've got to complete that integration.

We've obviously now closed on our RAFI integration and VettaFi -- or acquisition of VettaFi. So we have to finish that integration and then keep continuing to execute quarter after quarter, day after day, because that is what it's going to take.

Okay. We'll shift gears a little bit, and we'll talk about some familiar themes, right? Threats, defensive moat as well as TMX as a fast follower. And I think 2026 feels like the year of disruption fear, right? And that's weighed on TMX valuation despite some positive momentum in developments. Some of the key concerns: it's AI disruption, tokenization, perpetual futures. So I know both of you have been asked these questions frequently over the last little while, and I'll nuance mine and say, with the hindsight of reflecting on some of the primary investor touchpoints and, at times, misconceptions, maybe talk to some of those concerns, the TMX moat and even upside opportunities you might see stemming from these.

Yes, it's a great question, and Loui and I will probably tag-team on this one. It's interesting. We've got a proven track record of innovating at TMX, right? And we often don't -- and it's very much in our Canadian nature -- we don't laud our successes and our firsts. But the first to bring the ETF to market, incredible development of technology and intellectual IP on matching engine technology. And it's really something that gets overshadowed when John and I often refer to the fact that on certain of these emerging, what I would call more retail theme-based topics coming out of the U.S., that we will be a fast follower, right?

It's not because we don't have the skills and capabilities to lead. It's just in some of these, we really need to see a proven client demand, right? There's a lot of talk about prediction markets in the U.S., perpetual futures, a lot of talk about digitization of securities, where Loui and I would argue that cash securities or cash equities are really digitized in the Canadian ecosystem.

And so, it's really looking at some of those and being able to actually deliver what our clients want and need, and not maybe be swayed by a retail theme coming out of another part of the globe that's well suited in that economy and environment, but maybe less suited in the Canadian ecosystem.

So yes, because of the work that we're doing with MEMX and BOX, and now the MEMX Group, which we hope to be able to close on next year, they recently announced that they would do binary options or prediction futures or options on events based on earnings releases. That's something that we will look at doing possibly on the Montreal Exchange, but there needs to be enough of a demand from the Canadian investor community for us to actually deliver it.

So that's the theme that I would have is: we're going to be a fast follower where we're not quite sure there's a proven client demand. But when there's a client demand, we are going to lead.

Okay. So maybe I'll reframe that and pitch that a slightly different way. Again, you described TMX as a fast follower. What makes that a good strategy for TMX and its shareholders?

So it's interesting, we don't like to spend shareholder money and shareholder capital on speculation where, as I said earlier, there isn't a proven client demand. And so, we're spending a lot of time speaking to the client community, both in Canada and abroad, where we have operations, as to what their wants, desires and needs are.

And really, a good case in point was the Canadian broker-dealer environment really talking about collateral management and really helping make collateral management a little bit more efficient. We partnered with Clearstream to bring to market a product called CCMS, the Canadian Collateral Management System. Once again, it wasn't something that we developed in the laboratory and said, "We hope that someone would need this." This was us co-creating with the industry.

In the next few days, our teams are actually bringing together a number of thought leaders on September 15 across Canada to talk about, in the broker-dealer community, the digitization concept -- what is it going to solve? How can we do it? How do we partner with various different other networks, Canton Networks and others, to actually bring a solution to the Canadian marketplace that is fit for purpose and isn't just following maybe a trend that we see in the U.S. or in another marketplace?

Okay. So again, what are examples where it makes sense to really push to be an innovator or, in this case, a disruptor?

So I think the places where it is one of our core strengths -- for example, matching engine technology, different order types. Some of the next-gen technology that we use to build Alpha-X U.S., our U.S. ATS, was to do that, right?

And we're now well positioned as we bring together MEMX and BOX to actually critically look at the MEMX technology, the Alpha-X U.S. technology and really innovate to that next level, and that's where we can lead. And that's where I think we should lean into our strength, versus areas where it isn't a core differentiator or part of our defensive moats that's better purchased from a partner and/or potentially a cloud service provider.

Okay. So data analytics, I think, continues to be a valuable source of growth and recurring revenue. And I think Trayport has seen strong top line expansion for years, although the relative pace slowed a bit in 2026. So what do you see as the biggest drivers for near- and midterm growth for Trayport?

So I think it's a couple of things. The first is continuing to execute on the core Trayport technology platform that really brings together the network of brokers, traders and exchanges for a lot of over-the-counter products that are actually traded in the energy sector in Europe.

But I think the second one is more product offerings, right? We, at 1 stage, did not have algorithmic trading as a capability in that ecosystem. We listened to what our clients' wants and desires were. That was very, very self-evident. In addition, there were some charting and analytics capabilities that they were really asking to take data out of the ecosystem so they could throw it into Excel and other visualization tools. So really adding more product will help fuel it.

But then also, it's diversification of asset classes is very important, too. We spoke at our Investor Day about getting into other asset classes and exploring oil. And then, finally, it's the geographic expansion, right? We've done a decent job. We have almost $10 million of our revenue coming from the Trayport business based out of the U.S. right now, in North America. But Japan is deregulating, and that's really a growth market. And so, that's where I think the growth would come, and that's more in the long term.

On the near term, it's product enhancements and facilitating that client growth in the user base.

Excellent. So given some of the broader, I'll call it, industry changes with SaaS-type models, is there any discussion or work being done to consider Trayport more as a usage-based revenue model?

Yes. So Trayport today -- and this is one of the things where there's sometimes a misunderstanding -- publishes metrics from our Trayport business that are very common metrics that SaaS-based businesses will publish.

As a result, some people have said, "Oh, well, Trayport must be a SaaS-based business." And we really don't sell software as a service at Trayport. What we effectively do is sell access to a network, and we sell it based on user subscribers, right?

We obviously have 2 models. We have clients that will be on a 1-year pay-as-you-go, subscriber-use-based licensing agreement. But then we have a great swath of our clients that actually use our site-license opportunity or model. And that's effectively priced over multiple years. And effectively, it's an all-you-can-eat arrangement during that term.

And so, I think in the -- it's really dispelling the fact that, yes, when we show net NRR and ARR, which are very common SaaS-based metrics, it isn't purely a SaaS business because we don't sell software as a service.

Okay. So I think it's been a very active period of M&A for TMX. I guess the combination of BOX and MEMX, I think, is the most recent transaction announced. So can you walk us through some of the highlights of that, and also what you think makes this exciting for shareholders?

So that's a very, very exciting transaction for us because we've been asked the question for a number of years, which is you have a 48% equity earnings interest in BOX, but you have a voting interest just north of 50%. You've built a U.S. ATS. Why don't you bring them together? What more can you do to accelerate your growth in the U.S.?

And so, this was a shareholder-led transaction, with really some shareholders are common between MEMX and BOX. But then there are a number of unique shareholders in both entities. And so it was really shareholders coming together where we felt that we could actually create a far more compelling options and trading venue in the U.S. that stands a chance, long term, of really competing to be the fourth-biggest venue in the U.S.

And so we were excited about that. We said on announcing that we would be roughly around a 59% owner in that. By the time we get to close, that number might be somewhere between 55% and 60%. And the reason it might slip down a little bit is the reaction from the shareholders and the marketplace to this announcement has been incredibly positive. And so, some of our shareholders in both entities that had indicated initially they might roll 50% of their equity stake and take 50% off the table are now expressing an interest to roll either 100% or a greater percentage than their 50%.

So we're actually quite excited about that. And that will actually help us as well, Phil, when we come down to our leverage because we had said we'd roughly have to disburse around $800 million for this. It will be south of that, depending on where we land up. I think as well, bringing together these listed-options venues in the U.S. is going to be really, really powerful for the constituents. I think we're going to have an opportunity to modernize the technology stack of the combined entity because the technology that Jonathan Kellner and his team have built at MEMX is really state-of-the-art. And we were due for some technology upgrades on the BOX side.

So I think that's going to help us there. And it's going to help us on the global expansion agenda. Our desire to be a meaningful player in the U.S. has continued to be something that we've steadfastly stood behind, and this is another step in that direction.

Okay. And you recently closed Cboe Australia. So what does that deal mean for TMX, I'll call it, in the near to midterm? And also, what are some of the long-term opportunities that might lead to?

Loui, do you want to...

Sure. I'll speak to it from a capital-formation perspective. The deal closed about a month ago in Australia, so teams have been working hard on integration and whatnot.

I think it's a real opportunity to bring together 2 of the world's leading mining and energy financing ecosystems -- Australia and Canada -- obviously, with real strength in mining and energy. So bringing those 2 markets together, I think, is a real opportunity.

There are 2 areas that I think we're really focused on right out of the gate: one is ETFs. I would argue that the ETF market in Australia is years behind where we're at here in Canada in terms of growth, innovation and maturity. So I think we have an opportunity to replicate the world-class ETF franchise that we've built here in Canada -- a leading ETF market -- and replicate that success in the U.S.

And then following on to that, I would say the corporate opportunity, the corporate-listing opportunity. Cboe does not have any corporate listings. We know from being active in that market for years that the community there is really looking for an alternative. And just based on recent feedback from roadshows that we've done, the investment bank community there is really, really keen to see us up and running. And so we do think we can bring some of that expertise to that market.

We also think, longer term, we can replicate our venture market in Australia, which doesn't currently exist there. And then, longer-term opportunities -- and we'll speak to this a little bit later on -- but our Corporate Solutions business, and these are the different products and services that we sell to listed companies, we plan to roll that offering out into that market as well. So lots of opportunity ahead over the next couple of years.

And a bit closer to home, you've got Cboe Canada, I think, likely to close next year. What makes that a compelling deal for TMX?

Yes, it's an interesting one, Phil, because I think, firstly, it creates a stronger Canada, right? The deal strengthens Canada's standing as a champion in the global marketplace. And I think that's good for us in Canada.

I think as well, it does create value for our clients and for our stakeholders. And the reason is it's going to give us an opportunity to expand the client-centric products that are offered in the Canadian marketplace. I think it's also going to create some domestic market opportunity for more global expansion because we'll be stronger.

And then, lastly, I think, as I said on the call when we announced it is, while it's going to be accretive before synergies, we're expecting there to be significant cost synergies. And really, that is ultimately going to benefit Canada, right? It's going to benefit our clients. It's going to benefit the Canadian ecosystem by simplifying it.

We have a number of venues that our broker-dealers in Canada have to connect to. We have an order that requires them to connect to all of these marketplaces, and finding a way to actually simplify that marketplace connectivity will result in lower costs for our clients.

Okay. Now, does TMX still have management and financial capacity for further M&A? Or are we really entering the period of execution?

Yes. So there are 2 parts to that: one is financial capacity and the other one is management capacity. So from a financial-capacity perspective, there's absolutely more capacity than would be apparent to everyone, in part because, as I touched on in the MEMX-BOX transaction, that will probably result in less of an investment being required because more folks will probably roll at a higher percentage. But also, we would probably only see our leverage top out at around 3.4x. And I feel very comfortable right up to 4x levered. So there's capacity there.

But in addition, there's management capacity for us because these acquisitions are not all closing on the same timeline, and they're also not all in the same business. So the same technology teams are not being impacted. There are obviously parts of our information security, technology team, our HR team, finance, legal and compliance that are impacted across the board. And so what we've done is we've tried to augment those teams with some additional resources. We've brought in some professionals, some contractors, to actually help the team.

And as I said earlier on, the immediate goal for us is execution, execution, execution. It's really finishing the job on integration, but executing on the day-to-day and not losing sight of what got us here. But it just happened to be that we announced all 3 of them in very quick succession. We had been working on these transactions for multiple years, and with some of them, for almost 25 years. It just happened to be that they all came to the same announcement dates within a similar window.

But as you've seen now, we've closed on Australia. We're still a ways away from closing on Canada. That's still going through the Competition Bureau and the appropriate review process. Obviously, we've closed on RAFI. It's another team that is dedicated for that. And then, obviously, the SEC and other bodies need to weigh in on the MEMX and BOX merger. So I'm not worried about our execution capability and/or our financial capability.

Okay. Maybe as a bit of a follow-on and, in light of recent M&A activity, what are the current capital priorities?

So first and foremost for us -- and it is unchanged -- is we want to maintain our credit rating. Leverage, we would like it to be, absent acquisitions, in that 1.5x to 2.5x range.

We've been active on our share buyback program this year. We were at a peak in June of last year. There were some extraneous factors coming out of some of the AI fears, which we felt were unfounded at the time, but there was clearly an impact to most of the North American exchanges and some other businesses, too. And so we had an opportunity to accelerate our share buyback program, which we did.

The next element of the capital stack, if you will, or the redeployment stack, is returning capital to our shareholders. And we do that, obviously, in the Form of share buybacks that helps, but it's also the dividends that we pay. And we've targeted a 40% to 50% payout ratio. We just announced in the third quarter our third dividend increase. So in the last 12 months, which is -- it was, a, justified; and b, a signal of the earnings power that we have. But we really needed to do that to keep pace with our 40% to 50% payout ratio because our earnings per share have been growing at a solid double-digit.

So that remains the stated objective. We've always been open to using leverage for inorganic financing. It is the cheapest form of financing. But we're also being very open that, if the right opportunity were to arise, we have a very attractive stock. And as it traded into its full value, it becomes a more viable acquisition-financing vehicle. So we'll stay open to that.

But at the end of the day, we are so focused right now on executing on these transactions we've announced and the organic growth plans that we have, and we have more than enough capital to sustain.

Excellent. Listen, I think the listing business is a fundamental part of that TMX flywheel. So Loui, how does TMX differentiate itself in the listing business? And what do you see as key to winning new listings, both at home and abroad?

Sure. There are a number of different things. I'd say, first and foremost, I think our ecosystem in Canada of dealmakers, advisers and brokers is somewhat unique, as much as it may not seem that way. When you get to other jurisdictions in Latin America, even Israel and parts of Europe, it doesn't come together the way it does here.

And so that ecosystem understands the risk trade, understands our sectors, and that's what makes us experts in the SME space. And that's a real draw when international companies are looking at our market. I'd say also the uniqueness of our 2-tier ecosystem with TSX Venture and TSX, that is truly unique in the world. That is a big draw. Our venture market really is the growth engine of our capital-formation business. It continues to be the largest source of listings for a TSX franchise.

That ability to list the company at a very early stage, incubate on Venture, use your share as currency to do acquisitions and then ultimately graduate to TSX is really, really a unique model that people around the world have been trying to replicate for years.

I would also say we have probably the largest and most robust global-business-development team of any other exchange group. So we've taken the approach of putting boots on the ground in jurisdictions that we think work well with our market. So we have people in the U.S., Latin America, Israel, Europe. And those people really are not only looking for listings, obviously, but really doing the work to build ecosystems of dealmakers in those jurisdictions.

So for example, when you look at Israel and the success we've had there, I'd say any time we're doing a listing out of Israel, 50% of the capital that's raised on a deal is actually coming from that jurisdiction and the rest coming from Canada. So it's also helping us supplement and complement the pools of capital that sometimes aren't always in our market here.

So those things are really what make us unique. I said this earlier in one of our meetings: When you're in California and you're in a room like this with 100 entrepreneurs, and you educate them on the fact that you can go public at a very early stage and you don't have to go to private equity or VC and deal with some of those issues, people's eyes light up and really take to that opportunity. And that's really been a big part of our sales pitch.

And the U.S. continues to be the largest source of listings outside of Canada for us. And I think it's really because the message of the uniqueness really, really resonates. And again, we know where we play, right? We're an SME market. We're not competing with large caps on Nasdaq and NYSE. And I think that sweet spot for us has served us well over the years.

Okay. So U.K. regulators, I think, have made some changes to really, quite frankly, to the London Stock Exchange to help it regain relevance, for lack of a better word or even a direct quote. Do you see any potential changes in Canada that could help TMX in its own home market?

Yes. I'd say, I think I touched on this a little earlier. We've been -- what London has been trying to do over the last couple of years, I would argue we've been trying to do for 15. So we've been very, very engaged with the CSA and the regulators for years in driving regulatory change, reducing burden. We've been very, very active under the leadership of John McKenzie over the last 6-7 years in doing a lot of advocating with the federal government to drive tax-policy changes and incentives for public companies.

And so, we will continue to do that. I think we've seen a lot of wins. We've seen regulators in Canada show a real willingness to make those changes to make our markets far more attractive. But I think the other thing we've done, which is a little bit different but an important point, is we look at London. I think with some of the transactions that London has done over the years, their big Refinitiv deal, the listings part of their business, I think, became a bit of an afterthought. And I think they're paying a little bit of the price of that now.

Whereas at TMX -- and Dave can speak to this -- even as we've expanded globally and we've diversified our businesses well beyond our capital-formation business, we've never lost sight of how important that core business is. So it's not a business that's in care-and-maintenance or sustained mode. This is a core part of the flywheel. And I think that focus has proved us right in that strategy, and I think will continue to keep us in the position that we're in.

Okay. So the Corporate Solutions business and capital formation, I think, has become increasingly important parts of growth in recent years. So maybe you can talk us through the importance of this business and the opportunity that it presents.

Sure. And for those in the room who may not be aware of what it is, our Corporate Solutions business is essentially all the products and services that we make available to our customers on the listing side of the business.

Now, originally, it was just the listed companies. But as we've expanded that portfolio of solutions, we now sell to public companies, private companies. So we've expanded our addressable market well beyond our public markets. We service governments, we service law firms. And not just in Canada -- the service offering allows us to sell into the U.S., into Lat Am and into Europe because they are truly global offerings.

So a big part of that solutions offering is our transfer agency and trust business. So we offer transfer agency, trust, employee-plan services, we do registered plans, dealer services. So a pretty robust offering there. Just over a year ago, we bought a newswire business. So we're now in the disclosure dissemination business that we're selling globally. And that is the high-growth segment of our capital-formation franchise.

So our listings business will grow at a more modest 5% to 7%, let's say, over the long term, whereas this segment of our business is high-single digits, low-double -- actually, even higher double-digit growth. And so the goal there is to deepen our share of wallet within our existing customer base. And what we're seeing is our ability to sell multiple products into multiple touchpoints within a company.

So when we look at a particular listed company, we're seeing companies now with 5, 6 or 7 different products within our product suite in their offering. And I think that just deepens our relationship with our customers, makes it more sticky and then just creates opportunities for us across the broader TMX franchise.

And that's really been the focus. So Corporate Solutions represents about 40% of our total cap form revenue today. Our longer-term goal by 2030, we'd like to get that to 50% and even higher, and we're well on track to achieve that target.

Thanks. Maybe just in terms of some closing thoughts to leave with investors, and I guess I'll aim this one for you, David, here. What do you think is the most compelling reason for investors to own TMX today?

I think, look, we're a technology-driven business that's really globally diversified, and we're an information company at the heart. And we set out a TM2X plan. And quite frankly, we're -- as we covered right at the beginning there, Phil, we're on track to deliver that well ahead of schedule.

So I think that's 1 of the 3 most compelling reasons. The third is like -- or the second is we've effectively deployed our capital to accelerate our growth in a way that our shareholders have rewarded us for. We don't overpay for inorganic growth. We invest in our organic growth in a targeted manner. And it's really shown in our earnings per share, which has consistently been double-digit earnings per share growth, which is part of our long-term objectives.

And then, really, the third -- and I'll close with it -- is we've got a proven track record of innovation, right? We are obviously the benefiters of what we see around the trends around AI right now, more so than a threat. And so I'd leave that with everyone which is: AI is an enabler. We didn't get to unpack a lot of that today on the stage, but Loui and I did in many of our meetings earlier today -- the things that we are doing at TMX to really drive innovation in our client-facing activities that is having tangible benefits and it's being accelerated through the use of AI is to me, middle-aged-man, jaw-dropping. And so, I think that's another compelling reason: we are positioning TMX for the future, and that is a future using AI as opposed to a future avoiding or ignoring AI.

Excellent. Well, listen, it's been a great conversation. And David and Loui, I'd like to thank you both personally for taking the time today and thank the TMX organization for your continued support. Thank you.

And thank you for being our client. Appreciate it.

Thank you.

Thank you.

Hi, everyone. Thanks for being here. My name is Aravinda Galappatthige. I'm one of the TMT analysts here at Canaccord Genuity. Very pleased to have for the second year in a row, the TMX Group. And with me is David Arnold, the Chief Financial Officer of the company.

TMX obviously needs no introduction, but it's -- they operate global markets and clearing houses in Canada, the TSX and the TSXV as well as the Montreal Exchange on the derivative side. And here in the U.S., the Boston Options Exchange and more to come on that as we'll discuss during this conversation. And then the Global Insights business, which includes a myriad of analytics and insights businesses in the capital market space represents almost half at this point of the profitability of the firm. So a lot to discuss. David, thanks for being here again.

It's a pleasure.

So typically, we leave the M&A questions a little later, but you've been busy. So let's kick it off with that. I mean you've been active ever since sort of the milestone acquisition of VettaFi, you've kind of been making tuck-in acquisitions. Of late, the size has been ticking up, Cboe, RAFI and then most recently, the MEMX deal. How would you kind of characterize your M&A playbook at this point? Has it really changed much in the last 4 or 5 years?

No, it's a great question, Aravinda. So firstly, thank you for having us back at the Growth Conference. I think it's your 45th year.

46th.

Yes, 46th. Impressive. So yes, for me, this is an interesting question because our M&A playbook really hasn't changed, right? This is all anchored in our growth strategy of the enterprise. We have some transformational objectives we've set out, which is to really have more recurring revenue than transactional revenue, more revenue outside of Canada than inside of Canada. And as you touched on, our Global Insights business having at least half of our revenue coming from that segment.

So we've really tried to accelerate our strategy using 3 techniques. The first is really organic growth. It's one of our superpowers. We are really good at building technology, running great markets and infrastructure as well as the full ecosystem. But then there's also the ability for us to partner with individuals. And then obviously, the third lever is to accelerate it through M&A. And so that M&A playbook hasn't changed.

What's very, very important to us is being disciplined. Price discovery and fit with the culture of the organization is very important. It's interesting. You just rattled off 3 announcements in the second quarter. Those obviously had very, very different tenures behind them, right? Sure, we were busy getting to announcement, but they will close on different schedules, and they're in different parts of the business.

Exactly. So maybe just we'll take the bigger one and the most recent one, MEMX, BOX. Maybe just sort of walk us through that transaction a little bit for those in the audience that may not be familiar with it. But the central question is, you always talked about being positioned more strongly in the U.S. You always had sort of the controlling ownership of the Boston Options Exchange.

But when you look at the portfolio now, you're going to have, I think, 3 options exchanges here and an equities exchange. You obviously have the ATS, which you built up organically. And then obviously, VettaFi and Verity, how do you put all that together? I mean how does all of that potentially fit into a broader U.S. strategy?

I mean, look, we were clear at our Investor Day and prior that we have a North American expansion strategy. You just got to call it like it is. The U.S. is the most liquid, most competitive market in the world, and we are just north of the border. And so for us, competing with the U.S. marketplace is very, very important to our success in Canada. And similarly, it's important to our long-term success to have a presence in the rest of North America, principally the U.S.

So it fits really squarely in there. I mean the Boston Options Exchange was seeded originally through our Montreal Exchange as part of that legacy in the business. But we've always had an opportunity to evaluate can we do more? And many folks, yourself included, have asked us over the years, like what more can you do in the options space. So this creates a scaled U.S. kind of equities option venue. The management team at both of those businesses are very, very strong.

The management team at MEMX is going to be in a prime driving seat with Jonathan Kellner leading the enterprise. So we're excited because it answers the question now, right? Like what more can you do? And as we get into the various put/call options in the future, we have our U.S. ATS. We've got to figure out do we vend that in, don't we. So there's lots of options for us. But job one is go through the kind of competition and regulatory filings with the SEC and then obviously, integrating those 2 businesses.

Okay. And you're looking to close this early '27 with that...

Yes. I mean we don't know how long the SEC process will take. We've used some of the benchmarks, which is somewhere in that kind of 1-year window.

Okay. Makes sense. So let me switch over to the ETF market. I mean I attended your exchange conference, which is very interesting. I mean you kind of have an appreciation for how much ETFs have grown. And ever since you acquired VettaFi, you've been sort of essentially nourishing it with these tuck-ins, whether it's sort of geographically going into EMEA, whether it's sort of strengthening the sort of the teams with indices, fixed income and nuclear indices and so forth.

And despite maybe some concerns, I mean, you probably had one of the best quarters for VettaFi, 26%, 27% organic growth. So what's the outlook for that business? I mean what does VettaFi look like now fully armored with all of this?

So it's interesting, Aravinda. So we -- when we first acquired VettaFi, one of the things we did look at is we need to diversify that business into other asset classes, right? And so you touched on them, right? Nuclear was one. We obviously did the work on the fixed income side with the Credit Suisse, UBS indices that we took over. And really, for us, it's been let's continue to diversify the business.

And what RAFI does for us is it exposes us to a whole different approach to weightings within an index or an ETF at the end of the day, which is using fundamental research that Robert and his team at RAFI have done an incredible job in creating a really, really good business. So that once again then diversifies all. But at the end, yes, the top line is very impressive of recent quarters.

I got to anchor everyone back to our long-term guidance, which is really high singles to double digits growth because I'm not looking to print 26% or 20% plus every single quarter. We've got a much longer kind of horizon for growth in that business, and the long-term guidance of high singles to double digits is a great value proposition for us.

Could we sort of view what you have been doing and what you did with RAFI as well as not just about growth, but sort of moating this industry, this business so that it can deal with the changes that would naturally come?

Absolutely. The strength in the business by having a more diversified client base and going across multiple asset classes and different parts of the cash equities kind of spectrum, it creates a stronger franchise and creates some critical mass. And yes, you can look at it as a moat. We consider it to be more defensible through market cyclicalities.

Okay. Makes sense. You've recently closed Cboe, the Australian component of your Cboe acquisition. Can you sort of help us understand the opportunity in Australia? Because I think your starting position alone is close to 20% in terms of market share. Obviously, very close parallels between the way Canada operates as well. What's sort of the broad opportunity in Australia?

It's a great question, Aravinda. I mean so the first thing that we've done is we've obviously announced the closing. We've rebranded. It's now TMX Australia Exchange. And it really does provide a significant opportunity for us. And this is a very, very interesting one where we did some business development work back in 2022. We went to Australia, a number of us from the senior management team. And we really liked what we saw. We saw a great opportunity.

Cboe had recently moved into the Australian marketplace. So we are like we could probably organically build a third competitor in that marketplace. But we'll put it on the back burner because we've got a lot of other work to do. We had VettaFi in the works and stuff like that. And then when Cboe announced that they wanted to divest of Australia and Canada and specifically Australia, we saw it as an opportunity to accelerate that.

So we once again, the M&A opportunity was an acceleration of an intended strategy, which is to go into Australia. We already had business development resource on the ground in Australia, helping with mining and associated kind of natural resource businesses that naturally had an affinity with listing on the Toronto Stock Exchange or the Venture Exchange. So the outlook over there is good.

I mean I think that first job is migrate off of the legacy technology as part of our transition services agreement, build the like-for-like functionality and then look to bring some of the TMX DNA to Australia. Dare I say it could be a really, really good proving ground for a venture exchange equivalent down there. And there could be great opportunities for dual listings for a lot of individuals listed on the TMX Australia Exchange, but then also listed on the Toronto Stock Exchange or the Venture Exchange here.

So I'm excited for what this brings. We pretty much took on the entire team from the Australian business. So we're hitting the ground running. And when we talk to our clients in Australia, they are very excited that we've decided to invest in the business.

You talked about rebranding it. I mean stylistically, are there significant changes to be made in terms of how you would run that? Or is it...?

No, I think that the team in Australia are very strong. Emma leads an incredibly strong seasoned team of professionals. So they're going to do their thing, and we're going to help fuel that by supporting them, investing in them and bringing some additional capabilities to the Australian marketplace.

So maybe a topic that's been quite relevant to the last, I guess, last 3 months and maybe even a bit before that, but still worth discussing because it does affect your stock price and Global Insights is half of your business. So what's -- how do you view what's been going on with software? The valuations of, I mean, July was not bad, things came back, but considering the starting point, we're still off a fair bit. Do you sort of look at this and say, I still have a good balance sheet. I could maybe things -- assets that would have been less attractive then and more attractive now? Or are you sort of maybe taking a step back and sort of trying to adjust to the macro?

Yes. And I think you're hinting on without saying it AI. And so let's unpack a little bit of it quickly, Aravinda. So the first part for me is we see AI as more of an opportunity than a threat in the company. We are already actively using artificial intelligence through various different large language models in our software development teams. But remember, we don't develop software to sell to others, right? We develop software to run our infrastructure and our marketplaces.

And in some cases, we even buy in software from others, we've decided it's not core for us to actually do that. And so our software development teams are actively using Copilot, GitHub and other large language model AI tools to be more productive in their coding, right? And so that's really, really positive.

Obviously, on the M&A front, one of the things that we do, do is we have a number of filters, as you would expect us to. And we would look at strategic alignment, cultural fit, we look at valuation. But one of the other filters we've done is really, can this business that we're maybe interested in acquiring to help accelerate our strategy does it have a competitive advantage or a weakness to AI, right? Could it be under threat? And that's an important part of our filter.

So we've walked away from a few things that we've looked at that we felt that, that business is probably going to be disrupted. Other parts of our franchise, we feel that the moats are, it's proprietary data. And we, today, in some of our data offerings take nonproprietary data that we use artificial intelligence to scrape, but we actually merge it with proprietary data to derive the insight that our clients actually subscribe to. So that's our take on it. Because we're not a software manufacturer per se, it's less of a disruptor for us than anything else.

So maybe just a quick follow-up to the point about proprietary data, especially when you think about the VettaFi RAFI side of the business. Is there an argument to be made that the proprietary data in and of itself can be recreated?

It's interesting. Yes, but to a small degree. When you deal with the Datalinx business, as an example, the vast majority of that data that is valuable is effectively the professional subscriber data feeds and the APIs and such. The trading houses and brokers and dealers that subscribe to those professional services, they want depth of order book. They want a whole host of data that we do charge for.

And we used to move from pre-APIs and algorithmic trading, it was a simple billing model. As the technology kind of changed and our clients wanted to consume that [ pro data ] in different ways, so did our billing structures change and so on. But you still pay for that quality data. The less valuable delayed quote data where you're not getting all of the insights and the intel in terms of depth of order book and so forth, we pretty much do give most of that away for free, right?

And so that is not something that would be disrupted because there's really no revenue associated with it. The vast majority is on the professional side. So yes, when you go to VettaFi, the same applies, right? People are subscribing to our services and/or we're supporting their index and their benchmark. You can use AI to mimic our calculation engines, but it's so much more than that.

And when you look at RAFI, it's based on fundamental research, right? It's not using just market cap weightings, right, to come up with an index. So we consider it to be quite defensible. And I'm often when I'm talking to the team in New York on our index factory team, they're like, it is so much more than a calculator, David, like you need to realize that. And so I've spent a lot of time looking at what they put in to actually derive the indices. And there's a lot more human capital intel than necessarily would be meeting the eye.

Okay. So maybe just on a similar theme. I mean let's just move to Trayport. In my mind, one of the most successful acquisitions you've done, if you think about that period of time. How do you think about the outlook for Trayport? I know you got a lot of questions in the recent couple of conference calls. But I know there's more to come in terms of geographic expansion and new products. And then maybe also just touch on to the point about your defensive credentials against AI, like that network effect, I mean, that's another factor, right? And Trayport is sort of a good case in point there. So maybe I'll just leave it...

No. You know what, you've almost answered the question. You know us so well, Aravinda, like the ability to replicate the Trayport screen using AI tools to create the technology is doable. But without the network effect, as you said, which is connecting brokers and traders and then exchanges and getting everyone onto a platform, you would literally have a piece of software with a blank screen, right?

And so the secret sauce really for Trayport is the strength of the network. And we spend a lot of time looking at the network strength, and it's never been stronger. It is really, really robust. In more recent quarters, we've had some of our renewals that have come up that are lower growth rate businesses. For example, if you've got a very mature subscriber coming up for renewal, chances are they're only going to uplift by maybe 4, 5, 6 percentage points.

This year, our cost of living adjustment was only 3%, it's one of the lowest in recent times. And so that's kind of what you see factoring in through the numbers. But when we look at the pipeline for '27 and '28 renewals, there are more clients in there that are in more of a growth phase, and we expect them to renew at higher rates, i.e., more subscribers and therefore, a higher bill.

Okay. I would be remiss if I didn't touch on the derivative side of the business. And I picked up coverage, I think, 2.5 years ago, and there's never been a segment where I'm always low on and I'm like revising upwards. So...

I am internally...

Yes. So I think on top of my head, I think 20-plus percent in '24, 32% growth in 2025, all organic and double digits and probably the middle teens this year. There's clearly a structural aspect as well as a cyclical aspect. Maybe just sort of give us sort of the high-level view on that.

It's a great question, Aravinda. I mean the way I look at it, and people internally know I use a lot of analogies and metaphors. And here is a really good one, right, is if you've got a sailboat, you've got to have the sails. So when the winds come, you can capture it and you can go at speed. And I give Luc Fortin and the entire team based out of Montreal, a ton of credit, right? They have built out the interest rate curve over the last number of years. We have multiple products all along the yield curve. They've added various different option and future products. And we've seen in the last 5, 6 quarters, incredible momentum, right, in the derivative complex.

And if we had not done the work that we did to create all of the product, we wouldn't have using my analogy, the big sail to capture that momentum. And so you're seeing that right now. I said it on one analyst call, long may this continue. But at some point, the wind is going to die down a little bit more, and there'll maybe be less volatility and therefore, a little bit less action. But it's still a high-growth business, right? Like we've always said through the cycle, long term, high single to double digits. And yes, right now, it's outperforming on those measures.

Great. So maybe just jumping across to a couple of more recent thematic topics. You know better than me. So end of Q2, we saw a notable sell-off in the space, in particular in the U.S. names, I think, triggered by the CFTC decision around the approvals given to Kalshi and Coinbase. So maybe talk about what your view is when it comes to perp...

Perpetual futures...

Perpetual futures, yes. Any sort of, I know it's early stages, but is there anything that you have at the company?

Look, I'll speak to Canada, right? I mean we are very focused on listening to our clients and our clients' interest, desire and demand for product. We're not getting a, the phone is not ringing off the hook for when can you launch perpetual futures and so on and so forth.

We are capable of doing it, and we have work to do that within our marketplace because it's something that we see happening south of the border, and we want to be able to be ready and willing when the demand flows. We're just not seeing it right now. And once again, everything goes back to a client-driven product road map, if you will. But yes, to the extent the demand arises, we're ready to launch.

And then on the prediction markets, I mean, very quickly opportunity? Threat?

That's a little bit more of a U.S.-centric discussion. We don't see a lot of that in Canada, but we operate in the U.S. and now with MEMX and BOX hopefully coming together after regulatory approval so on and so forth. And you might have seen this morning, MEMX put out an announcement that they are going to be able to facilitate a predictive market instruments on their environment. So that's obviously got to go through the right kind of approval process.

But that is something that we need to do because we have a presence in the U.S., and we need to be responsive to those needs. But in Canada, it's really not the case, right? The retail demand is not really there. And the institutional is not at all, right? Like we don't have any of our institutional clients demanding that. If that changes, much like the perpetual futures, it's something that we can offer. The problem is those would really be zero-day options that are all binary that we need to probably work with the regulator locally to figure out how to make those available because right now, the current rule construct wouldn't allow those instruments...

But it's interesting. I mean it seems to me from the quick read that I had, you're looking at creating binary futures based on particular equity -- public equities-related events. So earnings miss revenue, EPS and then maybe certain events. I mean there's probably a case for it.

Yes, there's a case for it. And the question will be is, are the consumers of those products, retail investors that are leveraging? Or is it an institutional hedging instrument? I hear the great story about the one guy has an ice cream shop and he's going to offer free ice cream if it goes above a certain thing. So he goes and he does a prediction market bet to offset that. That's a great hedging strategy, and that would make sense. I'm not so sure this is going to be as prolific in the Canadian marketplace, but time will tell.

Yes. Okay. We'll see. Maybe just, I'll just open it up to the room if there's any questions. We've got a couple of minutes. Go ahead, David.

[indiscernible]

That's interesting. Nothing imminent, but we are looking at all marketplaces. But no, nothing imminent in India for us.

Sorry, you had a question.

Yes, sorry, very specific on Datalinx and colocation and a [indiscernible] growth market for you, and I think you launched recently the Elastic Market Access...

Yes, that's a great question. And that ties a little bit to AI and now the chip war and so on and so forth. The demand for next-generation colocation hardware technology that dare I say will consume way more power than the existing architecture is real. And so our team are working on that. We actually have client demand for those types of colocation services. Those will be very much the premium offering in that space until such time as that really becomes ubiquitous and it's the only real offering.

But I would expect in the next 0 to 5 years, just more and more to take hold. But once again, like everything else, that's being driven by client demand, right? Clients saying, we would like to put next-generation hardware with AI-enabled on the silicon into the matching engine room, so we can actually high-frequency or algo trade very close to matching engine. So we're responding to that.

It's a tough project. Someone asked me about it the other day, and you got to deal with the local municipalities, you got to deal with power, right? You can't just fire up those machines in the existing infrastructure without dealing with infrastructure upgrades, right?

Well, I think we're out of time. I want to give you 7 seconds to answer one question so thank you, David.

Thanks, Aravinda. Appreciate it. Thank you.

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Q2 2026 Analyst Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Amanda Tang, Director of Investor Relations. Please go ahead, Ms. Tang.

Thank you, Rocco, and good morning, everyone. Thank you for joining us today to discuss the 2026 second quarter results for TMX Group and last night's joint press release with MEMX, a U.S.-based equities and options exchange announcing the strategic combination of MEMX and BOX into MEMX Group.

Last night, we also announced our results for another outstanding quarter, highlighting double-digit revenue growth across all of our segments. Copies of our press releases, MD&A and the investor presentation for the announcement of MEMX Group are available on investors.tmx.com.

This morning, we have with us John McKenzie, our Chief Executive Officer; and David Arnold, our Chief Financial Officer. Following remarks from John and David, we will have a question-and-answer session. Before we begin, I would like to remind you that 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 laws.

Actual results may differ materially from these expectations, and additional information is contained in our press release, investor presentation and periodic reports that we have filed with the regulatory authorities. Finally, figures referenced in today's call are in Canadian dollars unless otherwise specified. I will now turn the call over to John.

Well, thanks, Amanda, and good morning, everyone. Thank you, as always, for joining our call today, especially on a beautiful Friday morning. And as Amanda mentioned, we announced our financial results for the second quarter last night. And as she also mentioned, they were another outstanding quarter and what has been a tremendous first half of the year. And this company has continued to build on the impressive momentum of the last few quarters with year-over-year double-digit growth in overall revenue, highlighted by key contributions from our core markets and recent areas of expansion.

Our results reflect the balanced strength that we set out to achieve when we embarked on our long-term TM2X growth strategy. And today's TMX is a deep and diverse enterprise made up of complementary assets integrated into a national champion and global powerhouse and very much now built to compete around the world.

And while our performance in the first half of the year showcases this strength, more than any growth metric, 2026 will be remembered for the work we have done to push the evolution of TMX to serve the needs of clients and stakeholders across the crucial capital markets ecosystem, to compete globally, and ultimately to lead Canada's markets to the sustainable future success. Now suffice to say, it's been an intense spring and summer.

And so before I go any further, I want to express my deepest gratitude to the phenomenal team we've got behind the scenes here at TMX. Our people around the world have done a tremendous job providing excellent service to our diverse and global client base while pursuing innovation and expansion opportunities and executing against our global growth strategy.

And for anyone who's followed our story closely, I know we've kept you very busy lately as well. We've been taking some exciting steps forward in the execution of our growth strategy and in pursuit of our transformative TM2X objectives. So this morning, I want to briefly cover off our first half performance highlights and then turn my focus to the major progress we have made in our global expansion in 2026, including yesterday's announcement of our strategic investment in MEMX Group, the acquisition of RAFI Indices and the Cboe Australia and Cboe Canada acquisitions.

Together, these investments in both traditional and nontraditional business, domestic and international jurisdictions are designed to build on a track record of leadership and innovation, responsiveness and resilience.

Now turning to our results for the first 6 months of the year. Overall revenue grew 16%, driven by strong performance in all segments across transaction-based businesses as well as recurring revenue streams. Our organic revenue, excluding last year's Global Insights acquisitions of Bond Indices, ETF Stream, Verity, and the nuclear sector indices increased 14% when compared to the first 6 months of 2025 and adjusted diluting earnings per share increased 27%.

Revenue from capital formation increased 20% compared to the first half of 2025 due to higher revenue from both listing fees and TSX Trust. In the listings business, performance was driven by a continued upward momentum in financing activity on both TSX and TSX Venture. Overall capital raised increased 51% compared to the first 6 months of 2026 (sic) [ 2025 ] led by a surge in corporate financings in the mining sector on both exchanges.

And equity capital raised on the TSX Venture totaled $6.9 billion in the first 6 months of 2026, and this is a 108% increase from last year, including some major mining investments highlighted by Blue Moon Metals' $156 million public offering and private placement in May. And in addition to the sustained growth in financing activity, we continue to add new listings to the ecosystem. We welcomed a total of 251 new listings to our exchanges in the first half of the year, which is a 44% increase from the same period last year.

First half new listings included some major IPOs, including Coeur Mining; AGT Food; Xanadu Quantum Technologies; Metatek Group; and Apotex, a Canadian-based global health company, which joined TSX with a $1.5 billion IPO in June, which is the largest life science IPO in Canadian history; and Lumina Metals, which debuted in April with a $406 million IPO, Canada's largest mining IPO since 2021.

So on the heels of a record year in 2025, Canada's ETF market also continues to reach new heights in 2026. Total net inflows in Canadian ETFs totaled more than $104 billion in the first half of the year, nearly double last year's first half inflows. And year-to-date, assets under management have grown more than 23% from the end of 2025.

And the first 6 months also featured very strong growth in trading on our equity -- sorry, trading activity on our equities and derivatives markets. Revenue from equities and fixed income trading increased 25% year-over-year, largely due to a 32% year-over-year increase in combined volumes, led by a 60% increase in volume traded on TSX Venture Exchange.

Derivatives Trading and Clearing revenue at MX and CDCC increased 26% compared to the 6 months of last year, driven by increased activity in short-term interest rates and bond futures and an increase in rates per contract. MX sustained the upward momentum in trading activity in key products throughout the first half of the year with average daily volume of 1.1 million contracts and set a new all-time record in overall open interest of 35.6 million contracts on June 18.

Some of the other MX highlights included record volumes in open interest across our Canadian bond futures portfolio in Q2 and a 34% year-over-year increase in volumes in the CRA, further solidifying its status as the flagship short-term interest rate product as participants continue to navigate uncertainty regarding interest rate policy expectations.

Now turning to our Global Insights franchise. Revenue increased 16% compared to the first 6 months of 2025, reflecting higher revenue from all of TMX VettaFi, TMX Datalinx and TMX Trayport. Revenue from TMX VettaFi increased 23% year-over-year or 25% in U.S. dollars, driven by organic growth in assets under indexing as well as revenue from 3 2025 acquisitions, again, Bond Indices, ETF Stream and the nuclear sector indices.

TMX Datalinx revenue increased 21% from the first 6 months of 2025, reflecting the inclusion of Verity, which we acquired in October of 2025 and higher organic revenue from subscriber and usage-based sources, colocation and data feeds. First half revenue from TMX Trayport grew 7% compared to last year or 6% in pound sterling, largely due to an increase in the number of licensees, which has been somewhat muted by a lower nonrecurring revenue when you compare it to 2025. And David is going to unpack this a little bit later as he gets into the discussion.

So TMX performance overall reflects the consistency, resiliency and again, the balanced strength of our business model. And it's also powerful evidence of an effective long-term growth strategy and a proven execution mindset. But we can't do it alone, and we're fortunate to serve at the center of a powerful and diverse ecosystem. And I want to pause here for a moment to give credit where credit is due.

And we've talked for years about the importance of activating TMX's voice at the center of the market to advocate for the interest of our stakeholders across the capital markets ecosystem. Specifically, we've called on policymakers to evolve tax and regulatory policy and take other support measures to help spur domestic and international investments.

So today, I'd like to take the moment to thank the Ontario Finance Ministry, the Federal Finance Ministry and our partners at the OSC and the broader CSA for advancing the Passport program with Ontario's commitment to join, which was announced earlier this month. This simply is another way to remove trade barriers in Canada, reduce the cost and complexity for companies raising public money and helping them to expand, grow and build prosperity in this nation.

Now in this year marked by milestone operational successes that we've already talked about, I want to turn our attention now to some of the game-changing initiatives we have undertaken driven by our purpose to make markets better and empower bold ideas to the benefit of both our domestic and global client base.

A few years ago, we embarked on a strategy to expand our capabilities and broaden the presence of the ETF industry and to better serve a key segment of the marketplace of an area that we know very well. Beginning with our minority investment in VettaFi in January of 2023 and the acquisition of the company a year later, we've made a series of targeted moves to build the business, expanding the geographic presence and portfolio, leading to the acquisition of the RAFI Indices.

Not only will this acquisition, which we expect to close by the end of the third quarter expand VettaFi's presence in the key fundamental space, it will more than triple the total assets under indexing. And we continue to invest in our core market ecosystem as well, domestically and internationally, and we are excited about what the future holds in the expansion of our markets business.

We anticipate the first leg of the Cboe transaction, the expansion into Australia, which we announced in April, will close imminently. Australia is a market that we know very well, and we see a phenomenal potential. And we're committed to pursuing new inter-market linkages and bringing what TMX does really well in terms of operational expertise and innovation to Australia's market ecosystem. And we look forward to welcoming Emma Quinn, the current President of Cboe Australia, and her team to what will soon be known as TMX Australia.

Now turning to the news of last night. As Amanda mentioned, we issued a joint press release with MEMX, a U.S.-based equities and options exchange announcing the combination of MEMX and BOX to create MEMX Group. As Amanda mentioned, we've posted an investor presentation on our website as well. Now David is going to cover the financial components of this deal in a moment, but this is a strategic investment, and it is an exciting step forward, increasing our stake in the U.S. options and equity market, which is the most competitive marketplace in the world and one we know very well.

The TMX has operated alongside the U.S. market for almost 175 years. We see the landscape from a unique vantage point. We compete every day for listings, for capital, for liquidity flows. And specifically on the options side, we are a long-time investor and founder in BOX and originally built their exchange technology. Our biggest clients today operate across borders, and this investment will help us to serve them better over the long term.

So it's a transformative deal for MEMX and BOX and positions the combined entity to build on a track record of innovation and pursue further growth. The total transaction is valued at USD 2.3 billion or approximately CAD 3.2 billion, and we are contributing approximately USD 800 million in cash and our current ownership stake in BOX. The transaction is expected to close in the second half of 2027, subject to regulatory approval and upon which TMX will be the majority owner with approximately 59% of the combined entity, supported by leading MEMX and BOX participants rolling their equity into minority stakes in the 2 companies into the new combined group.

Going forward, MEMX Group will be powered by a management team ready to build and grow with strategic partners around the table ready to guide. And as we outlined in the press release, we have a number of like-minded industry partners in this transaction, including existing MEMX and BOX investors, and I want to thank them all for their shared commitment to building the new MEMX Group.

Now I want to ensure we leave enough time for your questions. But before I turn over the call to David, I want to emphasize a point around our 2026 initiatives. While the acquisitions of Cboe Canada and Cboe Australia, RAFI Indices and the plans to create MEMX Group, each have compelling dynamics and distinct value propositions on their own, together, they stand as a clear representation of an enterprise focus on pushing the evolution of TMX, leveraging our strong balance sheet to seize on opportunities, to strengthen crucial capital markets ecosystems here in Canada, accelerate our global expansion, create competitive advantages for our diverse and growing client base and generating increased shareholder value.

So with that, I look forward to updating you on our progress in the fall, and I'll turn the call over to David. Thank you very much.

Thank you, John, and good morning, everyone. I'm very pleased to report that for the eighth consecutive quarter, TMX Group has delivered double-digit increases in both total and organic revenue. We continue to build on upward momentum across our entire global enterprise in the second quarter. Our business model is firing on all cylinders, delivering outstanding results. We achieved outstanding top line performance with total revenue of $487.5 million, representing a robust 16% increase year-over-year.

This growth was driven by strong performance across all of our segments, including 18% growth in Global Insights, 15% growth in Derivatives Trading and Clearing and a 13% growth in Capital Formation and a 13% increase in Equities and Fixed Income Trading and Clearing. We reported an increase of 96% in our diluted earnings per share, which included a net foreign exchange noncash accounting gain on our U.S. dollar-denominated intercompany loans in Q2 of 2026 compared with a noncash accounting loss in Q2 of last year. Our adjusted diluted earnings per share grew 19%, driven by a $35 million or 18% increase in our income from operations compared with Q2 of last year.

Turning now to our businesses, beginning with the segment that saw the largest year-over-year increases. Revenue from our Global Insights segment grew by 18% this quarter. TMX VettaFi delivered outstanding results in the second quarter with revenue growing 40% in Canadian dollars and 37% in U.S. dollars. This growth included $4.1 million of revenue contribution from recent acquisitions, namely ETF Stream and the nuclear sector indices. Revenue, excluding these acquisitions, increased 29% in the second quarter, reflecting organic growth in assets under indexing.

TMX VettaFi's assets under indexing sustained its robust growth momentum, finishing the second quarter just shy of USD 90 billion. TMX Datalinx revenue was up 22% in the second quarter, driven by the inclusion of Verity. Excluding the $8.2 million of revenue contribution from Verity, revenue increased 8% from Q2 of last year, driven by growth in subscribers and usage, colocation services and revenue from data feeds.

This quarter, TMX Trayport's revenue growth can be broken down into 2 distinct dynamics: First, a solid 8% expansion in recurring revenue. TMX Trayport ended the quarter with an annual recurring revenue of CAD 293.5 million or GBP 157.6 million, which reflects the average recurring revenue for the quarter on an annualized basis. This expansion was supported by a 6% increase in total licensees, reflecting the count of unique chargeable licensees for core TMX Trayport products under our trader, broker and exchange customer segments. This performance tracks solidly within our long-term growth objectives.

Second, a component of the Trayport revenue is nonrecurring. And while not material in aggregate, changes year-over-year can have a noticeable impact on the aggregate Trayport revenue growth percentages. Nonrecurring revenue was GBP 1.7 million in Q2 of last year or 4% of total Trayport revenue compared with GBP 0.4 million or 1% of Trayport revenue in Q2 of this year. Therefore, this quarter was noticeable as we saw a GBP 1.3 million decrease in nonrecurring revenue, primarily driven by consulting services delivered in Q2 of last year. Increased revenue from data and analytics and other trader products and annual price adjustments also contributed to Trayport's performance in the second quarter.

Derivatives Trading and Clearing revenue at MX and CDCC grew 23% from Q2 of last year, including a 26% growth in Montreal Exchange and an 18% growth in CDCC revenue, primarily driven by continued strength in derivatives trading volumes, which increased 18% from Q2 of last year. We also benefited from a higher rate per contract relating to the sunset of the CRA and the 2-year Government of Canada bond futures market-making programs in 2025.

Revenue from BOX increased 5% this quarter, driven by higher rate per contract, reflecting a favorable product mix, partially offsetting by a 3% decline in BOX volumes.

Turning to Capital Formation. We saw broad-based revenue growth across the segment. TMX Corporate Solutions grew 15%, driven by higher dealer services and transfer agency fees at TSX Trust alongside increased volumes of press releases in Newsfile. Sustaining listing fees and initial listing fees grew compared to last year due to increased activity on TSX and higher revenue from ETFs. Additional listing fees grew 6% year-over-year, reflecting a combination of higher number of transactions billed and higher average fees for secondary financing activities on TSX Venture.

Now in our Equities and Fixed Income Trading and Clearing segment, revenue was up 13% in the quarter, driven by 16% increase in our Equities and Fixed Income Trading business and a 9% increase in our clearing business compared to Q2 of last year. The increase in Equities and Fixed Income Trading and Clearing reflected 15% higher volumes in our equities marketplaces, including 17% on TSX and 25% on TSX Venture Exchange, while volumes on Alpha decreased 25%.

Our combined equities trading market share for TSX and TSX Venture-listed issues was approximately 59% this quarter, down 3% from Q2 of 2025. TSX auction volumes, which typically have higher yields, grew at a slower rate compared to continuous volumes this quarter, resulting in a lower proportion of auction trading overall.

On the Fixed Income Trading side, revenue decreased from Q2 last year, primarily reflecting lower activity in Government of Canada Bonds and lower swap activity. Now taking a closer look at our operating expenses, which increased by 13% in the second quarter and included the following items: First, we incurred $15.6 million of additional expenses related to acquisitions, namely $7.7 million of higher operating expenses related to ETF Stream, Verity and nuclear sector indices; $5.7 million of higher acquisition, integration and related items; and finally, $2.2 million of higher amortization related to acquired intangibles.

Second, we incurred $1.6 million of higher litigation dispute and related items and partially offsetting these increases were $7.4 million related to strategic realignment expenses in Q2 of last year. Excluding these items, our operating expenses increased by approximately 10% on a comparable basis, largely due to 4 drivers: First, 4% higher costs related to merit increases, increased headcount and related costs and higher short-term performance incentive plan costs on the heels of our very strong results to date in 2026.

Second, a 3% impact from noncash adjustments, including a write-down of an intangible asset, increased bad debt expenses, which factors in the reversal of a provision in Q2 of last year and a gain on an asset retirement obligation recorded in the same period last year. And the net residual is largely driven by increased investments in technology.

Now turning to our sequential performance. We successfully carried our momentum from Q1 into the second quarter of 2026. Total revenue remained essentially flat holding steady at our record levels reported in Q1. We saw growth in our Global Insights segment, reflecting increases in TMX VettaFi and TMX Trayport as well as strength in capital formation from the seasonality of AGM activity in our TSX Trust business. However, these gains were mostly offset by softer trading volumes across our Equities, Fixed Income and Derivatives Trading and Clearing segments.

Now turning to our sequential expenses and the analysis. Operating expenses in Q2 increased $10.8 million or 4% on a reported basis from Q1, primarily reflecting higher employee performance incentive plan costs, higher acquisition integration and related costs and a noncash write-down of an intangible asset in Q2 of this year. Higher revenue-related expenses are largely related to the seasonality of TSX Trust business and higher BOX expenses. These sequential increases in operating expenses were partially offset by VettaFi's final annual exchange conference expenses recorded in Q1.

Now on the balance sheet front, we finished the second quarter in a very strong position. Our debt to adjusted EBITDA ratio at June 30 was 1.9x. As of June 30, we also held over $517 million in cash and marketable securities, which is approximately $273 million in excess of the approximately $244 million we target to retain for regulatory purposes.

Net of excess cash, our leverage ratio was 1.6x. I'm pleased to share that our Board of Directors approved an 8% increase to our quarterly dividend last night. The new dividend of $0.26 per common share is payable on August 28 to shareholders of record as of August 14. This brings our payout ratio to 42% for the quarter, which remains well within our 40% to 50% target range and continues our long-term trend of dividend growth and delivers on our commitment to drive shareholder returns.

But we aren't just returning capital, we are also investing in our future. The Board has also approved our strategic investment in MEMX Group. I want to echo John's sentiments here. This is a very exciting investment for TMX and a transformative move for us in the U.S., one that directly underscores our long-term global growth strategy.

Now we have been long-term equity holders of BOX and with this investment of approximately USD 800 million or CAD 1.1 billion, as John referenced, and contributing our existing interest in the BOX entities into the combined USD 2.3 billion MEMX Group, our investment will result in an ownership stake of approximately 59%. The remaining 41% of the combined platform will be owned by key equity holders who are existing stakeholders of either or both MEMX and BOX and other strategic partners, including many of the leading U.S. brokerages and trading firms.

3 years following the closing of this transaction or in mid-2030, our ownership structure provides a pathway for further evolution as TMX will be granted call rights and the minority equity holders will be granted put rights. This framework reflects our long-standing interest in expanding our ownership stake in BOX, supporting our strategic goal of broadening our footprint in the U.S. and remains consistent with our goals around geographic expansion.

In 2025, MEMX and BOX delivered a combined revenue of approximately USD 280 million and adjusted EBITDA of approximately USD 134 million. The implied valuation is approximately 17x the combined 2025 adjusted EBITDA. Over the last 3 years, the combined revenue has grown at an average rate of approximately 27% per year, reflecting both rapid expansion within the business and naturally benefiting from higher market volatility.

Now the incremental impact to TMX's results will be net of our existing stake in BOX Holdings, which is currently consolidated into our financial results. Had this investment been made on January 1, 2025, the net contribution to TMX's 2025 revenue would have been roughly $120 million, with a corresponding net impact of approximately $44 million to adjusted EBITDA.

Now looking ahead, we expect the transaction will be accretive to adjusted earnings per share within the first 12 months of the closing date before any synergies. This transaction is anticipated to close in the second half of 2027, subject to regulatory approvals, including the SEC as well as the HSR filing in the U.S. and customary closing conditions. We intend to finance this investment through debt. We have a thoughtful deleveraging strategy aimed at rapidly returning this ratio back within our long-term target range of 1.5x to 2.5x.

Now as you'll recall, our leverage has exceeded our target range at various points in our history, including following the acquisitions of Trayport back in 2017 and again, following the acquisition of VettaFi in 2024. In both instances, we successfully delevered back to our target range within 12 to 24 months, fueled by our ability to generate strong free cash flows.

So on a pro forma basis, our leverage ratio could increase to up to 3.4x. However, we expect the actual ratio to be lower. This 3.4x projection is our most conservative view and accounts for this strategic investment as well as our pending acquisitions. It assumes Cboe Australia and Cboe Canada are funded by debt and cash, while RAFI and MEMX Group are funded by debt and all 3 transactions closed simultaneously.

The actual leverage ratio is expected to be lower at closing because closing dates will likely be staggered, allowing for interim deleveraging between transactions. There will also be earnings growth, both organically and from the acquired assets. The actual leverage may vary depending on the closing dates of these previously announced transactions as well as financial results at closing.

Given our history of rapid deleveraging and strong cash generation, we are confident in our ability to return to our target range within 2 years of closing. Our capital allocation strategy remains focused on 3 key priorities: investing in organic growth, pursuing strategic acquisitions and returning capital to shareholders through dividends and buybacks. Driven by our strong balance sheet and robust free cash flow, we remain well positioned to execute on these priorities while maintaining the financial flexibility to capitalize on market opportunities as they arise.

Following our announcement last night, Morningstar DBRS confirmed our AA (low) credit rating and stable trend in their press release. Morningstar DBRS views the leverage driven by these transactions to be both manageable and temporary, crediting our proven ability to delever following prior acquisitions. This investment marks another meaningful step in the execution of our TM2X strategy. As a majority shareholder, we are contributing to the evolution of a more global platform and broadening the competitive footprint in the U.S.

MEMX Group establishes a more scaled and competitive U.S. exchange platform that is well positioned to attract new clients and launch new products under the leadership of Jonathan Kellner and the newly merged management team and backed by strategic partners. By uniting 2 scaled options platforms with complementary capabilities, we are delivering a comprehensive suite of execution solutions designed to compete and thrive globally.

Ultimately, this investment accelerates TMX's global growth strategy, deepening our presence in a key international jurisdiction and fulfilling our purpose to make markets better and empower bold ideas.

I'd now like to turn the call back to Amanda for our Q&A session.

Thanks, David. Rocco, could you please outline the process for the Q&A session?

[Operator Instructions] And today's first question comes from Bart Dziarski with RBC.

Congrats on the MEMX BOX acquisition. I just wanted to ask maybe more on the operational side, how you're thinking about juggling the 3 acquisitions and also maintaining a focus on the organic business over the next, call it, 6 to 12 months as these acquisitions get integrated?

Yes. Thanks, Bart. And I mean that's a really important question. It's actually what we spent a lot of time on both as a management team and a Board. When you think about capacity, it's not just your dollar capacity and your balance sheet capacity, but that capacity of the team to execute with excellence. And there's 2 pieces that are the consideration on why we believe that this is really set up for success.

The first is that of the 3 major transactions that we're working through closing right now, which is the Cboe transaction, the RAFI transaction and the new MEMX BOX merger, first of all, they don't all happen at the same time frame. And that's really important because it allows us to do the appropriate both preplanning and execution. So both Cboe Australia and RAFI, we believe, are very close to closing, and we'll be moving those ahead.

The Cboe Canada piece is a different time frame because of the regulatory review processes in Canada. And as we mentioned in the call, we expect that the combination of BOX and MEMX, which is subject to SEC review and approval is essentially around a year from now, and then we'll be able to give more data on that as we get closer to and we work through that process. So that's part number one.

Number two, we're always quite thoughtful that we're really utilizing different parts of our franchise in terms of the teams, the business teams that are leading a lot of the integration execution work. So the teams that are doing the work on integrating in the RAFI Indices once we close that is a very different part of our organization that's working on building out the team with TMX Australia with Emma Quinn and her team there.

And we're also thoughtful when you have transactions that bring talent in with them as well, so our team gets enhanced by talent on the ground in a lot of these organizations. So those are the considerations we went through. You're absolutely right on the question. It was one of the most important things we talked about because we're very keen on the fact that we've built a strong track record on execution, and we want to continue that going forward.

Very helpful. And then a follow-up on the leverage. So definitely a historical track record of delevering pro forma the deals. The leverage comes at a time where there's more debates around TMX, I'd say, just tokenization, AI and perp futures, if you will. And notwithstanding that, the core business keeps chugging along and you're obviously signaling confidence in that core business trajectory. So can you just maybe unpack that for us in light of some of these key debates that are going on the stock?

Yes. I mean that's also an important consideration. So when you think about long-term planning and we think about both our ability to delever, our stress testing, our scenario analysis, we need to deal with reality and not what's become kind of media speculation in the marketplace. The business is very well insulated. We've got very good guardrails. And some of these factors are factors that we've got more upside than risk in.

So the adoption of AI in the franchise is creating new opportunities, new efficiencies, new chance to develop new products. And even in the areas you talked about around things like tokenization, that's another area we're going to integrate that into things like our clearinghouse to provide better services to our clients. So any time you're thinking about deleveraging, you think about future scenario analysis. And to your point, you said right in the premise of the question, we're highly confident in our growth prospects that we're going to be able to delever just as fast as we have in the past.

And our next question today comes from Stephen Boland at Raymond James.

Sorry, busy night. So just -- I don't know if this is public, but you mentioned accretive before synergies. Are we talking about expense synergies or revenue synergies? If you could explain that, please?

No, that's great, Stephen. So yes, it is going to be accretive before any synergies. And as we said, within the first 12 months. Yes, there will be a number of synergy opportunities, but our focus is on growth, right? So naturally, there will be some expense synergies, but I think the more meaningful and material will be the revenue growth synergies by bringing these 2 very powerful platforms together in the U.S.

Okay. And just the process, I'm just wondering if this was an auction, like how did the 2 of you get together.

Yes. Well, sometimes it's nice to say you date a long time before you get married. This is both platform of BOX and the platform of MEMX have some very strong and market-leading shareholders on both sides that have driven this business along. We've been engaged as shareholders and market participants with the shareholders of BOX and of MEMX over a period of time to explore the best opportunity to bring these together.

And that's why you're seeing a culmination of a process that is a merger that sees a lot of the leading market participants also stay into the transaction and strategically support success. So the -- it's been a long time coming. And when you're working with so many parties, it's not as easy a process. It creates a different degree of complexity. So no, this was not an auction process. This was actually a process that was put together by the combined shareholders to create a better opportunity for all of us.

And our next question today comes from Aravinda Galappatthige with Canaccord Genuity.

Congrats on yet another transaction. Maybe just to set the stage, John, just can you talk to what your U.S. position would look like? I know BOX had about 6% market share. But together, how substantial would your market position be? And perhaps in terms of the prospects in front of you, I know David mentioned 27% growth. What are the prospects of sort of sustaining that double-digit growth momentum? I'm not sure if that 27% is all organic, but -- and how competitive the market is, but just a picture of what the outlook would look like.

Sorry, I'm just getting a bit of a feedback there. Okay.

All great questions. So I just apologize for getting the feedback on my line. I'm going to switch mics. All right. I hope you can hear me now.

So a number of great questions that are in there. So I want to be thoughtful in terms of how we share here and also recognize that this is a process of putting together a company of while we are the leading and large shareholder, we are not the only shareholder and the management team of the combined company will be doing a lot of work going forward in terms of that strategic plan under the direction and guidance of a broad shareholder base of which we will be the lead and the Chair of the organization.

With that, we've talked for years about our intention of being a more meaningful player in the U.S. and really taking in all the things that makes TMX strong and unique into the U.S. market. And as you know, we're already doing a lot of things in the U.S. already, be it from our U.S. ATS, our strong position in terms of indexing ETFs, some of our data products like Wall Street Horizon and Verity. We have more recently put some of those together in our flagship office in the U.S. to create more synergies in terms of how our teams work together.

So when you think about the context of what we've been doing, this is actually a very natural extension. Now the combined platform based on today be approximately 10% of the U.S. option market and also a growing percentage of the U.S. equity market. So BOX, as you know, has been options only. MEMX is options and equities. We're doing some work in equities around our U.S. ATS. So this is all designed to continue that trajectory, and we would put this investment in our high-growth bucket when we give that kind of forward guidance in terms of long-term growth.

So I'm not going to be able to give you details in terms of kind of where that shakes out and we've got work to do, but that's how we would look at it as a high-growth opportunity. But more important to that, it's a platform to do more. That's always been our position. And I've talked about this in the beginning, we always lead from the client base. The largest clients for TMX today are global traders and global issuers.

So when you think about how do we best serve them, when we serve them from only one side of the border, we're missing part of their need set. And we're really looking at what are the unique things that we can do in the long term to create a service offering to service these clients in a way that they're not served today. So very much symbolic of how we've talked about the Australian initiative in the past by our investment in Australia, really focusing on issuers, on mining sector, on ETF, we can create new value for international players that want to engage in both marketplaces.

So it's the same kind of thinking as we focus on how we build out in the U.S. If I had my vision at the end of the day that someday there would be a TMX U.S. that looks a lot like TMX in Canada in terms of a service offering that has the breadth of what we bring to the clients here. Now it's a long road to get there, but you get there step by step, and we are thrilled that we're making this step today because it's such a big building block on what we like to do.

A quick follow-up for David on the transaction metrics. So if you use the Canadian dollar number, the $3.2 billion, I'm still not clear exactly what the valuation that's ascribed to BOX within that transaction just so that we can sort of calculate what the multiple is for what you are vending into the combined entity. Any clarification you can provide there?

Yes. So we're not actually breaking down both components. We're really speaking to the aggregate, Aravinda. But you can do some back of the envelope calculations to kind of get there, right? You can take the full purchase price divided by our previous kind of equity ownership stake, if you will, or at least the amount we picked up from an earnings perspective.

Then you could probably back out our USD 800 million investment and then do some proxy calculations. But I would guide you that we're not actually disclosing the individual componentry. So that's the best way to kind of look at it. And the combined EBITDA multiple, which I spoke of around 17x is really the thing to guide you at. John?

Yes. And I'll just add a little color as to in terms of kind of why we're proceeding this way. Remember in a transaction like this, there are buyers, there are sellers and there are rollers. So we've got both shareholders that are buying stakes up. We are not the only one that's expanding our position, we have sellers that are less strategic that are using this as their liquidity opportunity. We have folks that are rolling their equity into both franchises.

So there's a robust price discovery process in terms of what's the overall value and the mix that makes this work for everyone involved. And candidly, we talked a little bit about synergies earlier on. We do believe that there is going to be synergies in putting these operations together, and they only accrue through the merger. And so they really aren't a value to be ascribed to either side of a transaction. So that's why we've really focused this on the entirety of what we're building in terms of a combined entity.

And our next question today comes from James Gloyn with National Bank Financial.

Just first one, staying on the BOX MEMX deal. You talked about the opportunity that MEMX provides. Like what is it that MEMX has that BOX doesn't have already? Is it technology? Is it client base? What's the big driver here that you couldn't just naturally grow through the BOX and through the U.S. ATS that you have in place today?

Yes, that's a great question. So there's a number of pieces there. I want to start, first of all, with the talent that's in both of these teams. So we're going to be able to bring the best talent in both in terms of client service. We're getting a new team within MEMX that's got extremely good connectivity in the U.S. in terms of what they have built. The recency and the innovation and the technology platform there is excellent. It is highly regarded throughout the industry, and it will become the basis of how we bring these platforms together in terms of a next-gen offering for the U.S. market.

And so those are just a piece of some of the highlights. To your point as well, is there is already a development in terms of multiple market licenses in terms of both the options market and the equity piece and building that initial stake in the U.S. in terms of more of the, what I'll call the high-volume liquidity in the U.S. So even the types of things that we're doing with our own ATS in the U.S. is actually targeting different parts of the marketplace than what MEMX does today. So these things are all very complementary.

Okay. Understood on that. Just going to Trayport, and it's another, let's say, slower quarter. What can you break down in that growth? I see like revenue -- recurring revenue is up 8%. But if you kind of look at licenses, growth isn't there, connections growth isn't there. So as we kind of look forward, is this sort of the new trend for Trayport growth is to be more in the mid-single digits? Or what do you see in the pipeline that gives you confidence Trayport will remain in that high-growth bucket?

Excellent question. So as I covered in some of my remarks and as you've seen, we've enhanced some of our disclosures, and I'm really going to unpack that in a second, but I want to answer the last part of your question, which is absolutely, it's still a high-growth business segment for us at Trayport. This year is somewhat anomalous. Every 3 to 4 years, depending on the renewal cycle of our site license agreements and possibly some macroeconomic conditions that really might impact the non-site licenses, right?

Remember, site licenses are multiyear agreements, averaging between 3 and 4 years. And so depending on the renewal cycle that occurs for those, you could actually see higher or lower upsell in any given particular year. So this year is kind of -- we knew this going in. We obviously don't disclose our forward-looking guidance in terms of our budgeted revenue and so on and so forth.

But Trayport is very much tracking to what we had budgeted and forecasted internally for this year. So this was something that was very much on the radar for us. And it's really got to do with the mix of who is renewing this year on the various site license agreements. So let me talk a little bit to kind of like some of the components and it really helps you unpack it. 8% expansion in recurring revenue, which is why we've kind of pulled it out, really gives you the comfort that the core engine of the Trayport revenue producing top line is still strong.

8% is very much in 1 quarter, tracks very much to our long-term guidance. But as you've heard us say many, many times, we don't manage quarter-by-quarter. We really manage through the medium to long term, and that really kind of guides us there. It's tough when you've had multiple years where you've had 12%, 13%, 14%, sometimes even higher than 18% and then you deliver an 8% or a 9% or a 7% and the question is what's wrong. And the short answer is nothing. It's a time -- it's through the cycle.

I would expect, as we go into 2027 and beyond, with the renewal pipeline that we see that we return a little bit more to that high single to low double digits, if you will. So that's kind of the best that I can do, but definitely keep note of what I said in the remarks and then what I've shown you in the disclosure. We do have some nonrecurring revenue. It is relatively small, but year-over-year versus Q2 last year, and then we've given you history as well, so you can see it kind of going forward, you'll really be able to key in on not just the top line, but the recurring revenue line, which really is the driver of the Trayport franchise.

And our next question today comes from Graham Ryding at TD Securities.

Could you maybe just give us a bit of color on the growth profile within MEMX specifically? What does that look like over the last 12 months or in 2025 from a sort of top line perspective? And then what -- which are the pieces that are driving that growth? Is it predominantly options that are doing the heavy lifting? Or is it broad-based?

Yes. So I appreciate the question, Graham. We're looking at this as a combined business going forward. So we haven't really spent any time giving disclosures and not going to do it on the call for individual componentry. What we really provided is it's averaging around 27% if you look back over that kind of 3-year kind of corridor.

As John touched on, obviously, we don't see it being 27% in the long term, but we definitely would guide that it's going to be in our high-growth segment, which is high single to double digits. But disclosing the information of a private enterprise's prior kind of growth revenue percentages is not something we're going to do today.

Okay. And just to be clear, that 27% average that you're including BOX in that number?

Correct. Correct. And so Graham, folks can reverse engineer and do math. I think one of your colleagues did some analysis last night as well.

Okay. Understood. And then just focusing on BOX in particular, the volumes were -- or the revenue was up, but the volumes and the market share is down this year. Is there anything in particular to call out that's driving softer volumes this year versus -- for BOX?

Yes. And we've talked about this in the past in terms of when you see either both upside in share and some downside in share. The BOX market itself has got a very strong offering, but it's also catered to certain parts of the market segment in terms of kind of higher execution quality trading. And sometimes when you see large volume growth in different parts of the market segment for which those offerings aren't as strong, it's an overall change in terms of the kind of the mix in terms of where the share is growing and things like that.

It's actually one of the reasons why this is a really complementary transaction because even though both the BOX and MEMX participate in the options market, they do it with different offerings, different services that really different -- target different users and client bases. And so when you have that broader spectrum of offerings, you can see growth in multiple market scenarios as opposed to being kind of subject to where that trends are at the time.

So the BOX business remains very strong. That's what you're seeing in terms of those changes. But I also want to reflect the fact that the shareholders as we move this along, is there a likelihood we have distracted staff over the short term? I'd be remiss to say that we haven't. And so I'm really glad that we have this out in the public domain now, and the teams are able to focus on what they do best, which is serving the clients.

And our next question today comes from Phil Hardie at Scotiabank.

Just maybe 2 quick questions on MEMX and BOX. First, just if you kind of -- how would you gauge the relative timing risk on the deal close of MEMX, particularly with the SEC? And then second, maybe you can just share a bit of color maybe on the approximate revenue split in MEMX between options and the equities business within that platform.

Okay. So I'm going to handle your -- the second part of your question first because it's going to be easy for you to handle it. So I'd hate to reiterate what David said, but as a private company, we're not going to be disclosing the details of the economics. Obviously, they're going to be commercially sensitive as well with other players in the industry. I can appreciate the ask, but hopefully, you'll understand why we're not giving that level of detail today.

With the second piece, any -- both exchange combination and ownership change of this size is subject to an SEC approval. So there will be a process for filings from both MEMX and BOX with respect to an SEC approval for these changes, both in the ownership side, the control stakes and the governance structure. I can also tell you though from a process standpoint that this transaction will not have come as a surprise to the SEC. There's been a long dialogue in terms of the intentions of the parties to do this. And so the fact that we are collectively announcing it today should signify that we've got some confidence in that process.

Okay. Perfect. Let's change gears a little bit. Maybe a few modeling questions for David here. I think kind of revenue capture on cash equity trading, I think it actually may have looked a little bit better than the past few quarters. So first, is that correct? And what's driving that? Was that mix in venues? I know you mentioned higher-yielding auction volumes were actually lower. So just a bit of color on that revenue capture and equity trading.

Yes. Actually not much more to give you. I think you've got it. There's -- we obviously saw the part that you maybe just hinted at is that there is a mix, obviously, between the continuous limit order book kind of the lit market mid-section of the day, if you will, versus the auction process in the beginning and the end. And so we obviously do see there's a shift between auction to the continuous limit order book kind of time window. And we have more market share clearly in the auction space because we run the only auctions in Canada. But yes, there's nothing to add. I think you've got it.

Thank you. And this concludes the question-and-answer session. I'd like to turn the conference back over to Ms. Tang for closing remarks.

Thanks, Rocco. We appreciate everyone for taking the time to join today's call. If you have any further questions, contact information for Investor Relations as well as media is in our press release. Thank you, and have a wonderful day.

Thank you, ma'am. This brings to a close today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Limited Investor Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Amanda Tang, Director of Investor Relations. Please go ahead, Ms. Tang.

Thank you, Rocco, and good morning, everyone. Thank you for joining us today. Last night, we announced an agreement to acquire RAFI Indices. Our press release and the investor presentation for this call are available on investors.tmx.com. This morning, we have with us John McKenzie, our Chief Executive Officer; Peter Conroy, CEO of Global Insights; and David Arnold, our Chief Financial Officer.

Following remarks from management, we will have a question-and-answer session. Before we begin, I would like to remind you that 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. Information concerning factors that could cause actual results to differ from forward-looking information is contained in our press release and the investor presentation. Figures referenced in today's call are in Canadian dollars unless otherwise specified. For today's call, I encourage you to refer to our investor presentation slides via the webcast link or under Shareholder Events on investors.tmx.com.

And with that, I will now turn the call over to John.

Well, thanks, Amanda, and good morning, everyone. Thank you for joining us, especially on a beautiful Friday morning on a last-minute call. So we really do appreciate your engagement. It's great to be here this morning with the team and really to share some additional strategic context and financial details around this exciting news that we announced last night, our agreement to acquire RAFI Indices, a global index company from Research Affiliates. This is a tremendous deal for TMX VettaFi, more than tripling our total assets under indexing and enhancing the value of the client offering and significantly advancing the expansion strategy. I hope you had a chance to read last night's press release. And as we've mentioned, we put together an investor presentation that we will take you through in a moment.

And as Amanda mentioned, we've got Peter Conroy with us on the call today, and I'm really happy to have Peter here. Peter, who heads our Global Insights, our Information division, which includes TMX VettaFi as well as TMX Trayport and TMX Datalinx. Peter is here to provide some really important insights into what this deal means for TMX VettaFi, how it furthers our expansion strategy and supercharges our ability to serve clients across the ETF community in North America and around the world.

And following Peter, David will provide an overview of what this deal means for TMX shareholders, taking you through the financial details, including projected impact on TMX's transformational objectives and capital allocation strategy. Now as many of you will recall, we acquired VettaFi in January 2024 and had already been a minority shareholder in the prior year. And VettaFi was an ambitious upstart with an innovative spirit and an aggressive growth strategy.

And what we said then has really proven to be true. The addition of VettaFi has bolstered our Insights division, adding a depth of expertise and new capabilities in serving the ETF community while contributing to the acceleration of TMX's enterprise growth strategy. Since joining TMX, the VettaFi team has continued to flourish, successfully expanding the global presence, applying the proven client service expertise to new asset classes and geographies and consistently generating double-digit revenue growth. Yesterday's announcement represents the next major milestone in the evolution of TMX VettaFi.

So moving to Slide 2 of our investor presentation, I will take you through the transaction summary at a high level. And I'm going to try not to steal too much of Peter and David's thunder here. But as noted in the press release and captured in the summary, this acquisition constitutes a significant expansion of VettaFi's business and portfolio coverage as well as client service capabilities. The addition of RAFI Indices also brings a tremendous group of experts to the VettaFi team with world-class IP and a proven track record of industry-leading client-focused innovation.

As we announced in the press release, this acquisition totals USD 490 million or approximately CAD 683 million, subject to regulatory approval and customary closing conditions. David will take you through the other financial measures, but importantly, this acquisition accelerates measures we identified around TM2X, increasing revenue from recurring sources, revenue derived from outside Canada and revenue from Global Insights and once again, delivers on our fundamental purpose to make markets better and empower bold ideas. And I hope you can hear from the excitement in my voice how excited we all are about this deal.

But I think I'd be remiss if I didn't close today that recognizing even though this investment is driving more in terms of outside of Canada revenue, today is also a Canada Day. FIFA is playing tonight in Toronto. I'm going to close with Go Canada Go. With that, Peter, take it away.

Thank you, John, and good morning, everyone. I want to echo John's words and energy in talking about this announcement. This is an exciting day for TMX VettaFi. Not only does the acquisition of RAFI Indices accelerate the pace of our strategy, it represents a breakthrough opportunity, affecting a shift from incremental to transformational growth and raising TMX VettaFi's game on the global stage.

My comments this morning are focused on framing the strategic rationale, how this deal supercharges VettaFi's ability to serve clients across the entire ETF community. As John mentioned, our core mission is client success. VettaFi exists to provide innovative and data-driven investment solutions that help asset managers build and grow. The addition of RAFI Indices, the pioneer of fundamental indexing, fits seamlessly into our existing platform and aligns perfectly with that mission.

Turning to a brief overview of RAFI Indices. The company was founded by Research Affiliates with a unique research-driven innovative approach to index construction informed by an academically rigorous understanding of the forces that drive capital markets return. They created the Fundamental Index, a non-price weighted index strategy, which uses fundamental measures to select and weight companies such as sales or cash flow rather than just market capitalization. It has historically outperformed these market cap-weighted benchmarks. They are a global index company with 15 employees, approximately 90 indices tailored to a diverse range of investment needs, tracking USD 182 billion in assets under indexing or AUI.

I want to turn the focus now to illustrate the scope, the scale of the combined TMX VettaFi and RAFI Indices offering to frame how this acquisition elevates TMX VettaFi's game, building on our strengths in a complementary way. It expands and broadens VettaFi's portfolio of products, augmenting our traditional strength in energy and thematic indices with wider coverage in fundamental research-driven strategies designed to mitigate market volatility to deliver growth. The combination of RAFI's world-class intellectual property and what we call TMX VettaFi's Index Factory, which is our technology engine, which drives our indices, creates a more powerful set of tools and analytics to serve the needs of our global client base, including the most respected fundamental strategies in the industry.

The acquisition of RAFI Indices significantly increases VettaFi's institutional presence, accelerating our expansion into channels characterized by recurring revenue, consistent growth potential and durable net flows. And with the integration of RAFI's Index suite with TMX VettaFi's distribution and analytics capabilities, we are looking to create mutually beneficial relationships with leading asset managers and their distribution networks. This alignment would broaden our market reach, providing partners with enhanced access to market-leading investable products, driving sustained net flows while ultimately strengthening our competitive position.

Since the company's inception, TMX VettaFi has executed on an opportunistic build and grow strategy. Over the past 2 years, we've made several smaller acquisitions, but they've been important, including Index Research in 2024 and last year's addition of Credit Suisse bond indices, ETF stream in Europe and a set of nuclear energy sector indices. These acquisitions expanded VettaFi's presence into new geographies and new asset classes, building out the reach and scope of the business and bolstering our client service capabilities. The acquisition of RAFI Indices is a bold step forward for VettaFi, but it is rooted in this proven strategy, and we can't wait to get started.

Before I pass the call on to David, I also want to thank the team at Research Affiliates, including Rob Arnott, the company's Founder and Chair and a legend in research-driven investment strategies. We look forward to working together and welcoming RAFI Indices to the team. And our first priority post-closing will be to ensure a smooth transition for all of our clients.

Look forward to taking your questions, and we'll now turn the call over to David.

Thank you, Peter, and good morning, everyone. The acquisition of RAFI Indices fits squarely with our long-term strategy. This transaction will accelerate all 3 of our long-term transformational objectives. First, revenue from outside of Canada will increase to 53%, exceeding our goal of generating more than half of our revenue internationally. Second, recurring revenue will increase from 53% to 55%, moving us towards our goal of 2/3 of our total revenue to be from recurring sources. Lastly, revenue from our Global Insights segment reached 43%, bringing us 2% closer to our objective of deriving over half of the revenue from data and analytics services.

Now let's take a closer look at the financial highlights of this very exciting deal. We are acquiring RAFI Indices from Research Affiliates for USD 490 million or approximately CAD 683 million. Related to this transaction, we expect a net tax benefit of approximately USD 97 million or CAD 135 million. Net of this estimated tax benefit, the implied total valuation is approximately 10.3x the pro forma run rate adjusted EBITDA.

Now looking ahead, we expect RAFI Indices top line growth to be in line with TMX VettaFi's high growth rate, which we define as high single to double-digit growth over the long term. And the transaction will be accretive to adjusted earnings per share within the first 12 months of closing date before any synergies. The acquisition is anticipated to close by the end of Q3, subject obviously to regulatory approval and customary closing conditions. The transaction will be funded by debt through a loan facility, and we plan to refinance the loan with long-term debt prior to its maturity on May 14, 2027. We expect our leverage ratio will increase to roughly 2.7x adjusted EBITDA post closing, and we have a solid deleveraging plan to quickly bring this back to our targeted leverage range of 1.5 to 2.5x.

Now history shows that this would not be the first instance where our leverage has exceeded our target range. Our leverage ratio reached 3.7x in 2017 after we acquired Trayport. However, we utilized our robust free cash flow to successfully lower that ratio to 2.4x in only 12 months. We demonstrated similar discipline more recently following the acquisition of TMX VettaFi in 2024, which saw leverage rise to 3.6x adjusted EBITDA. Now while we had originally set a 2-year time frame to return to our target range, our effective execution enabled us to reach that milestone well ahead of plan by the middle of 2025.

Now with the upcoming acquisitions of RAFI Indices, Cboe Australia and Cboe Canada, we anticipate our leverage will increase to roughly 2.7x following these deals. Now this 2.7x is a conservative view, assuming these upcoming transactions are fully funded by debt and close simultaneously. The actual leverage ratio will vary depending on actual closing dates, which will likely be staggered, allowing for interim deleveraging to occur between transactions. More importantly, and in addition, our ability to pursue additional capital allocation opportunities remains strong, whether that be through share buybacks, dividends or further acquisitions to accelerate our strategy. Given our history of rapid deleveraging and strong cash generation, we are confident in our ability to return to our target range within 1 year of closing, and we expect to maintain returns to shareholders.

Now in summary, the acquisition of RAFI Indices, a global suite of fundamental factor indices, marks a transformative step forward for TMX VettaFi. This transaction immediately triples AUI and accelerates TMX VettaFi's expansion into fundamental indices, a growth area that allows us to compete for the largest pools of capital. The transaction will help accelerate TMX's long-term growth strategy and the pursuit of our 3 transformational objectives. Additionally, by bringing together RAFI Indices distribution networks, which include direct brokerage platforms and institutional asset owners with TMX VettaFi's Index Factory and content and analytics engines, we are generating opportunities to drive net flows through new products and expanded reach.

This is an exciting transaction for TMX and marks another step forward in the execution of our TM2X strategy, accelerating our evolution into a truly global player, broadening our competitive footprint while delivering sustainable value to our clients, employees and shareholders. And with that, I'd like to turn the call back to Amanda for our Q&A session.

Thank you, David. Rocco, would you please outline the process for the Q&A session?

[Operator Instructions]

Our first question today comes from Ben Budish at Barclays.

Congrats on this deal. Maybe you talked about this deal unlocking new distribution channels. Curious if you could unpack that a little bit. Where is RAFI selling through today that VettaFi perhaps isn't and vice versa? How much overlap is there? And what are the plans for kind of cross-selling or cross at least introducing the products day 1 when this closes?

Sure. That's -- it's Peter here. That's a great question. This deal really unlocks the institutional market and the retail market. VettaFi historically has focused a lot on thematic indices whereas the fundamental research and fundamental equity portfolios that RAFI serves really broadens the base into a larger segment of the market. In fact, the thematics really cover about 20% to 25% of the market, whereas the entire equity portfolio, we can increase to like 100% coverage.

So this is really targeted and complementary to what we do today, but also expands into new relationships. Based on the inbounds that we've gotten last night even, conversations will happen that couldn't have happened before this transaction. So we're really, really excited about what this does to VettaFi and the conversations that we can have going forward.

Great. And just a very small follow-up. I think in David, in your remarks, you talked about the deal being accretive, excluding synergies. Are you expecting anything on the cost side? It sounds like more of a revenue opportunity, but just curious if there's any more color there?

No, absolutely, Ben. I mean, look, this is a carve-out, right? So Peter touched on it. Obviously, for us, we operate a pretty fixed cost base on the TMX VettaFi's side with Index Factory. So that actually is really attractive for us in the deal because we'll port it over to our technology. But yes, primarily, the synergies are revenue and growth acceleration synergies.

And our next question today comes from Etienne Ricard with BMO Capital Markets.

So if we go back in time with VettaFi in 2023, TMX first acquired a minority stake to get comfortable with the business. Why not replicate this playbook here given there's intellectual capital in the value of the firm? And how do you think about retention mechanisms for the team?

Yes, that's a great question. And I'm glad you actually remember that how we actually got into this. And I actually want to remember, we actually started this with actually some build and partnership strategies that we built on from there. The difference is where we are now is we've got capabilities to build this into. And so the importance of being able to actually integrate, integrate the product onto our platform, integrate the teams together means you really need to do it as a full investment upfront. But we're not doing it as just a, what I'll call a full investment and walk away.

We are actually continuing to have an ongoing relationship with the firm in terms of other product relationships. And as appropriate, we're putting things in place to make sure the most important talent is coming across to us. So all that was considered as part of the transaction, and we saw this was the best way to take it forward.

And, Etienne, just further your second part of your question was on retention. Obviously, there's 15 people coming over, 14 in the U.S., 1 in London. Customary in these transactions, we obviously look at that personnel. These are highly talented experienced, well-qualified experts in this industry, and we're not concerned about that. We've taken the customary measures.

And Peter, we know VettaFi is well known for the thematic indices. I think these command premium and quite resilient fee rates. Now with RAFI, the average fee rate per asset looks a bit lower. So what gives you the comfort that this business should not experience fee rate compression?

So you're absolutely right. Thematics generally yield higher. While we don't disclose the specifics, I will say the market opportunity is so large in the fundamental space that it more than compensates for any adjustments in yield.

And our next question today comes from Aravinda Galappatthige with Canaccord Genuity.

Congrats on the acquisition. I wanted to maybe just see if you can give us a little bit of background in terms of the development of RAFI Indices. I mean, how long has it been around? What kind of growth rates -- what kind of growth trajectory has it experienced over the last 3 to 5 years? And then secondly, maybe just -- obviously, the EBITDA-driven valuation is quite evident. But I wanted to sort of break down how you see the sort of the core value of the asset. Is it the algorithms and the method? Or is it more sort of the relationships and the network that's being built and sort of those that plumbing that you think sort of really drives the valuation that you're paying for?

So I'll address your second question first. It really is that they're research-based approach to fundamental index investing, which is very, very different from some of the potential competitors in the market. They focus on sales and cash flow, whereas a lot of index providers focus on market capitalization. So this is a big, big distinction. It's research-driven, very academically based. And the history goes back to 2002, Rob Arnott, as I referred to, a pioneer in this fundamental approach to equity investing, developed this company over the years and in 2016, founded the RAFI Indices.

And it's grown to a point where it's time to say, "Hey, who can take this to the next level, who can take this forward ongoing in a 10-, 20-year vision?" which is what we have. And that's kind of how the conversation really started. So we're super excited. And as John mentioned earlier, we will have a relationship with the Research Affiliates ongoing. They will remain a client of ours. So we're super excited about this.

And the last point that you touched on, Aravinda, was just kind of what the growth rates have been like. And it's roughly been around 10% over the last 3-odd years. And as we've indicated, like we squarely see this in our TMX VettaFi high-growth rate bucket, which is high single to double digits. And as you've seen from some of the VettaFi results since we've acquired it, it's tended to on the side of double digits.

And then maybe, David, just lastly, on the tax asset, can you just sort of help us with how that will sort of play out in terms of the effective tax rate at the consolidated level?

Yes. Thank you. Aravinda, yes, so basically, I mean, because this is effectively a carve-out, the way it actually is -- it works with the U.S. tax code is it really gets treated as what we refer to as a disregarded entity and that allows us to obviously, for U.S. tax purposes, amortize the intangibles over a 15-year period. And then this will obviously form part of our U.S. tax base. And then obviously, U.S. tax rates for corporates will apply, and then it will roll within our aggregate numbers. So the best is you can do some math on the side, but I would wait until we close and then see what this does to the enterprise effective tax rate, which I don't anticipate being material in any given quarter.

And our next question today comes from Jaeme Gloyn with National Bank Financial.

Just wanted to follow up on that growth rate, 10% CAGR over the last 3 years. And maybe you could break down what's been driving that? Is that growth in AUI through new partnerships, new relationships? Is it adding more indices? What's sort of driving that 10% growth rate?

It's all of the above.

And can you share anymore? Is it like 50-50? Or what would you -- how would you...

We don't break it down, but suffice to say, new products, new flows and appreciation of the market, all of the above. And let me just add, what RAFI is getting out of this deal is VettaFi's digital distribution and the focus that we spend and the secret sauce as we call it, both in North America and Europe and into Asia, really helping grow assets under index for our client base.

Okay. Understood. And then I'm not sure if this came up or I missed it, but just curious on the stability of the margin profile. You provided the run rate as it stands as of the last quarter. Just curious if that's a fairly stable margin, if we've seen some expansion on that, pretty healthy margin as it is. But just curious on the trajectory that we've seen there?

Yes. I mean I would say it's stable, and that's the best way to kind of look at it. We've given you kind of our pro forma EBITDA and our pro forma revenue. So it's a good jumping off point, Jaeme. And then obviously, the part that would be overlaid would be the part that I touched on earlier in the question about synergies. And so that will obviously help with that profile. But remembering that in the aggregate TMX enterprise level, this is not going to materially move the TMX EBITDA margin.

And our next question today comes from Stephen Boland at Raymond James.

Can you just talk about the process here? Was it competitive, a one-on-one type of relationship? And also why is the parent company selling?

So I'll handle the first part, and then I'll hand it over to Peter. Look, we believe it was a competitive process. And obviously, the normal approach, Stephen, when looking at strategy accelerants. And in this case, it was an acquisition. Obviously, we look at publicly traded comps, precedent transactions and obviously, the discounted cash flow. And then we determined fair valuation. We entered into the typical nonbinding LOI kind of stage, progressed into a second stage, then moved into a period of exclusivity. And then we find ourselves as of last night, signing and announcing. So I believe it was a competitive process, but I don't have any extra intel to give you on that. And then Pete, a little bit about...

Yes. I kind of alluded to it earlier. Really, research affiliates founded in 2002 and then the indices in 2016. And I think it's fair to say that they were looking for someone to take this with a 10-, 20-year vision going out to the future and then they'll maintain their research affiliates organization, and we'll take the indices as a carve-out. So it's really a testament to Rob and his vision going back to 2002, doing the fundamental work that he's done that's so important to the ETF community and then looking for a partner to take this to the next level.

And Peter, I'm going to add because I want to make sure we give a lot of credit to our own team here as well. It's a testament to what Peter, Tom, Sebastian, Brian, the whole team of VettaFi have done in terms of building a very strong, reputable growing global player because it's a part of that reputation that we actually have relationships with folks like RAFI even before these things become a process.

When it comes through a process, we're already well engaged. We know the players. And also the players know that this is a really good home for the assets they've built, and I think this is a really important piece that when you build something, you put your blood, sweat and tears into it in over decades. It's not just a transaction about dollars, it's a transaction about knowing what the future is of the legacy you've built and TMX VettaFi is the right home for that to ensure that, that legacy is actually taken on, built on and expanded. So Peter, I didn't want to let you off the hook there without giving some credit to what the team has built here that made it such a good partner for RAFI as well.

Okay. Great. And my second question, quick one. What regulatory approvals do you need?

Yes, it's pretty simple. I mean, given that we are in the index space already, it's primarily competition approvals in the U.S. HSR type filings. They are customary of a transaction of this nature.

We'll move on to our next question, and that comes from Bart Dziarski with RBC Capital Markets.

So RAFI Indices looks like they partner with some of the largest asset owners, consultants and asset managers globally. Can you just help us understand maybe the mix of those 3 groups? And is there any client concentration that we should think about?

That's a great question. Yes, they have a huge roster of names. Schwab is by far one of their most important names, but it's not just limited to Schwab. There's Invesco, there's State Street, there's PIMCO, L&G. I mean the list goes on. This is an A-tier list of clients. And as I mentioned earlier, there's -- we're targeting now, this gives us the ability to move into that institutional space. So there's a whole roster of institutional clients that are coming as well as that retail distribution platform, primarily through like a Schwab and Invesco, et cetera.

Okay. Got it. And then just a follow-up on the competitive process comment. So you're paying about 10x. That's below what you paid for the VettaFi business despite sort of similar growth rates, very strong EBITDA margins. So can you just help us bridge those 2 different valuation metrics? Like have multiples derated? Or are there other factors that led to an attractive 10x multiple?

Yes. I think that the key difference there, Bart, is that it was the -- when we acquired TMX VettaFi, it was -- as you know, it was a minority stake and then it was an acquisition of the full business. This is a carve-out, right? And so in a carve-out like this, we obviously have spent a lot of time during due diligence and then in our bid submissions, really modeling out what it would look like and operate as effectively a very large tuck-in on the TMX VettaFi platform. And so that enabled us to actually do the math to figure out what fair value was. And because both the seller and the buyer, in this case, us were able to reach agreement at USD 490 million, we believe it was fair value.

Congrats on the acquisition.

And our next question today comes from Graham Ryding at TD Securities.

Probably a question for Peter or John. Just you've always talked about proprietary components of your business being defendable against competition from Gen AI. Can you just speak to sort of how you think the Indexing business is positioned relative to sort of potential pressure from competitors that are sort of leveraging Gen AI and then specifically RAFI Indices, what's proprietary defendable within their business?

Yes, it's a great question, and it's a space we spend a lot of time on when we look at any of these pieces. So right to your point, these products are all proprietary products, proprietary methodologies. The indexes that are used in ETFs are done through long-term agreements in terms of the assets under management that go with them. So we do think that they are both highly proprietary and highly defendable.

But that actually does not mean that we don't look at how the AI use cases actually work with this. We actually are looking at AI use cases that help us to actually construct these indices better in terms of the operational work around them. But regardless of the use of Gen AI, you really need to have that talent and the research capabilities on top. So the Gen AI pieces can help you process these things more efficiently, but they don't actually create the intelligence in terms of what makes the products important. And so we spent a tremendous amount of time on that. We do that with the core business as well, and we're highly confident in the proprietary nature of what we're acquiring here.

And let me just add to that, too. VettaFi is a disruptor in this space. It's been using technology for the last several years at an accelerating pace using all the tools that are available and really, really innovating in this index space. So I'll just add that to the tail end of John there.

That does conclude our question-and-answer session. I would like to turn the conference back over to Ms. Tang for any closing remarks.

If you have further questions, contact information for Investor Relations as well as media is in our press release. Thank you all for your time and your insightful questions this morning. We look forward to continuing to execute on our growth strategy and sharing our progress with you following the release of our second quarter results in July. Thank you, and have a great day.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good afternoon, ladies and gentlemen. My name is Luc Bertrand. I am the Chair of the Board of Directors of TMX Group. As prescribed by our bylaws, I will preside as Chair of this Annual Meeting -- Annual and Special Meeting, I should say, of the TMX Group shareholders.

Joining me on the podium are John McKenzie, the Chief Executive Officer; David Arnold, Chief Financial Officer; and Cheryl Graden, the corporation's Chief Legal and Enterprise Corporate Affairs Officer and Corporate Secretary. Also joining me are my fellow directors, members of senior management and our auditors from KPMG.

We are delighted to welcome some of you today in person. We also welcome those who are joining us virtually by webcast, and thank you for your interest in the affairs of the corporation. I am also pleased to welcome many employees of the company, most of whom are shareholders of the corporation. I would like to begin by acknowledging that the land on which TMX Group operates in Toronto is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabek, the Chippewa, the Haudenosaunee and the Wendat peoples.

And as an organization with a national footprint and operations across the country, we are grateful for the rich indigenous history, traditions and contributions to Canada. Now I formally call the meeting to order. And with the consent of the meeting request, Cheryl Graden will act as Secretary of the meeting and to respond to any questions during the meeting regarding the procedural matters. Our goal is to ensure that shareholders joining us virtually are able to participate fully. Shareholders and proxy holders who have logged into the TSX Web Trust platform with their control numbers or their meeting access numbers may ask questions during the meeting by clicking on Ask a Question button displayed on their screens and following the instructions to submit them in writing.

Our Corporate Secretary, Cheryl Graden, will receive all questions submitted, and I encourage you to submit your questions as early as possible so that we may address them at the right moment during the meeting. We would ask that anyone present in person at the meeting who wishes to speak do so through one of the microphones that are available so that participating through the Internet can hear you. We would ask that questions or comments, whether submitted online or in person, be related to matters currently before the meeting, and we will do our best to respond to all your questions.

If there are questions pertinent to the meeting matters that are unanswered this afternoon due to time constraints, management will post answers to representatives set of such questions online. Members of the media are permitted to attend this meeting. However, they may not participate in the meeting. Following the meeting, members of the media may reach out to Shane Quinn, Vice President, Corporate Communications and Brand Reputation or Catherine Kee, Head of Media Relations, with any questions that they may have for John McKenzie or David Arnold.

Pursuant to a resolution of the Board, I appoint TSX Trust Company by its representatives, Rebecca Prentice and Steven Nguyen to act as scrutineers of the meeting. The scrutineers will report on the number of voting shares represented in person or by proxy at this meeting and will compute the votes on the ballots taken. Before proceeding further, I would like to say a few words about the shareholders who have signed and delivered proxies for the meeting.

Only registered shareholders who held shares on March 10, 2026, and those persons appointed as proxies for shareholders are entitled to vote and participate at the meeting. If any shareholder or proxy holder who is present in person has not yet registered their attendance with TSX Trust, please do so now. Representatives of TSX Trust Company, the corporation's registrar and transfer agents, are outside the room here. The matters to be dealt with at this meeting will include the reappointment of the corporation's auditors, the election of directors for the coming year, the approval of an advisory -- on an advisory basis of our approach to executive compensation and the approval of our Omnibus Equity Incentive Plan resolution.

All these matters have been sent out in the notice of Annual and Special Meeting and the management information circular is made available to all shareholders and was done so in advance of this meeting. So before we proceed with the formal part of the meeting, I'd like to take a couple of minutes to reflect on a very eventful year for the TMX Group. The company delivered exceptional financial results in 2025. TMX's adaptive business model continued to perform in the often volatile and unpredictable markets, providing world-class services to our clients across the capital markets ecosystem.

The company also made considerable progress in executing a disciplined long-term global strategy. The TMX continues to evolve, diversify and to innovate to meet the needs of modern capital markets. I want to thank our clients and our broader stakeholder community for their essential partnership for helping to ensure our market continues to perform their important functions in generating economic growth and opportunities. In a year marked by outstanding performance and strategic progress, the company also advanced its sustainability efforts, including the completion of a materiality assessment and to transition from net neutral to emission reduction activities. TMX continued on its reconciliation journey as well during 2025, publishing its first reconciliation action plan and establishing indigenous procurement guidelines.

Looking forward, the global financial industry is rapidly evolving faster than at any other time in history. Whether it's the impact of AI adoption, tokenization, 24-hour trading or predictive markets, technology is defining a new exchange landscape and setting a new pace of change. But change is not new. Like the world around us, the finance industry has evolved, reshaping and transforming many times over as new technologies have emerged over time. I have been fortunate in my career to participate in the evolution of Canada's capital markets, and TMX has long stood at the forefront of industry progress from the first fully electronic derivatives and equities exchanges in North America to the birthplace of exchange-traded funds. And we are actively pursuing multiple client-driven solutions to build on this proud history of innovation while preserving the core principles of market integrity, fairness and transparency.

Last month, TMX announced another exciting step forward with the announcement -- with the announcement transaction to expand into Australia and strengthen our domestic market to create a more comprehensive Canadian champion, a clear signal that TMX is committed to Canada to acting with purpose to make markets better and to build our strategic presence in key international jurisdictions. TMX also made an important progress in 2025 in its advocacy work. In the early year, the company outlined specific steps the Canadian government can take in terms of workable solutions to ensure that our country is seen throughout the world as a great place to invest and to do business.

The TMX Board is very supportive of John and his team in this ongoing effort. The TMX is well established as a leading public voice on behalf of the vital capital markets community we serve, and we are encouraged by the success of this program. I'd like to take the opportunity now to thank my fellow Board members for their service to the Board for their valuable insights and their commitment to governance and oversight. I want to recognize the contribution specifically of Martine Irman, who will be retiring from our Board of Directors. Martine has been on the Board for the last 12 years, and she has truly served in an extraordinary manner and provided a lot of insights, especially your expertise in the capital markets world was very, very helpful for us.

I've had the distinct pleasure of serving alongside Martine during this time, and the Board and the company greatly benefited from her experience and insights. In closing, on behalf of the entire Board, I want to acknowledge the efforts of the excellent senior management team led by John McKenzie. I want to also extend our gratitude to the fantastic team of employees across TMX for their commitment to serving markets with the highest standards of excellence and integrity.

To our growing global network of clients and entrepreneurs and investors and participants and industry professionals from around the world, thank you for your business. And finally, I want to express my appreciation to our shareholders for your ongoing confidence in the Board.

Now I will ask John to make a few remarks.

So thank you, Luc, and good afternoon, everyone here at the TMX Market Center and those that are joining us virtually. Thank you for attending the meeting today and for your interest in the company.

[Foreign Language] Good afternoon, everyone, here in the TMX Market Center and those of you joining us virtually. Thank you for attending the meeting and for your interest in our company.

Given that yesterday was the only nice day of the year so far, I hope you're enjoying spring so far. This was a unique opportunity for me to reflect today because the first time I went to an Annual General Meeting for TMX or what was at the time, Toronto Stock Exchange, it was a very different organization. We were across the street. And if you were a member of the exchange, you were given a red rose to indicate you had the right to vote that day. And I look to that from the starting point to where we have come from then and really started thinking about the remarks today, reflecting not on just that history, but on our achievements of 2025 and quite the interesting world we live in right now.

And the theme that really stood out for me on reflection was just how vibrant and resilient Canada's capital market industry is and what a privilege and responsibility it is for all of us to serve our clients and stakeholders across this vital ecosystem every day. And so while my day-to-day focus is very much on what's next for TMX, I have a special appreciation for yesterday or in this case, last year's news and a very unique perspective. In my 26 years in this great company, I've been very fortunate to see the most ambitious successes evolve from the primary stages of planning to execution to success.

I remember not long ago when our post-trade modernization program was just a concept or a bold idea when T+1 settlement seemed like a pipe dream or even when T+2 settlement seemed like a pipe dream or even when T+3 was a pipe dream. But looking back through that lens gives me an even greater appreciation for the value of sticking to a clear vision and purpose and to strengthen the conviction that we all have in our long-term strategy. So what I'm going to do today is spend a few minutes really looking at the performance highlights of 2025 and then provide an update on some of the exciting initiatives that we've got underway for the future.

Now by all means TMX delivered excellent results in 2025. In fact, we delivered excellent results in each quarter of 2025 with strong growth in overall revenue for the year, including 15% higher organic growth when compared to 2024 as well as record adjusted earnings per share and operating income. And the success of 2025 reflects an adaptive high-performance business model and the benefits of adhering to a consistent growth strategy. And volatility, while fueled by macroeconomic forces, drove higher market activity as we work closely with our industry partners to provide essential services and solutions to help them navigate what has been an unpredictable near-term challenge. And we continue to build TMX ever stronger for the future, more innovative, more global and more essential to better serve our growing client base around the world.

Now total revenue actually increased 18% year-over-year when you consider the acquisitions we've made and reflecting strong performance across the enterprise, including double-digit revenue growth in derivatives, trading and clearing, equity trading, TMX Trayport and TMX VettaFi. And we are very encouraged by the renewed strength in our capital formation business, particularly in financing activity in the second half of the year as TSX and TSX Venture-listed companies increasingly turned to Canada's proven market ecosystem to fund their growth.

Organic revenue, as I mentioned, excluding these acquisitions, increased 15% and adjusted diluted earnings per share increased 25% when compared to last year. I'm going to take a few minutes now to share some of the business highlights from across the enterprise. And later on, David is going to provide a more comprehensive overview of the financial results when he follows. Now given that we are meeting here in this fantastic market center and it's home of our market open ceremonies, I'm going to start with the highlights closer to home. A tremendous year in 2025 for our core domestic markets.

Derivatives trading and clearing revenue, excluding BOX, increased 31% compared to 2024, driven by significant year-over-year growth in activity and the success of new product initiatives. The Montreal Exchange's 2025 highlights include 80% growth in ETF options, double-digit growth in volumes across our expanded bond future offering and record-breaking performances in our fixed income suite, specifically the 3-month [ CORRA ] futures, [ CRA, ] the [ CRA ] broke all-time [indiscernible] daily volume records and open interest levels late last year.

And that sustained volatility drove higher equity and -- higher values in the equity markets as well. 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 volume traded on TSX, TSX Venture and Alpha combined to increase 27% over 2024, including a 45% gain in volume traded on the TSX Venture Exchange. Now the success of 2025 extend from our domestic venues with centuries of market tenure to fresh-faced upstarts breaking into new markets.

AlphaX U.S., our U.S. equity trading venue, had a terrific inaugural year in terms of volume traded and participant sign-ons. The launch of Alpha-X also helped us build on TMX's strong tradition of leadership in exchange technology. The team earned three prestigious industry awards for innovation and alternative trading systems by the trade, most innovative third-party technology vendor trading risk and compliance by WatersTechnology and the TabbFORUM 2026 Award, NOVA Award.

Now I'd like to turn to Global Insights. Revenue increased 16% compared to 2024, led by double-digit increases from TMX Trayport and TMX VettaFi. TMX Trayport's powerful and dynamic network plays an essential role at the heart of European energy trading. Revenue grew 18% year-over-year or 12% in pound sterling, driven by a number of factors, primarily an increase in the number of licensees and increased adoption of analytics and other trader products. And revenue from TMX VettaFi increased 24% year-over-year or 21% in U.S. dollars due to higher indexing revenue driven by organic growth in assets under indexing and recent acquisitions.

And our relative newcomer among our deep and diverse set of established business areas, this team continued to execute against an opportunistic strategy in 2025 with three additional acquisitions, the Credit Suisse bond indices, ETF Stream and a set of nuclear indices. Now looking beyond the respective core markets, TMX VettaFi, TMX Trayport remain in pursuit of expansion opportunities across geographies and asset classes. And the third component of our Global Insights segment, TMX Datalinx, also significantly bolstered their capabilities in 2025 with the acquisition of Verity, a leading buy-side investment research management system, data and analytics provider.

This addition of Verity brings dynamic new financial data and proprietary analytics, along with an expert group of professionals to our Datalinx team to enhance the services we offer to more than 5,000 clients worldwide. Now moving to capital formation. And again, this is where the theme of resiliency really rings true and loudly. You've heard me say in the past and always that we operate critical trading and clearing and settlement infrastructure. But also critical among these functions is our 2-tiered capital formation platform. It is unique to Canada, and it is a great source of pride and performing extremely well. In 2025, in a period of pronounced economic uncertainty and headline disruption, the signature strengths of public markets really shone brightly, providing stability, access to capital and always opportunity for growth.

In all times, our job one is to deliver exceptional service and to address the shifting needs of this powerful interconnected network of companies, participants and investors. Revenue in this segment for us increased 9% year-over-year, primarily due to higher revenue from additional listing fees and the inclusion of a full year of Newsfile revenue. We saw a surge in financing activity in the second half of 2025, including a 44% increase in the number of transactions, which we bill at the maximum fee threshold on TSX. Now big financial deals don't capture the IPO sized headlines. But this is a crucial function of public markets and positive momentum is really good for the entire ecosystem. Now as many of you are well aware, Toronto Stock Exchange and TSX Venture Exchange are home to almost 50% of the world's mining companies.

This sector is a major component of our market. It is vital to Canada's economy, and it is a competitive edge worldwide. And this sector has been thriving. Financing dollars in 2025 increased by 53% compared to 2024. The mining sector surpassed $1 trillion in overall market capitalization in 2025. And of the 11 companies that we graduated up from the TSX Venture Exchange to the TSX, 10 of these were mining companies last year. And beyond the corporates, it was also a stellar year for Canada's ETF industry. We welcomed 239 new exchange-traded funds to the Toronto Stock Exchange in 2025, surpassing the all-time record of 127 set in the previous year. And as I said in the opening of my remarks, 2025 was a big year for TMX and our best year ever. And the most exciting thing about the work we've done to build the high-performance TMX of today is what it means for tomorrow.

We've supercharged our ability to thrive and compete and deliver for a growing global client base well into the future. So always, our focus is now on what comes next. Now if you read the news at all, you'd see that no time in our history have we seen as many impactful trends pushing the pace of change in our environment, including AI adoption, 24-hour trading, tokenization, prediction markets, just to name a few. And we are all for modernization. We have long stood at the forefront of industry progress. We introduced the first computer-assisted trading system. We were the first fully electronic exchange. It should come as no surprise that TMX is actively pursuing client-driven solutions to build on this proud history of exchange industry leadership and innovations. And making markets better and empowering bold ideas is our purpose. It's guiding our decisions is emboldening these steps forward.

And our approach is to seek out purpose-driven innovation, measures that actually make the markets better, not just innovation for innovation's sake. And so necessarily, our next steps are rooted in a commitment to preserving the core capital markets principles of market integrity, fairness and transparency. We are deeply engaged now in a proposed plan to operationalize extended trading hours in Canada. This is an industry topic grabbing headlines around the world, and we've had many discussions with our clients and stakeholders to solicit their input and feedback. And quite frankly, with the largest and most competitive market in the world simply at our border, we have a responsibility to closely examine the potential impacts of transformative developments starting their marketplace and to ensure that Canada is ready.

For Canada, it's 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 out a proposed extended hours model, taking into account the potential impacts, the benefits, the challenges, the opportunities and risks for the industry. And these important stakeholder discussions are ongoing and will be one of the #1 topics next week at our annual TMX Equities Trading Conference.

The tokenization of public assets is also a hot button topic right. And while this may be proving to be transformative in time, there are hurdles to clear yet in moving toward a broad market adoption and including defining the right regulatory framework and the right standardization. Tokenization is the next evolution of blockchain, and this is an area where we've been exploring potential use cases for more than 15 years, including in early stages of developing the game-changing post-trade modernization project that we delivered in 2025, as I mentioned earlier.

And so we see real promise in some near-term opportunities potentially emerging on this clearing side, including the tokenization of collateral management, which can allow collateral to move seamlessly between accounts and even different clearing houses, improving efficiency, reducing costs for our biggest clients. And as we progress it, we will continue to update the market accordingly. So with the future in sight, I want to close with some details around another important announcement and an initiative that Luc just spoke to earlier, and we announced a couple of weeks ago. The agreement to acquire Cboe Australia and Cboe Canada. TMX is committed to investing in Canada's vast potential as we have been for almost 175 years, led by our conviction that stronger, more efficient capital markets are good for our country's economy and good for all Canadians.

This deal represents an important step forward for our markets. The creation of a stronger Canadian champion to the benefit of our issuers and participant communities, to our employees, to our shareholders, and it's a compelling opportunity that we could not pass up. This transaction is an important investment in advancing our global growth strategy by expanding our presence into Australia, a region we are well familiar with and where we see fantastic growth potential and strengthening our domestic market to create an even more compelling, competitive and efficient Canadian champion. So we are excited for the opportunities in front of us. And most of all, we look forward to partnering with our clients to identify ways to build on these unique strengths of these ecosystems to better serve both regions and our participants that trade across them.

In closing, as always, I want to sincerely thank Team TMX to all of our employees around the world for your unwavering dedication to our clients, to our company, to each other and supporting our collective success. This is an inspiring place to work every day. And of all the successes that we've spoken of here today, the unprecedented heights reached in 2025 as well as the exciting steps forward, they are always powered by our terrific people. So I look forward to the work we have in front of us together to continue to deliver on that promise of TMX.

With that, Luc, I'll turn the meeting back over to you. Thank you, everyone.

All right. Thank you, John. We now return to the business to be conducted at this meeting. All proxies will be voted as instructed by the shareholders. Only proxy holders and registered shareholders present in person or attending this meeting virtually who have not voted or who have previously returned a proxy and now wish to change their instructions and vote differently need to complete a physical or online ballot as applicable.

If you are attending this meeting in person for ballots for each matter were provided by the scrutineers to all the registered shareholders and proxy holders when you registered. If you did not receive a ballot upon registration, please raise your hand and the scrutineers will provide them to you now. To complete your ballots, if you are in favor of the motion, mark an X in the box opposite to the words for. If you are against the motion or wish to withhold your vote on a motion, mark an X in the box opposite to the word against or withhold as the case may be. Please sign your name, and if you are a proxy holder, indicate the name of the shareholder for whom you are a proxy and confirm the number of voting shares you or your ballot represents.

The ballots will be collected by the scrutineers following the last motion. If you are attending this meeting virtually and have logged into the TSX Trust web platform with a control number or a meeting access number, you may vote by clicking on the applicable voting option. Your vote will be automatically submitted to TSX Trust, our scrutineers, after you click on your choice. The votes may be changed up to the time voting is closed. If you do not choose for, withhold or against as applicable and if you have not previously submitted a proxy vote, your vote will not be recorded, and you will be regarded as having abstained from voting.

At this time, I ask that TSX Trust officially open the online polls. Thank you.

The results of the ballots will be tabulated by the scrutineers and announced prior to the conclusion of the meeting. Unless requested, I will not repeat these voting instructions for each motion. A simple majority of the votes cast in person or by proxy will constitute approval for all matters voted at the meeting. To make the best use of time, we've asked two employees of the corporation, [ Nicole Rosenberg and Amanda Tang, ] to move and second all motions. I will call on them at the appropriate time.

I will now call upon the Secretary to present the scrutineer's report on attendance.

The scrutineers report that there are 343 registered shareholders or proxy holders present and holding or representing 219,897,536 shares or 79.1% of the issued and outstanding shares on March 10, 2026, the record date for the meeting. According to the bylaws of the corporation, a quorum is present. The written report will be delivered to you at the end of the meeting.

Thank you. Based on the scrutineer's report, I declare a quorum to be present in the meeting to be regularly constituted for the transaction of business. The notice calling this meeting and the management information circular have been made available to all shareholders of the corporation entitled to vote to the directors of the corporation and to the corporation's auditor. The Corporate Secretary has filed with me proof of service of the notice of meeting, which is available for inspection.

The last -- at the last Annual and Special Shareholders Meeting of the corporation, which was held on May 6, 2025, the minutes of that meeting are now available for review by any shareholder. I will now request a motion that these minutes be taken as read.

I move that the minutes of the last Annual and Special Meeting of Shareholders of the corporation held on May 6, 2025, be taken as read.

Thank you, Nicole.

I second the motion.

Thank you, Amanda.

Cheryl, are there any online questions relating to the motion that the minutes of the last Annual and Special Meeting of Shareholders of the corporation be taken as read?

No, we haven't received any questions on that.

Thank you. We will now proceed with the vote. All those in favor, please signify by raising their hands. Any contrary? Cheryl, are there any online objections to the motion?

No, none.

Thank you. I declare the motion carried.

The next item of business to consider are the audited consolidated financial statements of the company for the year ended December 31, 2025, and the accompanying notes, together with the auditor's report and the management statement, all contained in the corporation's annual report mailed to those shareholders who requested a copy prior to this meeting.

The Board of Directors has approved the audited consolidated statements -- financial statements, and I now place them before the meeting for consideration. David Arnold, the corporation's Chief Financial Officer, will present the highlights of the financial statements later in this meeting. Are there any questions related to the annual financial statements?

No questions on that.

No questions.

The first item of business is the appointment of the auditor for the current year. I will now ask for a motion appointing KPMG LLP as the auditor for the corporation at a remuneration to be fixed by the Board of Directors until the next Annual Meeting of the Shareholders and for a seconder for this motion.

I move to appoint KPMG LLP as auditor of the corporation until the next Annual Meeting of Shareholders and authorize the Board of Directors to fix the remuneration of KPMG LLP.

Thank you, Nicole.

I second the motion.

Thank you, Amanda. You have heard the motion. Is there any discussion? Cheryl, are there any questions related to the appointment of the -- appointment of the auditor for the current year?

No questions.

Thank you. Please mark your ballot on the motion to appoint KPMG LLP.

[Voting]

All right. We will now proceed with the election of directors. The number of directors to be elected has been set at 12 by the Board. All 12 of the recommended nominees have been approved by the Board of Directors and have consented to stand for election to the Board. Additional information about the recommended nominees is contained in the management information circular. Our director qualification policy provides that in an uncontested election of directors, any nominees who receive a greater number of votes withheld than votes for will tender his or her resignation to the Board promptly following our annual meeting.

I would ask each of the nominees who is present to stand when his or her name is announced. I now declare the meeting open for nominations.

I have the pleasure of nominating the following 12 individuals as directors of the corporation to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed. The individuals are Luc Bertrand, Stephanie Cuskley, Nicolas Darveau-Garneau, Tamara Finch, Moe Kermani, William Linton, John McKenzie, Monique Mercier, Michael Ptasznik, Peter Rockandel, Claude Tessier and Ava Yaskiel.

I second the motion.

Thank you, Amanda. Does any shareholder or proxy holder wish to make a further nomination? Cheryl, are there any further nominations or any questions from the online participants on the nominations?

No further nominations or questions, Luc.

Thank you.

Since there are no further nominations, I declare the nominations closed. 12 persons have been nominated as directors, and there are 12 directors to be elected. Please mark your ballot on the election of directors. The next item of business is the approval on an advisory basis of our approach to executive compensation. I will now ask for a motion approving on an advisory basis, our approach to executive compensation as disclosed in the management information circular. You have heard the motion. Is there...

I move to approve on an advisory basis and not to diminish the role and responsibilities of the directors that the shareholders accept the approach to executive compensation disclosed in the management information circular.

Thank you, Nicole.

I second the motion.

Thank you, Amanda.

Now I've heard the motion. Is there any discussion? Cheryl, are there any online questions relating to the approval on an advisory basis of our approach to executive compensation as disclosed in the management information circular?

Once again, no questions.

All right. Thank you. Please mark your ballot on the motion to accept the directors' approach to executive compensation.

[Voting]

The next item of business is to approve the Omnibus Equity Incentive Plan resolution. I will now ask for a motion approving the Omnibus Equity Incentive Plan resolution as disclosed in the management information circular.

I move to approve the Omnibus Equity Incentive Plan resolution as disclosed in the management information circular.

Thank you again.

I second the motion.

You have heard the motion. Is there any discussion? Cheryl, anything online related to the approval of the Omnibus Equity Incentive Plan resolution as disclosed in the management information circular?

No questions on that.

Thank you. Please mark your ballot on the motion to approve the Omnibus Equity Incentive Plan resolution. We will now proceed with the vote. If you are attending the meeting online and have not yet voted on any of the other items on the business agenda, please do so now. Is there any shareholder who requires more time to complete their ballot?

[Voting]

The scrutineers will now collect all the ballots. The results of these ballots will be provided later in the meeting once the scrutineers have tabulated the results. The online polls are now closed. I will now ask David Arnold, the corporation's Chief Financial Officer, to present the highlights in the financial statements.

Thank you, Luc. Good afternoon, everyone. As John mentioned, we delivered excellent financial results in 2025, reflecting strong increases in revenue, including 15% higher organic revenue compared with 2024 as well as record income from operations and adjusted earnings per share. In 2025, earnings per share was $1.49, a decrease of 14% compared to $1.73 in the prior year, [indiscernible] 3 items. First, a $98.2 million increase in net finance costs, largely driven by an accounting net foreign exchange loss on the translation of monetary assets and liabilities in 2025 compared with accounting net foreign exchange gains in 2024.

Second, an accounting noncash gain of $57.1 million in 2024 related to the revaluation of our previously held minority interest in VettaFi, which we were required to account for when we acquired the remaining shares and full control of VettaFi. and third, higher income tax expenses. After adjusting for the items noted in our 2025 management's discussion and analysis, our adjusted diluted earnings per share for 2025 grew by 25% from 2024, an increase of $0.43 to $2.13. Our 2025 income from operations was $771 million, up 20% from $642.3 million in the prior year, driven by an increase of 18% in our revenue, which John covered in his remarks earlier, partially offset by a 16% increase in our operating expenses.

Now taking a closer look at our expenses, the year-over-year increase included: first, $28.9 million of higher litigation, dispute and related costs, including $15.3 million of box costs related to the SEC's mandated consolidated order trail initiative; second, $24.9 million of additional expenses related to new acquisitions, including Newsfile, Index Research, Bond Indices, ETF Stream and Verity. Specifically, $19.6 million of operating expenses that come with these businesses, $3 million related to amortization of recently acquired intangibles as we do our purchase price accounting under IFRS and $2.3 million related to acquisition, integration and related items. And third, $12 million of strategic realignment costs, mainly in the first half of 2025.

Excluding the 3 items I just mentioned, comparable total operating expenses increased by approximately 8% in 2025 compared with the prior year, reflecting continued investments in our team, including merit increases and higher performance-based compensation relative to 2024. There were also increased IT operating costs and higher project costs related to AlphaX U.S., which we launched on January 22, 2025. and our post-trade modernization project, which went live on April 28, 2025. Moving now to Slide 6. Turning to our long-term financial and transformational objectives. As a reminder, we measure growth in terms of compound annual growth rate or in short CAGR.

Over the long term, we continue to target double-digit growth in our adjusted earnings per share, which will be driven by strong growth, which we define as 5-plus percent in total revenue and our disciplined approach to cost management. Our high-growth businesses consist of derivatives trading and clearing, TMX Trayport, TMX VettaFi and TMX Corporate Solutions. Now recall, we define high growth as high single to double-digit revenue growth. Capital formation, excluding TMX Corporate Solutions and TMX Datalinx are categorized as our strong growth businesses. And finally, we expect our equity, fixed income and trading and clearing business to grow in line with the overall market. Now over the long term, we remain committed to maintain a target dividend payout ratio in the range of 40% to 50% of adjusted earnings per share and a target debt to adjusted EBITDA ratio of 1.5 to 2.5x, which is basically calculated on a gross basis.

Our global growth strategy underpins our long-term financial objectives, supporting our focus on balanced expansion, both locally and internationally, increasing recurring revenue and growing revenue contributions from our Global Insights business. Turning now to Slide 7. Now taking a closer look at how our 2025 financial results -- Slide 7, please. Now taking a closer look at our 2025 financial results and how they impacted these transformational measures. Our revenue outside of Canada was 51%, up 1% from last year, reflecting organic growth across the enterprise, excluding recent acquisitions. Recurring revenue as a percentage of total revenue was 53%, a decrease of 2% from 2024, driven by growth in transactional businesses, reflecting strong equities trading and derivatives trading volumes as well as growth in financing activity and capital formation.

As I've said on a number of occasions, investing in our core trading businesses continues to be a priority. And when trading volumes are robust, they can outpace our recurring revenue growth. Global Insights revenue as a percentage of total revenue was unchanged from 2024 despite high growth in many of the Global Insights businesses. And as I noted earlier, the robust trading and transactional revenue growth offset that, holding the percentage steady at 41%. Turning to our capital allocation priorities. Our first and foremost objective is to maintain sufficient capital to sustain our operations and to meet regulatory and related requirements. At the end of 2025, we held about $513 million in cash, cash equivalents and marketable securities, which was approximately $273 million in excess of the approximately $240 million we target to retain for regulatory and related requirements.

Our second priority is to invest in our businesses to accelerate our long-term global growth strategy. In 2025, we invested over $69 million in organic growth, including investments into TMX Trayport, expansion of our colocation services and the opening of our new U.S. office in December. Third is returning value to our shareholders through dividends in 2025, where we returned $233 million to shareholders, which equates to $0.84 per common share. Our fourth priority is to maintain a long-term target leverage ratio of 1.5 to 2.5x on a gross basis. In 2025, we continue to execute on our de-leveraging plans. And as of December 31, 2025, our debt to adjusted EBITDA ratio was 2.2x on a gross basis or 1.9x net of excess cash, well within our target range. Our fifth priority is to balance between investing in acquisitions to accelerate our growth strategy and our share repurchases programs to both offset the impact of earnings per share dilution from the exercising of stock options and also to return additional capital to our shareholders.

In 2025, we invested over $132 million to enhance capabilities in our high and strong growth businesses, including the acquisitions of Bond Indices, ETF Stream, Nuclear Sector Indices and Verity. Now as I noted earlier, in 2025, we were focused on our deleveraging plans. And as such, we did not have a share repurchase program. However, we launched a new normal course issuer bid program in February of 2026 to repurchase approximately 1% of our common shares outstanding. Our final objective is to maintain an appropriate and strong credit rating, specifically in our case to maintain our AA low credit rating under normal course operations.

Thank you, and I will now turn it back to Luc.

Thank you, David. I have received the report on the ballots from the scrutineers, and I will ask Cheryl to read the report.

The scrutineers report that the shareholders present in person, virtually or represented by proxy have voted as follows: on the appointment of KPMG as auditor at a remuneration to be fixed by the Board: for, 99.05% withhold 0.95%. On the election of directors, the average vote total for the 12 nominees set out in the circular, for is 98.57% withheld is 1.43%. In the interest of time, I will not read the results for each of the directors. I do, however, confirm that no director received a greater number of withheld votes than votes in favor of that director. On the acceptance of the approach to executive compensation as set out in the circular, for, 95.42% against 4.58%. Last, on the approval of the Omnibus Equity Incentive Plan resolution as set out in the circular, for, 94.57% against, 5.43%.

Thank you, Cheryl. As Chair, I adopt the report of the scrutineers. And based on these results, I declare that KPMG LLP has been appointed as auditor of the corporation at a remuneration to be fixed by the Board of Directors. I also declare that Mr. Darveau-Garneau, Kermani, Linton, McKenzie, Ptasznik, Rockandel, Tessier as well as Cuskley, Finch, Mercier, and Yaskiel.have been duly elected as directors of the corporation to hold office until the next Annual Meeting of Shareholders or until the director resigns, becomes ineligible or unable to serve or until his or her successor is elected or appointed.

I also declare that on an advisory basis, the shareholders have accepted our approach to executive compensation. And finally, I also declare that the shareholders have approved the Omnibus Equity Incentive Plan resolution. So this concludes the formal part of the business of the meeting. I would like to call for a motion for the termination of the meeting.

Thank you, Nicole.

I second the motion.

Thank you, Amanda. I declare that the formal part of this meeting is now terminated. And if there are any questions from shareholders or proxy holders who are present at the meeting, please approach one of the microphones set out in the aisle and wait for the microphone to be turned on and then start by identifying yourself. To ensure that all shareholders or proxy holders have an opportunity to participate, please limit your questions or comments to approximately 3 minutes.

Are there any questions from shareholders or proxy holders who are attending the meeting virtually?

No.

Thank you. So any questions from the floor?

No.

No. All right. As there are no further questions, I will now conclude the formal portion of today's meeting. Thank you for your attendance.

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. [Operator Instructions]

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, Vasilias, 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, presenting almost an even split between his current tenure as CEO and his former role as Chief Financial Officer. As those of you who have been following us long 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's instilled across our organization.

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 remind everyone, it's not the number of innings that are pitched. It's the number of the 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% 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%. And and adjusted diluted earnings per share increased by 33% 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% 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 billion 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 Metatek Group, a U.K.-based provider of geophysical survey and data services for resource exploration.

And 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% and 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% compared to the first quarter of last year, driven by record activity as investors look to derivative 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% 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 CORRA Futures contract or CRA, record volumes in bond futures highlighted by 30% growth in volumes in the CGZ or Two-Year Government Canada Bond Futures , and open interest in ETF options had 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 suites. In early April, we launched a new tool designed to help investors manage Canadian credit spread risk, the FTSE Canada Bank Credit Index Futures 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 3 components of the business: TMX Trayport, TMX VettaFi and TMX Datalinx. Q1 revenue from TMX Trayport grew 9% compared to last year or 8% in pound sterling, largely due to an increase in the number of licenses. 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 VettaFi 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 VettaFi 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. As 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 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 development 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 that 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+1 settlement and the implementation of post-trade modernization. These are all actually recent initiatives. In fact, last week marked the 1-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.

Thank you, John. Good morning, everyone. I'm pleased to report that the TMX Group has once again delivered outstanding financial results for the first quarter of 2026, highlighted by record revenue and record income from operations. We saw growth across all our segments with pronounced growth in transactional businesses as well as recent expansion areas.

Looking at our results sequentially, we carried strong momentum from Q4 2025 and into Q1 of 2026. This positive trajectory continued with enterprise-wide revenue reaching a new high of $488.2 million. Revenue grew $30.4 million or 7% from the fourth quarter, reflecting revenue growth in our Global Insight segment, fueled by growth across first, TMX Datalinx, including Verity, which was acquired in October 2025; second, TMX VettaFi, driven by a 10% increase in average assets under index or AUI compared to Q4 of 2025. And finally, TMX Trayport reflecting a 5% increase in ARR sequentially.

Volume growth of 16% in derivatives trading and clearing and 12% in equities and fixed income trading and clearing drove revenue increases in both segments. Increased capital formation revenue, reflecting higher sustaining fees as well as increased TSX Trust transfer agency fees compared with Q4.

Now turning to our expenses, as John indicated I would. Operating expenses in Q1 decreased $2.5 million or 1% from Q4, reflecting lower litigation dispute and related items totaling $15.3 million of BOX Consolidated Audit Trail or CAT for short related expenses incurred in Q4, partially offset by higher acquisition, integration and related items.

Excluding the impacts of acquisition, integration, litigation dispute and related items, operating expenses increased by 4% sequentially, driven by the following: approximately 3% increase related to TMX VettaFi's Exchange Conference that occurred in Q1. I will come back to this in a minute. A 4% increase in payroll taxes and merit increases, which is typical in the first quarter, driven by the annual reset and bonus payments, offset by a 3% decrease related to lower employee performance incentive plan costs.

After factoring in these items, our costs are largely unchanged from Q4. Following client feedback, TMX VettaFi's Exchange Conference is evolving in 2027. We are pivoting from a single large-scale event to a series of more focused, curated events to allow more meaningful engagement and in-depth conversations. This approach has proven successful in Europe, following our acquisition of ETF Stream last June. We look forward to bringing this concept to North America. As a result, there will be less seasonality in this part of the business going forward.

Earlier, John covered the highlights of our year-over-year revenue performance. Now let's take a look at our expenses compared with the prior year. Our operating expenses increased by 5% in Q1, combined with the 16% top line growth this quarter, this translates to double-digit positive operating leverage and a 6% operating margin expansion reaching 49% in the first quarter of 2026.

The increase in expenses included 3 items: First, we incurred $11.9 million of additional expenses related to new acquisitions, namely $7.7 million of operating expenses, excluding depreciation and amortization related to bond indices, ETF stream, Verity and nuclear sector indices, $3.2 million higher amortization related to acquired intangibles, and finally, $1 million of higher acquisition integration and related items for these new acquisitions.

Second, we incurred $3.7 million of higher litigation dispute and related items. And third, partially offsetting these increases was approximately $4.6 million related to strategic realignment expenses in Q1 of last year.

Excluding these items, our operating expenses were largely unchanged on a comparable basis, primarily reflecting: First, roughly 3% higher expenses related to higher headcount, annual merit increases and higher severance. Second, approximately 1% increased IT costs related to software license subscription and cloud services. Third, around 1% across other cost categories, including higher depreciation and amortization related to our post-trade modernization project, which went live on April 28 of last year. And lastly, these costs were offset by 5% lower employee incentive plan costs driven by a lower share price in the first quarter.

Now as mentioned in prior quarters, the performance of our shares relative to the S&P/TSX Composite Index is a factor in our performance share unit multiplier. The lower share price as of March 31, contributed to a lower long-term incentive plan expense for the quarter. Depending on the share price movement from April to June of this year, our long-term incentive plan expense may have a different impact on our expenses in Q2.

We have a shareholder vote for the implementation of an omnibus equity incentive plan at this afternoon's Annual General Meeting. If the required approvals are obtained, this plan will, among other things, enable an accounting treatment that is expected to significantly reduce P&L volatility for future grants that are subject to the performance share unit multiplier.

Moving now to our reported diluted earnings per share, which was up 111% compared with Q1 of last year. This increase includes $0.21 per share of litigation dispute and related items in Q1 of this year, reflecting a net cash settlement payment received as part of a legal dispute. A more meaningful comparison of our adjusted diluted earnings per share, yields an increase of 33% from $0.49 in Q1 of last year to $0.65 this quarter, mainly driven by a 32% increase in income from operations and lower net finance costs.

On the balance sheet front, in the first quarter of 2026, we spent $57.5 million, repurchasing almost $1.2 million or 0.4% of our common shares under our 1% normal course issuer bid program from launch on February 27 to March 31 of this year.

Our debt to adjusted EBITDA ratio at March 31, was 2x, which is squarely within our target leverage range of 1.5 to 2.5x. As of March 31, we also held over $500 million in cash and marketable securities, which is more than $285 million in excess of the approximately $215 million we target to retain for regulatory purposes. Net of excess cash, our leverage was 1.8x.

As a reminder, on April 22, we announced our plans to expand into Australia and strengthen markets in Canada. We plan to fund this acquisition through cash and debt. Lastly, I'm pleased to announce that last night, our Board of Directors approved a quarterly dividend of $0.24 per common share, payable on June 5 to shareholders of record as of May 22. This represents a dividend payout ratio for the last 12 months of approximately 40%.

TMX Group's performance in the first quarter is a reflection of the continued execution of our TM2X strategy, our ability to capitalize on market opportunities and our commitment to operational efficiency. Our diversified revenue streams highlighted by a 16% year-over-year revenue growth that significantly outpaces expense growth and this positions us really well for success in 2026 and beyond.

With that, I'll now turn the call back to Amin for the Q&A period.

Thank you, David. Vasilias, could you please outline the process for the Q&A session?

[Operator Instructions] The first question comes from Benjamin Budish with Barclays.

This is Chris O'Brien on for Ben. I wanted to ask about Trayport. When we look at year-over-year ARR growth, it looks like it's kind of slowed down to the high single-digit range after kind of being in the mid-teens in 2025.

So I was wondering if you could help unpack some of the drivers behind what's going on there? And then if you could make any comments on the revenue retention within Trayport as well. It's up sequentially, but versus the average that we've seen over 2024 and 2025, it's down a bit, too. So any color would be helpful.

Chris, it's good to take a question from you and send my regards to Ben. Let me start with our overarching view, right? Like we continue to expect high growth for our Trayport business. And the definition of high growth for us is high single to double-digit growth. And this is really part of our long-term growth aspirations and that hasn't changed.

We tend to not focus on quarterly or even small annual variances. It's a high-growth business. It's a proven track record ever since we've acquired and invested in the growth of the business, yes, we've been able to deliver some of the returns that you mentioned, i.e., in the low teens. But it's still squarely within our long-term growth aspirations.

Now in Q1, recurring revenues were 9% higher year-over-year and 5% sequentially. The growth in ARR was driven by continued signing and onboarding of new clients and sales of additional products from both the suite and our core European and markets globally.

So we continue to see good expansion and well within our long-term objectives. And remember, growth in recurring revenue is really influenced by trends in client usage and also seasonality, which impacts variable revenues. So -- and that also is a function of both timing and the renewal schedule for those that are on site licenses, which are longer term.

And as we've said many, many times before, we're continuing to develop our product offering, we're going to expand into new markets and asset classes to unlock further growth opportunities for the long term. And as my late father used to say to me, when you get an A+ every day at school and you come in with an A, there's an area for improvement. So I guess high single digits is really what you're knocking at.

The next question comes from Etienne Ricard with BMO Capital Markets.

On capital allocation, you announced 2 weeks ago, the transactions with Cboe. I presume the focus of the management team is on closing and integrating these businesses over the short term. So how do you think about the potential for M&A during this period I presume maybe some deals at VettaFi could be interesting? Or are you also contemplating larger transactions?

Yes. I mean, thank you for the question. It's such a good question, and it really is core to continuing to focus on adding capabilities that allow us to continue with the long-term growth trajectory. So you're absolutely right, there is some short-term focus around bringing these in, moving them through their process, getting them to closing. But if you recall, the total capital we're deploying for this at USD 300 million or slightly over CAD 400 million really doesn't tax our capability. So the capability of either our balance sheet or our team to execute.

So we remain committed to looking at opportunities to deploy capital further to continue to accelerate the growth strategy. So to your point, as we have in the past, adding in new capabilities to help build us out in index fee data spaces, support for issuers, both domestically and globally, are all areas that we are continuing to focus on.

We have both operational capacity and balance sheet capacity to do both small tuck-ins as we have done throughout the last year. But also larger, more transformational initiatives as well. So everything is on the table, and they will be governed mostly by again, that commitment to driving the strategy and ensuring that every transaction we look at has got the right shareholder fundamentals in terms of return to shareholders, return on investment, et cetera, et cetera.

So no change in strategy going forward. We have both the capacity and balance sheet to continue to do more.

And John, how are you thinking about the chain of reporting to you, given the increasingly global presence of TMX to make sure that everyone is aligned on the relevant goals.

I mean that actually that's the piece I worry about the least because from a leadership team standpoint, we have a highly aligned leadership team. So having our three core business areas under the leadership of Luc, Loui, and Peter, they are very focused in terms of what we're doing to do from a growth standpoint. And interesting enough, though, a lot of these initiatives actually work across the organization.

So when you see the way we structure our team, the way that we work together, the way that we review performance, the way we compensate the team, it is designed around TMX objectives. It's designed around the long-term performance of TMX, everything we've tilted to over time has reinforced that. So I'm very comfortable, we've got a team that's all anchored in terms of the same strategy and rowing in the same direction.

I'm looking forward to the 41st call.

I'm not yet. I'd like to just finish this one first.

The next question comes from Aravinda Galappatthige with Canaccord Genuity.

Congrats to the team on another very solid quarter. I did want to follow up a little bit on the Trayport question earlier. Perhaps, John and David, could you give us a little bit of an update with respect to sort of Trayport's initiatives on diversification? I know that diversifying outside of Europe, in Japan, U.S. and so forth, are very much on the agenda. Perhaps an update as to how that's been tracking in the last several quarters?

And secondly, on the M&A front, I know you said sort of there's no major change in plans, but I was just wondering, the Cboe acquisition obviously makes a lot of sense. But given what we see in the markets in terms of software and the sell-off there, does that kind of cause you to take a pause and wait and see what happens in the private markets before taking actions on that side of the aisle. Any sort of thoughts there would be helpful.

Okay. That's great. So I'm going to try to tackle both. And if I missed some of the second part, as I'm going through, please jump back in there.

So with respect to Trayport, we are continuing to develop into the new regions. So the regions that we've talked about in the past in terms of the U.S., in terms of Japan, that is still progressing quarter-by-quarter. We've been adding additional clients in both those regions. The Japanese market, it's more -- it's difficult to get to a projection as to where you start to see that become more material because it really has to do with the development of the market itself.

So we are in there in an early stage. The secondary market is developing. You've got new players that are coming in. As that evolves, you will start to see more of than the actual impact on volumes on revenue picking up on actually levering more participation, like we are doing in the U.S., where we're actually adding more participants all the time.

So those continue to progress on an ad basis. We are also looking from an exploration standpoint at some other regions as well as we get some traction on those as those markets evolve around the world, we also will continue to update the analysts and the investors in terms of how those progress. But on each of these cases, we're continuing to grow.

In addition to those, we are continuing to grow different strategies on how to bring more asset classes on platform. And so that strategy when things like oil market continues to evolve, and we've got different approaches this year. We're going to look at to accelerate that because again, we're trying to break into markets that haven't traditionally been traded electronically.

Secondly, so to your question around -- oh, sorry, David has just -- with that, good opportunity for me to announce actually that we actually do have a new lead in Trayport. So with Peter taking on the larger global role in terms of global insights, we've hired an exceptional new lead Matt Brief who comes to us in the London market to lead our Trayport operation. And it's going to be an opportunity for him to look at the strategy as well, see what he thinks from an outsider lens looking in is working, what we can do to accelerate even further. So there will be more for us to report as we get Matt up and running the business, as he comes on in the next month.

Now I knew I would do this Aravinda, you got to remind me of your second question again because I went too far down the Trayport hole.

No, that's okay. So it was on the M&A question. I know that you had said that your plans there haven't really changed, even following the Cboe acquisition announcement. But I was wondering on the other side of the aisle with respect to software analytics and that side of the equation.

Given what's happened in the public markets, is there a sense that you perhaps want to pause and see what happens on the private market side before sort of taking any action? I know that longer term, it probably means even better opportunities for you, but just sort of high-level thoughts as we sort of digest sort of the movement over the last 3 or 4 months.

Yes. I mean the fundamental piece is always to remind folks that we're actually not -- we're not in the software business. we are an applied technology business. The technology is core to what we do, but our technology is largely proprietary. Our networks are proprietary. Our data sets are proprietary. So when we are looking to bring new things in, it's largely not software, even though some of our business is delivered in the style of Software as a Service. So Trayport, for example, billing as a subscription basis, it's a deployed technology, but it's not a software sales business.

And so the types of things we're looking at are really not in that lens. They're really not in the lens of things that are kind of AI disrupted or disruptible. So continuing to look at index opportunities that we can tuck in and scale up that have proprietary capabilities in them that have unique investor followings will continue to be a priority.

And if those happen to be on sale now because of this disruption on pricing, I think that's opportunistic for us to potentially give advantage of the opportunity to bring things in at different price points than we could have in the past. So no change in our strategy. We would never want it to be dictated by those kind of market forces.

The next question comes from Jaeme Gloyn with National Bank.

Yes. First question, just on VettaFi. As we see a step back in the exchange conference this quarter, I guess, and a shift in that strategy longer term. Can you talk a little bit about maybe what happened in Q1? What was the feedback to drive that shift? And then more broadly on the VettaFi, just talk through some of what would be the, let's say, nonrecurring revenues that drive that business.

So one of our takeaways as we were looking at some of the questions coming in today, is we've got to almost do a better job explaining what's in there because the first quarter for VettaFi was fantastic, and we didn't write it that way.

Like when you actually look at the comparable business on the core of what matters in terms of kind of indexing revenue, the core products and services, that was up 21% in the quarter year-over-year, 15% U.S. dollars overall in terms of growth, 21% when you exclude things like acquisitions and the exchange conference. So the core of the business that we're trying to build with client adds, AUM growth, new index opportunities.

But to your point, there's a lot of noise in Q1. And the biggest thing that's driving that noise, one, beyond the exchange rate impacts on the year-over-year comparison is the change in strategy around what we're doing around the conferencing component.

So as David mentioned in earlier remarks, is moving away from doing this one big bang show, to doing things more on a regular basis that gets more engaged in the community, more engaged in these geographies. This is a strategy we've been building on since also we brought in the ETF stream piece in the U.K. market last year that does many more kind of like micro conferences, things to get investors and IAs engage on a more regular basis.

And to David's point, it's going to take some of the lumpiness out of the business as well, where we have this big event that's conference-related revenue that as people have noted, it's not high-margin revenue, but it's really important from building pipeline. And so that's going to get more normalized into the year.

But as we've been transitioning that, it's a step down in the revenue for that event year-over-year in terms of that Q1 comparison to last year. So that's the way to think about it. The core business in terms of indices, assets under indices, products and services related to that had an exceptional Q1, and we expect that strength to continue going forward.

Okay. So the organic growth in the business, did you say it was 21%. Because you're right, as it's written, it looks like organic growth was like sub-10%.

Yes, organic growth in U.S. dollars, so taking out the conference and taking out acquisitions because I don't want to credit those, was 21% year-over-year in U.S. dollars. So when you include the flows from the new acquisitions, it's higher than that.

Right. Taking out acquisitions in conference, okay. That's the piece that I just missed on that comment. And then second question, just listening to some of the global peers talk about tokenization, it sounds like it's a lot further along in their strategic plans than maybe perhaps TMX?

Or maybe this is kind of what you're going to talk about next week at that Equities Trading Conference and moving to extended hours. Can you talk through where you're at on the tokenization strategy and implementing that in Canada?

Yes, I'm happy to. And we're not going to talk a bit more from a process standpoint of what we're doing, what we're working on because I never like to be in the announcement of intentions business. And unfortunately, I'm finding there is a bit too much of that in this space that's speculating on intentions. We've actually been quite active through the end of last year into this year on developing road map and strategy around blockchain adaptation and tokenization.

And that's really exploring everything through the value chain. So the unique thing to us versus, say, some of the U.S. peers that you talked about is we actually have all the components of the value chain in our ecosystem, right from issuance and listing through trading, through clearing settlement, corporate actions, depository custody the whole work.

So we really have a unique view on how to bring forth these capabilities and value for the industry. But with a mindset of how do you make sure that things are standardized and interoperable and that's a really important piece because you can't simply tokenize the market and it just goes there. You need to do it in a way that's interoperable. And it's certainly part of the conversation that we're going to be having at the Equities Trading Conference next week.

So early stage in terms of work we've done, and we were actually having this conversation with our Board, yesterday as well as the Board today, it is really about where is, for lack of better words, kind of a low-hanging fruit in terms of where opportunities are to create value. And that really is around how do you tokenize the assets that are in the depository.

So this is the fixed income assets, the collateral assets and to a lesser priority, the equities themselves. But by focusing on those earlier ones, you can start to unlock value for users to make collateral more mobile, to make it more efficient in the system, to reduce cost and reduce frictions. And so we do see that there's some real opportunities there as Canada and other players in Canada look to do more around things like stable coins as we launch things like secured general collateral notes.

Those are all things that actually can be facilitated even better in a tokenized regime where we can use the capabilities of the depository to really cut the assets behind it to make them more mobile. So we do see that as kind of being the priority edge where there's going to be value for the industry.

At the same time, like the U.S. market is, we are looking at the application of what this tokenization of equities look like. I'm going to be candid. There is not material demand that we're seeing for that application because it actually is not as efficient as the core application of the centralized order book in terms of both liquidity, transparency and ease of execution.

And the Canadian market is not as liquid as the U.S. market. So if you start to tokenize that and you fragment and have fractured even more, the investor experience can be deteriorated. So there's not a reason for us to be at the front end of that, but we are doing the work to ensure that Canada can move in lockstep if that's the right move for the Canadian market.

And that's very consistent with the way I talked about around-the-clock trading. It's -- we're right next door to the U.S. We need to make sure the Canadian market remains competitive. And so again, at our conference next week, we're going to talk about the right way to move to round-the-clock trading, in a way that's both smart, thinks about the system impacts, thinks about the stakeholders, minimizes the execution cost and risk of making a change where there may not be liquidity earlier on.

So these are areas that are near -- kind of near to our hearts. They are priority areas from us. And as they turn into products or things that we need regulatory approval with, then we will actually make announcements in the public domain to that regard.

The next question comes from Steve Boland with Raymond James.

Just the first question, and I apologize if this is in the disclosure somewhere. But the litigation, can you talk what that was related to? And is that -- $80 million plus, is that actually cash in the door at this point?

Stephen, it's David. Yes. So regarding the reported settlement and really the related provision, these figures do reflect the conclusion of a confidential legal dispute, right? So while the specific terms of the agreement remain confidential, I can confirm that the settlement represents full and final resolution of the dispute. And the $7.3 million provision we noted, specifically covers the remaining obligations we have in connection with this matter.

Obviously, it's a nonrecurring event. Consequently, we don't anticipate any disruption to our ongoing business operations or further impact to future financial performance. And yes, the amounts are received. And really, that just assists us in, obviously, cash flow management going forward.

Okay. And gentlemen, you tend to pretty good about talking about the pipeline. Obviously, capital markets continues to be very, very healthy. Maybe you could just talk a little bit about the IPO pipeline, additional listings. I mean April was a busy month. Is there the same sort of outlook that you had maybe last quarter as well.

Yes, it continues to be really robust. Pipeline still has 1,500-plus companies in it. In addition to the IPOs that we actually talked about in the call, there were actually 32 new corporate listings that came on in the first quarter of 2026. Because there's a lot more ways to come on to our marketplaces than just IPOs. They can be through capital pool companies, qualifying transactions, things like that. There is some very strong sectors that are driving some capital raising in terms of mining. There is potential in the energy market with all the energy dislocation in the world, and we haven't seen that translate yet in terms of actual financing and the capital raised.

So all the core indicators are for continued strength going forward. And you're seeing it exactly right. We're seeing a lot of early dialogue on new issues coming to market, both from a new issue standpoint. And again, from existing companies raising net new capital standpoint. And so that $10 billion plus that was raised in the first quarter of this year would be a combination of both of those.

The next question comes from Graham Ryding with TD Securities.

John, if I could just sort of follow on that tokenization discussion, that was helpful what you provided earlier. Are you in a position yet sort of given the work you've done and what you've seen evolving in the other markets, U.S., in particular, to give us a sense of what part of your business you think could benefit if the market does move towards tokenization.

It sounds like post trade, you could be well positioned. Is that the right way to think about it? And are there some other areas of your business where there could be some attrition. I'm thinking maybe either some trading volume moves on chain? Or what does it mean for your clearing services if the market moves to an instant settlement model?

Yes. It's such an important question. In Canada, we don't really see this as a material plus/minus, and we can go through some of those pieces, but it's more of how is the technology that underpins the market continue to transition and evolve. And keep in mind that this has been a constantly evolving technology stack for decades in terms of how you trade, how you bring this to market, including the replatforming of clearing that we just completed.

So there are different views in terms of what it means from a settlement standpoint in terms of whether you move to an atomic or real-time settlement. The challenge with those models is they actually have real efficiency costs to the industry as well. When you start to move into an atomic settlement, you lose the ability to net. And that actually makes the capital less efficient in the marketplace. It raises the cost for players.

So it's not necessarily the right outcome. The blockchain or tokenized technology, it actually isn't necessarily -- it isn't actually necessary to move to a real-time clearing model. The reason we settle at T+1 is because the industry convention actually makes the industry work better and more efficient. You could actually go to a real-time settlement today, I believe, actually in our trade for trade capability in the clearinghouse, people could adopt same-day settlement if they chose to. So that functionality exists already. But again, it's less efficient.

In terms of trading, whether or not you tokenize or not at where you tokenize take assets off exchange, if you want to have those assets integrate then with the biggest pool of liquidity, they integrate back in from a trading standpoint. Because if you tokenize an equity, for example, and move it off on chain and then trade it chain to chain. Is that investor still getting best execution? Are they still getting the full price visibility? Are they still getting the liquidity of the central market and the ability to interact with the bulk of it?

So these are actually the kind of things that we need to think about as we look to how do you tokenize is, how do you bring the next-generation capability in, but make it interoperable with the existing capabilities. So it's got the best experience for the investor base, and we still care about things like best execution, investor protection, disclosure for public companies, those types of things.

So that's why we're trying to be thoughtful on the approach to doing it. So in all these cases, we do see them more as transformation of the underlying capabilities over time in a way that also interacts with existing capabilities, but not material changes to the underlying components of the franchise.

That's helpful. And one more, if I could, can't have a conference call without talking about AI. Can you share with us an update of just how you're incorporating AI or Agentic AI, both internally from an operations perspective but also perhaps just within your products and your market solutions, any development there?

Yes. I mean this is an area we continue to be very active on. We actually just recently stood up our new AI and enterprise data management team. So an engineering team that is actually focused on developing use cases in the firm and helping the firm to adopt different capabilities. We've made available essentially all of the major AI tools around software development in a box basis, so it could be used appropriately and you can use it in a risk management basis.

So you're not actually doing it in live production systems. And so we're making that available and we're using it in the development environment on multiple parts of the franchise. We've got unique pieces of actual development going forward in transformation of some of our businesses where we're actually using these tools in. I'm not going to actually talk to you about which specific technology pieces. I don't think that would be appropriate to do, but they are being used in multiple development teams.

In addition, we also have it in some of our data areas where we're using Agentic AI to actually create unique data sets from underlying source data. And then the general AI tools, we have deployed throughout the firm with over 90% participation from the employee base in terms of using productivity tools. So that is a big piece we continue to deploy, continue to make the right tools available and prototyping around different parts of the franchise, including things like corporate actions on the CDS side, as we were just talking about post-trade recently.

The other piece that's really top of mind, and I think you're going to hear this from more institutions as we go forward, particularly the ones that are big technology stacks like we do and especially around financial services is one of the real priorities around AI this year is going to be around more cyber defense.

So the most -- the biggest changes in terms of the AI world is in terms of things that are being done, that are developing or identifying cyber vulnerabilities and software like things like Anthropic, Mythos, and et cetera, et cetera. So we are looking at it and working in the industry as well, is that focal point of how do you actually then patch all the different pieces of third-party software that make up part of the franchise that have vulnerabilities that are being identified, how do we look at our own software stack in terms of legacy technologies that may be out of service, out of support.

There are actually AI tools that we can use to identify what some of those are and actually bring them into next-gen or potentially replace them. And then also, which is what are the other components of our environment that are insulated from this and ensure that we've got the right kind of doorways and locks in front of them to continue to make sure they're protected as this change happens.

So this is both -- to your point, the offensive strategy around how we do more, do faster, develop more, deploy tools, but also the defensive strategy to make sure critical infrastructure that we've got is real-time up to date to ensure it's well defended against the evolving cyber landscape that's now AI influenced.

Next question comes from Bart Dziarski with RBC Capital Markets.

I wanted to touch on Datalinx. It sounds like you're getting pretty good traction there in terms of monetizing your existing data sets. So just help us understand what's driving that? And then maybe more broadly, like as you build this mining and energy transition ecosystem post-Cboe Australia, like how does that expand the Datalinx' TAM, if you will?

Thanks so much, Bart. I'll take the first part of your question, then I'll let John touch on kind of what the acquisition of Cboe Canada and Australia would do for our data business. But really, yes, you're right, Bart. I mean, it was a very strong quarter for Datalinx, right? Professional subscribers grew by about 2.4% and that was really driven by a 1.4% increase on both TSX and TSX Venture professional subscribers. We also saw 3.3% in the Montreal Exchange and 4.5% in Alpha.

So really reflects the strong demand across the board given the current market environment. And growth comes from both existing clients increasing their subscribers, but also new logos looking for our proprietary data. So that's kind of the best color that I can give you. And then, John, maybe you want to talk about the expansion.

Yes. The expansion, particularly when we talk about Australia, it's really an ecosystem expansion. So -- and let me come to the data piece along the way there. So part of our hypothesis is the ability for us to assist in terms of the capital raising regime globally, particularly around the resource sector when we've got a combination of the 2 largest resource markets in the world and the ability to serve both.

And that -- we're already getting the right response from clients that kind of validates that proposition of clients that have come to us and say we need to be financing into that market as well, how can you help us? How can we be involved in what you're doing?

So as we build out and we work with the marketplace participants in Australia, we believe there's a lot we can bring to bear there, in terms of product and innovation that would be unique to the market. So our strength in junior capital around mining, the ability to do things like capital pool companies, junior issuances that grow and graduate, our unique capabilities that we're looking to see if there's an opportunity there for.

And in that, as the marketplace builds, there's already actually a strong data stream that's generated in the Australian market from this asset. We think there's opportunity for upside there, an opportunity, quite frankly, to kind of essentially co-distribute around the world.

So as it gets more scale and the data sets to get more interesting, the opportunity to start co-mingling that data with data that we've got here to do things that are sector specific to a global audience to take advantage of the really broad distribution capabilities that TMX has for data distribution globally, are all part of those kind of additive pieces that we looked at when we looked at the transaction or things that we can build to make the market stronger and more robust.

So your question is bang on. It's right in the wheelhouse of what we're working on. In the near term, the priority though is actually moving through the regulatory process, having the deal approved and closed so we can start to move ahead with a great team there.

Got it. Very helpful. And then just on capital allocation and the buyback. So great to see you guys stepping in and buying the stock this quarter. I think you're halfway through the program now. But just stepping back, like when I think about the core business, the free cash flow generation is strong, the leverage is in a good spot. And even on M&A, you delever quite fast. So more longer term, like how should we think about the potential for that buyback program to ramp up over time?

So that's a great question there, Bart. So the way we think about share buybacks, and if you call into our Annual General Meeting today, I'll actually spend a bit of time as I do each year, kind of on our capital allocation philosophy. And really, the share buybacks are right at the bottom of the capital deployment philosophy, right?

Like first, it's invest in the organic growth of the business, and so on and so forth, return capital to shareholders through our dividend program. But then really, we have an opportunity to organically or to inorganically accelerate our strategy, and that obviously would be capital deployed through M&A, but also to be opportunistic on share buyback program.

And historically, our philosophy has been that we'd like to participate in the share buyback program to at a minimum offset the dilution of the options that might get exercised during any kind of period. As you noted in this first quarter, it was -- we're close to halfway through the 1% normal course issuer bid or share buyback program. And we reserve the right to increase the ability to do other share buybacks later in the year or in future years.

At the end of the day, it's just another method for us to deploy capital. If we feel that a share buyback is actually the best method to return, returns to our shareholders, right? So stay tuned. I mean we continue to debate with our board and as a management team, kind of what's a normal course issue bid, if you will. And something in that kind of 2% range seems about right for a company of our size. And so we'll see, and it really is a factor of deployment opportunities and kind of the environment.

John, congrats on 40, and here's to 40 more quarters.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Mousavian for closing remarks.

Thank you very much for joining our call today. As a reminder, again, we have our AGM at 2:00 p.m. this afternoon, and we welcome you to join us. We know your valuable time is finite, and thank you for spending with us and until next time, goodbye.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Limited Conference Call. [Operator Instructions] The conference is being recorded. Following prepared remarks, there will be an opportunity for analysts to ask questions. [Operator Instructions]

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. Thank you all for joining us today. As you know, this morning, we announced an agreement to acquire Cboe Australia and Cboe Canada. Our press release and investor presentation for this call 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 remarks from John and David, we will have a question-and-answer session.

Before we begin, I would like to remind you that 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. Information concerning factors that could cause actual results to differ from forward-looking information is contained in our press release and the investor presentation. For today's call, I encourage you to refer to our investor presentation slides via the webcast link or under shareholder events on the Investor Relations section of tmx.com. Lastly, throughout today's call, the figures referenced are in Canadian dollars, unless otherwise specified and can be referenced in our investor presentation.

And with that, I will turn the call over to John.

Well, thank you, Amin, and good morning, everyone. Thank you all for joining us on short notice this morning. We very much appreciate it. And hopefully, you've had time to read this morning's press release. If not, we're going to go through all the details regardless. And as Amin said, we have provided an investor presentation that David and I will walk you through in a moment.

But I just want to say right off the top, and this is with emphasis this morning, this is an exciting day for TMX and primarily for what it means for our clients and stakeholders, both here in Canada and around the world. Today's announcement represents a bold step forward for our markets, the creation of a stronger Canadian champion to the benefit of our issuer and participant communities. It's to our employees, to our stakeholders, and it's a compelling opportunity that we could not pass up. TMX is committed to investing in Canada's vast potential, and we've done it for almost 175 years, led by our conviction that stronger, more efficient capital markets are good for our country's economy and all Canadians.

This transaction is an important investment in advancing our global growth strategy, expanding into Australia, a market that we know very well and where we see fantastic potential and delivering on our fundamental purpose to make markets better and empower bold ideas. Now my comments this morning are focused on the strategic rationale and what it means for our markets and how the components of this deal will help us to better serve our clients and stakeholders while strengthening the ability of our ecosystem to compete for global investment into the future. And this is also a good deal for our shareholders, another important step forward in pursuing our stated growth objectives. David is going to walk you through some of the specific financial details in a few moments, and then we will open up the call to your questions.

Now moving to Slide 2 of our investor presentation. I will take you through the transaction summary. As we announced in the release, the acquisition totals USD 300 million or approximately CAD 409 million and is subject to regulatory approvals in both Australia and Canada. Each asset is a vertically integrated business, offering trading, listing and market data products and services, each with specific attributes and features that we are well familiar with. The acquisition will create opportunities for intermarket linkages between Canada and Australia and bring TMX's proven operational expertise and commitment to innovation to serving Australia's market participants, corporate issuers and ETFs. It will also expand our presence in the Asia Pacific region by bringing together 2 world-leading mining and energy transition financing ecosystems.

In Canada, we are acquiring highly complementary assets, which will enable us to improve the client experience across core listings, trading and data products and services. And we are committed to working with our partners to ensure a smooth industry transition and most encouraged about the opportunity in front of us in the near and long term to make Canada's markets more attractive as a global hub for issuers, ETFs and institutional capital. As mentioned, David will close the presentation on the financial highlights, but the deal is expected to be accretive to adjusted earnings per share within the first 12 months of closing, excluding synergies.

Now I'd like to turn to focus on how this transaction positions TMX to better serve the needs of our global client base by capitalizing on 3 prominent secular trends. As I mentioned, Australia is a market we already know well, a market of similar size and makeup. Canada and Australia are already recognized as the world's leading jurisdictions for the mining sector, and we can do better together. This transaction will provide global mining companies, including those involved in energy transition with streamlined access to capital and liquidity in 2 major financial hubs. It couldn't come at a better time with demand for energy and critical minerals on the rise and not projected to slow down in the near term.

The second secular trend is an increased demand for market data and is driven by a ubiquitous factor that writes its own headlines, the relentless proliferation of AI. Market data clients stand to benefit from the transaction with enhanced data quality and price discovery by concentrating liquidity and unifying and top of book feeds and expanded product innovation with unified cross-border indices, analytics and high-value alternative data opportunities in Canadian and Australian markets.

And the ETF industry is a vital part of our stakeholder ecosystem, dating back to the invention of the first-ever exchange-traded index-linked product launched on the Toronto Stock Exchange in 1990. Over the past 36 years, we have worked in close partnership with providers in support of the ongoing evolution of the industry through key milestone innovations, including TSX listing, the first fixed income ETF and the world's first Bitcoin ETF. We also expanded to better serve the ETF community with the acquisition of VettaFi in 2024. Growth projections for the global ETF market are strong over the next few years in terms of both the size of the market and in overall assets under management. And the Australian ETF market is estimated to triple in AUM by 2030. Today's announced transaction will further strengthen our ability to address the needs of this important ecosystem into the future as it continues to grow.

Now turning to take a closer look at Australia. The next 2 slides summarize the key components of the business and the strategic benefits of the deal. In listing, trading and data, we see significant potential to continue to build on the success of this platform and create a more diversified venue of choice for issuers as well as trading and data solution clients. We work well with stakeholders in the region to introduce tailored innovative solutions and apply our expertise and experience to help build and strengthen the ecosystem.

And turning now to an overview of how our expansion into Australia will accelerate TMX growth by applying what we're really good at to a vibrant new market. And we're a global operator with expertise in running markets here in Canada and around the world. And together, TSX and TSX Venture, we ranked #3 in the world in terms of total number of listings, including more than 260 companies interlisted with markets outside of Canada. We are the leading mining marketplace in the world with over half of the world's listed mining companies representing more than $1 trillion in market capitalization. And we have an already established presence in Australia with 27 issuers listed on the TSX and TSX Venture combined. With this transaction, we are looking to build on the strength of these 2 ecosystems to create a North American Asia Pacific hub to serve clients in both regions better, connecting issuers to innovative products and deeper pools of liquidity and participants to diversity of tailored trading and data solutions.

Now in Canada, we're adding a diversified multiproduct platform, including listings of CDRs, ETFs and corporates, an advanced trading business with differentiated pricing models, maker-taker and inverted markets as well as dark and block trading solutions and comprehensive data access and connectivity to over 500 global clients. Now as I indicated in the outset, today's announced acquisition fits squarely with our purpose to make markets better and empower bold ideas.

For our domestic clients and stakeholders, better markets means making Canada a more attractive and competitive destination for global trade flow with deeper liquidity pools and enhanced price discovery; enhancing the capabilities of Canada's leading dark pools, MATCHNow and TMX dark to create a premier destination for unlit execution in Canada; establishing a unified dedicated listing platform for alternative investment vehicles, including CDRs and leverage ETFs to attract specialized issuers; and driving high-value proprietary trading data directly into TMX Datalinx, Datalinx and fueling TMX VettaFi indices and indices opportunities. And finally, reducing duplicative connectivity costs with a unified technology stack and simplified processes. We look forward to working in partnership with our clients and stakeholders as well as with the OSC, our world-class regulator as we bring these companies together to make Canadian markets better.

Now before I pass the call to David, I want to thank everyone at Cboe to Craig and your whole team for working together with TMX to help ensure a smooth transition for our clients. We are committed to building on the considerable value that you have created in these businesses to deliver the markets, the solutions that they deserve. I look forward to taking your questions at the end of the presentation. Over to you, David.

Thank you, John, and good morning, everyone. In closing, I want to take a few moments to present the financial highlights of the transaction. We are acquiring Cboe's Australia and Canada operations for a combined USD 300 million or approximately CAD 409 million. For the combined business, we expect the overall top line growth to be comparable to TMX's financial objectives of strong growth over the long term. As a new opportunity, we expect the revenue growth in Australia to be more in line with our high-growth businesses, and the Canadian business is expected to track market growth over the long term. The implied total valuation is around 16x the 2025 adjusted EBITDA, and we expect the transaction will be accretive to adjusted EPS in the first 12 months of the closing date before any synergies. The transaction will be funded through a combination of cash and debt, and we expect to maintain our current target leverage of 1.5 to 2.5x adjusted EBITDA. At December 31, 2025, I'll remind you,, we were at 2.2x.

The acquisition of each asset is subject to regulatory approvals and customary closing conditions in their respective jurisdictions. The acquisition of these exchanges in Australia and Canada to vertically integrated businesses with proven expertise in serving a client base we know well will help accelerate TMX's long-term growth strategy and the pursuit of our transformational objectives, namely growing revenue derived from outside of Canada from recurring sources and the revenue contribution from our Global Insights segment. TMX will be well positioned to capitalize on powerful secular trends, including the global growth of mining, growth in ETFs and the increased demand for high-quality market data. This transaction will create an enhanced client experience for our listings and trading ecosystem by simplifying markets, reducing operational costs for clients, deepening liquidity and building a gateway to extended into market opportunities in the Asia Pacific region.

Now to echo John's comments, we are indeed excited about this transaction for all of the strategic and business reasons we've outlined this morning, but most of all, for what it means for Canada's markets. Guided always by our purpose, this deal makes markets better and represents a clear and powerful step forward. We are confident that this transaction will create a more truly global enterprise to the benefit of the vast and growing client and stakeholder communities we serve as well as our shareholders worldwide.

With that, I'd like to turn the call back to Amin for the Q&A period.

Thank you, David. Drew, would you please outline the process for the Q&A session?

[Operator Instructions] The first question comes from Benjamin Budish with Barclays.

Maybe first for David. I think in the presentation, you guys said the purchase multiple did not include any synergies. I was wondering if you could talk a little bit about what those may be. I think there's a fair to assume that in Canada, there's a lot of natural overlap, maybe a little bit less so in Australia. You obviously talked about revenue opportunities. So just curious if there's any more details you can share in terms of what that may look like as you integrate these assets.

Thanks, Ben. Yes, to be clear on my comments, right, what I was really referencing was the 2025 adjusted EBITDA kind of as a reference point for the multiple. And the fact that without synergies, this will be accretive within the first year. But we expect there will be meaningful cost synergies in Canada, resulting in efficiencies and savings for our clients. And obviously, there are a lot of revenue growth opportunities, including growth in mining, and an increased demand for data and the growth in ETFs. So the acquisition of obviously, both the Australia and the Canadian business are obviously subject to regulatory approval. But we'll give you more details once we close on the transaction to really dig deeper into any additional synergies.

I appreciate that. Maybe just a quick follow-up strategically. You talked about in the presentation, this provides a pathway for more expansion into APAC. It seems like there's a lot of natural overlap with Australia, given, as you mentioned, the size of the market, the kind of average issuer type. How do you see this expanding elsewhere into Asia? Maybe I'm getting a little bit ahead of myself. I imagine there's some work to do here first. But just curious, do you see that translating to other geographies in the region? And should we think that, that is perhaps a next leg of the strategy here?

Well, this is John. Thanks, Ben, for the question. I think you're both ahead of yourself, but you're also on the right track. When we think about the global strategy and the global the expansion, I almost like to use the word that it's more of a hyper-regional strategy, where we really look to identify what are the regions in the world where we can bring value, competitive advantage where our unique attributes create value for the ecosystem there. And Australia is a natural one for us in that way. So not only about the pieces we talked about in the call, we've been active in Australia from a business development standpoint for years. We have resources on the ground that work with listed issuers that work with the sell-side community. We've had the ability to engage with the buy-side community as well. The work we did on the Montreal Exchange in terms of extending to Asian Pacific hours a number of years ago was very much around making sure we could support those traders in that region that were hedging or looking for the Canadian dollar exposure.

So as you said, there's a lot for us to do just in the region there in terms of really working to build out more of the cross-border ecosystem for trading and clearing, for looking at how we support the development of product. I think we are a complementary player in the region. This is also a marketplace where the energy sector is opening up more like it has in other regions like Europe, like in Japan. As you know, through Trayport, we have assets there that could be very valuable to that marketplace as it opens. We already operate in Singapore for that same reason. So you are on the right path. Our focus in the near term is really about building here for the ecosystem for the client base and really meeting the moment. This is a moment, particularly around the resource sector around countries like Canada and Australia to punch above their weight, and so we're looking to facilitate that, and that's going to be the highest priority. But as a building block to do more in the region, it's absolutely something we were thinking about, and it's why we made the strategic investment.

The next question comes from Etienne Ricard with BMO Capital Markets.

Congrats on the transaction. Why is an expansion in Australia the right move at this point for TMX? My initial presumption is that the -- that driving revenue synergies and capital formation may be a longer-term benefit. So why pursue these transactions as opposed to data businesses you've acquired in the past that have delivered double-digit organic growth?

Yes. I mean that's a great question. We spend a lot of time on that. It's not a question of either/or. It's a question of how they can complement each other. And as you mentioned, the ability to grow long term around capital formation and supporting additional listing activity, ETF activity is a long-term strategy, but you have to start. And this investment helps us really get off the starting line. And so that is the marathon and not the sprint. But it also recognizes that as a vertically integrated marketplace, there are data opportunities here as well that are quite meaningful. And in fact, when we look at the mix of the revenue profile, these businesses are actually tilting more to the recurring revenues than the average of our existing business.

So it actually is giving us a footprint into that data distribution opportunity in the region that is harder to do organically. So we really see it as a yes and as opposed to a yes or and that's how we think about it in terms of being both complementary. And if you think about the other parts of our ecosystem, you said the point kind of like why now because we actually did look at some of these opportunities a number of years ago. But with the expansion of our franchise and having capabilities like we have in VettaFi around the ability to build global indices, we can do more here than we could have done in the past. And so for an ETF market in Australia that is on a different development curve than where we are in North America, that ability to provide solutions and index product at an earlier stage is quite compelling. So that's where you get the confluence. It's both the actual marketplace opportunity and supports the data and industry opportunity on a global basis as we go forward. So that's -- you got why we're excited because it hits multiple points of the strategy that way.

And to circle back on VettaFi and ETFs, how meaningful is the cross-selling synergy potential here?

Yes. I mean it's both cross-selling and it's also just where we are in market development. So if you look at the market there as a market similar size to Canada, but not at the level of development in terms of ETF product, ETF variety, number of listed issues, assets under management. That's where we talk to the expected growth potential on the AUM basis. So it's an the earlier stage of development, the opportunity to work with clients that we already have in Canada, in the U.S. and now in Europe that are also building global product in Australia, that is a net benefit. We're a known player. We are a trusted partner in that. So the ability to build new products to create new indices to help build new issues that come to market is again, when I say we're going to expand globally, it's where we have expertise that we can add value with, and that's clearly an expertise we have.

The next question comes from Aravinda Galappatthige with Canaccord Genuity.

Congrats, John and David, on the transaction. Maybe just start with sort of helping us understand sort of the Australian market, the competitive conditions and the market conditions there. Obviously, Cboe Australia seems to have a pretty decent starting point in terms of market share around 20%. Maybe just talk to the trajectory there and sort of the competitive dynamics vis-a-vis Canada when you think about sort of the competitive dynamics against the incumbent. Any sort of color on that front would be helpful.

Yes. And I mean this is where we've got a really interesting experience in history because as you know, the Canadian market has a very open competitive model. It's been that way over 20 years. With new announcements, we have up to 19 venues that compete in the Canadian market, plus we compete across border with the largest liquidity pools in the world. So we're very well versed in operating in a model like that and understanding how you focus on driving value to your users, to your clients and that actually a lot of these markets can be complementary with each other. So we go into this with those types of eyes open and that level of experience in the Australian market, which is, again, very much now open to creating that more competitive dynamic, which really fosters more innovation and product creation, but it's less developed than where Canada is today.

And we've got to give a lot of credit to the work that Cboe did in the region in terms of not just building market share, as you said, but also laying the groundwork around the capability to do listings, working with the regulatory community, working with the clearing house and the ASX to be able to provide that capability. So a lot of the building blocks are there for us to then build on top of with the expertise that we have. So I think it's going to be a very exciting time in the region. I know from our own experience that competitive ecosystem creates innovation. It brings more capital to the market. It brings more players in. It makes the market more interesting. And so I think it has the potential to be very positive in the region.

And just a quick follow-up. In terms of the data solutions, outside of VettaFi, given the similarities in the markets between Australia and Canada and obviously, the energy and mining focus, are there sort of data and analytics opportunities along the lines of Datalinx or more advanced versions of products that are emanating from Datalinx that can prospectively be ideas for you as a result of this going forward?

I mean, absolutely. So building block, this will open up other opportunities for us to scale things in, but I don't want to speculate on future acquisitions at this point. We want to focus on the story today.

The next question comes from Stephen Boland with Raymond James.

I apologize if this is in the disclosure, but I'm just trying to -- the timing of closing would be the first one. Has that been laid out somewhere?

No, not laid out at this point because in both cases, these transactions are reviewable by the authorities in the regions. In Canada, this is one that would be reviewed by the Canadian Competition Authority as well as our securities commission, so primarily the OSC. In Australia, this would be subject to review by the Australian commissions. And so upon approval by the local authorities, we would be closing immediately after approval. So we're not able at this point to give time line on that, and we'll be doing the filings in the region immediately. What I can say is given that we've got very strong regulatory relationships in Canada that we've had introductions to the regulators in Australia as well, our intentions -- we've already had the opportunity to telegraph what our intentions are in both marketplaces. So this won't come as a surprise to anyone on announcement.

Okay. That was my second question, actually. So that's great. And with these 2 entities, was this a package deal that someone had to take both? Or there's 2 processes going on?

I can't comment on any other bidders in the process. From our standpoint, we definitely designed this as a package because we saw the value that we could create for the clients and for the ecosystem by being able to do these things together. The transaction is designed so that the 2 elements can close on their own paths. So the regulatory path may be different in each region. And so you could have a bifurcation as to when each piece is closed based on approvals in the regions.

Okay. Maybe I'm not sure how much you can say, but like obviously, there's been a lot of rumors about the Cboe here in Canada, but I don't know if I've seen anything in Australia. So was that something that you wanted in Canada and went to them and said we want Australia too or that was up for sale. I'm not sure how much you can comment there.

Yes. If you go back to Cboe's disclosure, they did announce that they were looking for bidders for both of these assets, and we were very interested in doing both with them. And candidly, where they -- Cboe is going on their strategy and where we're going on ours, I think this is the best possible transaction of getting these assets into the right home going forward.

Okay. And then second one for me. Just what does this do in terms of like with both close, is it the revenue breakdown, I guess? I mean, I guess we know that like how much does this add to Global Insights? Obviously, there's no derivative trading, but equity trading, clearing and then basically your capital formation. So I'm just trying to get the breakdown of that combined revenue a little bit generally.

No, it's a good question, Stephen, and it's David here. So obviously, we'll provide more details on the financials of the businesses and really that kind of granular breakdown once they close. Obviously, the financials will be included in our quarterly reporting when we close on these. And obviously, at that time, we'll provide you some granularity on revenue contribution and what it means to each of our segments, listings, trading and data. So for now, we've given high-level enterprise numbers, but that kind of granularity will be forthcoming upon closing.

The next question comes from Jaeme Gloyn with National Bank Capital Markets.

Yes. The transaction, strategic rationale really seems to focus more on the Australian opportunity to build out that business in VettaFi?and data products. There's been opportunities to buy the assets that Cboe owns in Canada, the MATCHNow, the Equitas in the past, and it's been something that TMX has been hesitant to transact on. So if you could talk specifically about Canada, perhaps what's changed? What's different in this deal structure that makes you excited about acquiring the Canadian market share?

Yes, James, it's a really good question. So I'm glad you actually asked that one because we're equally excited about both parts of this. And there are 2 pieces that are a bit different than when we looked in the past. And there are different assets within the Canadian franchise that are interesting to us. So the MATCHNow dark pool asset is actually one we looked at quite deeply in the past. I would have liked to have been that part of the TMX franchise. It is very much complementary to us in terms of the capabilities that it provides to the marketplace. So it is additive in terms of what we can do for the community. And even the development of the lit market has evolved over time from where we were in terms of providing different unique product opportunities.

There's different unique listings there that I think are going to be complementary to what we offer. And it's going to allow us to really start to segment the different markets to provide more specified needs to the industry. But the important piece in there, and I don't want to get this lost that there is a moment right now in terms of building stronger Canadian champions and building an organization that actually can be more efficient for our users throughout the community. So by moving to a transition of moving these platforms onto a shared delivery model from TMX, we're going to have the ability to really make the industry more efficient in Canada for all of our users.

You think about connectivity costs that are duplicative, data center costs that are duplicative, access fees that we'll be able to harmonize and eliminate. We expect to actually save the industry money, make it more efficient. And at a time, in terms of the global ecosystem, making the Canadian market more efficient and more competitive is a very compelling opportunity. And so we really felt that this was something that we couldn't pass up that chance to do this to make the Canadian market stronger at a time where we all need to be focused on focusing on competitive advantage that way.

And just to follow-up on that, the efficiency side of it, the duplication side of it. It does sound from your commentary and the tone that most of that you'll look to sort of pass through to the marketplace as opposed to pulling into margin expansion. It sounds like this is the same, this is very much about improving the overall market and maybe you clip a little, but not necessarily extravagant synergies to come through this as you look to sort of make that a more competitive marketplace overall.

Well, I like the words you use here, extravagant synergies. I've never put that in a release before. So the synergies are very meaningful because we really -- and we've got a very strong track record on efficiently operating marketplaces. We've got a history of being able to do this in the past in a way that's really impactful. So I mean, Jaeme, let's be fair, it's both. We will see efficiency in terms of how we operate the platform, how that translates into the efficiency into the margins. And there will be a meaningful piece that goes directly in terms of the users, both in the fees that we charge, but also in the costs that they incur to connect, which aren't necessarily fees for us. So it is both that we create value in there.

And so it's not a lot of opportunities that you can have in terms of investments to have both meaningful client save impact and meaningful opportunity within the combined entity as well. So long term, once we get to closing, we'll be able to share more at that point. And the reason we can't share more now is because we have to get to a point where we get to a regulatory approval, which also includes what is the design of how the marketplaces all fit together. And it would be premature to do that without having that direct conversation with our regulators.

Yes. Fair enough. And then last question is just, obviously, there's a lot of products and capabilities that are similar across platforms in Canada. How much risk have you baked in, in terms of like leakage in terms -- in that -- in those volumes and that data opportunity to other players in Canada with similar capabilities.

Yes. We've absolutely built that into our thinking. And we've also built into our thinking the fact that within both the markets we operate today and the markets operated by Cboe where there are some elements of redundancy that the solution might be that we don't actually keep every single small venue, but we port some of that functionality into other venues. So the objective is to maintain all the functionality for the industry in the way that's going to be the most efficient for them to interact with it.

The next question comes from Graham Ryding with TD Securities.

Just maybe get your thoughts on the competition issue here from a regulatory perspective, why you think this deal will get approval. I'm just thinking, I guess, along the lines of the increase in your -- potentially increasing your equity trading market share.

Yes, I appreciate the question. And just off the top, I want to make sure that I'm being very respectful and not getting ahead of any of the authorities and the important work that they need to do. But we wouldn't have brought this to the table if we didn't have very strong confidence that we could see this through to approval. And the reason we have that confidence is a couple of key points that I'll share with you today.

One, as I mentioned earlier, we have a track record of being able to do this. And in fact, the last time that we did this with the bringing in of the Alpha market in 2012, that was actually in a time when there was a lot more concentration in the Canadian market than there is today. So we actually have a broader market with more players. So that impact is smaller than it was in the past when we had other transactions approved.

The second piece and the most important piece is this market is not Canada. It is a North American and/or global market. And we are competing with the U.S. exchanges every day for capital and for flow, for listing activity, for capital raising. And so that's where we need to look at the lens in terms of what the real competition lens in terms of how we have to think about these things.

The third piece is when it actually comes to Canadian venues, this is actually one of the most open markets in the world in terms of supporting new entries. And that has been a position in terms of our regulators for years. It is something that the OSC does very well in ensuring a competitive opportunity for other players to perform, provided they meet the appropriate standards in the marketplace. And there are also things that we do to actually facilitate that competition that you wouldn't see in other countries.

So as you know, we operate the clearing house for Canada. We clear for everyone that has a regulated approved marketplace at no cost to them. We operate the information processes for Canada, which means we actually create the data feed distribution for firms that wouldn't have to do it on their own. And CIRO, our market regulator, provides that regulatory capability for new marketplaces, again, at no cost to them. And for those who don't know, that's very different than going to the U.S. market. And we know this from experience, having launched the ATS there, where a lot of those capabilities as a market operator, we paid for out of pocket as opposed to the Canadian market, which actually you get direct access to.

So then those 3 pieces are why we have a lot of confidence that there's -- that this should be an approvable transaction. And again, at the end of the day, it creates more value for the Canadian industry. And I think that is the most important piece is that when you're flowing benefits back down to the participants and to the users and creating more efficiency for them, that's a value-add transaction for the country. So I hope that gives you a lot of context in terms of how we think about it, but we think this should be very positive.

That was helpful. And then my second question, if I could, is just can you talk about -- you talked about your growth expectations. Can you talk about maybe what the growth profile of these businesses was in 2025? And also, like what is the recurring revenue mix here? How does that compare to your existing business, which I think is about [ 53 ] in 2025.

We'll give you a couple of highlights. For 2025 for both the businesses, they would have been growth rates that would have been in our high-growth bucket. And the revenue mix would tilt more to the recurring, more to the data than our average for TMX today.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Mousavian for closing remarks.

Thank you. If you have any further questions, contact information for Investor Relations as well as media is in our press release, and we will be more than happy to get back to you. I know your valuable time is finite, and we thank you for spending it with us this morning. We look forward to speaking with you again on May 5 following the release of our first quarter results. Until then, goodbye.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

All right. Thank you, again, everyone. Last one here before we get to the exciting launch presentation from Stefan. We're joined -- I don't know if we've done this before, but -- two is better than one, I guess. So we've got on my right here, Luc Fortin, President and CEO of TMX Global Markets. And then further to my right, David Arnold, Chief Financial Officer with TMX Group. Gentlemen, thank you for joining us.

Thanks for having us.

I'll start with you, David nearing the end of Q1 '26 here. How is this quarter shaping up for TMX and relative to your expectations?

Yes. So I mean, we report our results for the first quarter in a little over 7 weeks or 8 weeks, first week of May. We do publish our stats, which I know Jaeme here is very keen student of. And really, we're very pleased with what we saw in January and February. And really, what I'd like to do is just talk quickly through the kind of 3 key parties of the business that will give you a flavor.

So I'll start with capital formation. I'll then hand it to Luc to touch on markets, which he oversees and then I'll end it off with global insights. On capital formation, a really strong January and February from our stats, a lot of secondary financings some IPO activity, early green shoots. Some of the activity in the early part of March with what's going on in the Middle East, I think, has taken a little bit off on the pipeline.

But the pipeline remains really, really strong as it relates to IPOs. What's been very interesting is our Corporate Solutions part of that business has really benefited to a lot of corporate actions, some net interest income pickups and so forth. So stay tuned for a new report in, as I said, 7 weeks or 8 weeks. And then maybe, Luc, just touch on markets.

Yes. Obviously, the beginning of the year where the Fed was a little tentative and central banks were a little tentative in terms of rate movements, saw derivatives be a little quieter in January, but then with the -- all the both constructive and destructive volatility that we've seen since the markets have just literally exploded our derivative business is doing exceptionally well.

Our equity volumes are kind of similar to the levels we were seeing during the pandemic. So the only concern I have is around -- I often talk about the dichotomy between constructive and destructive volatility. And if we can get back to having a little bit clear line of sight in terms of where central banks are going and whatnot, that will probably appease investors. If the war continues to remain protracted, we'll see globally, what kind of impact that has on investor appetite.

Yes. And in Global Insights, I mean, which is really primarily the recurring revenue businesses, Datalinx continues to have a strong performance outlet. And it's really based on the jumping off point, right, Jaeme, where we ended Q4. Verify, our assets under index continues to grow and we're really proud of how that is performing as what we refer to as a high-growth business, which is high singles to double digits.

And then finally, the business that we've owned and operated since late 2017, which is Trayport. Our natural gas and energy trading platform out of London continues to perform really above our expectations of high single to double digits. So we're off to a good start.

Good to hear. How about we jump into AI right away. Obviously, some investors, the share price perhaps reflecting that AI eventually some how it disrupts parts of the market data and analytics ecosystem. So how do you think about the risk for TMX, particularly within that global...

Yes. So it's interesting, Jaeme. I mean, we see more opportunity than risk. And we never want to say that the market has got it wrong, but we think that they got it wrong as it relates to our business. Sure, we're in some businesses where small elements could be disintermediated but we can actually do that to ourselves to do it better, faster, cheaper.

The real secret source is most of our franchise is pivoted on what we call proprietary data. Right? So if you just break it down, right, like Trayport, it's bringing together a network of brokers, traders and exchanges. That data is proprietary in that environment.

Could you use AI to replicate the software? Sure. But without the network connectivity, the software is meaningless. And then the same thing would apply to the other parts of our business, right, index and benchmark through VettaFi.

Yes, you can use AI for a lot of the regression testing in the past, but the active portfolio recalibration and the secret source of how we will market and promote that is less AI disruptable. What we do see internally though is that, as I said, there's more opportunity. We think that there's a big opportunity for us to be more productive as a company.

Our focus internally is on doing more with the same so rather than increasing headcount, and there are certain parts you might have to increase headcount. But a lot of the need for us to scale up can actually be done now using AI tools.

We're a big developer, shop, as you know. I mean, we developed a lot of software in-house. So we're using a lot of the AI tools in there, too. So I would say the -- I'm being caught up in that broad swath of market correction. We consider it to be a little bit premature and unjust, but time will tell.

Yes. Yes. And you mentioned data as being the key moat here. And so the question around data then is whether improvements in AI and trading automation, analytic capabilities, does that actually increase the demand for high-quality data such that TMX has? Or on the flip side, does it risk commoditizing parts of that data ecosystem?

It's a great question, Jaeme. So really 2 parts, right? The first part is, the demand for the data continues to increase. And there will be an evolution of the business models as to how data is being charged.

We've lived through this before when we went from a very much a point-to-point solution as it relates to data with the bulge bracket brokerage and trading purchasing data from us. And then the advent of algorithmic trading, high-frequency trading. So those business models continue to adapt. And I think it will be the same here.

But the point that you touch on, which is really the key one is most of our clients are looking for raw data from us, whether they consume it using humans or artificial intelligence versus us actually using artificial intelligence to generate insights and then selling those insights because most of our clients want the unique ability to generate their own insights to develop their own trading strategy, right? And so that's why we see it more of an opportunity and less of a disruptor.

Yes. The other theme that's out there is tokenization and maybe, Luc, this is probably better for you. If tokenized assets become more widely adopted, is this something that you see TMX operating that type of infrastructure, trading of tokenized assets? Or again, the risk is do new competitors, new entrants emerge that can provide those capabilities?

I think when you look at tokenization, you want to sort of categorize that into 2 parts. One element of tokenization, where I think we have an absolute right to play is one where you're looking at creating means to facilitate payments. I think there's probably a lot of friction in post trade globally.

There are financial institutions that are having issues during large global firms that are having the need to move capital around even within a variety of different balance sheets. Tokenization solves for a lot of these different things. Tokenization in the realm where it exists today, where it's happening in Asia and it's not a true replication of existing assets.

I think that creates a bit of a problem because essentially, you're fragmenting liquidity, you're taking liquidity and you're taking it out the realms of where you would use these different securities to kind of gain leverage. I'll use another example.

The other example is, one, when you talk about seeing Apple trading somewhere in Asia right now. What people don't realize that it's trading on going base or trading on these other digital platforms, they're not a true replication of the underlying asset. And very much like NASDAQ we're big believers you need to think about the issuers here.

And when someone chooses to invest in Apple, it's not only to gain upward or downward exposure to it, you really want to have -- there's corporate actions. There's a whole series of things that are not being factored in. So the work that some of our, I guess, our competitors or cooperators in the U.S. are doing is really taking a firm stance and working with the regulators around let's establish what the rules are around tokenization.

And the SEC has been pretty clear. These tokens are securities and DTCC has worked with -- coming up with some very interesting alternatives. And as you know, we set aside the most liquid market in the world, so to have significant market structure differences to them never works out well for Canada.

So I think having the ability to follow what the U.S. is doing around tokenization. And what DTCC is doing is they're allowing these tokens to be replicated and they connect back to the actual registry. And what that fluidity does is it ensures that you're not fragmenting liquidity. So imagine Apple gets tokenized, you buy the equivalent of 100 shares of Apple you can trade it with someone.

And when you trade at someone on payment rails, different payment rails in the traditional DTCC network, it will connect back into the registry and actually recognize this. that's great innovation. And we believe that that's probably a path that Canada will follow along.

But as far as the other efficiencies that it brings around payments, you need to be able to pay that Apple, so some folks don't feel comfortable in paying it in bitcoin. Having these different tokens that have assets that could be used as a means of payment, I think, serves a purpose.

And we, as sort of the central registry, the operator of the central registry in Canada in CDS and CDCC I think, leads to some great opportunities for us, and we're working very, very closely with our U.S. partners to see what the best solution will be for the market.

Yes. Yes, still a lot to work through, but TMX is certainly in the middle of that. Maybe a question for both of you guys. With AI tokenization, do you see this -- maybe this is more for David, but do you see this more as a driver of consolidation of what could be fragmented global markets capabilities or infrastructure that is coming about? Is that an opportunity for consolidation?

Possibly. I think the -- you really got to look at the asset classes first, Jaeme, right? Like I think on cash equities, when we talk about tokenization, it's not something that we're seeing a big institutional demand for, right? But as Luc touched on, I think that there is a ton of collateral management and funding and liquidity friction in the system that tokenization absolutely can assist the large bulge bracket institutional players.

So I think it has a place, but it has a place in the right spot. And then when you layer on AI, the jury is out as to how some of our clients are going to be using AI, right? Are they going to use AI to really replace their traditional algos. It's really now a self-sustaining living, breathing, if you will, algo that is machine learning based with generative AI on top of. That's to be determined.

I mean any of our clients when Luc talks to them they're skeptical that they can actually get their hands around it. One of the key things you're doing as a trading firm, when you do algorithmic trading is making sure that it does what your investment hypothesis is intended to be.

And if it is being done, where it's actually thinking itself what you kill switch and how do you actually manage that? But Luc, I know you've got some thoughts about this whole ecosystem, too.

Yes. I think to imagine greater consolidation as a result of that, you're getting a bunch of innovation, and innovation is going to bring sort of new parties bringing new perspectives in terms of how you can use these new instruments. So I think competitiveness is great but I think you need rules of engagement.

And we're finally seeing some rules of engagement and the U.S. administration is certainly putting a lot of pressure on modernization and thinking sort of outside the box to bring greater efficiencies to the marketplace.

I've had and we've had the privilege of running markets for 175 years next year for TSX and 150 for MX. Innovation is in our DNA. So to see innovation happen, it just can't be innovation for innovation's sake. It has to be innovation that serves a better purpose. We'll be supportive of that. And I welcome this new innovation that's coming to market, we'll work very closely with regulators to make sure that the public interest mandates that we hold dearly are serving our clients well.

Yes. Okay. I think that's it's a good round of those topics. Maybe let's switch to some of the interesting growth strategies and initiatives that have been underway. Probably for you, Luc, the AlphaX U.S. that was launched over a year ago now, volumes are doing well.

Maybe give us an update on how that platform is performing versus expectations. And then what are the priorities? What are you looking to do here in 2026 for the AlphaX U.S.?

So Alpha X U.S., for those who aren't familiar with this platform, this is our inaugural launch in terms of entering the U.S. equity market. And there are a variety of ways that you could do this, and we chose to be innovative to kind of compete on a different realm. So Alpha X U.S. caters to the segment of the market that is really focused on quality of execution.

And this quality of execution market probably stands around 7% of the ADV that trades right now. Our view is that it will grow beyond 10% so when this thing launched early in 2025, it actually exceeded every benchmark that we had set for ourselves in terms of where some of our competitors that are in that realm are doing at the same period of time as we're doing.

So a very, very good year. This is a long-term investment for us. So we're not watching this to say, hey, tomorrow, we're going to be at the maximum we can be for an ATS at 2%. We're seeing very good adoption. There is great engagement with the type of functionality that it brings the Alpha X hub allows how participants can kind of interact with each other.

And that brought a lot of interest to bear. So we're seeing great onboarding, great uptake in terms of the innovation. We were recognized for a couple of prices in terms of technology. And again, just remembering that when you go and you innovate and you disrupt a different market, this is not in your own jurisdiction.

But we're using this as a testing round, right? The U.S. is the most liquid market on the planet, and we've got new technology that was built for us that is actually driving this platform and longer-term plans are to take this technology and put it back into what drives all of our other markets here in Canada, including our derivatives business.

So it's very exciting to see all of this innovation and what it's done for us. And there are new books that are being contemplated, additional functionality that will be added on to this.

And just to give the audience a sense of the scalability of this business, and that's the beauty of when you're a small global market operator and you're going into the largest market.

If we're successful with this, if we reach 1% of that 10-plus percent addressable market, that represents close to 50% of the entire revenue stream of our equity business in Canada, just to put things into perspective. So it's a -- we think it's a unique way to kind of enter a new market without just buying market share and trying to make a big push but that's one of the elements that we have in mind in terms of future growth for us.

What's really interesting there, Jaeme, is we've actually had Luc and I want some business development trips recently in the U.S. Some of the clients of Alpha X U.S. are now talking to the folks in Canada about trading in Canada, too. So an unintended byproduct, that's really a good outcome.

Yes, absolutely. And I mean you gave us some revenue sizing margins roughly similar to Canadian equity markets. Is that...

I think that would be fair. Yes, right.

One of the other initiatives post-trade modernization of heavy lifting over several years, but now it's almost been a year, I think it was this time last year it was launched. So what have you seen so far in terms of benefits operationally?

And then I think more importantly for investors in terms of new revenue opportunities here for investors.

I mean, I could not imagine being in this environment with our old mainframe. Like imagine as this tokenization elements, the interaction of the digital world with the traditional world in the state that we were previously would not have allowed us to feel this comfortable in this type of environment.

And we're actually ahead of the pack relative to a lot of like DTCC they're doing this, and they're in the midst of their own modernization. OCC is the same thing. There are a lot of other global CCPs that have not done this modernization. So for us, it took a while, but we got there.

And I think the incremental efficiencies of a much more modern platform is to reassure investors that this is obviously very secure. You're no longer running on mainframe. There's no longer any operational risk so we're very excited at the prospects of future opportunities.

Keep in mind, CCMS, which is the Canadian Collateral Management Service that was also launched last year, coincidentally with the launch of PTM. That is kind of -- imagine the new plumbing of the Canadian financial markets, the ability to move collateral around in a more efficient fashion, had we not modernized our post trade or CDSX. This is the main driving engine that powers a lot of the CCMS functionality that we've enabled.

So that's just one example of probably many different things that we'll be able to do with this new modernized refresh for structure it's not sexy. It's the plumbing, it sits behind the walls, but it's so critical to Canadian investors.

And what's interesting here, Jaeme, and baseball seasons upon us. So I'll use our CEOs analogy, there are a lot of singles to be hit here. They're not home runs and massive needle movers, but you start adding up all the singles and as Luc is rounding out in that CDS ecosystem, what we can do to actually help individuals manage collateral.

We touched on the tokenization, how we can help ensure that liquidity isn't being fragmented, I think is going to really pay dividends for us in the next few years. So I would watch the space quite closely.

Yes. Somethin maybe for '27, I guess, is kind of the idea that I'm picking up here. Just looking at the time here, maybe let's step up a little bit, get out of the weeds, TMX has long had the objectives of driving revenues, 50% outside of Canada, 2/3 recurring revenue, half coming from global insights. So walk us through that path and those targets. And then layer in how M&A is going to help to achieve those targets.

It's a great question, Jaeme. So in the interest of time, I'll try and be as brief as possible. I think each of those 3 transformational measures in quotes as we refer to them, they had a specific objective, right?

So the -- our business, as Luc said, over 170 years old for the vast majority of our existence has been predominantly a Canadian business, which means we go as the Canadian macroeconomic goes.

And what we decided as a management team and the Board that we wanted to ensure that we were at least a little bit more balanced so that geopolitical movements were really balanced in our results, and we weren't skewed one way or the other. So hence, the objective of, let's at least have greater than 50% of our revenue outside of Canada, right? And we're around 51% right now.

We have no aspirations to grow that number much, much higher because it will literally be a function of how our Canadian businesses grow in the Canadian macroeconomic environment, how our non-Canadian businesses grow outside of Canada, right? So that's kind of the objective of that one, which is really to balance the earnings and at least balance the risk profile.

The second one, which you touched on, which is really our Global Insights business, we would like that business to be half of the revenue of the organization in part because we saw the greatest opportunity for accelerated growth in that area, right?

We saw ourselves not being in the index and benchmark space other than the work that we do with S&P. And so we said there's a lot of thematic bespoke work. That's an area we can play. If you're going to play in a whole new part of a vertical, that vertical is going to naturally grow, right?

And so that's part of that stated objective. But we've been very, very clear, we don't want to starve the core part of our business, right, capital formation, corporate solutions, markets. And so it's really been a much longer transformational measure, which is -- it's something that if you look at it quarter-by-quarter, it hardly moves. But if you can zoom out 5 or 10 years, you will then start seeing the movement.

And then last one is really to have 2/3 of our revenue be more recurring than transactional. But once again, we're not going to get there by starving our transactional businesses. We're very comfortable with the incredible transactional performance that we've had out of our markets business and out of our Capital Formation business. And yes, if that means it's going to take us a little longer to get to 2/3, so be it, right?

And so that's kind of the macro overlay. And then M&A for us, we do not have an M&A strategy, if you will, Jaeme. We are all about our corporate strategy for growth. M&A is just one of those areas where we can accelerate it, right? And sometimes, we choose to build it ourselves, sometimes we choose to partner, and sometimes we choose to buy.

And so hence, there's more the M&A is in that third leg. But AlphaX U.S. is a great example. We chose to build that from scratch. And we did an outstanding job, and we've got that done within 18 months and it's exceeded all of our expectations so far. So that's kind of the high level, if I take it up to the top.

Right. And then in terms of like the M&A pipeline, it's been, I'd say, relatively active for TMX. So what's that outlook here for the next 12 to maybe...

So I can't talk about what I can't talk about. But what I can tell you, Jaeme, is that we look at a lot of things. They are all rooted on, as I said, a minute ago, our strategy and accelerating the strategy. And as we've said repeatedly, we are not shy to do M&A in capital formation or in markets it's not all just about our Global Insights business.

And what I can tell you is the portfolio of businesses that we're looking to expand into is quite balanced. Now depending on when we get certain things over the finish line, if we do, they might skew one way or the other. But if you give us time to have the fullness of our aspirations for growth kind of come to fruition, you'll then be able to see that it's not just skewed towards one part of the business. It's quite diversified.

For example, adding news file to corporate solutions was very, very important for us because we see a lot of white space there to support companies. So at a high level, stay tuned. And if we've got something to report, we will put out a press release, and we'll call it in an analyst call.

Excellent. We're right out of time here. Any final thoughts to leave investors with today from either.

The thing that I would leave you with before I hand it to Luc we are on it. We think that there are some fundamental shifts in the marketplace. Some of it is a little bit more hype than reality that's our job. Our job is to kind of cut through the chaff and figure out what we need to pivot. We've often spoken about being a fast follower, and I'll hand it over to Luc because I think that's part of how we see the tokenization digital.

Yes. I think for us, the focus is to get -- to continue doing what we've excelled at for all these years is innovation. Bringing innovation to our participants. We really are a big believer in the community involving the entirety of the ecosystem to help build things together.

And as we globalize, what's interesting is that these partners that we were talking about we were in Boca a couple of weeks back. And the amount of interest in Canada is absolutely spectacular, and it's coming to us to say, hey, how can we partner with these existing firms that we're doing business with to bring Canada the world and vice versa bring the world to Canada.

So in our view, a lot of the interesting growth opportunities for us in the years to come. And it's the working model that we've been espousing for a long time that seems to be working. So why fix something that isn't broken. Keep doing the same thing.

Excellent. We're there. We're out of time. Everyone we'll see you at lunch and gentlemen, thank you again.

Thank you.

Thank you all for joining Bank of America's 34th Annual Financial Services Conference. I'm Eli Abboud, Craig Siegenthaler and I cover U.S. exchanges at BofA. And I'm pleased to introduce John McKenzie, the CEO of TMX. TMX is Canada's largest exchange with the business that spans cash equities, options, rates, fixed income and energy. It is also one of the largest listing venues in the world, providing capital formation services to almost 4,000 companies. John has been with TMX for over 20 years and has worn many different hats over that time. Among other things, he was the architect of several major acquisitions, including Maple, the Montreal Exchange, Trayport and VettaFi. John, thank you for joining us.

Thank you. Happy to be here.

Let's kick things off with the IPO backdrop. TMX almost doubled this number of IPOs in '25. What's your confidence in being able to maintain this pace? And to what extent do the ongoing Canada-U.S. trade disputes threatening to pour cold water on your momentum?

Well, it's a good question to start. And I actually think the numbers are the doubling, we went from 1 to 2. So it wasn't huge numbers to begin with in terms of the IPO landscape. And there's been a quiet landscape for a couple of years. But on IPO specifically, we have now one of the deepest pipelines of private companies ready to go public than we've had in a decade plus. And so it's really positive in terms of companies that are ready to go at different sizes and in different sectors. .

So the potential to see a lot of new issues coming to the market is there. And prior to kind of 2021, we had been on a 7-year run of being net adds to our public company ecosystem. And it's just that last 2 years that we've seen that dislocation. So if the conditions remain strong, and we have confidence in the market, I would see a lot of good new issues coming. And the other indicator you can take to that was the financing activity of already listed companies.

So you mentioned, we have almost 4,000 listed names. We saw a 60% increase last year in the financing activity on exchange. And so that's really positive in terms of the leading indicator that the markets are strong and you can get good deals priced. But I always want to remind people that like the IPO is not the only way on to our markets. The need to think about our market structure with both venture and senior, there's actually a lot of different ways for companies to come on.

And a lot of companies come on through the junior track on the small cap exchange, usually through a capital pool company and then they can graduate up to the senior market. So even though there was only 2 net traditional IPOs last year, there actually were 11 companies that came up from the junior market that in any other jurisdiction would have been an IPO. So that's why when you look at a new global stats on new listings. You mentioned we were leading in the world on listings total. We're also, I think, #2 in the world for new listings last year.

Got it. And zooming out which businesses do you anticipate will be the largest contributor to your organic revenue growth over the next couple of years?

And I always lead some folks to you to look at the guidance we've given around the growth profile of the firm. So we divide our business up into what we call market growth, things that kind of grow with the economy and the market itself. Strong growth, which is kind of the mid-single plus 5 to 7-ish and high-growth businesses that are high single, low double or more. And we've got a number of business segments. Actually, over half of our business is now in this high-growth category. And so the examples are the ones I'd point to that are going to drive growth for the firm are, and it's the majority of our global insight space. So TMX Trayport, our energy platform, which has been a long time, high-growth business for us, is going to continue to have that strength going forward.

And we have a lot of white space for that franchise, our VettaFi franchise that you mentioned earlier on, which is our index and benchmark piece. That business was up 25% in the last quarter last year, 13% organic, 12% inorganic. And so we see that as another high-growth area going forward. Our derivatives franchise should be another high-growth area going forward.

Now it can be lumpy. The curves don't go like this, they go like this. And last year, we were up about 30% in that business. So it could be -- it will be long -- high growth over the long term. And the last area that we're talking more and more about is actually Corporate Solutions. So within our Capital Formation business, we talked about the IPO capital raising, but we also do a full suite of corporate solutions for companies, be they private or public to help them with capital raising activities. So these are like trust mandates, transfer agencies, employee plans, shareholder registry, things like that, and now disclosure tools, which we added just over a year ago, that's one of our high growth segments as well.

It now represents 44% of capital formation, is actually in this Corporate Solutions business, and we have an ambition to make that more than half of that franchise. So I'd say those are the key pieces that will drive the growth going forward.

And I know you just broke ground on a new office in New York. So can you talk about your ambitions in the United States?

My ambition is to get invited to Miami every single year when it's minus 32 in Toronto. Yes, our ambitions are quite straightforward. If you -- Just over 2 years ago, I hosted our team in New York for a dinner, and we could see the entire organization around a table for 8. And now we have about 240, 250 people in the U.S. across multiple business lines, and that is intentional.

We really are thoughtful about the fact that we've built some great capabilities in Canada just north of the border and a lot of them have value add in the U.S. market. So to give you just a few examples. Some of this is we built, some of it we bought. We're doing Trayport here as well because the energy solution that we've built out in Europe is applicable in the U.S. market in terms of solving for some of the fragmented energy markets here. So we're building that up and scaling it up.

We have our market data business, and we've just now expanded in the U.S. with the acquisition of a team from Verity, which is doing buy-side research management tools and AI-based improved information sets. So that's played a part of that solution as well. We have the VettaFi business, obviously, that we've been in a couple of years now based in New York that is really doing index creation and ETF solutions. And actually while based in New York, much more global than it used to be as well with everything we've added to it.

And the most recent launch being Alpha ex U.S. So we took a lot of the capabilities that we built in Canada, around improved execution quality trading, and we built it into an ATS in the U.S. market, which we've now been live on for about a year. So we are intending to be a multi-solution player here in the U.S. to meet the needs of both the trading and the investing community.

Got it. Let's dig deeper into Alpha ex U.S. It just celebrated its first birthday. So looking back on year 1, how has progress trended relative to your expectations?

We had high expectations, and we've met all of them. If you think about the time line forward , first of all, this is a product that we built out in about a year from ideation to building out new technology stack to regulatory approval. So really fast path to bring a new marketplace to the public domain. And since that time, we've had continuous additions in terms of clients sign up, our volumes are exceeding expectations. So we are really happy with what we're delivering. .

And January is another record month for what we're doing. And it should be. I mean every month should almost be a record when you're in that growth phase. So when we benchmark it because this is not an exchange, it's an ATS. It's fit for purpose. But when we compare it to other ATS launches in the U.S., this is actually one of the fastest ones to its volume levels that the U.S. has seen in a number of years.

So I'd say we're off to the races. Year 2 is even a bigger test than year 1. It just can you build on the success of year 1, and we've got a great team doing that. And we'd like to see that growth continue now because that will be then the opportunity to add more product, more capability to it in terms of continuing to build out the smart place.

Your U.S. peers, NASDAQ, ICE, CBOE, all of them have been deemphasizing U.S. cash equities and investing in other areas. Pressure day trades, they barely squeak out a couple of mills of revenue per share traded. So what do you see in this market that they don't?

I'm not sure that we see things that they don't. I think we're coming from a different size. And so what can be a meaningful opportunity as to build out may actually be too small in terms of the priority for a Nasdaq and CBOE, and it gives us an opportunity to actually build some capability. I also think that, candidly, we've proven ourselves in Canada competing against some of the same players who have competed north of the border, and we've been very successful.

And so it gives us some confidence that we can take those capabilities south of the border as well. And the last thing I'll put on that is that despite current geopolitics, Canada and the U.S. are some of the closest marketplaces in the world. They are very much interconnected. The border is almost seamless in terms of capital flow. So we actually have a lot of clients that operate both in Canada and the U.S. And so it's actually a natural extension for us to serve them in Canada and serve them in the U.S. market as well. Now we've got a lot of nascent U.S. clients that are on the platform, but we also have a lot of clients like TD, BMO that have both big Canada and U.S. operations, they're active on the platform as well. So it just makes sense to us -- for us to serve those clients everywhere they want to work.

I wanted to do 2 new products that you're scaling up for now secure general collateral notes, which is a new money market instrument, and then your Canadian Collateral Management service, which brings tri-party repos to the Canadian market for the first time. What problems are these products solving? And why are they a better solution than what currently exists in the marketplace.?

Well, starting with the latter one, what collateral management is there to serve is the -- it's the inefficiencies in the collateral markets. So when broker and dealers and banks are trading in different venues, you end up with lazy or trapped capital in them. Because if you can't get your margins efficiently set and it's not easy to move capital from one to another, you end up just overutilizing your balance sheet and it's inefficient and that has a cost because you can't use that capital anywhere else.

So the cloud management solution is designed to help take that inefficiency out to be able to port your capital where it needs to be, really identify how much you need and therefore, bring down how much you need to have in these various entities and redeploy it to build your business other ways to trade more, to support more clients, et cetera, et cetera. So that's the basis of the solution. We're not inventing it from scratch. We've partnered with Clearstream that's delivered the solution in the European market already.

And -- but really to get it off the ground, we needed to get our own modernization of our stack done which we did last year. So last year, we went live with a whole new platform for post-trade went live in the first half of the year, full modernized stack, and that allows us to do these products on top because it makes it much easier to move collateral around and create that mobility. The SGC note is really a funding solution. So a lot of companies, these things like bankers acceptances to do short-term funding. And that market essentially went away when we changed overnight rates. So this was a way for us to create a unique product to fill in some of the gap for the industry. And we're kind of like the only people that can do it because we have both the derivative shop, the clearinghouse and the trustee that it takes to put that product together. Now interesting on both of these things is next gen, as we do more and more work on tokenization, there will likely be tokenized versions of these products in the future.

And so tokenizing collateral is essentially the potential next step in doing this. But In the near term, these are the ones that create the efficiency for the users.

Got it. And can you share any details around these products contribution to your results in '25? And how that could potentially ramp into 2026?

I mean it's a rounding error in 2025 because these products are essentially contingent on, again, getting our technology in place. They have potential to be meaningful as part of our post trade business in 2026. The one that's the most meaningful is the federal management solution. And that's one where even we've got clients like the Bank of Canada itself, looking at how they participate. .

Got it. And your competitors, NYSE and NASDAQ have been laying the groundwork for trading stocks on the blockchain. I think you teased it a little bit, but how is TMX viewing the opportunity to utilize blockchain technology?

I'm not sure they're saying it's an opportunity or not or something they need to do. We've been active in blockchain technology for 15 years. And that's the interesting piece. A lot of us we have been looking at different use cases over and over again, there hasn't been a clear winner in terms of a use case that created real value to the industry.

So on the tokenization of equities, we're staying very close to what both NYSE, NASDAQ and DTC are looking at. From a Canadian marketplace, if we see demand, we think we're the right player to do that because we -- again, we would have all that piece in our franchise, right, from trading right through to clearing and settlement. And I do think it's critically important that if we do go down the path of tokenizing equities, we do it in a way that interacts and is standardized with the central market ecosystem. If we do not, then a tokenized equity is just a fracturing of liquidity. It actually has potential for adverse price movements for investors. It's less efficient from a settlement standpoint. So we want to make sure we get the industry solution right to solve for that. So that if there is a valuable use case for someone to take a token form, it can be done with the same infrastructure, so they still have the value of the efficiency of the centralized system at the same time.

I always want to remind folks that the U.S., Canada, this is some of the most efficient capital markets ecosystems in the world. So when you actually tokenize the security and take it out of the ecosystem, you lose some of that efficiency. So that's what we're working on. The stay close to it so we can modify the Canadian market as appropriate if the U.S. market goes there. And then similarly, at the same time where we're exploring other tonization solutions within that ecosystem. So we think there may be opportunity to do that structure around private companies, which then would allow you to have better ledger to be an ease of exchange. Again, we're not seeing a huge demand side for this yet, but we're exploring the capability to do it.

You've done 6 bolt-on deals over the past 2 years. How are you thinking about M&A going forward? Do you still feel like you're missing any capabilities?

Well, we never felt like we were missing capabilities before. We've always driven M&A by the strategy that we're trying to deploy. So the growth strategy we have across our 3 core pillars of capital formation, global trading, global sites. We've looked for what are those assets out there that can help us to accelerate. So I mean, to your point, and maybe that's fair to way in terms of filling capabilities. When we brought in new indices, as we have a few times now with both index research, the Credit Suisse indices, the nuclear indices at the end of the year, each of those ones capture different either geographies or asset classes that we get add into the portfolio rather than build ourselves.

And so they're kind of build buy decisions. Similarly, ETF stream that we brought on last year gave us distribution capability in the European marketplace. So we could do -- similar to what we do in the U.S. in terms of marketing for ETFs and distribution. We can do that now in the U.K. as well in that content creation. So we don't feel like there are any gaps. We're always looking at these kind of things in terms of how can we move the business ahead faster. Similarly, on Corporate Solutions, I mentioned we brought in news file, that is a complementary product to the other products we've got in there. And that's creating cross-selling opportunities that we never had before.

So I can go into a bank that is a trust client and say, how will you look at our news wire solution as well rather than using other competitor from outside our ecosystem. So that strategy is going to continue going forward. So we are continuing to look at a lot of opportunities that we can tuck things in. We are looking at indexes that we can -- Essentially, these are asset purchases that will be separated out from other businesses that we can then integrate into our platform.

We are looking at the data operations as well, like the Verity piece that came in, in the fall as long as we can integrate it in and help it grow faster and help it grow faster.

What about BOX, the Boston Options Exchange? Right now, you own a 51% stake and don't directly operate the business. Are you happy with the status quo that -- how much do you have to gain by integrating that business into TMX?

Yes. So I'm happy with the performance of the business. It's really a good business. They've got a unique product set. The clients are very happy with BOX. So I'm really happy with how the business is performing and what it can do. the structure is not ideal because that structure of the model you talked about does limit what you can do with the business strategically. So we're always open to discussions with our partners around the table in terms of how do we take it to another level that would allow us collectively to do more with it. And so that's our priority going forward, is to continue to explore how we can use that asset with other things to find new opportunities to work with it.

And how are you thinking about capital allocation more broadly? How are you weighing M&A against capital return and organic investments?

I mean we're blessed with the fact that we do not have to weigh them against each other. We do look at return on capital to ensure we're deploying capital efficiently. But as we've demonstrated now multiple times, the ability to lever up for a sizable transaction and then to delever back down, we've got a lot of confidence from our partners that we can continue to do that. .

Now I will say that when we took on the leverage to do VettaFi, we did suspend our normal course issuer bid until our leverage came back to kind of our target level, and it's back there now. So that is something that we could restart. So we are continuing to look to priorities that are -- keep building the business organically, and that's part of our plan of kind of reinvesting in our expense base to keep building the business, inorganic opportunities to accelerate the strategy, maintaining a paid on our dividend of 40% to 50%, so that the investor participate in the growth of the firm.

So as long as we're continuing to grow the bottom line at that double-digit pace that we guide to, you would see the dividend moving to that same pace, and that's why we were very comfortable bringing the dividend up another 9% last week, and then reconsider the ability to buy back the stock now that our leverage is back in target range.

Got it. Talk about Trayport. So you've had 3 years in a row of 20-plus percent revenue growth, can you help us understand how much of this growth is sustainable? And how much of it do you attribute to the really unique geopolitical situation over the past couple of years?

Well, so we've never guided to 20%. We've always guided to high growth being high single, low double. But I will -- candidly, the entire time we've owned Trayport, we've grown at more than 10% every year since we bought it in 2017. And there are a number of factors. The geopolitical piece is a bit of an asset. At the end of the day, you've got an energy market, which is the core part of our market, the European energy market, which is still a long-term growth market. So even though we've really developed it well, and that business is more mature in Europe that market will continue to expand.

So as you have demand for energy increasing, you have different sources of supply, you have transformation of the energy ecosystem, that creates more points to trade. And over time, you bring more traders in to do that. And again, that's not a straight line. You'll have some peaks and valleys in that. We had a real big lift, the year before last in terms of new traders. The new trader growth or subscriber growth in the fourth quarter last year wasn't as high as those other periods because you will have steps in the valleys.

When you've got periods with a lot of energy volatility, you have more traders that will come to the market, folks will shop, we do more new logos. So that will continue over time. But the other piece that's going to drive the long-term potential in this business is there's a lot of also global white space to grow into. Now these are harder to do and they take time to scale up.

As I mentioned earlier, we are scaling up in the U.S., and that's particularly around gas and power. We are now on the ground in Japan. And so as the Japanese market opens up and matures, we'll be able to support that market. If it grows to potential, the Japanese power market can be as big as Germany and France combined. So these are sizable marketplaces, but there are different stages of development. And the third area we're continuing to focus on is how do we actually expand Trayport from gas and power into refined oil.

And so this is another marketplace that when you're outside of the liquid products on ICE and CME, all the refined products are generally over the counter. And if we can bring them on the screen, we can make that market a whole lot more efficient. But it's step change. You've got to get the kind of broker by broker to start to build that liquidity and transform what is essentially a voice market today into something that's digital. And so that's what we're working on doing for the long term.

I know a lot has been written about the multi-manager hedge funds getting into the energy space. So I was wondering if you could give us any insight into the -- how you're seeing the growth of Trayport by client channel?

Great. More traders. Really is the more traders and the more different channels you can bring in, the more valuable the platform becomes because the value of the platform is really when you've got disaggregated supply and demand, you creating that 1 space where people can see the entirety of the marketplace. So I always think those are positive to that new liquidity to the market and new traders. .

Got it. The cash equities space has been another area of strength. Canadian equities trading volume was up 27% year-over-year in 2025. Can you help us unpack the acceleration there?

Yes. Wait till you see January. And I always want to thank the U.S. for creating lots of volatility in the market because I think January, we're up 50% to 60% over the same time a year ago. Not that one month makes a trend. But you're seeing a couple of features there.

There's a lot of volatility in the marketplace. There's a lot of retail interest in the marketplace. And there's a lot of net new product. And so that's the trend over time when you think about it as we've moved from a mutual fund market more to an ETF market is there's more product that's tradable on exchange than there was in the past. So in 2025, not only did we that lift in equity trading, in terms of new product, we had 239 new ETFs listed.

That was the new record. The year before was the record. It was 124. So there's continued product innovation, very retail-oriented. You've got more retail-oriented brokers that are putting these products in front of their clients. And so it's the real nice spot to be in from an equity platform standpoint. Now volatility can go away as well.

And so I'm not saying that these are permanent marks or that trend continues, but the conditions are really good. The other place that you're seeing that track through is on the derivatives market. So our derivatives market, we trade options on ETFs. That platform is up 80% year-over-year in 2025. And so you're getting that trade into the options profile as well.

Got it. I do want to hit on artificial intelligence as well. I know the whole exchange space has -- it's up for debate, whether you are a beneficiary or maybe it's a headwind...

Well, we're going to close the debate today. .

Perfect. Yes. How do you see TMX position for the rise of AI?

Yes. I can continue to think we're in a really strong position. And the reason being is the types of businesses that are the most likely to be disrupted as you bring AI tools to market and you normalize AI usage are ones that have less proprietary nature to them. So even though like 40-plus percent of our business is global insights, which is data information sets and things and information tools, the vast majority of it is actually proprietary in nature.

So Datalinx is proprietary data that comes from our marketplace that is our IP. And that actually puts us in a very strong position to be the ones to build AI tools on top of to create new information sets and use cases on top versus someone outside who still needs to get the data from us. Now where it can transform? Is it can transform the way data gets used and consumed? And so AI tools that may impact how a broker or a trader or a buy side consumes data, and let's be candid, we may see a lot fewer seats in the future in terms of the data users. But that doesn't mean the firms aren't going to be using actually even more data than before. So I see the model over time, will convert more from being a seat-based model to a usage model. And I think that's actually a great transition for organizations like ours because I'd rather go to an enterprise partnership with our clients and have them use and consume our data everywhere they can in the franchise, and we will just price it over time based on usage.

So I think that's going to transform more time what that looks like, but that's not necessarily a risk. Trayport is a screen platform, and I know we've had folks that have been worried about that piece. But again, it's a proprietary network. The data is private. You need to be in the network to use it. So there isn't an AI disruption risk around that.

And even in our index business, we're looking at how we actually layer the AI tools on top, so we can actually do a better job of index creation. But when you create an index, that is IP that's then baked into a product. So it's very, very sticky at the point. And then even within data sets themselves, one of the business we brought Verity into the organization last year is because they've actually created some really good AI-based analytics tools.

And so they've built the tools to be able to take insider holding data, insider trading data and turn it into investment signals. And I think that's what we're going to see more of in this space, where you layer on AI tools to create new information sets and clients are going to want that from a trusted source. Because then that they trusted source that takes less liability out than doing their own AI tools on top and then they internalize their own risk.

So we're in a good spot here. We also have a lot of opportunity on the efficiency side as we deploy more things in our organization, we're already deploying things like copilot through our development chains. We're getting development efficiency in Trayport already. That's allowed us to increase the amount of development we're doing with the same size workforce.

So this is the first year in the 8 years we've been in this business that we haven't had to scale up our development team in 2026. So we're already seeing efficiency. And this is going to be a real year where we test how big the efficiencies are and try to get it in terms of how much code can we do per person and those types of things. And we deployed generative AI tools all through the firm. So we've already got a 90-plus percent adoption in the company of people utilizing these things to make their own work processes more efficient. So it's not to say that I'm not nervous and I don't lose sleep because I lose sleep about things I don't understand. But I do believe that we are very -- our competitive moats here are very strong, and the opportunity for us to create new value-added service top is very good.

And to wrap up, John, looking back at your meetings over the last couple of days, what other tailwinds or components of the TMX store do you think investors are overlooking or not fully appreciating?

I mean we've talked about AI and tokenization a lot, that's just a testament of what's going on in the last couple of weeks. And the nice thing is I think our investors have really gotten it because most of the feedback I get back is this doesn't really do apply to you guys that much does it? Like that's right.

So why do you think you're being sold off. And I think it's because the end investor, not the asset manager, but the end investor may not get it. So there is some onus on us to continue to do more education about the ecosystem, the proprietary nature of it, the way it works and how we're investing to actually continue to bring value. And I've always been a believer in the long term is helping understand people understand what's our long-term potential of as an organization. And we are not backing off our long-term guidance in terms of where we're going to grow, the ability to continue to create more operating leverage so that kind of mid- to high single top line growth firm-wide.

The ability to transit that into double-digit growth at the enterprise level bottom line. The transformational metric we have in terms of continuing to grow more globally. I mean we didn't talk about it earlier, but even though we are Canadian-based, 51% of our revenue is outside of Canada now. And I think that's an area that's going to continue to grow. So more global, more subscription base, more data and information in the sets and a growth curve that's kind of top quartile of our peer group. So I think people get it. And as long as we keep proving it quarter after quarter, we'll see that come back from where we work.

Got it. John, on behalf of all of us at BofA, thank you so much for joining us.

Absolute pleasure.

Hope to see you again next year.

Thank you.

All right. Thanks for coming back. Hello again. I'm Alex Kramm, senior research analyst at UBS covering the U.S. exchanges and business services companies. Next up, we have TMX Group, John McKenzie, CEO. Thanks for coming again.

We don't formally cover you guys, but we are certainly happy to get an update on what you guys are doing up in Canada and in other places, growing U.S. business. So look, as I said, we don't formally cover you guys, but we certainly follow you and some of the predecessor businesses I've looked at for probably 20 years or so. So a lot of transition over the last few years that continues. So for those of us who are not too familiar, maybe a good way to start is just a quick overview where the company is, key growth targets and objectives that you've laid out over the last few years.

Yes, I'm happy to. And I'd be remiss if I didn't thank you also for inviting us to Miami again in the middle of a Canadian winter. So we are happy to be here.

So TMX Group very much encompasses all parts of the Canadian capital markets ecosystem. So we are the largest exchanges, the blue-chip equity exchange, but also the junior exchange. We have the derivatives markets through the Montreal Exchange, but we also have the clearing and settlement infrastructure as well as other components of the value chain like transfer agency, trustees, support of issuer companies, et cetera, et cetera.

But in addition to that, we also have some international business as well to really fill out some of our global insights or data spaces. So we operate Trayport in the U.K., which is our energy data platform. We have VettaFi in the U.S., which is our index operations and a number of other things. So despite the fact that we are a Canadian-based market company, about half the business is actually outside of Canada and more than half is actually in that recurring revenue data type revenues going forward.

Great segue. You know what you're doing because one of the objectives is increasing those recurring revenues. I think that's still an objective. I think you used to target 2/3 longer term. I don't know if that's still an active target. But when we sat here last year was at 55%. So what's the progress? And how are you going to get to those long-term targets?

So the long-term target is still the target, 2/3. Sometimes on a road forward, you take a step backwards along the way. So we actually were closer to, I think, 52% for last year. And not because we didn't deliver on the recurring revenue side, we actually had really good growth in our recurring revenues and double-digit growth in Trayport, double-digit growth in other parts of insights like VettaFi, very strong growth in Datalinx, but we also had outstanding performance in some of the trade business. And that's actually why the percentage went the other way. So in our derivatives business was very strong double-digit growth, so was equity trading. So it's actually more of a temporary piece where we've always said along the way, we want to get there by growing the franchise and growing the data businesses faster, but not sacrificing that core market capability. And so that's where we are on that piece.

We've got 2 additional measures that we care about in that as well. So the international measures I talked about, we are 51% outside of Canada now, so getting more global by the day. And then we also do target just purely how much of the business comes from Global Insights, which is the collection of all of our information businesses. And we have a target of 50% for that, and we are currently at about 44%. So we're very -- we're moving along the right track on that one as well.

Well, let's start right there. Global Insights, the biggest business in there, and you mentioned it already, is Trayport. And as you said, Global Insights, over 40%. Now speaking specifically on Trayport, and we'll get to some of the other businesses in there, continues to put up strong growth. I think last year, 12% constant currency. However, that was down from 17% growth in 2024. So look, on the 4Q call, David, who's sitting right there, talked about at least it sounded like maturing of the business. So maybe you can talk about what you're seeing specifically in that business that made you or made him make the comment. And then maybe some of the opportunities to perhaps accelerate that business again.

Well, I'm going to change the word there. It's not a maturing. It's that there's part of the business that is more mature. So when we think about the Trayport energy business as a global business, the core part of that business is the European energy market, which we've been building out for 30 years. So that is much better developed than some of the other regions that we're in, but it's actually still one of the biggest sources of long-term growth. Because even in that marketplace we're already in, you've got tailwinds in terms of increasing energy demand that brings new traders to the marketplace. You have new products that come on as the market fragments in different ways, that brings new traders onto the marketplace. But what we haven't had in the last year is that volatility that we had a couple of years ago that also would have brought more traders in the marketplace. And that will change in time.

So if you look at our history with Trayport since we brought it into the firm in about 2017, you will have periods where we got growth that levels out for a bit and then starts growing again. And we had a bit of that, not leveling out, but just slowing the acceleration a little bit in the last quarter where we were getting more subscribers, but not to that same degree. But still very much to the long-term guidance we've given that this is going to be one of our high-growth businesses, which we defined as high single, low doubles. And candidly, this one has been doubles every year we've had it.

So we still have that confidence in the business. You're going to continue to get more product, more client add, new logos. We're bringing new clients on in the European space. But we've also got a couple of areas of really outsized growth potential that we're working on. They just take longer to do. And so that's what gives us some of the long-term confidence.

So we're building out in the U.S. The U.S. is a good market for gas and power. We keep adding new players into the U.S. market. So our run rate there is growing faster than the rest of the firm. We are active in the Asian market now in Japan. That's still a very early-stage market. So there are not a lot of players yet. And until you get more players, the Trayport screen doesn't get as useful until you've got more fragmentation, but that market is building. And we see traction and roads into the oil market as well. Oil market is very much old school, telephone-based brokered market. We can transition that one on screen as well. So all these areas give us a lot of confidence that we've got levers for long-term future growth as well.

Okay. We'll stay tuned. And then on the other growth engine, clearly, Global Insights, there are more businesses in there, but let's focus on the most exciting ones, VettaFi, you mentioned yourself. I think you owned it for 2 years now. I think asset growth has been impressive. But I think you've also been expanding the product set, some of that actually inorganically through M&A. So how do we think about this business, I guess, into 2026?

If you look at '25 as a proxy for '26, I think it's a really good example of what we're doing. In '25, we had essentially 25% growth year-over-year on the business, of which 13% came from our organic work and 12% from inorganic adds to the platform. We've got a really solid team that's built a great platform that allows us to add more index to it. More asset classes, more different products and work in different geographies. So that's what we've been executing that strategy on.

And so while we've been building new indices in there and actually selling globally into different asset managers, we did 3 new adds that we added into the platform this year. One was to bring in a fixed income suite from Credit Suisse. You guys might have heard of those guys. We brought that in the early years. That gives us now capability to commercialize that because it's the challenge now when banks actually own some of these index products inside, they really can't commercialize them into products because their clients expect it to be to give into them. So now we can take these indexes that have great history and build them into products that can go into ETFs going forward.

Same thing with the suite of nuclear indices we acquired at the end of the year. And then we also acquired a distribution capability in Europe called ETF Stream, so we can market ETFs on behalf of our clients out to an investment audience. So it's the same playbook we've been doing for a couple of years now, driving that top line growth.

And in the 2 years that we've had the business, we've gone from having about -- I think it was about $32 billion-ish in terms of assets under management when we first came in as the majority owner to now over $80 billion. And that's a combination of both new product, assets under management growth with existing product, both from net inflows and market returns and new pieces we've acquired. So we've got a really good playbook now to continue to drive this with new product development and sales -- sorry, organic product creation and inorganic opportunities if they make sense.

And there's 3 things that will make them make sense. One, it's got to be assets going to be interesting in terms of having a growth profile for the client base. The economics from a valuation have to make sense, but it's also got to be integratable. We have to be able to take it and put it on our platform and scale it up.

Okay. So before I switch to the trading side, since we just talked about Global Insights, we need to talk about AI. So I'm going to go ask about the opportunities in a minute, but let's first actually talk about what everybody has been focused on here in the market. You've seen this, which is the potential disruption from AI. So I think there's 2 main concerns. One is disruption of software-type businesses by new entrants or in-house solutions that can replace third-party solutions. And then also the potential decline in headcount as automation comes into the marketplace. And for you, I guess, there would be financial services, which a lot of my companies care on, but also the energy markets, of course. So how do you think on those 2 lines or those 2 scopes how you're positioned? So how do you feel about disruption? We'll talk about the opportunity in a minute.

Why didn't feel very good last week -- we believe that we are a net beneficiary here, and I'll explain why. And I think a lot of the sell-off in the last week or so is a misunderstanding of the proprietary nature of a lot of the business that we do and how we can actually deploy it to the market, and I'll explain what I mean by that.

In Trayport. Trayport is a data platform, but it is a proprietary data platform. There is no access to that data unless you are part of that ecosystem. So it's very difficult for AI to disrupt it the way an AI agent can disrupt a data delivery platform that's delivering public data. Same thing with our Datalinx business, proprietary data sets that they are our IP. We've got the deep data lake underneath it.

So in a lot of these cases, the AI tools are ones that we can actually use to take that data set and create net new product. In some cases, it's been hard to access the data in the past. We've got some estimates that even in our market data, our trade data, we've got 80% of the data that never gets commercialized because it's hard to access. It's hard to clean up. It's hard to standardize. So the tools we're looking at now are going to allow us to commercialize this in a way we couldn't in the past and bring better product to market.

Where we think about data delivery into businesses that historically have been more seat count-based, that model will transition over time. And it's already been transitioning. And that's the interesting piece that I think people have missed. We've already been through -- going through generational changes where we've gone from shops that have been really people-based to algorithmic trading was a transition that already had. So we already had to figure out how do you reprice the data into a feed base to be using for multiple use cases that's not seat-driven. Trayport, we already have transitioned a lot of the business to site license, where we will originally price it based on the usage in there, but then we -- then it's all you can eat, use it everywhere in your shop, and then we will reassess the usage on renewal. And that's why you see in our history on Trayport that kind of really strong net revenue retention because we step up on renewals as we go.

So the area I think that's going to have to transition the most has been the traditional market data, like the equities and fixed income and derivatives data because most of that is for proprietary real-time market traders is seat-based. And that over time is going to transition to enterprise. And in some cases, I expect that enterprises are going to use more data in the future because they're going to consume it in more places to drive their models, to drive the tools they're using. So we don't see it as much as a risk as it's something that's going to transform the way we deliver the business.

You couldn't help yourself but already kind of touched on some of the positives you're seeing, but I'm going to ask a separate question anyways because quite frankly, prior to August last year, when I think a lot of this negative attention started with some of the companies I cover, prior to that, it was actually -- people were looking for revenue opportunities or cost opportunities through AI. So -- maybe as you think about -- and you touched upon it a little bit already, but where do you see actually the biggest revenue opportunity coming out of that? Where you're deploying it?

Two places. So I want to talk even efficiency with the revenue opportunity as well because we do believe that where we're deploying AI, right, because we were very much a development company. All of our products are technology driven. So the ability for us to develop at speed to bring new features and functionality and products to the market matter. And we've already got places in the firm where we're deploying AI from a development standpoint. Trayport is a really good example where we're using products like Copilot to accelerate our development curve and also allow us to get more out of the resources we have. So this was in the 8 years that we've managed Trayport, we've had stepped up our employment base in that organization every single year as we've been driving that growth.

2026, we did not need to add a single developer. Because we can do more with the capacity we have, with the tools that we have there. We also run really complex platforms. Like when you think about trade platforms and clearing platforms, these are really complicated. When you bring new iterations to the market, it is almost impossible to test every use case on there. But the AI test tools we can bring to bear now actually allow us to test way down the curve, which you couldn't do before and therefore, deliver better product. And candidly, most exchanges, when you have a technology challenge, it's usually because of something that's in the code base that you didn't know from before that interacts with something else you didn't know was in there before. So this is going to bring better product faster to market.

With that, we're also looking at other areas where we're enhancing the product for the clients themselves and allowing us to do more for them, which is the revenue opportunity. We brought in the Newsfile business just over a year ago. This is our news dissemination business. We're already looking at how we embed those tools in there to improve that product for clients and make it even more self-serve, which is going to allow us to bring more clients on to the product. We actually have the kind of the next-gen disclosure product versus the other peers in the marketplace that we're competing against.

So we see both the efficiency opportunities. And candidly, we've deployed the Gen AI tools all through the firm. I think we have over 90% adoption throughout the company at this point. And then the product side in terms of where we're enhancing as well. There will be -- let's be candid, there's a lot of experimentation here still in terms of what's going to create value and what's not. And this year is also going to be about figuring, okay, now we've deployed these productivity tools, can we actually measure the impact and seeing if we're getting value creation from it. That's going to be part of our test this year.

Okay. Very good. We'll keep on following it. Switching gears to the trading side. And you mentioned yourself a very strong year, and that's why kind of that mix maybe went the other way a little bit in terms of recurring, nonrecurring, but it was good, right? So I think derivatives was up 30% or over 30% actually last year. So look, we all know it's impossible to predict volumes. But clearly, the business is facing some tough comps this year. So any indicators you're looking at or any structural growth drivers you would highlight to still give us a little bit of comfort that, that business actually can continue to grow or have growth on growth?

Yes. I mean, start just with the underlying. This is a business that's got long-term growth adoption in it and a lot of still runway in terms of maturing the products. So over the long term, we will continue to have straight -- great underlying growth. Now whether or not it's linear is a different question. And I agree with you. We've got some really strong comps when we compare to last year.

Now if I look at -- not to make a trend out of a month, but January total volume in our derivatives market, we were down about 5, 6 points year-over-year. But the open interest, the indicator of future trading is up 20% in terms of the adoption of the products that are already there. So that's in really good shape, and we expect to see that health continue.

One of the big pieces that helped drive growth in 2025 was also continued adoption of options on ETFs. This has been a great engine for future growth, and we are now working on the regulatory side to open up even more capacity there. So that growth could have been higher, but for -- there are actually some regulatory limits on what people can do in terms of market making, capital deployed, things like that. We're looking to raise these up, which will allow more activity on these products, which are phenomenal products for both hedging exposure, trading exposure and working with the underlying.

We also recently brought a whole number of additional products onto the listed venue that are now going to be option eligible. And what I'm talking about is Canadian depository receipts. So we've got one of our clients has built a suite of Canadian depository receipts, mostly on U.S. names so that retail traders can trade these products in local currency. They're now going to be option eligible as well, which is like another suite of new product adoption we can have into the option market going forward.

Then in addition to all that, we're continuing to build out things on the fixed income side because we are both fixed income and equities. On the fixed income side, we've got really good adoption now in our yield curve product, but there are things we can do around that around total return, other products as well that we will bring to market with clients that act as market makers to build liquidity early on, exactly like we've done with the other products.

The last thing I'll add because all that was about volume, is we've got revenue on opportunity on top of the volume as well. So just like we've had in the last couple of years, we've got market-making agreements that are rolling off because the products are now quite mature and liquid. So we will have revenue upside in addition in terms of the revenue per contract.

And the last thing I'll add is what people don't see a lot of is we actually have an OTC clearing business as part of that Montreal vertical as well. We don't report a lot on it, but we do OTC clearing of repo through our clearinghouse. And there are two things that we're working on going forward in there, which is, one, we are working on an expansion of repo, so we can actually provide bringing more clients on and do more with it. And that's going to allow us to scale up what we do there. And we're looking at other products we can do. So we are planning to replatform the risk system over the next year. That's actually going to allow us to bring more over-the-counter clear product into the clearinghouse as well. So we've got a lot of irons in the fire to keep driving that growth rate going forward.

Okay. That's a lot going on. Staying on the trading side, I need to, of course, ask about the Canadian equities business. It's clearly more mature, and there continues to be competition. And then obviously, I cover Cboe and they recently announced that they're getting out of or they're going to sell the Canadian business. So do you think that's going to change the landscape? Maybe update us on the landscape in general? And then speaking of Cboe specifically, is that something that you could even look at for you to own? Or I know there's been some reports of some others already. But yes, just curious how you view that changing hands and what it would mean for you?

I mean I start with -- I think it's a bit of a reflection on how well we serve the Canadian market. We've had -- they're not the first international player to come in, but it's clear that it's difficult for them to scale up. We've got really good competitive moats around pieces of the franchise like the index relationships we have on the senior market, make it hard for other people to build competing listing platforms. Our options or futures market operates as a vertical. So you'd have to build that from scratch to be able to do it. And so I do believe that, that's sometimes what people see because also Nasdaq is also in the Canadian market. They've got a lean trading platform, but they haven't expanded it beyond that because the return on investment to do that would be challenging when you've got the incumbent.

So I think it demonstrates the kind of the strength of the competitive position that we have. Regardless of where this transitions, I think there's positive pieces to us. We've actually been able to move a lot of product off that market on to ours over the last couple of years, and we've been gaining share, particularly in our dark trading facilities as well. Whether or not we can own it, I mean, I can't really comment on that because unless you were doing it, you wouldn't really know. But I will let you know that about like when we did the Maple initiative, which now is actually part of history, I think it's 13, 14 years ago now. At that time, we actually did roll in a competing exchange into our platform. That was the Alpha Exchange. We went through the competition and regulatory process for that, and we were able to roll it in.

And now we actually use that to provide unique benefits to the market that we don't provide in our other venues. And like a lot of U.S. platforms here that will have different books to meet different needs. So it's certainly an ability that we have to do either through investing outside or building ourselves like we did with our Alpha Dark and our AlphaX platform about 1.5 years ago.

Okay. Last one on the trading side. Tokenization of assets and securities has been a big topic lately. I think I asked about it twice already on stage here today with a couple of other companies, maybe even more, it all blends. But look, a lot of people are focused on tokenizing equities, some of the U.S. exchanges have some things going on there already. But like there's more to that, right? There's other types of securities, fixed income and there's also collateral management. So just a lot going on. And I know it's still very early, but you see obviously some things already happening. So how is TMX fitting into all of this?

I think that we're in a really good place to be a leader in this despite the fact that we're not all collectively sure where we're leading to. I think that's to the point of even what you're saying, we're not sure what the use cases here that are actually going to be the ones that materialize that create real value for the marketplace. And the 2 things that we have that are kind of strengths for us is, one, unlike a lot of marketplaces, we have the entire ecosystem within the TMX. Right from the listing venue, we also operate our own transfer agency and trustees. So we have the recordkeeping piece. We have the clearinghouse, the depository, the collateral management system. We have that full value chain to work from. So we can think about tokenization or digitization solutions throughout the ecosystem because sometimes you need the different pieces to work together to actually make them effective.

And we've long been an innovator in the marketplace. And you don't want to rest on your record, but we were the first marketplace to go full electronic. We built the ETF, the launch all most of the ETF innovation that's happened in the Canadian market. So it has been an innovation hot bed.

When we look at these pieces and what our team is working on, and we're working on -- we're working with some of the same people that are working with the U.S. platforms as well. We're looking, okay, what is the real use cases that are going to create value. But also, how do you think about how do you adopt tokenization in a way that can interact with the core market. So I'm not a believer that it's replacing the core market. It has to interact with it because from a user standpoint, if there's going to be a token on an equity, you'd want it to be fungible and standardized to interact with the underlying equity. You'd like it to be the same security because that's going to create the best centralization of price discovery, capital formation and investor experience. And so I do -- I applaud the work that Nasdaq, NYSE and DTC are doing that because they're looking at how do you create that ecosystem to do it well.

Now the demand side is a different question. Like a lot of the demand for this is on a narrow part of the marketplace. So it's a question about whether or not there's a widespread demand for an adoption, and we'll work with that going forward. In the meantime, we're also working, as you talked about, okay, what are the collateralization options? Because we've got the clearinghouse and a lot of the capital with us, we are looking at things like how do you potentially tokenize those pieces to allow for more collateral mobility, different efficiency, pledge mobility, things like that.

Similar to the U.S., there is a stablecoin regime legislation for Canada, which I think creates a lot of clarity on what it would take to create a stable coin, the kind of -- which you kind of need that to be able to have that clearing capacity. But it's also clear for coin to be stable, it's got to have the assets behind it, high-quality liquid assets that are separately custodied and available, that's what makes it stable, which is a place where market structure players like us can provide a real value because we can create that custody opportunity to back those stable coins.

So we're looking at all of these pieces. We're looking at it in real time. And like you said, the landscape keeps changing. And the other one along with it is we're thinking about, okay, what does this mean for how often -- how do we operate the marketplace, 24-hour trading. Is that something we need to move to sooner versus later? So that's the same time, the same thing we're working on.

Okay. I guess finishing from a business perspective on capital formation then. So here in the U.S., we're all expecting another pretty active IPO year. And I can certainly say I'm seeing that myself right now. But I'm not so close to all the dynamics in Canada. So maybe you can just talk about what you're seeing in terms of IPO pipeline and general expectation to 2026 here.

Well, we're coming off of the end of last year, which was very strong from not just an IPO standpoint, but financing activity. And I always look at existing companies raising money on the market is the kind of the forebearer to be in a healthy market for doing IPO activity. And with the strength of the back half of the year, I think we were up 60% year-over-year in financing. 44% on the senior market, over 100% in the junior market. So a really healthy market for raising capital.

And from our team, who's engaged with private companies all the time, our pipeline of go-ready companies is the deepest it's been in a decade. And so companies -- and these are multi-sector companies that can raise public money. So we're seeing financials, we're seeing resources. We're seeing technology companies. Now I don't know if we're still seeing the technology companies after last week. I hope we'll let that settle out from a price discovery standpoint. But we're seeing depth in all those. And when we engage with the investment banking community, they also -- it's the same deep books.

That's the potential. This can always get dislodged by something that creates market confidence issues. And that's what happened last year. We had a deep pipeline going into the new year and then all the noise in North America on tariffs and other things created a lot of uncertainty and people pulled back for a little while. But what I see now in my engagement with companies is that they are looking through that more and more that this is kind of just the new normal is that there's a different level of volatility and people can see that deals can get priced and get done really well. And that's -- that was the important piece of seeing all this great additional financing activity is that good deals can get executed. So we -- despite the disruption last week, still very positive on what the pipeline is going forward.

Good. As we wrap up here, just quickly, I want to make sure I hit the expense side. Again, I'm looking to the rest of your team there, but I'm sure you have something to say about it as well. Because look, every exchange in the U.S. gives expense guidance. I don't think you guys do, unless that's changed. You do talk about operating leverage. So maybe you can just help us in terms of philosophy, expense growth algorithm, near term, long term. And then we spent a little bit of time talking about volume impacting the business and tough comps. So how is that impacting the way you kind of budget and grow expenses and invest?

Yes, it's a great question. So we -- I mean we have really good expense visibility inside. And you're right, we don't give guidance the way you do in the U.S. market that wouldn't be typical for a company like ours in the Canadian market. But we do try to give a lot of really good direction and insight into it. And it's been more important in the last couple of years because we've had so much new product and new acquisitions. It's hard to cut through that noise in terms of getting real apples-to-apples comparatives. And when you do -- when you cut through that, you'll see kind of our expenses kind of growing kind of 5-ish percentage year-over-year and very much in line with what we're trying to drive to kind of inflationary base expense because we're continuing to reinvest in the franchise. But with the objective to, as you said, positive operating leverage that we will grow the top line of the company faster than the expense line so that the margins can accelerate over time. That's been our objective. That's what we execute year after year. That's what we build our plan going into the year.

And what we challenge our teams on is identifying savings opportunities, both within their teams and across the board so that we can use that as essentially the fuel to fund the things that we want to do to build faster. And so every year, we're identifying $10 million, $20 million of new opportunities to recycle into investment going forward. And this year will be no different. So that kind of guidance, if you look at kind of where did we end last year because that's fairly clean when you take out some of the onetime stuff that's in there. And there are some onetimes in terms of write-offs and litigation pieces, things like that. But when you look at the clean numbers for the quarter, it's a good jumping off point for 2026. Then just adjust for kind of normal year-on-year things like wages, health benefits at the beginning of the year, things like that. And that's how we guide. We're going to continue to manage in that kind of discipline and drive for positive leverage going forward.

Maybe finishing up then on M&A and capital allocation more broadly. You've been pretty active in M&A, did things last year even or a few months ago even. So maybe just talk about M&A strategy just going forward. What types of business are you looking for? What's complementary financial metrics that you're focusing on as you think about executing deals? Yes, what -- how do you -- how should we think about it?

So M&A is not a strategy for us. It is a strategy accelerator, and that's always the #1 way that we think about it. We're not doing acquisitions to build the firm bigger, but to accelerate the growth plan across the 3 core pillars that we've talked about. So Global Insights, capital formation, global trading and clearing.

So we are continuing to look at things that we can essentially, whether they are small or large, tuck into that framework to accelerate those businesses and drive top line growth and also synergies in terms of owning them. If you look at some of just the core examples that make sense in there, we talked about index opportunities to continue to build on the platform. We're absolutely going to keep doing that. Data opportunities that enhance the data sets, but also the reach to different global clients. The Verity transaction that we did at the end of last year did 2 really important things to our data business. It gave us a new channel because Verity has got a research platform that goes into buy side that gave us a channel, not just to manage that side, but also to bring more TMX data into it. And it gave us some enhanced product capability because they've got an AI enhanced product capability for taking insider data and creating trade signals. We're going to be able to bring more TMX data in that as well.

So when we look at an asset like that, I'm using it as an example, we see an asset where we can accelerate the growth of it and it can accelerate the growth of us integrated into the franchise. So it's a really good example of the type of things that we're trying to do. Similarly, on our Corporate Solutions part of capital formation, when we can bring new pieces in that help us solve more problems for the issuers at scale like we did with the Newsfile business, we'll continue to do those kind of things.

So we're going to remain active on things that drive the strategy. On the metrics side, they should help us accelerate growth of the asset growth of ourselves and deliver what you would expect from an investor return. So we're going to look at return on capital employed. We're looking at accretion to shareholders on a time frame that makes sense. And with that, candidly, we're looking on the ability to integrate.

And this is -- given that we've been busy and we have a lot in the pipe from a company standpoint, integration capability is really important that we've got to know from the day we do the deal, how it's going to fit in the organization, how it's going to get integrated in, how are we going to get the synergy benefits from doing it before we sign the paper. And so we will not do a whole lot more things than we will do because we'll filter them out on that basis.

Okay. We're technically at the end of my questions. I'm looking at this room. We do have mics, if there's anybody who has anything on their mind. This is a constant occurrence. People are very, very quiet. I will ask a couple of more because we -- since we ended on M&A, and you mentioned the Verity deal, you gave us a little bit of a flavor of why you did it already. So you don't have to rehash that. But maybe talk about how it's going so far because it's been a few months. And then also, as you were going through this deal and we were talking about AI earlier, was that a consideration? Because when I looked at the business, it was like, yes, it's kind of a business where I'm sure some people that think about AI would wonder like, hey, how did you get comfortable that, that business continues to be in the position that it is as markets are changing?

It's such a good question. So again, the business is -- I mean -- and it's not -- this is not a massive business that we brought in, but it's -- I think we -- it contributed top line in the quarter. We disclosed about, what, CAD 7 million to CAD 8 million CAD 5-ish and change U.S. Yes, it's good to have. So it's a nice size in terms of -- there's a base there that's meaningful. It helps us build out, but it was also actually quite concentrated in terms of the client base and the product. And so when we looked at the 2 core products within Verity, research management solution that's deployed to buy side to help them aggregate their research capabilities when they are looking at investee companies like us and otherwise. And it was nice actually when we met with an Investor Day that said we use Verity, we really like it. I wouldn't want to meet to investors that said the other thing. So that's one piece.

The other piece is the data product that they create. The data product is this is where they're actually using AI capabilities to create enhanced data sets out of things like insider holding and insider transactions. And we spent a lot of time thinking about that, okay, is that ripe for disruption with other AI tools? And at the end of the day, you still want to have -- do you want every firm -- do they all want to do it themselves with their own AI tools? Or do you want to rely on someone who actually does it consistently using those tools that creates the expertise and creates essentially a source of truth.

And that's the thing that's getting lost in some of the AI discussion is not everyone wants to take on that responsibility themselves. They want to be able to have a third party that brings that expertise to do it really well, and that's what this does. When we complement it into our business, our Datalinx business, it actually gets stronger because when we're going to be able to populate it with now our own data sets, which are proprietary, that value add gets even stickier.

And then from a business standpoint, we can help bring this platform to a broader client base because essentially, we have a much larger global client base that we can bring it to. We've got upside on both the product and on the reach. And so that's the work we did. And we spent a lot of time thinking about exactly this, what I'll call AI disruption risk as we looked at it and saw there was more value in what we were going to be able to do with those tools across our platform than there was risk to what we were acquiring.

I'm going to ask more -- sneak one more in here because I see I have a couple of minutes, but it's got to be a quick one, and it's on AlphaX U.S. because I remember when we were sitting here last year, I probably asked you, why do we need another U.S. liquidity pool or whatever I said back then. Any quick update with 1 year in? Are you happy with what you've seen? What's the trajectory since you're here?

I don't know why I thought of it, but when you said that I was thinking all the way back to my early days when I worked on old spice and why do we need another cent of old spice on the shelf? And because there's a different use case, and there was a different buyer. There are a lot of marketplaces in the U.S., you're absolutely right. What we built with AlphaX U.S., to take you back a year, is we use capabilities we had built in Canada to create better execution quality for investors, building it right into the functionality of the marketplace. And so we launched AlphaX U.S. based on capabilities that we've already proven out in the Canadian market to improve execution quality in a way that wasn't getting done here. And the results have been what we had hoped for.

So we believe this would have a lot of potential. We'd be able to build volume very quickly, and that's now been proven out. So we're -- we just had our 1-year anniversary. We continue to hit new records on the platform, both from an engagement standpoint, size of the fills and the participants. We're continuing to add participants to the platform on a regular basis. So we couldn't be happier with what the team has delivered on it. We're looking to the next year now in terms of getting to that next leg of growth and all the indicators that we're going in the right direction.

When we benchmark ourselves against -- and what we've done is we've -- you can't benchmark it against a full exchange offering because it is a unique ATS, it's purposes specific. When we look at other ATS launches that have been in the U.S. over the last number of years, and we look at how fast we've been able to accelerate the growth, this is one of the fastest-growing platform to actually get client adoption of any launch in the U.S. market. So thrilled with what the team has done, thrilled with what we're going to do in the next year on it.

Perfect. I think we're out of time. So thank you very much for coming again and excited to get the update. Thank you.

Alex, thank you. Appreciate it.

Thank you for standing by. This is the conference operator. Welcome to the TMX Group Limited Fourth Quarter 2025 Results Conference Call. [Operator Instructions]

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 fourth 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 6 weeks ago, 2025 already seems like a distant memory as it's been a very eventful 6 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 stand-alone 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 Trayport and TMX VettaFi. And we are 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 turn 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 remained 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 3-month CORRA futures contract, or CRA, which replaced the BAX in mid-2024. The CRA surpassed all-time BAX's 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 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. Alpha ex U.S., 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 in exchange technology, the AlphaX U.S. team was recognized with 2 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 WatersTechnology.

Now I'd like to turn over to Global Insights. Revenue here increased 16% compared to 2024, led by double-digit increases from TMX Trayport and TMX VettaFi. TMX Trayport'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 pound 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 Trayport 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 VettaFi, revenue increased 24% year-over-year or 21% in U.S. 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 3 new acquisitions, the Credit Suisse Bond Indices in February, ETF Stream in June and a set of nuclear energy indices in October. These latest additions enhance TMX VettaFi's diverse product suite, while growing our presence in targeted regions. Next month, TMX VettaFi hosts Exchange, our marquee event and the premier gathering of ETF and wealth management community in Las Vegas.

Now on to capital formation. As I mentioned earlier, revenue increased 9% year-over-year, primarily due to higher volume -- sorry, higher revenue from additional listing fee and the inclusion of a full year of Newsfile revenue. Now in a year clouded by economic uncertainty and headline disruption, the signature strength of public markets shown 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 with 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 featured some game-changing deals. In September, RFA and Artis REIT announced a business combination through a share exchange transaction to form RFA Financial, a more diversified financial services platform. On October 1, Maple Leaf Foods completed the spin-off of Canada Packers, Inc. as an independent public company. In November, TSX Venture-listed Carcetti Capital completed the acquisition of Hemlo Gold Mine 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 $1 trillion in overall market capitalization in 2025. And of the 11 companies to graduate from TSX Venture Exchange to the senior market in 2025, 10 of these were mining companies.

So looking more broadly across the marketplace ecosystem, it was also a stellar year for the 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 of my 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 6 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 has 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.

Now 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 exploring 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 clearing houses 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. 2/3 of the public companies on TSX and TSX Venture are small or medium enterprises. And our public venture market is the bedrock of our 2-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 2 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. Markette 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.

Thank you very much, John. Good morning, everyone, and thank you for joining us today. I'm pleased to report that the TMX Group delivered outstanding financial results in the fourth quarter of 2025, capping off an exceptional year. This quarter, we achieved double-digit revenue growth across the enterprise and coupled with our disciplined approach to cost management, delivered record income from operations. The strong financial performance reflects the successful execution of our diversification strategy and our team's commitment to operational excellence.

We achieved record quarterly revenue of $457.8 million in Q4, representing a robust 16% year-over-year growth. This outstanding performance was driven by strength across all of our business segments with particularly strong contributions from our derivatives trading and clearing, TMX VettaFi, TMX Datalinx and Capital Formation businesses.

The 2025 fourth quarter diluted EPS of $0.41 was 29% lower than Q4 of last year. This decrease in reported diluted earnings per share included $0.19 per share decrease related to the net noncash foreign exchange accounting losses on our U.S. dollar-denominated intercompany loans in Q4 of 2025 compared with noncash accounting gains in Q4 of last year. Notwithstanding, our adjusted diluted earnings per share increased 22% from Q4 of last year, reflecting a 14% growth in income from operations.

Turning now to our businesses, beginning with the segments that saw the largest year-over-year increases. Global Insights revenue grew by 16% this quarter, reflecting double-digit increases across all 3 businesses in the segment. Revenue from TMX Datalinx grew 18% from Q4 last year, which includes $7.9 million from the inclusion of Verity, which was acquired on October 1, as well as an increase in subscribers and usage, data feeds and also higher revenue in colocation.

Excluding Verity, TMX Datalinx grew 5% organically. Revenue from TMX VettaFi grew 23% in Canadian dollars and 25% in U.S. dollars this quarter. This growth included $3.7 million of revenue from recent acquisitions, namely bond indices, ETF stream and the addition of nuclear sector indices. Revenue, excluding these 3 acquisitions, increased 13% in the fourth quarter, reflecting strong organic growth in assets under management and higher revenue from digital distribution.

TMX VettaFi's assets under management grew 49% from December 31, 2024, to over USD 77 billion at December 31, 2025. Revenue from Trayport grew 11% in Canadian dollars or 8% in pound sterling this quarter, primarily driven by a 6% increase in total licensees, annual price adjustments and incremental revenue from data analytics and other trader products compared with last year.

TMX Trayport's average recurring revenue for the quarter on an annualized basis was approximately CAD 276 million or GBP 150 million, up 17% and 14%, respectively, compared with the same period last year. Trayport continues to grow in line with our expectation of high growth over the long-term. As our core European market matures, we are actively developing Trayport's product offerings, expanding into new geographies and asset classes to unlock further growth opportunities.

Revenue in our derivatives trading and clearing businesses, excluding BOX, was up 27% from Q4 of last year. This strong performance was driven by a 32% growth in Montreal Exchange and a 17% growth in CDCC revenue, reflecting both higher rate per contract and a 10% increase in derivatives volumes. The increase in average rate per contract this quarter reflects the sunset of the CORRA market making program at the end of Q2 of 2025 and the sunset of the 2-year Government of Canada Bond Futures market making program at the end of November of 2025.

Our derivatives business maintained its strong trajectory through 2025 and open interest at the end of December was up a staggering 33%. Revenue from BOX increased 16% this quarter, driven by a 17% growth in volumes compared with Q4 of last year. In our Capital Formation business, we saw an increase in capital-raising activities this quarter, which translated into a 13% year-over-year revenue growth.

Additional listing fees grew 53% from Q4 of last year, reflecting an increase in the number of transactions billed at the maximum fee on both TSX and TSX Venture Exchange or TSXV for short. Sustaining listing fees and initial listing fees also grew compared to last year, driven by continued growth in ETFs. The increased revenue in listings was partially offset by a 5% decrease in TMX Corporate Solutions revenue in Q4, mainly reflecting lower net interest income revenue due to lower yields and lower balances compared with Q4 of last year.

Turning now to our Equities and Fixed Income Trading and Clearing segment. Revenue was up 13% in the quarter, driven by growth in equities trading. The increase in equities and fixed income trading reflected a 38% volume growth in our equities marketplaces, including 24% on TSX, 74% on TSX Venture and 35% on Alpha Exchange, X and DRK combined. Our combined equities trading market share for TSX and TSXV listed issues was approximately 61% this quarter, down a minor 2% from the same period last year. We saw a modest 2% growth from our clearing business this quarter. In our fixed income trading business, revenue in the quarter decreased from last year, primarily reflecting lower credit and swap activity.

Now taking a closer look at our expenses. Operating costs in the fourth quarter increased by 19% and included the following notable items. First, we accounted for a $15.3 million regulatory charge passed through to BOX by its self-regulatory organization in Q4, resulting from the impairment of an asset related to the Consolidated Audit Trail or CAT for short, a system the SEC requires marketplaces to track U.S. equity and options trading. Second, we incurred $8.9 million of additional operating expenses related to new acquisitions; and third, a $3.3 million increase in dispute and litigation costs compared with Q4 of last year.

Now excluding these items, our operating expenses increased by approximately 6% on a comparable basis, largely due to 3 key drivers: first, roughly 2/3 of this increase or $8.4 million is driven by higher headcount, year-over-year merit increases and severance costs; second, approximately 1/4 of this increase or $3 million relates to IT operating costs, reflecting higher licensing and subscription fees and cloud services compared to last year. The remaining increase relates to higher amortization related to the launch of our post-trade system earlier this year, partially offset by savings from the strategic realignment updates completed earlier in 2025.

On a reported basis, we had slightly negative operating leverage of 2% in the fourth quarter. However, excluding the 3 items I discussed a few minutes ago, namely; first, the CAT-related fees; second, recent acquisitions; and finally, dispute and litigation costs. I am pleased to report we produced positive operating leverage of 7% in the fourth quarter, which is a direct result of our focused strategy with our robust 13% organic revenue growth outpacing a well-managed 6% increase in operating expenses on a comparable basis.

Now looking at our results sequentially, our revenue increased by $39.2 million or 9% from the third quarter, reflecting increases from, first, higher revenue from our Global Insights segment, driven by TMX Datalinx, which included revenue from Verity in Q4 and VettaFi AUM growth I spoke to earlier; higher revenue from capital formation driven by higher additional listings; and finally, higher revenue from both our equities and fixed income trading and clearing and our derivatives trading and clearing businesses, reflecting higher trading volumes.

Turning to our sequential expense analysis. Operating expenses in Q4 increased $25.3 million or 11% from the third quarter, primarily reflecting $15.3 million of CAT-related regulatory fees passed through to BOX, $5.5 million of operating expenses related to Verity and higher employee incentive plan costs and higher software license and subscription costs. On the balance sheet front, our debt to adjusted EBITDA ratio at December 31 was 2.2x, which is within our target leverage range of 1.5 to 2.5x. We continue to maintain a disciplined approach to capital deployment and prioritize driving shareholder value.

Turning now to our cash and marketable securities financial position. As of December 31, we held approximately $513 million in cash and marketable securities, which is approximately $273 million in excess of the approximate $240 million we target to retain for regulatory purposes. Net of excess cash, our leverage ratio was 1.9x at December 31, 2025.

I'm pleased to announce that last night, our Board of Directors approved a 9% increase to our quarterly dividend to $0.24 per common share, payable on March 6 to shareholders on record as of February 20, and this positions our last 12-month dividend payout ratio at 42%, consistent with our target payout range of 40% to 50%.

Now as we look to 2026 and beyond, we remain focused on building on this momentum and continued execution of our TM2X strategy to accelerate our growth. Our robust cash generation capabilities, our strong balance sheet and our diverse portfolio of interconnected global businesses positions us well for continued success.

So with that, I'll turn the call back to you, Amin, for our Q&A period.

Thank you, David. Drew, would you please outline the process for the Q&A session?

[Operator Instructions] The first question comes from Benjamin Budish with Barclays.

Maybe just to start out on Trayport. I know your ARR was up a little bit. It looks like the revenue trend has been a little bit more flattish over the last couple of quarters. Just curious, maybe a 2-parter, if you could remind us, how do you think about like energy price volatility translating into revenue growth, subscription growth? I imagine there's a little bit of a lag. And how are you thinking about the recent volatility and how that could translate into growth going into next year? That would be the first question.

Thank you very much, Ben. So it's David here. I'll deal with the last part of your question first and then hand it over to John, and we can talk a little bit about our overarching Trayport strategy.

I mean, yes, I mean, if there is more volatility and activity in the energy markets in Europe and various trading houses decide to either expand their operating desks, then obviously, that would have a potential uplift for us as they subscribe to additional licenses or seek to renew, let's say, an enterprise site license if they have that with us.

But it goes without saying, as we've said many times before, we don't directly benefit from energy market trading. Our billing process and site license agreement is really based on subscribers. And then maybe I'll just hand it back to John, and he'll talk a little bit about our overarching long-term strategy with Trayport and our long-term growth objectives.

Thanks, David, and thanks for the question, Ben. Yes. And one of the pieces I just do that, I do want to iterate, we've had this conversation in previous calls as well. As we bring clients in over time, that can be lumpy. So clients will come in, they will take a number of seats, they renew at different times. So it's very difficult to look at that quarter-by-quarter to create the trend. And that's why we always guide towards the long-term guidance on this business in terms of that high single, low double-digit growth, which we continue to be just as bullish on as we have been in the past. So there is no change in outlook for us in terms of what we can do with this business.

So as David said, you continue to have upside in the European market as volatility does come back, as you start to see other people coming into the market, as the market demand expands because it is still a growth market from an energy usage standpoint, you've got long-term tailwinds there. But what we're really looking to, to create that long-term growth curve is what I talked about in my earlier comments as well is the continued build-out of new asset classes and new geographies.

So while the European market is well developed, we are not the same degree of development in the U.S. and Asia, and we're continuing to build that out. We are looking at how do we bring other commodities on, and we are in discussions in terms of particularly the refined oil market. That is a long-term program to bring those additional commodities on. So we see this as a business that has got a lot of white space for growth, and that's why we're able to continue to iterate that long-term guidance.

I appreciate that. Maybe just a follow-up. The Montreal Exchange has seen very robust growth over the last several years. Some of that is market-driven, but some of it is driven by TMX's various initiatives. As you look into '26, '27, what other levers or initiatives do you have kind of in the works that might either continue or accelerate or sustain that growth sort of ex whatever market volatility does?

Yes, happy to. So I mean, as you're right, we are really happy with how that business is performing. And I always equate it to a bit of a large sailing ship, which is -- you don't have the ability to catch all that wind unless you put up all the right sales, which our team has been continuing to do in terms of product innovation, operating our innovation, et cetera, et cetera.

And even in the things that we've launched, we have room to grow and mature in them. We have the market making agreements that are rolling off for potential upside on the revenue side. But to your question around go forward, I really put it into 2 categories. So one, we are continuing to look at a product road map of new and enhanced products. You'll continue to see us bring out new things that will give new on-exchange things for people to trade.

We are also looking at new product expansion on the clearing side. So the unique vertical we have with MX and CDCC means we can do more on the cleared product side like we do with repo when there's opportunity to do more there. And then the other piece of this is continued market reforms. So as the market has grown, we've identified areas where there are some limitations on market making that have made it difficult for people to do more on the market, and we are making changes there that will allow more expansion in things like ETF options and otherwise, so that our participants can do more within the ecosystem. So it's product introductions, it's clearing capabilities and new clearing over-the-counter product and marketplace reforms that allow for more activity.

The next question comes from Etienne Ricard with BMO Capital Markets.

Just to circle back on Trayport. Can you remind us what the long-term growth algorithm for this business is between volume and price? And specific to volume, should we expect the new connection growth going forward to be largely driven by non-European clients?

Thanks so much, Etienne. It's David. So let me talk a little bit about the algorithm for growth in Trayport, and it's a bit of a refresher.

So as you know, I mean, in Trayport, it's a Software-as-a-Service business, which is really subscriber-driven. We really have 2 types of subscribers. We have enterprise site license subscribers and then effectively shorter-term pay-as-you-go, if you will, site licenses. And really, the growth algorithm there is pricing, which effectively automatically resets every year in December.

All of our agreements have a Consumer Price Index, which is pegged to Bank of England's published Consumer Price Index. And in and around early December each year, we do reach out to all of our clients, notify them as to what pricing changes are going to occur in the next year. And as you can see in our disclosure, we've indicated what that is for 2026 for Trayport.

And then the second piece is really as our clients grow, right? And what that really means is in the European market is do they -- as I mentioned when I was answering Ben's question, do they expand their usage, i.e., do they have a trading desk of 4 that now becomes a trading desk of 8? And if it is, a trading desk of 8 and they need a Trayport screen. Then if they're on a pay-as-you-go approach, they'll approach us and they'll purchase additional licenses. And if they're on a site license, they won't have an immediate revenue impact because we'll wait until we renew the agreement with them to actually upsell.

But the second part is really what we would refer to as our premium products, right, whether it would be algorithmic trading, chatting charting and analytics. Our team in Trayport are constantly working with our clients on how to enhance the platform. And so in doing that, they're adding features that upon renewal, enable upsell with our clients. And really, it's meeting a client-driven need as opposed to something that we thought of and have offered. It's really listening to our clients and building the capabilities that they would like. And for example, one we spoke about at our Investor Day, is the chat capability, which is something that we're working on actively.

And then as John said, and that's the most important one is how do we expand into other asset classes and other geographies. And that really, when put all together is the long-term algorithm. John, do you want to add anything?

Yes. The only thing I'll add is -- this is the interesting, continued transformation of the business that even the marketplaces themselves, in some cases, are becoming less geographic. So while this business was largely built in the European marketplace, areas like natural gas are very much becoming a global market, a globally priced market, especially if you have the more advent of LNG. So things like Japan, the trade reporting facility, things like that are getting much more global pricing. So you've got the ability not just to continue to grow in Europe, but to grow beyond it because these asset classes are becoming more global.

Very helpful. And then switching on VettaFi. So I know you've talked about more M&A opportunities to continue scaling the business. And VettaFi has had a lot of success with some thematic and factor-based products. So as you look at some new acquisitions here, would you prefer to continue acquiring more thematic indices or maybe look at more diversified products?

We're actually not limited to either one. So what the team has built out and the scalability of the VettaFi platform and now a proven track record that our team has had on being able to bring in new product and build it onto the platform and distribute it to the audience is not limited. So when we are looking at new opportunities, we are more looking at, okay, what is the unique opportunity of those assets and indices and our ability to scale them.

And so they could be thematic, but we want thematic that has potential like the investment in the nuclear indices because we saw the long-term potential for increased investor demand in those interest areas. So it really can be across the spectrum. We are also continuing to look for more geographic distribution. That's why we've done some more work in the European sphere. That's why we brought the index research team on, if you remember, just over a year ago. So expect that to be the continued approach.

And candidly, though, we look at far more than we will execute on because we are continuing to be very disciplined about what are the products, the ability to scale up, the interest level to the investor audience and the ability for us to integrate it in. And that's really a critical touch point in terms of how we do these things is we want to be able to scale it up on the platform in a way that's really efficient.

The next question comes from Aravinda Galappatthige with Canaccord Genuity.

Congrats on another excellent quarter. I wanted to maybe just picking up on the M&A question, talk about -- or ask you about your thoughts with respect to sort of the M&A market in general. Obviously, in the last couple of days, we've seen sort of an extension of the sell-off in software with -- obviously, the analytics and data businesses getting hit in multiple industries, including financial.

I guess on one hand, as your balance sheet gets better, I mean, these potentially opens up interesting opportunities for you as this sort of extends into the private markets. And then on the other hand, though, perhaps you can talk about sort of the moats that you have with respect to your existing businesses in terms of sort of addressing the potential threats from some of the emerging technologies?

Yes. I'm so glad you asked that question because it's so timely and thoughtful for where we are in terms of this point in history.

Our strategy is unchanged. And I'll get to that in terms of the defensive moats in a little bit. But our strategy is unchanged. The areas we are looking to invest are unchanged. If anything happened this week, things got -- things went on sale and maybe that will create different opportunities for us to bring things in it at valuations that make sense because it's always been a sector where valuation has been challenging in terms of ensuring that you can get good return for the investors to bringing things in.

And candidly, to your point, our strategy has been to bring in things that we can integrate and scale as part of our ecosystem. And that really gets to the heart of the defensive moat pieces we bring it in. So as you saw recently, the pieces that we brought in around data, the Verity team, which actually does have AI-enhanced data capabilities in it is designed to integrate with our Datalinx business, which uses a lot of proprietary data and creates unique opportunities that you can't create necessarily just as an AI agentic outside.

And so that's the real reminder that we want to make sure that people understand about our business and particularly about our Global Insights businesses that are very much proprietary based. So Datalinx, very much proprietary data, Trayport, proprietary networks that you need to be connected to be able to get the visibility and the activity on the VettaFi applications, those benchmarks, proprietary benchmarks that are integrated in products that are in investors' hands. These are very difficult to disrupt with the types of technology advancements [ we've ] been talked about in the AI market these days. So candidly, I think this reaction was an overreaction, and I don't think it's particularly appropriate for a company like us.

And just a quick follow-up, perhaps for David. Great analysis of the OpEx piece as usual. Looking forward, obviously, a lot depends on sort of the growth trajectory we see in '26. How should we think about sort of the organic OpEx inflation from here on? Any kind of -- any components we should be aware of as we sort of model through?

Yes, it's a great question, Aravinda, and pleased to actually take it.

I mean, we continue, and this echoes what John said about our strategy, right, which is unchanged, is we continue to invest in growth in 2026. And the thing that is the biggest guidepost for both the management team and when we review with our Board of Directors is being focused on the positive operating leverage, right?

And as I've said before, it's less about the quarter. It's really about the full year and the multiyear. This quarter, obviously, it was an outstanding performance at 7% operating leverage generated obviously, through '25.

Now as you know, I don't traditionally provide expense guidance and there -- but there are 2 things that I can share with you, right? So first, looking at our most current quarter's expenses, really using Q4 as kind of a jumping off point. I would use the comparable basis as kind of the best jumping off point. And then from there, as you look to the next quarter, I would adjust for what you would typically expect are pluses and minuses, right? And the best way to look at that is to say, okay, as we head into Q1, we typically have higher payroll expenses as things reset at the end of the year as well as we typically have the VettaFi Exchange conference, right? So those would be the 2 things that you would look at.

And then secondly, as I've said in the past, right, like we try and maintain expense growth to inflation. And really, inflation is on an annual basis. But as we've noted in the past, like we have various expense categories that are subject to different types of inflation. So for example, compensation and benefits really tracks more as wage inflation in the various countries in which we operate. And dare I say inflation is not quite similar in some of these jurisdictions. So that's number one.

And then number two, we factor in obviously movements in total shareholder return relative to the S&P Composite Index because that changes the valuation of our performance share units and the multiplier, which we don't hedge, as I've spoken in the past. So that's really kind of on the salaries and benefits, which is about half of our expense base.

And then on the technology front, the rate of inflation, Aravinda, as you know best, differs from general wage rate inflation. And then we move to SG&A, right? And that really is moving more on some part of the Consumer Price Index, but other parts like travel and entertainment seem to be somewhat disconnected from the typical Consumer Price Index. So we factored that all in, but we go back to the most important guide point, which is positive operating leverage and investing for growth. Go ahead, John.

I want to add in one piece because it actually then circles back to your first question. I don't want to lose sight in the discussion about the AI opportunity here for us and the work we are doing there. That is actually integral to how we see the future state of how we manage the investment, the talent base in the organization.

We are already seeing some early wins. So we have AI adoption within some of our development teams. That's actually allowed us for the first time in the time that we've actually owned Trayport to essentially hold our development team flat year-over-year because of the additional productivity we're getting out of that tool deployment, so we can get more with the team that we have in terms of developing more product, more software.

So we're looking into this year in terms of actually how do we scale that up, move it across more of the divisions. We're actually deploying tools across the entire population base to improve productivity throughout the firm. So that's part of then what the tool base is for help us to maintain that cost discipline going forward by using these things smartly in terms of how we would work every day.

The next question comes from Jaeme Gloyn with National Bank Financial.

Just want to go back to the AI risks and opportunities as well. And as we look at some of the companies in your peer group or adjacent peer group like an LSEG or FactSet, getting hit a little bit harder than yourselves. It seems to be maybe perhaps focused on some of these data and analytic screens or tools that would maybe be comparable to like a Trayport. So I appreciate your commentary around the proprietary network and difficulty to disrupt that network. I would agree with that. I'm just wondering, are there other strategies or other projects underway to reaffirm that moat you have in the Trayport business as it relates to potential threats?

Yes. And Jaeme, thank you for that. And I think we've actually talked about this in the past that we've actually been on a continuous investment program within Trayport. We're actually just reaching the end of an investment period, which we call JUUL 2.0, which is an entire replatforming of the Trayport system, which actually then makes it even easier and quicker for us to bring new features and capabilities to the user base to keep them connected.

And so that's -- like the value of a really strong network is you can only get that value by being connected to it. The data that goes through a Trayport screen is not publicly available data. You can build any AI agent you want, but the data is not available for it to do anything with. And that's what I mean by it being a proprietary network. And the users on it don't want that data exposed in a public way because it's their value-added data as well in terms of how they act with other participants. And so that's the nature of the business.

Our job is to compete is to continue to innovate around it. There have been folks building competitive alternatives, the entirety of the time we've been in this business and before we owned it. And the strength in it continues to be building that value-add network that has the best price discovery in that closed market. So that's what we're going to continue to do. So it really isn't comparable to those other organizations you talk to, and those are really about screens that are actually aggregating public data that's otherwise readily available. And that really is the differentiating point.

Now the second piece on that, in all of our data businesses, we are looking at where do we actually incorporate AI capabilities to both make them more efficient, but also potentially create more data and insight sets on top of them. That is what we're doing in terms of Verity team that's using public information with an AI component on top it to create investor signals on that, that you wouldn't otherwise have. We're similarly doing that with what we can potentially do in the data sets, and our analytics sets around Trayport, around Datalinx as well.

So you are going to see more of that coming forward in terms of the areas where we invest. But we're focused on areas where it makes the data sets more efficient and helps to create more information and useful investor site signals to the investor audience. But I always want to remind people, the underlying proprietary data comes from us, and that is a really strong asset as this industry evolves.

Okay. And then still in Trayport, it looks like there were some lower nonrecurring consulting fees this quarter. Not something I think I've seen called out in the past that perhaps is what's driving maybe organic revenue growth a little bit slower this quarter than what we're used to seeing. Is that the driver? Is there something else that we should be thinking about here in terms of that organic revenue growth number? I mean, you spoke very convincingly of the high single, low double-digit target in the near term as well. But maybe talk through some of those consulting fees and what kind of movement it can have from a quarter-to-quarter or year-to-year basis?

Yes. I appreciate that, Jaeme. Yes. I mean, effectively, what it was is it's less than GBP 0.5 million year-over-year delta. But it was meaningful for us just to call out because it was a variance year-over-year. That's kind of why we did it because it was notable. But typically, as you know, in many of our quarters, we don't call that out because the year-over-year variance is kind of not material. And this time, it was just slightly on the material side on that not material, material kind of judgment. So we thought it would be good to provide that color.

But yes, that is something that is also a really good harbinger of new client kind of growth because typically, the nonrecurring projects are us helping onboard either a broker or a trading desk and so on and so forth. But it's not the big driver of our results. But in this particular quarter, it just was notable to call it out.

The next question comes from Graham Ryding with TD Securities.

Maybe we could jump to equity tokenization. The SEC in the U.S. seems to be encouraging the development of platforms to trade and settle tokenized equities. We're also seeing some initiatives here from some of your peers like NASDAQ, NYSE and I guess, the Clearing Corp in the U.S., DTCC, they've all sort of rolled out some new initiatives or announced new initiatives. So maybe you could just comment on what do you expect from the Canadian regulators here? Should they be following the lead of the U.S. to some extent? And then should we be expecting some announcement or initiatives from you on this front in 2026?

Yes. It's a great question, and it's so timely. So thank you.

So let me start with in terms of where the transformation is coming from. And this transformation, again, we had talked about in some of the comments, is a technology capability that has the potential to make markets more efficient in some ways, but in some ways, less efficient than they are today.

The marketplaces, particularly around equity trading throughout North America, are some of the most liquid, deep and effective markets in the world. So when we think about how we tokenize and we think about what is the value add and what is the way to do that constructively.

And so actually, I really applaud the work that NASDAQ and NYSE are doing in terms of the leadership position in the U.S. where the activity on this is the highest to try to chart out what is the way to do it appropriately, so that you continue to have the benefit of price discovery, deep liquid markets, fungibility, standardization. And that's what they're looking to do in conjunction with DTCC in terms of their applications.

So from a Canadian standpoint, we do have a bit of a benefit of the ability to be observing and participating in this to see how we can standardize and be part of that discussion. We've got our team engaged on that as well. And one of the unique advantages we bring to the equation is that we actually have the entirety of the ecosystem to work with.

So like -- unlike in other markets, we've got exchanges and clearing houses that are separate. The fact that we have both the primary exchanges, CDS in terms of the depository and clearing, the trust and transfer agent capability, we have that full value chain so we can actually explore where we can see the abilities to innovate through this and actually create value.

And what we're really encouraging in our discussions with the industry and with regulators is that we do this in a way that thinks about the industry itself, how do you standardize and ensure that the efficiency we've collectively created isn't lost as part of the innovation. And so that -- again, that IDBB how do you standardize, how do you make sure things are fungible.

Now in that, I'll be candid, we've had actually discussions with companies for years that have considered bringing their issue to market in a tokenized form as opposed to a security form. It's actually not materially different in terms of the security itself because any security that's listed today is a fully digitized product, digitized from the front end all the way through, through trading and clearing. It's the question of whether or not you want it centralized or decentralized.

And so the model that the U.S. is pursuing is a way to potentially still have it as the same vehicle, but decentralized so you can remove the token from the depository and take it in the old wallet, which is a question in terms of the benefit, in terms of -- for some large users, they may see a benefit in that because they can use it for those things. But for some small users, there actually may security concerns around it. So these are all the things that we're considering. And we think it's our role as the leading marketplace to take a lead role in helping to identify the best way to adopt innovation for the marketplace. So it benefits all the various parties as opposed to just adopting for adopting.

So you will see announcements from us as we see practical applications that can be utilized. But we won't be doing this kind of what I'll call announcement for the sake of announcing. We're doing the work, and we want to see how we can get it right. I mentioned in my comments; we've actually been working on blockchain solutions and tokenization use cases for about 15 years. I do believe that the real biggest potential in the near term is going to be around large capital moves, collateralization.

The Bank of Canada stablecoin legislation is an enabler of that because it will allow the development of stablecoins in a way that candidly to begin are stable. But that also means you have to have liquid assets behind them. You have to have them property custody, and we can be part of that solution set. So those are the things that we're working on exploring, and we'll be active in the conversation going forward.

Great. Thanks for the thorough answer. Is it fair to say that there may be some areas of your business at risk, but there also could be some areas of sort of new market opportunities if the market structure does move in some extent towards blockchain and tokenized securities?

Yes. What I think is that there would be some areas of the business that would change. If -- I don't see where we're going to move to what I would call a 100% on-chain market because these markets are going to have to integrate. Even in the existing market today for equities, as I mentioned, everything that's been listed in the last 20-plus years is fully digital. But everything that was listed before that is a hybrid of digital and quite candidly, papers and gram of safes.

And so what we do is we actually make all that work and integrate together. And so as we move down the world of potentially tokenizing things along the side, we want to make sure that it all integrates together so that it can be fungible, not just through a marketplace standpoint, seamless from a user experience standpoint, seamless from a bank or dealer to be able to connect to all of these things at the same time.

And so I think it's more about how does that ecosystem transform over time in terms of how you support it. So for example, a transfer agent today maintains a register of both the centralized security that's on the centralized book and the decentralized security that's sitting on certificates. This would be another leg of that, that needs to be integrated together for it to be effective.

I will be candid; the one place I do not think is an effective solution is the solutions that are more about creating a token on top of an existing equity. That's a big question mark for me because it actually doesn't confer the rights back to the user. It's not fungible. It impacts price discovery and capital formation in a way that's not necessarily positive. And I'm not sure the actual investor at the end of the day understands what they're buying or has the same liquidity when they choose to sell it.

So those are the things we want to make sure we're very thoughtful about in terms of how we do market structure.

The next question comes from Bart Dziarski with RBC Capital Markets.

Lots of good discussion around AI and tokenization. So maybe I'll ask about the capital formation business, seeing really good growth there momentum. Just can you give us an update on what you're seeing early days to start 2026 and how you expect kind of the rest of the year to play out on that front?

Yes. Thank you for the question. And I mean early '26 really flows from the end of 2025. I mentioned in my comments that the financing activity in the back half of '25 was outstanding. If you actually look at the financing activity for all of the totality of 2025 now was up 60% year-over-year, 44% in the senior market, over 100% in the junior market, multi-sector behind it in terms of resources, financials, technology. So that is a very strong leading indicator. We're seeing that strength continue into 2026.

And then in terms of the new issue pipeline, this is -- it's always conversation-based because we can never give actual visibility to when a company will choose to go public. But we have one of the deepest IPO pipelines that we are engaged with. If you talk to the investment banking community, they would tell you the same thing, one of the deepest pipelines we've seen in a number of years. And again, multi-sector in terms of companies that could be coming to market. So you're seeing a return of technology companies interested in raising public money, which we haven't seen over the last number of years since basically 2021.

So we're pretty excited about the potential. I always use the word potential because global events can be disruptive as we have seen in the past. But the potential is there. Market values are strong. Liquidity is very deep. The liquidity in the marketplace is the strongest it's been in decades. So the conditions are good for companies that want to go forward. And now it's a question of which ones go when.

Great. And then just wanted to ask around the Corporate Solutions business you're building out. You're tapping into private markets. It's a new asset class. Like how should we think about that in terms of the opportunity for you over, call it, the next 3 to 5 years as you address that asset class for new growth?

Yes. I mean one of the simple ways we've thought about it in terms of how we've kind of set up our objectives internally is when we think about the whole Capital Formation space in terms of Capital Formation and Corporate Solutions, Capital Formation being very much the capital raising activities of the exchanges and Corporate Solutions being all the solution sets of public and private issuers.

Right now, the Corporate Solutions is about 44%, I think, of the total revenue of that division. We're looking for that to be actually the larger piece. So more than 50% of the Capital Formation overall business, which actually means we have to grow even faster when the capital raising activity is strong in that piece.

And the reason we believe that, that has potential is because those solutions, they are not limited to public companies. The ecosystem, the client base is capital raisers, whether you're raising from a private source or a public source that transfer agency, that trustee capability, that employee plan, the disclosure tools are useful for all of them. And we've really seen this through our expansion of the Trust business, the Newsfile business when we came in, had hundreds of clients that were in the private space as well.

And so all those ones have a lot of growth space to get deeper relationships. And the unique piece around as we build this out is it allows us to have multi-solution conversations with clients that we didn't have the ability to do in the past. So when we can talk to a client about not just the transfer agency capability, but the disclosure as well or vice versa. And that applies not just to private companies, but candidly, it applies to some of our largest blue-chip companies as well that use other providers that now we can have discussions with.

So that's why we get really excited about that solution space because it's not bound by public. It's capital raisers in general. And as we sell into private companies, either through solutions or through the Marquette initiative I mentioned earlier, it allows us to build that relationship deeper with a company that has a go-public potential in the future. So again, when you build your pipeline for who can go public, we're starting that relationship earlier in the life cycle by being able to serve them in their capital raising activities while they're still private.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Mousavian for closing remarks.

Thank you, Drew. If you have any further questions, contact information for Investor Relations as well as media is in our press release, and we'll be more than happy to get back to you. I know your valuable time is finite, and we thank you for spending with us this morning. Until next time, goodbye.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is your conference operator. Welcome to the TMX Group Limited Third Quarter 2025 Results Conference Call. [Operator Instructions] The conference call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Amin Mousavian, Vice President of Investor Relations and Treasurer and Interim Chief Risk Officer. Please go ahead, Mr. Mousavian.

Good morning, everyone. We join you from our Montreal office today to discuss the 2025 third quarter results for TMX Group. We announced our results for another outstanding quarter and our fifth consecutive double-digit revenue growth, highlighting strong performance across all of our business units. 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 the 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 I will turn the call over to John.

Thanks, Amin, and good morning. [Foreign Language] Good morning, everyone, and thank you for joining the call this morning, broadcasting to you live from our Montreal office on a beautiful morning here in La Belle Province. Now as Amin mentioned, we announced third quarter results last night and TMX delivered outstanding performance in the quarter, highlighted by strong year-over-year growth in revenue, adjusted earnings per share and operating leverage.

And as David will cover the quarter in more detail in a few minutes, I'm going to focus my remarks this morning to provide important context around our -- how our year-to-date progress sets the stage for future success. At last year's Investor Day, we unveiled an ambitious strategy we've been working on for a number of years called TM 2X. And I say ambitious because what we needed to do was shift the organizational mindset from a growth -- to a growth mindset from incremental to transformational.

It took the organization 14 years to get from $0.5 billion in total revenue to $1 billion, but our aim was to double that pace to reach $2 billion in 5 to 7 years, and we are well on the way. People across our enterprise have embraced this challenge. And I'm happy to report that as we move along in the fourth quarter, we are delivering on the promise of bigger and faster. And we are now 5 consecutive quarters of double-digit growth into the TM 2X journey, well on our way.

So turning to our results for the first 3 quarters of 2025. Our overall revenue increased 18% compared to 2024, reflecting gains across all business lines, highlighted by double-digit growth from derivatives and clearing, equities trading and Global Insights. Our organic growth, excluding acquisitions, increased 16% and adjusted diluted earnings per share increased 25% from the first 9 months of last year.

Our results showcase the power of a unique diverse portfolio of interconnected global businesses as well as the resiliency of our market ecosystem. And 2025 success stories span the entire enterprise across established traditional business areas as well as new business areas and geographies.

Our overall operating expenses for the first 9 months increased as well year-over-year, reflecting expenses related to recent acquisitions, and continued investment in organic growth. And David will walk through the expenses in more detail following my comments this morning.

Now moving through some of our business area highlights. Trading activity on core domestic markets remained strong throughout the first 9 months. Revenue from derivatives trading and clearing, excluding BOX, increased 32% year-over-year, driven by strong trading activity across both equity and interest rate derivatives. The first 9 months also featured continued upward momentum in our Government of Canada bond futures products, supported by a record open interest and increased client adoption.

Macro environmental and geopolitical factors drove record investor demand for derivative instruments. MX overall open interest reached an all-time high of 33 million contracts in September and finished the month 57% higher than the same date last year. On the equity trading side, increased activity due to market volatility as well as higher yields on premium products drove revenue gains.

Overall revenue from equities and fixed income trading and clearing increased 11% compared to the first 9 months of 2024. On a combined basis, TSX, TSX Venture and Alpha volumes increased 22% year-over-year. Now looking beyond Canada, building on our early success, AlphaX U.S., our new U.S. equities trading venue continued its impressive growth trajectory during Q3.

Market share grew 30% and average daily volume increased more than 30% quarter-over-quarter. But what we are most encouraged about is the pace of industry adoption with approximately 30 participants now connected representing a range of firms all connected to AlphaX U.S. Turning now to Global Insights. This has been a key contributor to our tremendous year-over-year performance and a propulsive force in our strategic growth.

Revenue during the first 9 months increased 16% compared to 2024, led by double-digit increases from TMX Trayport and TMX VettaFi. TMX Trayport revenue grew 21% year-over-year or 14% in pound sterling, driven by a number of factors, primarily an increase in the number of licensees and increased adoption of analytics and other trader products.

Trayport's forward strategy is focused on 3 primary client-centric components: strengthening the core jewel network by investing to improve speed, scalability and reliability while supporting enhanced capabilities and product innovation; number two, expanding into new asset classes and geographies; and three, adapting to address the evolving needs of energy trading clients with innovative data analytics tools.

Our revenue from TMX VettaFi increased 24% compared to the first 9 months of last year or 20% in U.S. dollars due to higher indexing revenue driven by organic growth in assets under management and recent acquisitions. TMX VettaFi continues to execute against an opportunistic expansion strategy, moving to capitalize on specialized long-term global trends. And so earlier this month, we acquired 3 indices that track the nuclear energy sector, crucial for AI infrastructure from Range Fund Holdings and North Shore Indices, including the Range Nuclear Renaissance Index.

These latest acquisitions expand TMX VettaFi's industry-leading indexing platform to over 1,250 indices across a diverse group of major asset classes. Now moving now to the third key component of Global Insights, TMX Datalinx. We also made some news earlier this month. We acquired Verity, a leading buy-side investment research management system, data and analytics provider.

The addition of Verity brings a dynamic new financial data and proprietary analytics and capabilities, along with an expert group of professionals to our Datalinx team to enhance the services we offer to more than 5,000 clients worldwide. And I'd like to take that quick opportunity to welcome the Verity team into TMX.

Now turning to capital formation. The first 9 months of revenue increased 8% when compared to 2024 due to higher revenue from additional listing fees and the inclusion of revenue from Newsfile. You'll recall at the beginning of the year, we separated the Capital Formation segment into 2 primary components: Traditional capital formation, the role of our stock exchanges, TSX and TSX Venture play in helping listed companies raise growth capital.

And TMX Corporate Solutions, an end-to-end set of services, including TSX Trust and Newsfile to serve the needs of public and private companies through all their capital raising activity and stages of evolution. And we established then a long-term objective of generating over 50% of the revenue from capital formation from these corporate solutions.

But the story of this quarter is actually really about capital raising itself and the strength of our public market ecosystem. Combined, TSX and TSX Venture market capitalization reached a record high in the quarter, topping $6 trillion for the first time, highlighted by $1 trillion in the mining sector alone, also an all-time high. And most importantly, we are also seeing sustained positive momentum in activity at the crucial foundation of the ecosystem, led by a surge in the mining sector, equity financing dollars raised by TSX Venture issuers increased 67% through the first 9 months compared to that same period last year.

And over the past few quarters, we've talked about our efforts working closely with a well-defined pipeline of private companies to prepare them to join our ecosystem. Earlier this month, we proudly welcomed Calgary-based Rockpoint Gas Storage to the Toronto Stock Exchange, the largest independent owner and operator of natural gas storage in North America.

The company raised over $700 million during its IPO, and we are hopeful that this is a signal to the community of issuer prospects and to the entire marketplace that the conditions for going public are right and that we are on the cusp of a robust IPO season. Growth momentum also continued through the third quarter in Canada's ETF industry. Through September 30, 200 new ETFs listed on Toronto Stock Exchange this year, surpassing the full year record set in 2024.

And now as I close, I'd really like to take a moment to thank our employees around the world for their continued and essential contributions to our success. TMX has an impressive track record of leadership and innovation and we have a long proud history. Last Friday marked TMX's 173rd birthday. And in 2 weeks, we will celebrate 23 years as a publicly traded company, and I believe in celebrating our milestones.

Those of you who have followed us through the years have seen the yellow evolution from a regional exchange operator into a global competitive force. Now to be clear, I haven't been here for 173 years, but it's been my absolute privilege to work here during the most transformative era. And I feel very strongly that we're on a course for an even brighter future. As we move forward towards the end of this year, we are equipped and emboldened to take TMX to new heights from promise to delivery, ambition to execution.

And with that, let me turn the call over to David. Thank you.

Thank you, John, and good morning from Montreal. I'm pleased to report that the TMX Group delivered outstanding financial results in the third quarter of 2025, reflecting the strong momentum across our franchise and the effectiveness of our strategic initiatives. We once again achieved double-digit increases in both reported and organic revenue in the third quarter.

Our Q3 revenue of $418.6 million equates to a robust 18% year-over-year growth. This exceptional performance was broad-based across all of our business segments, with particularly strong contributions from our derivatives trading and clearing, TMX VettaFi, TMX Trayport, TMX Datalinx and equities and fixed income trading businesses. The strength in our revenue, coupled with disciplined expense management, led to strong income from operations and earnings per share this quarter.

Diluted earnings per share increased 43% to $0.43, while our adjusted diluted EPS grew 27% to $0.52, driven by growth in our income from operations, which increased 23% compared with Q3 of last year. Now turning now to our businesses, beginning with the segments that saw the largest year-over-year increases.

Global Insights revenue grew by 18% this quarter, reflecting double-digit increases across the 3 business segments -- 3 businesses in the segment. Revenue from TMX VettaFi grew 35% in Canadian dollars and 32% in U.S. dollars this quarter. This growth included $4.6 million of revenue from recent acquisitions, namely iNDEX Research, Bond Indices and ETF Stream.

Revenue, excluding these acquisitions, increased 21% in the third quarter, reflecting strong organic growth in assets under management higher analytics revenue and higher revenue from digital distribution. TMX VettaFi's assets under management continued to show robust growth with over USD 71 billion at the end of September. Now as John mentioned, earlier this month, TMX VettaFi continued to expand on its indexing capabilities and product offerings through the acquisition of 3 nuclear sector indices.

These thematic equity indices track nuclear energy and uranium miners, which is a rapidly expanding sector, especially as the world economy seeks to power generative AI and other energy consumption-driven technologies and services. Revenue from Trayport was up 16% in Canadian dollars or 12% in pound sterling this quarter, primarily driven by a 6% increase in total licensees, annual price adjustments and incremental revenue from data analytics and other trader products compared with last year.

TMX Trayport ended the quarter with average recurring revenue for the quarter on an annualized basis of CAD 275.7 million or GBP 148.6 million, which is up 18% and 13%, respectively, compared with the same period last year. Now revenue from TMX Datalinx grew 12% from Q3 of last year, reflecting growth in benchmarks and indices, data feeds and higher revenue in subscribers and usage related to prior period billing adjustments.

There was also a favorable impact from pricing changes that came into effect earlier this year, and an increase in analytics revenue, coupled with the growth in colocation.

Our revenue in our derivatives trading and clearing businesses, excluding BOX, was up 27% from Q3 of last year, driven by a 31% growth in the Montreal Exchange and a 20% growth in CDCC revenue on the heels of a 13% increase in volumes and a higher rate per contract this quarter relating to the sunset of the CRA Market Making program in Q2 of this year.

Our derivatives business demonstrated sustained strong performance through the first 9 months of 2025. And as John mentioned earlier, open interest in September is up 57%. Revenue from BOX increased 27% this quarter, driven by a 27% growth in volumes compared with Q3 of last year.

Now turning to our Capital Formation business. We saw encouraging trends in capital formation activity this quarter, with revenue up 15% from Q3 of last year. Additional listing fees grew 42% year-over-year due to an increase in the number of transactions billed at the maximum fee on both TSX and TSX Venture Exchange or TSXV for short, and higher average fees for transactions below the maximum.

Sustaining listing fees and initial listing fees also grew compared to last year, reflecting increased activity on both TSX and TSXV as well as a higher revenue from ETFs. TMX Corporate Solutions grew by 9% in Q3, reflecting $1.8 million increased revenue from TMX Newsfile, which was acquired in August last year and a higher transfer agency set of fees from TSX Trust.

The revenue increase in TMX Corporate Solutions was partially offset by lower net interest income revenue, mainly due to lower yields compared with Q3 of last year. Now in our Equities and Fixed Income Trading and Clearing segment, revenue was up 10% in the quarter, driven by growth in trading, while revenue in our clearing business was up 2% from Q3 of last year.

The increase in equities and fixed income trading reflected 35%, driven by higher volumes in our equity marketplaces, including 18% on TSX, 86% on TSXV and 40% on Alpha Exchange and DRK combined. Our combined equities trading market share for TSX and TSXV listed issues was approximately 61% this quarter, down approximately 3% from Q3 of last year.

On the fixed income trading side, revenue decreased versus Q3 a year ago, primarily reflecting lower activity in Government of Canada bonds this quarter compared with a very active Q3 last year as well as lower credit and swap activity. Now as John mentioned, I'd like to take a closer look at expenses.

So let's take a closer look at our expenses. On a reported basis, operating costs in the quarter increased by 14% and included the following items: First, we incurred $7.4 million of higher dispute and litigation costs compared with Q3 of last year. These costs include a settlement provision and external advisory services related to these matters, which are not part of our ordinary course business have been excluded from our adjusted EPS.

Second, we incurred $7.9 million of additional expenses related to new acquisitions. Excluding these items, our operating expenses increased by approximately 7% or $13.2 million on a comparable basis, largely due to 3 key drivers. First, over half of this increase or $7 million is driven by higher headcount, payroll costs and year-over-year merit increases. Second, approximately 1/4 of this increase or $3 million relates to IT operating costs reflect the higher licensing and subscription fees, mainly related to supporting our growth initiatives compared to last year.

And the remaining quarter of this increase relates to $2.5 million of higher amortization relating to the launch of our post trade system and $1.1 million representing higher costs related to AlphaX U.S., which was launched in January of this year. partially offset by $0.4 million of other net cost decreases. Now let me be crystal clear. We delivered double-digit positive operating leverage in the third quarter, driven by a robust 17% organic revenue growth, outpacing the 7% increase in comparable operating expenses, and our entire management team cannot be prouder of this excellent result.

Turning now to our sequential results. We maintained strong momentum from Q2 into the third quarter of 2025. Total revenue decreased by $3.1 million or 1% in Q3 from a record revenue quarter in Q2. The decrease reflected lower revenue from capital formation due to the seasonality of TMX Corporate Solutions revenue, primarily driven by TSX Trust revenue related to Annual General Meetings in the second quarter and lower fixed income trading revenue from decreased activity in Government of Canada bonds.

This decrease was partially offset by higher revenue from our Global Insights segment, driven by TMX VettaFi AUM growth. and higher revenue from derivatives trading and clearing, driven by higher rate per contract due to the sunset of the CRA Market Making program in Q2 of this year.

Now turning to our sequential expense analysis. Operating expenses in Q3 decreased $2.8 million or 1% on a reported basis from Q2, primarily reflecting $1.6 million of lower employee performance incentive plan costs and recoverable expenses and lower costs related to the now completed post-trade modernization project. These sequential decreases in operating expenses were partially offset by $1.6 million of increased acquisition and related expenses in the second quarter and $1.3 million of higher operating expenses related to ETF Stream, which was acquired in June of this year.

Our balance sheet remains exceptionally strong, providing us with the financial flexibility to pursue strategic opportunities for growth to accelerate our strategy while maintaining our commitment to long-term shareholder returns. Our debt to adjusted EBITDA ratio at September 30 was 2.3x, which is within our target leverage range of 1.5x to 2.5x. We continue to maintain a disciplined approach to capital deployment, as evidenced by the recent acquisition of Verity for approximately USD 98 million completed in early October, which was completed with existing cash and commercial paper.

We continue to demonstrate our ability to execute strategic investments while maintaining financial discipline and prioritizing returns for our shareholders. Turning now to our cash and marketable securities financial position.

As of September 30, we held over $585 million in cash and marketable securities, which is $371 million in excess of the approximately $214 million we target to retain for regulatory purposes. Net of excess cash, our leverage ratio was 1.9x at September 30 and 2.1x following the acquisition of Verity.

Last night, our Board of Directors approved a quarterly dividend of $0.22 per common share payable on November 28 to shareholders of record as of November 14. This represents a dividend payout ratio of 42% for both the third quarter and the last 12 months, consistent with our target payout range of 40% to 50%. Our cash generation capabilities remain robust, supporting both our growth investments and our commitment to returning capital to shareholders. The strength of our financial position, combined with our diverse revenue streams and strong market positions provide a solid foundation for continued growth and value creation.

So with that, I'll now turn the call back to Amin for the Q&A period.

Thank you, David. Chuck, would you please outline the process for the Q&A session?

[Operator Instructions] Our first question will come from Ben Budish with Barclays.

Maybe just first on Trayport. Just curious if you can unpack what's going on maybe across the energy franchise. I think this was the first time in a while your revenues declined sequentially. There's been some headlines sort of indicating that energy trading is getting more difficult for some of the big trading firms. We generally see lower kind of volatility in gas pricing and things like that. So just curious if there's any read through for some of those macro factors into what's going on in Trayport and any other thoughts on kind of the underlying health of the end clients?

Ben, it's David Arnold here. I appreciate the question. Yes. So look, sequentially, revenue was slightly lower, but it was actually entirely driven by onetime revenues. So we had about $1.4 million. There was a delta between the delivery of client projects and other consulting work in Q2. So that didn't obviously recur in Q3. But the underlying recurring revenues are up about GBP 0.5 million or 1.5% from Q2 to Q3. So Trayport is obviously continues to still be a high-growth business for us Ben. And we continue to target the 10% plus revenue CAGR over the long term. So as I did mention in my remarks, right, average recurring revenue is up 18% in CAD or 13% in pound sterling.

So really, if I just bring it all back full circle, Ben, it's really just because of some of the, as I said, client project consulting that was in Q2 that didn't recur in Q3.

All right. Helpful. Maybe one follow-up, David, on Verity. Is there anything you can share there in terms of the P&L impact we'll see starting in Q3? How you think about cross-sell opportunities across the existing Datalinx customer base? Any other details there could -- if you could share would be helpful.

No, I appreciate it, Ben. What I'm actually going to do is I'm going to hand it over to John first just to talk about some of the strategic rationale of the acquisition and a little bit about the business, and then I'll give you what I can regarding economics.

Thanks, David. And thanks for the question because we're actually very, very excited about bringing this business in and what it actually does for our product suite and for the client base. I think you hit it in a bit of the question of the cross-sell opportunities. We see those as being substantial, both from a cross-sell opportunity, but also from a product development opportunity.

So the Verity business line has got some really good enhanced data capabilities in terms of unique investor insight data, that's analytics and insights, that's built from data. We're going to be able to apply that to underlying Canadian data sets as well. So we're going to be able to expand the reach of the product.

And to your point, the cross-selling opportunity is how we the ability to then sell that Verity data and applications to a broader audience base that we have. And I think I gave in the notes, we've got approximately 5,000 clients and Datalinx globally that are now an addressable market for that product set. The other interesting piece on the Verity business that comes in is it does have a research management platform. So an actual solution that sits in the research site for an asset manager, that's another way for us then to engage in the asset managers in terms of a larger share of wallet because right now, what we really provide is just raw data there.

So it's a complementary service. So you've got it exactly right. These are all cross-selling, upselling opportunities, but really about providing a deeper solution set into the client, and that's why we're excited about what we can do with it. So let me turn it back to David to talk a bit on the economics.

Thanks, John. Yes. I mean, Ben, what I can tell you is the annual revenue is probably comparable to our Datalinx colocation business contained within our Global Insights segment. So that's the first data point that I can share with you. And then obviously, the most important one really for us is besides the strategic rationale that John outlined, is consistent with previous acquisitions, it's expected to be accretive to our adjusted EPS well within the first year.

So that should give you enough. It's a significant investment strategically for the Datalinx business. But the grand scheme in terms of TMX overall results, it's not a material in-quarter movement in adjusted EBITDA.

Next question will come from Etienne Ricard with BMO Capital Markets.

Okay, thank you, and good morning, team. So VettaFi continues to be quite active acquiring indices in specific sectors, I'm thinking energy infrastructure. A nuclear, for example. My question is, how does the team think about expanding in some of these specific sectors without having too much concentration risk AUM-wise.

Yes. I mean, that's a great question because what we're actually doing is diversifying some of that concentration risk as opposed to accumulating more. So this sector, we talked about in the notes in terms of the nuclear sector. If you look at any of the long-term independent analysis in terms of where energy demand is going to be supplied from in the future. This is a sector that's going to see a lot of investment, a lot of investor interest. And so it was a natural piece for us to then expand into future asset classes.

While it sounds like it's more energy sector, this is very independent from the components that we've got that are in the more AMLP based indices, which are on more midstream pipeline infrastructure. So they're very unique and different in terms of the investor and the assets that they're servicing. But as you know, these are not the only transactions we've done this year. We brought in the suite of fixed income indices earlier on this year. At the end of last year, we brought in the iNDEX Research team to get access to a larger suite of European-based indices, which are up substantially now since that acquisition as well.

So it is part of a core strategy of continuing to diversify the asset base that we can deliver through the iNDEX factory at VettaFi. And the bigger governor for us is actually just being pragmatic about how quickly we can integrate things really well so that they're part of our ecosystem and deliver them for clients. So I will tell you that we look at a lot of opportunities.

We decline far more than we move forward with because we really want to make sure that they're going to create value for clients, we can integrate them well and deliver them on a scale basis in the platform. Those are key components that we're never going to step aside from when we're looking at these opportunities.

And John, staying on VettaFi, we know that digital distribution and data is quite a meaningful revenue driver for this business. How do you think about growth for this line item through the market cycle? In other words, are asset managers willing to get more data when the industry is experiencing market appreciation and net flows?

Yes. I'm always very careful about separating line items in here because what we are trying to do is grow the franchise as a whole and in some cases, using the different product lines to help create cross-sell opportunities. So if we can use a digital distribution opportunity to help drive the acquisition of a new ETF client for long-term indices and grow through AUM. We're looking at that strategic packaging of opportunities as opposed to thinking about being this as one line versus another line. It's exactly why we did the ETF Stream investment in London that we did earlier this year.

It was about having some of that same distribution capability in the European market because it gives us that extra strategic and competitive advantage when we're talking to new ETF providers, but the suite of offerings that we can provide to them. So in terms of how we manage the business, it isn't on a line by line by that. It's on the overall basket and driving that double-digit growth rate across the whole firm.

Now I'll just add in caveats when firms are doing well and they've got strong marketing budgets, that absolutely helps in terms of the tailwinds in terms of those stand-alone product sales.

The next question will come from Aravinda Galappatthige with Canaccord Genuity.

I wanted to start off with Datalinx. Obviously, you provided some detail around the growth there. It's picking up from a period of more flatter growth. I wanted to understand what sort of the bigger components were that sort of drove that spike to 12%? And just to sort of assess the sustainability there. I'll start there.

Aravinda, it's David Arnold here. Yes, as I mentioned in my formal remarks, right, there's obviously, year-over-year pricing increases, which we spoke about in prior quarters. There was also some billing true-ups for clients, but then also just robust growth in all pockets. So there isn't really one specific item I can point to other than some billing true-ups and we're getting some feedback on the line. Could you hear me, Aravinda?

I can hear.

Okay. Good. So yes, so it was across the board across multiple parts of the product line. The only item that I called out that was slightly different was some higher-than-normal billing true-ups. And obviously, feeds volume is up too.

And then for my second question, just going back to VettaFi. Considering some of the changes we're seeing in technology, in particular, sort of the rapid growth in Agentic AI and some of those platforms that are coming out. How do you see sort of the future of VettaFi? And how can you sort of insulate or future-proof VettaFi as you think about the next 3 to 5 years, ensuring that, that sort of growth can be sustained, perhaps any of the tailwinds or the headwinds or the threats you can talk to there?

Yes, actually, it's actually -- we think it as an opportunity. When you think about the nature of the business, and we are -- this is a technology-first platform. It is one of the first platforms that's completely cloud delivered and 100% scalable in terms of how we deliver those solutions. We already have teams working on potential AI enhancements in terms of the ability to do that smarter, faster and actually build additional scale. So we are looking at those technologies and really see them as a way to actually do more and create more productivity out of the platform.

Next question will come from Stephen Boland with Raymond James.

I just quickly go back to Trayport. I mean in terms of quarter-over-quarter, you kind of explained that. I just want to make -- find out and be clear that the lower energy prices is not -- like is the correlation to slowing growth or momentum? What drives that revenue growth? Is it volatility? Is it high energy prices? I'm just trying to get an idea of what the impact of lower energy prices may have.

Stephen, it's David. I'll start and John will add if need be. I think the key thing here is -- as we've said in the past, right, the revenue model for us at Trayport is a SaaS-based recurring revenue model. There is a small amount of consulting and advisory, which is sporadic as we onboard new clients and help them connect to the network. And that really is the key driver of what's going on sequentially, as I mentioned earlier on.

But I think the important point to also make is part of our revenue model is actually not tied to the trading activity of our clients on the network. So really, the movement in energy prices and/or demand in the marketplace doesn't have a direct correlation to the revenue of Trayport. Now indirectly, it can, as potentially other trading firms decide to open up a desk to trade in natural gas and power in the European marketplace.

They would naturally, if they wanted to trade in that and have those trades be via brokers and on exchange, they would love to connect to the Trayport network and that would obviously result in some increased volume. But the core message here is really at the revenue perspective, it's a very, very small delta, and it's related to, as I said, some project and kind of new client onboarding expenses and revenue. But what I can also tell you is that the annual recurring revenue still being north of 100% is a critical key success factor for us that we keep looking at.

Okay. That's helpful. And then just VettaFi and Datalinx, I guess some of these -- the ETF Stream, the purchase of the indices, even Verity. I mean can you just quickly give how the, I guess, integration happens on -- in TMX? Is it just a link to the existing site? Or is all the technology integrated, the tech stack and then sales was integrated? Just trying to get an idea of the process.

Steven, it's David. Yes. So I'll touch a little bit on kind of the mechanics of our integration. I mean -- and your question is a good one, but it was quite broad-based. So I'm really going to focus on the things that are the immediate day 1 to day 120 in any of our acquisitions, right? And so when we tackle the integration, our integration team, first and foremost, is -- it's about really making the onboarding experience for our new TMX family members, a pleasant one.

And really, that starts with getting them on to our productivity suite first and foremost, right? And that's everything from our e-mail system to all of our productivity tools as well as our HR and financial systems. So that really becomes the primary. And then at the same time, our sales teams are working on cross-selling opportunities and introduction and then actually leveraging the acquired businesses network with our network.

And -- but it doesn't result in a day 1, let's integrate CRM systems, or let's go and integrate production systems. That's really a later decision after we kind of really tackle the productivity suite first. And then we turn to how can we actually look at reducing infrastructure costs, right? And that may result in server rationalization, cloud service provider rationalization and so forth. So that's really the general principle. And with Verity, it's following exactly the same kind of course.

The only piece I'll add there is from a strategic standpoint, we've gotten very good at this. So we've got actually a dedicated team that leads the organization, a lot of folks that spend full time in terms of doing integration well. We've got our own playbook in terms of what are our standards that we move things on. But more importantly, before we do transactions, before we transact, we have a hypothesis of how the business will run as part of TMX.

And I think that's really important because it helps you make the right decision as to whether or not you're going to acquire or invest if you know in advance how you're going to operate it as part of our ecosystem. So knowing upfront, especially when you're doing something smaller, that this is going to run as a business line. It's going to run on TMX capabilities. It's going to be TMX people, all in one same team, gets it into a really honest conversation right upfront in terms of what we're going to do.

And then afterwards, we're pragmatic around the steps that we take in terms of what order because we didn't want to have -- you don't want to have an integration activity disrupting the opportunity to build sales momentum in terms of that new relationship. So that's the strategic way that we're thinking about it. It's part of the deal decision upfront before we ever execute.

Okay. And I'll sneak one more in, if you don't mind. Just the litigation and dispute seems pretty material. Maybe you mentioned this in the past. I just can't remember. Is this multiple disputes? Is this one case and maybe just what it's related to?

Yes, it's David here. What I would say, which is important, right, is it's our policy not to Stephen, to comment on obviously ongoing legal disputes. But what we do, do is we adjust these as they're really not representative of the kind of ordinary course activity. And we do believe that by doing that, it provides a more meaningful analysis for the investor community to really understand the underlying operating and financial performance.

What I can tell you is that we are not in the business of litigation. But from time to time, it does arrive. And depending on the matter, we obviously highlight the litigation costs and/or provisions. But then to the extent that there are settlements, both a positive settlement or a negative settlement, that will also be highlighted in our results as and when that occurs.

So you've at least got comfort as to what we're incurring that is really not normal course. And then any settlement that may occur afterwards is obviously not normal course as well. And it's really not necessary.

Sorry. So this is actually cash paid out, not like a provision that's been set up.

No. What I can tell you is some of it is provisions and some of it is payments to lawyers.

The next question will come from Jaeme Gloyn with National Bank Financial.

I wanted to start on the AI theme, and I guess you kind of answered a little bit of it around VettaFi. But more broadly, what are some of the strategies or technologies that you have in development right now to really sort of maintain the competitive advantage that TMX Group has? That would sort of be one. And then number two on the theme would be what is your view today of potential AI disruption around new trading platforms or exchanges that could impact your market share or growth prospects?

I mean that's a great question, and it's one we're spending a lot of time on. In fact, our Board session that we're doing this afternoon is really focused on what are those major industry themes that have the potential to change or disrupt in the future and AI is one of those topics. From a deployment in the firm, there are a number of pillars that we're working through right now. So first of all, we've actually already deployed a number of different AI solutions throughout the organization.

Every employee in the organization has got access to certain tools the actual engagement level of employees using them is very high. And I put the categorization of those tools and things that are productivity enhancing. So the tools that help the everyday employee do their job better, more efficiently, more timely, so that they can increase their own productivity, do things faster, deliver more for clients. There are also specialty tools that were deployed. I'm not going to talk to specific tools because I don't think that would be appropriate.

But as you can imagine, we've got tools that are deployed that are helping us build more enhanced data products that help you get more data access out of the proprietary data sets we have. We've got tools that we are using in the development sphere. There's multiple ones that we are testing right now in different areas that help to accelerate development. The way we've deployed these in the organization, again, is that sense of how do we actually increase productivity, the ability to go faster to build products faster.

And then to your point, we're also looking at where are the product opportunities going forward. And given an organization like ours, which has actually a robust set of proprietary data, we come into this with some competitive advantage because we have the ability to build on top of data sets we already have as opposed to just acquiring market data and building things that are not proprietary on top of them.

The Verity acquisition actually is right in that exact theme that there's some really interesting tools and capabilities in there that allow us to do more things with our actual data. The last thing we talked about on the trading side, I always want to remind people when we're talking about trading is trading is already highly digital and highly automated and a substantial amount of trading flow is actually already an algorithmic tool.

So this is really just a next generation of those tools. So we don't see that, that's a material change. We want to make sure the appropriate guardrails are there that protect the marketplaces from essentially what you could have as really high messaging volumes that would come out of AI-generated trading activities. So you always want to make sure there's market integrity. And we'll continue to look at how we use these tools to enhance the capabilities that we've got in terms of both development, throughput, et cetera, et cetera.

So you've got it exactly right. It is top of mind. I would say our strategic approach is to be fast follower in a lot of these, not to use the absolute bleeding edge because a lot of those technologies we found are already obsolete. So we're using a lot of ones that are becoming more mainstream and are also partnered with core technologies we're using throughout the franchise. So I hope that gives you a sense of how we're thinking about it strategically, but it's an everyday conversation. It's deployed right through the firm.

Yes. Perfect. One of the other themes out there is around a shift to semiannual reporting. Maybe you can share some of your early discussions and thoughts around that as well.

So I mean, I'll start with the top line, which is as much as I like talking to all you guys, if we could do that twice a year instead of 4 times a year, it would probably be better. We wouldn't talk about the quarterly trends as much, and we look more long term. But that's just a thematic piece. So this is an area where as an advocate for markets, we've been advocating this, particularly for smaller companies for over 7 years. We didn't wait for Trump to have this idea. Because at the end of the day, especially for smaller companies, when you think about the cost and burden and resources around doing reporting every quarter, and that also goes to audit resources, which are in scarce supply for smaller companies.

It's an unnecessary burden compared to the value of the disclosure that the investor needs. These companies are small. Their stories don't change on a material basis. And if any company has any material change, they're required to disclose that whether you're on a quarter or not. So this is -- we've advocated this for all venture companies already. There was a move to put it in the strategic plan of the CSA earlier this year. There's now some piece out for public commentary on a proposal from the CSA to pilot this for companies under $10 million.

I mean our response to that is going to be that we appreciate that this is now being made a priority, but there actually isn't a need to pilot something that's been used in 2/3 of the global capital markets of the world. It's already piloted and tested. And $10 million is too small. We should make this available for all venture companies. And should the U.S. move, we should make this available to all companies immediately. And it would be voluntary because it really then becomes a discussion between the company and their shareholders as to what's appropriate.

So just because the voluntary semiannual doesn't mean you can't do more if that's what's appropriate for your business. The last simple piece is, in addition to reducing cost and burden for small companies, it actually lets companies engage with their investors more. So any company has quiet periods as soon as their quarter ends, which could be 5 or 6 weeks that you really can't engage with the investor community. When you take 2 of those cycles out, you're essentially giving 3 months back to a company every year to engage with investors, with analysts, asset managers, et cetera, and tell their stories.

So we think this would be really positive in terms of meaningfully changing the burden for small issuers, helping them ease the burden of being a public company without really degrading investor access to information in a meaningful way.

The next question will come from Graham Ryding with TD Securities.

I wonder if I could discuss just the topic of regulation in the U.S. It looks like they're moving towards getting rid of the order protection rule and trying to set the stage for the trading of tokenized equities on blockchain type platforms. So I just wanted to get your view and your opinion on if the U.S. market does go in that direction, what's the implication for the Canadian equity market and yourself. Do we need to follow a suit in some respect? Or and if so, how would that process play out?

Yes, those are great questions. And I'm going to separate the 2 of them because the order protection rules, I thing our regime is already more liberal than the U.S. regime as it is. So what we know the Canadian regime is probably closer to where they're going as opposed to the other way around. And we've been able to provide some input into the SEC in terms of what's worked and not worked in the Canadian marketplace. I do see the subject on tokenization, particularly tokenization of equities to be a different topic of conversation.

Sorry, I was just going to ask you if actually, could you just mure the line for a second because your typing is really, really strong. All right. Perfect. Thank you. Tokenization piece, there are a couple of components to it, and this is going to be a regulatory discussion for a while. In the U.S. market, people have been clear that if you tokenize the security, it is still a security. And that's a really important component because the rules around investor protection need to apply, and we need to have level playing field between marketplaces.

However, they are exploring whether or not there are caveats or carve-outs or exemptions for some new platforms to that foster innovation. And that's an area where regulators have to be very careful because there's unintended consequences when you start to open that up without the same rules of the game. And I know the Canadian regulators are also right on top of this. When it comes to tokenization itself, this is an area as a firm.

We've been looking at this for a number of years. We've got pilot projects in different parts of the franchise, either ones we've done on the trading side in terms of the ability to trade on exchange, things we've looked at on both the custody side and the clearing side, we're continuing to do that. But it is a little bit of a solution that's looking for a problem. It's not clear what the benefits are of tokenization of an existing equity to the actual retail audience.

So a lot of these things have got to be driven by demand in terms of what's the benefit to the marketplace. A lot of what's getting done in the U.S. right now is actually more serving the ability to get U.S. equities that are demanded in foreign markets in overseas time zones, the ability to trade them over the counter. That's a very limited opportunity because it's really around a handful of equities that are globally interested in the Asian time zone.

So it also intersects with 24/7 discussions. So -- but that's the washout. We want to make sure that tokenization is done smartly. Having just a token on a security that's then traded outside of the regulatory system is not a technology innovation. It's an arbitrage. And it actually takes risks around investor protection. It impacts liquidity and can have unintended consequences around price discovery and capital formation. So these are all the things that the industry needs to consider. There are some smart proposals that are on the table right now in the industry to look at.

To your point, I would say that Canada again, would be a fast follower here. If the U.S. moves that we would be able to move with it. But again, driven by what is the actual demand from a trading standpoint. I got a really good reminder, and it came from a U.S. expert that reminded us that in the existing system today, securities are all digital. The formation, the issuance of a security, the custody, the trading of it, it is digital end-to-end.

So like there is no traditional finance versus diversified finance here that actually differentiates. The tokenization of a security is actually less efficient than the current system because it takes that security out of the centralized system. You can no longer use it in terms of either collateral offsets, et cetera, et cetera. So we're watching it closely. We're going to make sure Canada is prepared. Our marketplaces are prepared, but the use case is still a question mark in terms of the value add.

I appreciate the thoughtful answer. You talked about the demand for this. Should we view this really as potential for competition from crypto-based platforms, who are interested in sort of moving into the equity trading market? Is that where the push and the demand is coming from?

Yes. I mean I think it comes from 2 things. So I think you're absolutely right. It's a supply-side push. So organizations that are trying to, like you said, engage in the equity market. And my expectation is at the right point, regulators are going to say that's fine, but you've got to follow the same rules as other marketplaces, which in terms of fair access, DR capabilities, the audit trail, capital preservation, all those components of separation of assets, the kind of things that got FTX in trouble with a number of years ago.

So there's going to have to be a bit of a level set in the playing field for those organizations to participate in that ecosystem whether it's a token or not. And even if it's done on an exemption basis earlier on, this is going to get leveled out in terms of making sure we have fair orderly marketplaces. To my other point, the second area of demand is this over-the-counter piece on overseas trading. There are now, particularly on the U.S. market, a substantial portion of the assets of some large U.S. firms are held overseas and there's a lot of retail and institutional trading interest in them when the U.S. markets are closed.

So tokenized or off-market securities are being used as another way to provide liquidity into that region. But it is a very limited set of securities that are being demanded and it's really kind of the 10 biggest names in the U.S. market that are where the demand side is for the investor trading activity.

Okay. Great. I'll leave it there, but just one quick question, if I could. Is this a topic that you guys are discussing at your Board meeting today?

Absolutely. In fact, this was a topic I was at the World Federation of Exchanges last week, meeting with exchanges from around the world. This is a topic we are talking about in all jurisdictions. So I think this has been something that the industry is right on top of. And the most important thing is we remember what the value of central marketplace is for in terms of helping companies raise capital, price discover and build businesses. And always be thoughtful of what are the unintended consequences of fragmenting that.

And so that's what everyone is trying to figure out in terms of what we think is the right kind of market structure approaches going forward to get the benefits of new technology with while you can still preserve the value that efficient centralized capital markets have created.

Next question will come from Bart Dziarski with RBC Capital Markets.

Congrats on a great quarter. I just wanted to follow up on the AI theme and kind of hone in on Trayport specifically. So you guys have done a good job in the past kind of highlighting some opportunities around AI as it relates to Trayport. But I was hoping you could maybe dive a bit deeper into substantively like why do you think that this business is defensible against some of the AI threats? And is it the network effect? Is it other kind of dynamics that ultimately gives you the comfort to continue that 10% plus target revenue growth rate?

Bart, it's David Arnold. I first want to welcome you for initiating coverage on TMX on behalf of RBC. So welcome to your first call, sorry, Bart, should I say. The point that I wanted to make over here is, and you actually somewhat answered your own question. It's really the network effect of Trayport that creates the defensible and/or opportunistic ability for growth in that business. But when you talk specifically about AI and so forth. We actually were -- the predecessor for this in the kind of trading space would be algorithmic trading and large language models and so on and so forth.

So that is part of one of the premium offerings in our Trayport ecosystem. So the demand is currently not there from the clients to radically change the landscape for algorithmic trading. But we continue to work closely with our clients on the features and functionality that they need as they engage in trading in the natural gas and energy marketplace in Europe. So -- and that's really a common theme, right? Like most of our innovation is driven, if not all of it, by client demand.

And as opposed to when John was speaking on the last question about. It's not us trying to sell something. It's really trying to solve a problem for the clients that the clients have either made clear to us or that we've highlighted and requested whether or not they think that that's something we should address. And we're not getting a strong client demand right now to change the fundamental premise of the algorithmic trading features and functionality within the Trayport Software-as-a-Service platform.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Mousavian for any closing remarks. Please go ahead.

If you have any further questions, contact information for Investor Relations as well as media is in our press release, and we'll be more than happy to get back to you. I know your valuable time is finite, and we thank you for spending with us this morning. It's also a couple of days early, but I wish you all a happy Halloween. And until next time, goodbye.

This brings to a close today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.

All right. Good morning, everybody. Welcome to our next session here. I'm Ben Budish, if any of you don't know me, I cover the U.S. brokers, asset managers exchanges. And for this next fireside chat. We've got David Arnold, CFO of TMX. David, thanks so much for being here.

Yes. Thanks for having me. It's good to be here, Ben, and always nice to be in New York.

Great to have you. Just to kick things off, broadly, can you talk a little bit about the macro backdrop from the Canadian perspective, how is volatility trade tensions with the U.S. things like that have been impacting the business?

Look, I mean, global uncertainty, quite frankly, and kind of the interest rate outlook, as you'd expect, Ben, continues to really drive elevated volumes across our marketplaces. We've seen open interest growth, it's -- I think it's around 60% year-to-date on the Montreal Exchange. And that's really driven out of a lot of the uncertainty and the volatility in the macroeconomic landscape. Equity volumes are up also quite substantially on 14% year-over-year. So that's good.

But when I look beyond the volatility that's really coming from the macroeconomic conditions, it's looking at some of the things we've done, some of our new product launches and innovations have really helped us. Some of the sunsetting of some of our market-making programs. So those are the things that underlie or almost being overshadowed by the macroeconomic kind of factors.

Great. Along the same lines, we get asked about the IPO market a lot in the U.S. What are you seeing from the Canadian perspective? What does the current pipeline look like? How are you feeling about the next 6 to 12 months for new listings on TMX?

Well, if I knew the answer to that, I would trade. But what I can tell you is there is a global resurgence that is starting to show size. We're starting to see some positive signs in the U.S., and I think Canada is a fast follower traditionally when it comes to kind of the IPO pipeline. So yes, it's seeing signs of resurgence.

Beyond IPOs, it's been very robust. ETFs and related other noncorporate issuers have really been robust. I mean we're on track to beat our previous record of ETF listings from last year. So I think that's good.

You did touch on the pipeline, Ben, and it's robust and very diverse. Over 50% of the pipeline is companies that are outside of Canada and over 50% of them are [ innovation-centric ] businesses. So it's robust. I just think we have a lot of capital waiting to be deployed we need some founder shareholders and Board of Directors to feel comfortable moving into the public market.

All right. So moving into your trading business. You mentioned you don't trade, but you trade. You've seen very strong growth in Canadian derivatives on the Montreal Exchange, particularly in your shorter-term contracts -- sorry, your longer-term contracts, Walk us through some of the key drivers there. To what extent have TMX's initiatives to sort of build out liquidity across the curve impacted activity. Do you think you can replicate in like the 2- and 5-year contracts, what you've seen in the 10-year side?

It's a great question, Ben. I mean it's been a lot to unpack there. So let's kind of break it down, right? So Obviously, there has been market volume growth that has really helped in the derivative space. But it's also the innovations, right? And the new products that we brought to market. And so I would say the -- they've played almost a 1/4 of the momentum is kind of what I would call the new initiatives.

But if you look at that long-term kind of average, it's around 11% CAGR over the last 10 years. And we've been -- we categorize the derivatives trading and clearing business as a strong grower, which for us, we define as high single to double digits. Obviously, on a look back, CAGR of roughly 11% over the 10 years.

Look, the tenure, as you touched on, the CGB, that is a very mature product, and it's remained strong, roughly 11% year-to-date growth. But in the 2-year and the 5-year, we're actually seeing better performance than that, right? I think on the 2-year, it's roughly around 27% and roughly around 30% on the 5-year. So CGZ, which is the 2-year and the CGF, which is a 5-year are showing rapid adoption and I think that it will outpace quite frankly, what we've done in the tenure. Even though it's doing it early, I think it will sustain long term.

Great. In the U.S., your ATS launched earlier this year, trading volume looks off to a pretty solid start. Maybe for those who are unfamiliar, can you talk a little bit about this venue? What are you trying to achieve? How does the technology differentiated? We'll start there.

Yes. So let me jump to the technology first, and then we'll see if you have a follow-on. But we launched in January of this year, in the first four months, we literally compounded on ourselves every single month. So it's gone off to a really, really good start. It leverages in-house technology that we built in Canada, both from the Montreal Exchange and the Toronto Stock Exchange and Venture Exchange. And we had an opportunity to really take the best of both worlds and then actually in a greenfield environment for the U.S. ATS kind of reimagine how we would build it from scratch to meet the needs of the U.S. participants. And that was really an exciting project for us, Ben, because it gave an opportunity for some of our development team members to raise their hand and say, like, I really want to work on this because this is next-gen technology for matching engine, it's software. And so they did a really, really good job there, and it's gone really well. It's a meaningful opportunity for us even with the kind of modest kind of market share aspirations that we have. And right now, it's really performing well.

Great. The follow up, how do you think about [ porting ] this back to Canada where you have already very meaningful market share? And is there anything different about Canadian market infrastructure that would affect how that tech might port back to your home market?

So initially, and you might recall, I think we even chatted about this going back a year and a bit when we announced we're going to do this. One of the hypotheses we had was this is a great market to be in the U.S. market. We have a right to participate. We have the technology and skills to do it. And so therefore, we're going to go forth with the initiative. And if it works out, we will be able to take that technology and bring it back to Canada and really find a way to now upgrade the matching engine technology, both on the Montreal Exchange and the Toronto Stock Exchange.

So that is actually now starting. Team members under the leadership of our new Chief Information Officer, Judy Dinn, Luke Fortin on the Montreal Exchange and then Loui Anastasopoulos on the Toronto Stock Exchange side. We're starting to really imagine how to do that. So I'm excited. It's -- it was the hypothesis, and it's really nice when the hypothesis plays out. And this is one of those where we're able to build something from scratch and now actually repatriated back to Canada.

Got it. Switching gears a little bit, but still under that trading umbrella. Your post-trade modernization project went live earlier this year. And there's now opportunities for SGC and CCMS, which soft launched some new products earlier in the year as well. What kind of capabilities and products are these, again, maybe for some investors who are a little less familiar? And how should we be thinking about the revenue opportunity in the back half of the year and into 2026 and beyond?

Okay. A lot to unpack there. So yes, let's first celebrate. This was a milestone project for us in our 170-year history as a company. To modernize the cash equities and fixed income clearing technology in Canada was no mean feat. And the fact that we're able to get it done with the help of really, really active participation from the industry participants is kudos to everyone involved. And absolutely, as you've said, right, like the fact that, that is now done, we have a stable technology platform in which we can build innovative new products that meet clients' needs.

You touched on two of them, right. So SGC notes, obviously, was designed as an alternative to SEDAR. And the other one, which folks in the room might not be familiar with, the CCMS, which is the Canadian Collateral Management System. We did that with Clearstream and really is to help optimize triparty repo and collateral management. And that's been really important for our banking partners under the various evolutions of the Basel regime. Obviously, I'm expecting those to continue to generate more meaningful revenue as we move into 2026. And then gives us an opportunity to, quite frankly, innovate and meet additional needs that the buy and sell side are talking to our teams about.

So the core was get the technology modernized so we can do what it's intended to do, which is to clear effectively in the Canadian ecosystem but then now let's leverage that to innovate and meet additional client needs.

Okay. Great. Moving on to your Global Insights business, starting with Trayport, you continue to see very strong growth there. First, maybe talk high level about the long-term growth drivers of that business? Like what's been going so well here?

Yes. So the Trayport business for those in the room that are not that familiar, right? I mean the drivers behind that growth are client renewals. It's a SaaS-deployed technology environment. So obviously, we have clients, some with one year, some with multiyear agreements. When they come up for renewal, there's an opportunity for them to move deeper into the product stack. So more share of wallet is one of the key drivers.

But the other one, quite frankly, is the growth in the actual industry and space that we play. Folks often talk about is Europe getting saturated and kind of where are you. And we added 82 new client logos, and that's really important because that was in the last 1.5 years.

And finally, the thing that I'd leave you with is the geographic expansion outside of Europe is important to us because that helps fuel additional growth drivers, and that's really been Japan and obviously, the U.S.

And then obviously, asset class, as we've spoken about many times, Ben, is an area of growth for us. We added renewables to the platform a couple of years ago. And as we mentioned at our Investor Day a year ago, we would love to add oil to the platform. And so the teams are actively working on doing that.

So sticking with Trayport, you have a pretty meaningful amount of market share in Europe. How do you think about reaching a saturation point? It sounds like there's still a lot of opportunity from products from client renewals, but is there enough opportunity outside of Europe, in the U.S. and Japan sort of offset that risk. I think that's sort of the question we get a lot of since that growth has been fantastic, how or will it sustain?

Absolutely, Ben. I get that question a lot, too. And at the end of the day, the way I sized it up is we continue to see expansion in the European marketplace, as I said, 82 new clients in the last 1.5 years. So it shows you that Europe isn't yet fully saturated. But at the same time, we're focused on other markets, right? And you touched on it.

So Japan, to give people an order of magnitude like Japan for us is almost the size of Germany and France combined in terms of an opportunity. And then obviously, if you look at what we could do in North America, I mean, it could almost be the same size as Europe, if not bigger. So they're meaningful but they're organic growth opportunities, right? I mean when we started owning and operating Trayport, we made GBP 0 out of the U.S. It's now topping around GBP 7 million per annum. And it's just compounding. So I expect it to get more momentum. We recently signed an important broker in the U.S. environment and so in the U.S. space. So stay tuned. I think that there is enough white space for us to continue to grow. And as we've said, it's a high-growth business, which is high single to double digits. It's pretty much always been double digits since we've owned it. So I think that will continue.

Great. Maybe one last question here. One of the kind of bear things we hear are impacting some of your peers, some of the other globally traded exchanges is the idea that AI poses a threat to the sort of data aggregation and distribution model. So how do you think about the defensibility of Trayport? How proprietary is the data you're collecting? How sticky are the customer relationships? Why in your view, does that concern not apply to TMX?

Yes. So it's a great question, Ben. So let's start with the data and the data ownership rights, right? So in the Trayport environment, the trading data that is from a broker and a trader, it's proprietary to them, right? It is data that is only visible to them. And so I think the place where AI is going to play a meaningful part in the Trayport ecosystem is really twofold. One, it is what are the traders and brokers going to do to adopt Gen AI tools in their trading strategies, right? And how can we best support that in the Trayport software solution.

The second place that I think it will play a meaningful part for us is our speed to deploy software upgrades and software innovations. Because traditionally, we've really had to use brute force testing technologies, which most people do, they'll come up with 100 or 150 test scripts for trading or for testing. And then you'll run the new code through that environment with the adoption of Gen AI, I think we'll be able to test an infinite amount of test cases on new code script, which means we'll bring code to market with less bugs and also will bring more code enhancements to market at a quicker pace. So that's how I see it playing in the Trayport ecosystem.

Okay. Moving on to VettaFi. ETFs are one of the fastest-growing subsectors of the asset management industry. Again, maybe starting with a high-level question, can you walk through the business model for VettaFi and the rationale behind your acquisition?

Yes. So the rationale was really in response to an emerging client need. We would speak to a lot of folks on the asset management side who would be very keen on creating either thematic or bespoke indices, and then launching ETFs on the back of those. And really, we've had a long-standing partnership now over 25 years with S&P, which is really for our kind of marquee benchmark indices. But really, when we get into the custom bespoke thematic, we needed to be in that space.

VettaFi. What attracted us to VettaFi more so than anything else we'd looked at is how VettaFi is really at its core, it's the client success translates into their success. So everything is based on assets under management growing in the client's portfolio. And to help ensure that their product can grow, we have our digital distribution and analytics services that we add on as well. And so that, for me, was the unique value proposition with VettaFi and it's really borne fruit looking at how the VettaFi team can take a fledgling idea to market for an asset manager and then through its network with either etftrends.com or etfdb.com and the thousands of registered investment advisers in the U.S., we can reach out to them, create a podcast, profile that asset manager and, therefore, bring the eyeballs to actually be investing in that product. And it's really impressive to see that, that once again, the hypothesis does play out in reality.

And can you maybe expand on that a little bit. Can you walk us a bit -- walk us through how you think about the VettaFi growth algorithm. How should we think about AUM growth versus revenue growth? Clearly, some indices have very high value, some are maybe less proprietary or less differentiated. What are the key dynamics here as we think about those two kind of factors?

Yes. So you touched on it, Ben. I mean we -- and let me stand back on our publicly disclosed kind of guidance for that business, right, which is we define that business as a high-growth business, which is high singles to double digits. Ever since we've acquired it, it's been growing on a pro forma basis in mid-teens, so double digits, really good 15-plus percent. So once again, the hypothesis there is playing out. And really, the growth algorithm goes back to what I touched on earlier, right? It's obviously linking our revenue to the growth in assets under management is key. Not all of our asset classes have the same assets under management trade or fee structure. It's very unique and accustomed to each asset class that comes on to the platform then it's how do we actually help them curate.

And really, at the end of the day, the asset manager's job is to have their fund perform relative to whatever their stated benchmarking in iNDEX is. And there's not much we can do for them on that. But what we can do is, to the extent they are performing well is bring enough registered investment advisers to the product to kind of open up their [ aperture ] to say, that's a good investable product to prove their clients' money into.

And then last but not least is really using some of the data that we have on search history and ETF trends and etfdb.com to feed that back to asset managers to say, maybe you might want to innovate in this space because we've seen a lot of searches for -- and with the advent of AI, people are talking about nuclear as an example, right? So are there -- is there a nuclear index that I could invest in and then we can bring it to an asset manager and co-create that with it.

It's a good segue to my next question. I'm curious, in terms of new index creation, what types of themes are generating the most interest AI and power generation makes a lot of sense. What else is sort of pretty topical...

Global Defense is another area, fixed income. So yes, I would say the tip of the spear is AI. And then from there, certain things trickle out like power, so nuclear and so on and so forth. And then obviously, it's the global defense as I touched on, fixed income and so forth. Those are the ones that are getting the most buzz.

So VettaFi itself has been quite acquisitive. I think you recently acquired ETF stream adding some analytical capabilities. Can you maybe explain the kind of decision-making process there, buy versus build? And how else are you thinking about inorganic growth for VettaFi specifically?

Yes, it's a great question. So VettaFi, we have been quite acquisitive, but we're, at the same time, been investing heavily in some organic growth initiatives. So given your question is more on the inorganic, yes, it's been twofold. One is adding more indices and benchmarks to the portfolio and diversifying hence, the Credit Suisse, UBS bond index, which [ really ] gets us more in the fixed income kind of asset class.

And then obviously, when we added iNDEX Research, where we really liked about iNDEX Researcher's portfolio is they had a really sizable piece in Europe, and that is next for -- up for us from a growth strategy for VettaFi but also they had a really compelling strategic narrative as to how they wanted to grow in Europe. And one of the pieces that iNDEX Research didn't have but VettaFi does have in the U.S. is the digital distribution and analytics capability.

So that then created the opportunity when we started looking at ETF stream because while it's not a carbon copy of what we do in the U.S. for digital distribution and analytics, it has a lot of similarities. And so it's very complementary for the growth of indices and benchmarks and ETFs in the European landscape because they are a very trusted source for many ETF investors in Europe that if they were in the U.S., they would go to etftrends.com and etfdb.com. Now they will actually leverage the research and the articles and the depth of knowledge that comes out of ETF stream. So it's going to help us replicate VettaFi in Europe like we've done with VettaFi in the U.S.

Another good segue to my last question here on VettaFi. So I was going to ask about cross-sell opportunities you've been able to execute on between VettaFi and other parts of the business. I think the initial investor react to was Canadian trading venue, U.S. ETF manufacturer, index provider, doesn't at first seem particularly obvious. And so can you talk about what you've seen there? And maybe how that might unfold in Europe where ETF adoption is much lower than it is in the U.S., but you're obviously there with Trayport and some other parts of the business...

Correct. So that's a great question, Ben. So if I step back, so 1 of the things our CEO, John McKenzie did earlier this year is we put Peter Conroy, who's been operating effectively, the Trayport business for us for the better part of the last 7 to 8 years, right? And John tapped Peter on the shoulder to oversee all of our global insights business. In fact, Back in the day, you and I would have talked about the GSIA business, right, the Global Solutions, Insights and Analytics and even that is a mouthful and I even stumble trying to get it out. So now it's Global Insights. And Peter is in charge of all three of those businesses, which is VettaFi, Trayport and Datalinx.

So one of the things that we're seeing is a much better synergy between the three teams on joint sales efforts, a much better sharing of CRM data amongst the three groups. And then most importantly is looking at where certain assets should reside.

So a great example was TMX Money which is effectively a Canadian Yahoo! Finance, if you will. We like to think a better version. And that business, we've now placed under the management of the VettaFi team, right? Because once again, it's what they do with etftrains.com and ETF DB. So it's synergistic, and it's paying early dividends. So that's how we're tackling it, but I also think not to underplay the importance of having that common leadership across at all underneath Peter Conroy.

Very interesting. We talked about M&A within VettaFi. Maybe more broadly, your leverage ratio is now back within your target range. Is there any parts of the business you think could be strengthened through M&A where it makes sense to buy instead of build. And are you open to pursuing larger, more kind of needle-moving acquisitions?

Yes. So a nice little three part of the events. So let me start first with the deleveraging, right? That's an important part for us. And I hate to just gloss over it. I mean, just over a year and a bit ago on January 2, 2024, we announced the acquisition of VettaFi. Well, we actually announced that in early December of '23, but we closed the acquisition on January 2, 2024.

At the time we took on some bank debt, which we shortly thereafter, we're able to repay because we refinanced with some long-term debenture issuance in the debt capital markets. And at the time, we were outside of our target leverage range, which to remind people in the room is 1.5 to 2.5x. And that range is simply there to guide us during periods of normal course kind of small tuck-in kind of M&A and just good balance sheet management. But when we have opportunities to do step function acquisitions, the first one really was Trayport, back in 2017, 2018. We went outside of that range in a meaningful way, very quickly delevered. We did the same with VettaFi. When we announced it, we went outside of our range. We did say we would get within the range by the end of 2025. As you know, when we ended Q2, we were right there, knocking on the door, and now we're well inside the range.

So that's the story on the leverage, and it's really a testament to the firepower of our cash flow generating business. But quite frankly, the discipline of both the Board of Directors and the senior management team on managing the company really well. So that's the first part.

And then we talked a little bit about M&A and some folks often ask me and you touched on the word strategy, right, like M&A strategy. And I'd like to always remind folks that we have a strategy for TMX, which is to grow the business. We set out our high-growth businesses, our strong growing business and our marketing growth businesses. But really, we want to grow revenue as a strong revenue growth, which is 5-plus and we're going to grow EPS double digits. And to do that, we can invest organically or we could partner with someone or we can invest inorganically. And so the choice really for us is does this help accelerate the strategy. And so we don't have an M&A strategy. We have a strategy that's for TMX. The M&A opportunities are really accelerants or things the way we say would probably better buying this than building it, right, or partnering with someone. So that's kind of the best way that I kind of frame it up.

And then you asked at the end there, would you be willing to pursue larger acquisitions? And we said this when we announced VettaFi back in December of '23, that while we want to get within our target range, to the extent another business that helps accelerate the strategy, that would push us back outside of the range, we would entertain it. So had something occurred that was an accelerant for the strategy, Ben, 6 months, 12 months ago, we would have done it too. We just didn't have anything of that size of nature. And so yes, we are very interested in acquisitions of all sizes and quite frankly, most of the geographies in which we operate, which is really Canada, U.S., I think North America and then Europe and Asia Pacific as kind of the guidepost for now.

Switching gears a little bit. Let's talk about digital assets. So crypto has been a very popular topic for your U.S. counterparts given the shifting tone from our regulators here. I think you had previously considered listing spot crypto, but given the current market dynamics, is there an opportunity to revisit this? Or are there other opportunities, whether on a market infrastructure, are tokenized equities something you're thinking about? And if so, why? How are you thinking about kind of a wide range of opportunities?

It's a great question, Ben. So I think I'm going to start with a statement, which is really we need to see how it evolves with the new administration and the SEC in the U.S. first. I think Canada will be a fast follower and therefore, TMX will be a fast follower. But it really needs to -- first, we need to see how tokenization of securities plays out, right? I really see tokenization of assets that are non-securities as defined in the SEC rule book. is very, very relevant for so many folks in various different jurisdictions and marketplaces. We don't play in that space. We're a securities operator. So I'm very, very curious to see how it pans out in the U.S. And then I think that the OSC and others in Canada will be fast followers depending on where the U.S. ends up.

I also think that there is a difference in nature of the investor in Canada versus in the U.S., a little bit more risk averse north of the border, a little bit of a more skeptical view. So we'll have to wait and see. And then you did touch on a couple of years ago, we did chat a little bit about something we were able to do in response to the banks asking about what's going on in crypto and so on and so forth.

And we did work on a tentative solution, but it was actually driven by client demand, right? It was the 5 or 6 large Canadian banks approaching us and saying, we're getting questions from some of our wealth advisers that have maybe got clients that are a little bit more mature in their life cycle and either their children or family members are saying, you should get into crypto, Mom and Dad. And so they're talking to their financial advisers and the financial advisers are, therefore, bringing up the chain in the various banks to say, "We should find a way to meet this client need". And so we started working on a solution with both our trust business and our clearinghouse CDS that really would work for the banks. But then, unfortunately, a year and a bit ago, we had some of the missteps with FTX and others, and that kind of took the foot off the gas.

So we're ready and willing to support the Canadian sell-side firms, whether it be in the investment solutioning side or in innovation, but it's really going to be driven by them, and there's a 2-step process here, which is really where does it go in the U.S., how does Canada follow? And then will our clients actually have a demand for it.

Maybe one more question on kind of new markets. I don't think we've -- you guys have talked about, but sort of plays into the retail crypto theme in the U.S. We've seen tremendous growth in prediction markets. Is there -- you mentioned the Canadian investors generally are more risk averse. It wouldn't surprise me if adoption of those kinds of trading tools is lower in Canada than it elsewhere. But how do you think about that as a future business line? Is there appetite? Is there a role for TMX to play or perhaps better left to the fintechs that are kind of driving that kind of trend?

So I think the short answer is it depends. And really what it depends on is, is there enough client demand in the Canadian retail space that needs to be met, right? And if so, we're well positioned to meet it. If the opportunity is meaningful. So that's why I say it depends, right? I'm -- we are not going to be the leading innovator in that space in the Canadian marketplace. But I will leave with -- we will be a fast follower if -- and it's a big if, the rule book works and the Canadian investor public is demanding and calling for it because then we have the right to play. We have the skills to play and then there's the demand, which is critical.

Maybe following up kind of retail in general. That has been a very strong theme in the U.S. stocks, options, crypto. It's been more modest in Canada, as we've been talking about. What are you seeing there? Is retail engagement? Are you seeing any sort of changes in terms of engagement with the Montreal Exchange, anything like that? Are there kind of retail opportunities for TMX. There are certainly some unique aspects to the markets with the venture exchange that kind of open up some unique opportunities. But how are you thinking about how that theme may play out in Canada?

So it's a little bit of what I did touch on earlier, Ben, like I think the Canadian retail investor is somewhat more conservative and, therefore, risk averse. So we saw some of the phenomenon in the U.S. with some of the stocks where retail investors would buy options because they couldn't afford to take a meaningful position. So they would buy retail options in those stocks. We didn't really see that in Canada. It's starting to emerge, but I think it's a more sophisticated investor, with a smaller base and a much more targeted set of cash equities where they would look at those options.

So it's another one of those. Let's wait and see how it plays out. Once again, if the demand is there, Ben, we have the skills and the capabilities to meet the demand. It's just listing product on the Montreal Exchange that doesn't trade that is highly liquid, it doesn't help, right? It doesn't help the person who's bought it and now wants to sell and so on and so forth. And we are always willing to create markets through market-making programs and other incentives if there is enough demand for that market to be created. So it's almost like a bit of a chicken and the egg situation is we need to see the demand, and then we will very, very quickly respond versus let's create the product and hope the demand just follows.

I think coming back to Datalinx. We talked about Trayport and VettaFi, we hadn't touched on that one. Can you first maybe talk about the latest trends you're seeing there? And I think your revenue growth picked up kind of nicely in Q2 even as your market data subscribers metric kind of declined. What's driving the growth in that line?

So I think it's a couple of things. One is co-location is obviously helping in Datalinx, there is more demand for co-location services. But the other thing, quite frankly, is the fact that we're touching on some of the cross-sell opportunities there's more introduction given the fact that VettaFi is now part of the TMX family and therefore, opportunities for us to be connected with certain asset managers who would rather buy data sources directly from Datalinx. So that's underlying a little bit of the driver. It's also the fact that we have over 50% of the revenue in that business is coming from U.S. dollar-denominated contracts. So there is a foreign exchange benefit that we get there too, Ben. That's kind of the high level as to what's going on in Datalinx.

Got it. And maybe lastly, just following up Datalinx. How are you thinking about additional revenue or product opportunities should the longer-term growth sort of follow broader Canadian markets, maybe with some pricing power? Are there other ways to drive growth, new product creation?

Yes. That's a great question. So one of the things that I think is a huge opportunity for our Datalinx business is thinking about those additional data sets that would be complementary with the trading data that we really have as the kind of core bread and butter in that business.

And so we acquired a company called Wall Street Horizon a couple of years ago. And that was important because they are known for their ability for high-quality corporate action data. And so now what the team are really focused on is what are these other data sets that are out in the marketplace that aren't trading data but are complementary to trading data and how can we actually marry that up with our data.

So in our Capital Formation business, we recently acquired a company called Newsfile that does news dissemination services. So part of the things that the teams are working on is, okay, Obviously, in the Newsfile business, it's important to get out on time, in a quality way, the press releases for those issuers, some of which are actually private, right? And then how can we actually not only do that but create the data model behind that to create structured data on those corporates that are issued, the that are publicly traded, marry up that data with other data sets.

So one of the things we're thinking about is a lot of individuals spend a lot of time going and getting AIF data, various different executive compensation data points. And I would say in the generalized kind of marketplace because I use this a lot with my team as we're doing some analysis on the finance team, the data is average, right? I've got to double check sources. Every once in a while, they show me a chart, and I say that doesn't make sense. And sometimes I'm wrong, but oftentimes, it's the data was actually wrong, right? And the team come back and say, "Yes, we've checked it in the annual report. So we shouldn't have pulled it from that data source".

And so I think there's an opportunity for the Datalinx team, and that's part of their strategic road map right now is they're looking at these other data sets out there and the challenge that we have as we look at these other data sets is we need to be able to do it at the quality that has got the TMX label attached to it. If we bring in other data sets, Ben, that are just as poor as quality as others, it will actually hurt the value proposition of the Datalinx data set. So we spend a lot of time with our Newsfile team, spending a lot of time with our Wall Street Horizon team, making sure that we have quality, marrying that with the TMX Datalinx data. And then as I said, looking at these other pockets. And I won't give you what those pockets are because some of them are active files as we're talking to people about whether or not they would like to join the TMX data set family.

Great. we're nearly out of time. We'll leave it there. But David, what a pleasure to have you as always. Thank you so much.

Yes. Great. Thanks, Ben. Awesome. Thank you.

All right. Let's say it's an honor and a privilege to introduce our next speaker, Mr. John McKenzie, CEO of TMX Group. John, it's always great to have you.

And thank you again.

All right. So listen, last year, you unveiled some details of the plan to accelerate growth through the TM2X Vision and also introduced the CORRA+4 strategy. So maybe we start out our discussion with a bit of a recap of that strategy and then a bit of a follow-up on how things are progressing, maybe some of the recent milestones and key developments over the past year.

That's a great place to start. So CORRA+4 was always about recognizing that TMX Group in terms of the operation of some really important pieces of the Canadian infrastructure as a core business that's important to continue to reinvest in and ensure that it's growing, that we are making sure that we've got great markets in Canada and beyond.

So that there's always a continued reinvestment in what the clients need, that we make sure there's no technology debt and that we're putting that on a footing for growth and never take advantage of that kind of 173 years of history. But the Plus 4 was identifying what are the 4 vehicles for us to grow beyond that to really step change the size of the organization and where we help clients.

So they were around beginning beyond listings or listings and beyond, getting deeper into ETFs, deeper into servicing them, getting into private markets, servicing the issuers themselves in terms of other solutions that aren't just listing themselves, recognizing that capital is getting raised both in the public and private market and how do we take solutions to both those vehicles.

So that's beyond listing. Beyond our borders is about how do we take our trading platforms and our clearing platforms to organizations around the world, either through sales or through direct investment in other countries like we've done in the U.S. Beyond data, it was about getting out of just the provision of core data and into more indices and analytics and solutions on top of that.

And the last piece is beyond traders, which was around our energy market, getting out of just the trading community in Europe and really building into other asset classes, more brokerage support and new geographies like the U.S. and like Japan as well. So those were the 4 themes. It's actually nice to say in kind of a 1-year look back right now that the team is hitting on all of them.

And you're seeing it through into the results of the organization. Despite the fact that we've had a turbulent capital market for the first 6 months of the year, we are up 18% year-over-year for the first half, 16% organic, and we're getting growth across every single one of those strategies so far. And there's specific each one areas of execution that we've now demonstrated to the market, to the clients, to the investor base that we've got executable plans across all these programs.

And the piece I'm going to close it and wrap it with is -- and you started with in the question, it's all around the strategy that we -- we cleverly labeled it TM2X before we realize, it's really hard to say that over and over again. But it was about changing the paradigm in terms of how the organization thinks about growth.

When you think about growth, not incrementally, but in terms of how do you double a franchise, we have to think about the marketplaces differently and the addressable markets. And we've embraced that all through the franchise. So even thinking about the last 5 years, our derivative trading is 2x what it was before. Trayport is more than 2x from what we bought it at. We have a Corporate Solutions business now in capital formation. That is almost the size of capital formation itself. And so all these strategies have forced us to think beyond just incremental solutions and really understand not just what the customer needs today, but where it's going. So I couldn't be happier with the -- what we're seeing in the first half of the year for execution.

Excellent. Listen global trading patterns are shifting. We've got the Canadian government now taking measures to catalyze new investment to transform or accelerate growth of the Canadian economy. So what does that mean for TMX Group?

The -- so I'm hopeful on this. And I do want to see -- I'm going to be very candid, a move away from talk about actions and actually action actions, and I'll be specific on some. But anything that helps to build the actual investment climate for Canada is going to be good for the organization, particularly around the ability for companies that list with us or could list with us to raise capital.

And the last 3 years coming off of 2001 have been a very challenging time period for capital raising, both additional capital, particularly IPO activity. And so improving those investing conditions, whether it be things that we're doing around building things in Canada, one project office so that energy or resource companies can get more confidence is going to make the market more investable.

And things that they're looking around tax strategies can make the market more investable. So I like the positioning of what I'm hearing. I'd like to see it in action because candidly, some of these things we've been talking about for a long time. We went into the election this year, actually putting forward a policy paper from TMX on where we'd like to see reforms to accelerate the Canadian capital market.

And the nice thing in it is we actually had 6 strategies on it. They were all picked up in federal platforms, either somewhere in the conservative, somewhere in the liberals. So now it's for us to actually hold governments accountable to execute on what they've asked for. And the one win we've got so far is that they've now announced that they're going to reform the R&D tax credit program.

This is the SHRED program. It's really important to small companies that list with us because right now, if you're a small private company, you get refundable tax credits for R&D. And as soon as you go public, you lose your refundable credit. And by doing that, we essentially created this extra barrier to raising public money to grow.

It's the antithesis of what you want to grow the economy. So the government has now announced that they're going to equalize that where you can actually get refundable credits as a small public company or a private company. And again, that's going to help facilitate growth in the economy. So we want to see more things like that.

All right. So we think about top strategic priorities for the year ahead, I mean, what are you thinking about for that?

So now it goes back to growth and execution again, right? And so the grow the core piece has been really important. We've had some very large execution priorities that are both coming off of last year into this year and going forward. And I know we'll talk about some of these as we go. But our post-trade modernization program is a 7-year program, that went live. Our team did a phenomenal job of bringing that to market. It's one of the largest implementations of the system in the world. And now it's something we can build on.

Our launch of a U.S. ATS from idea to launch in 18 months, went live in January and is exceeding expectations. But we've also done some also inorganic pieces that, as you know, we acquired VettaFi over 1.5 years ago, but we've been doing a lot of tuck-ins as well. And each of these are an integration challenge to make sure we get the value out of them.

And so now we've got all these collective pieces in the organization, either the things that we've bought or the things that we've built or new products that we've launched on top. And the road map now as we look forward is about now in-market execution, ensuring we are selling across the franchise that the clients under know the full value proposition of what we can bring to their organizations.

And then we get out of kind of the historical silos of an organization that was built in kind of regulatory silos to be able to bring a total TMX solution across the board. And so that's been everything in the transformation. Our whole transformation around 2x about being more of an information company has been able to sell across the whole TMX market franchise.

So if I can help you with a new index that we can then build into an ETF and then I can list it for you and we can help promote it to investors and then build options on it on top and then provide that data back to the market. That's why we're unique in being able to have these -- all these different assets as we can bring that full solution to the table. So that's our go-forward piece is it's almost harvesting some of what we've already planted in terms of these seeds to get full value out of them.

Excellent. Let's talk about Global Insights, right? So the Global Insights portfolio, I think, is foundational to TMX resilience and it's a great growth engine. These are attractive businesses, which I guess also attract follow-ons and imitators. So I guess my question is, how does TMX look to create sustainable competitive advantage across this platform?

Yes. I was thinking about this recently when I think about some of the things that are developing around AI, I was looking at a business that was a data business and interesting little business, but when you start to dig into the coverage, you can quickly see that AI tools could actually wipe this whole business out.

What is different about everything we're doing, it's a combination of both proprietary data, proprietary capabilities and integrated solutions that are SaaS-based. And I mean, that's a lot of overall work, but let me put it into the core context. Insights has got 3 core pillars in it today. The Datalinx business that really is built off of the unique data that we generate, that only we generate, and we've got the unique ability to build insights on top of.

So we've got a growth strategy to continue to add new analytics on top, add new AI tools so we can harvest more of the data that's in the organization and essentially provide tools back to the industry that they can't build themselves. And you think about things like corporate action and reference data, this is expensive for firms.

It's not well done. We have all that in our asset base. So it's for us to figure out how to get that out and get it to market. So Datalinx itself has been growing at that strong growth level, the 5 plus. We think it's got potential to do even more as we keep building out the product suite. The 2 other pillars, Trayport and VettaFi, these are both in our high-growth franchises.

So Trayport, we've been growing at -- well, I think of high doubles in terms of teens. I realize they're actually in the 90s, but I mean in the teens. We've been consistently growing it there. The solution has so many more applications, so we're going to be able to continue to grow it by moving it into more energy asset classes and more geographies and really focusing on what makes it sticky.

And what makes it sticky is the core network of people that are in it. So you've got something that's proprietary. So someone can create a me-too piece of technology but creating that proprietary network is very hard to do. And then it's up to us to maintain that, continue to nurture it, continue to invest in it, which is why we've been on a 2-year program on actually rebuilding that platform. It will allow us to go faster in adding new solutions.

And then we continue to add premium components on top, data solutions, analytics solutions, advanced charging, all those types of things. You've got to keep meeting the customer where they're going to go. And so there's no reason for them to go somewhere else. And over time, we see what other industries or sectors we can transform into that model like refined oil, like Japanese power, we keep looking for more to do that with.

So we've got a growth curve we can continue there. The index piece under VettaFi is also really interesting because it's not just about creating indices, it's about creating enterprise solution. And what's unique in the model that we're doing is, not only for an asset manager here, can we build a proprietary benchmark for you, but we've actually got a network of hundreds of thousands registered advisers in U.S. and around the world with data sets to tell you, okay, here's what actually RIAs are looking for, for their clients.

Here's what the next kind of trend of investment vehicles they want. We can build a product bespoke. We can test it back against the market and show the relative performance. But then we've also got distribution tools back to that audience where we can market the product out because a lot of ETF manufacturers actually don't have their own channels. They use other channels.

So we can actually help distribute the product. We can talk about the product, and we can have the analytics on what the actual reception is. So what you'll see in all 3 of these pieces is they're all enterprise solutions, and they're not one-off products. So that relationship with the client, it gets stickier, it gets deeper.

And in each case, we are rewarded by our mutual success. So on the index side, we're paid under AUM models. So they're successful, we're successful, and that's that shared success. The last piece of insights I'm most excited for now is we've just made some changes to bring it under one banner and take a new approach to leadership to try to get the best out of each of them.

So we want to create a regime where we can actually incent people to get data out of one part of the franchise and build an index in another or build an index and get another part to sell it. And so that's what we're doing with the new leadership and getting the best of both breeds, creating better sales capabilities across the board and candidly teaching all the salespeople across different parts of TMX, what are the different unique pieces even if you don't sell them.

So if an ETF guy is actually going to talk to on a fund manager, you can introduce them to our newswire because we can actually help them with the disclosure too. And they might not know how to do it, but we can make the right introduction and make the right lead pass. So that's why as a system, we're excited about where we can take this to another level from where we've been rather than just a set of kind of bespoke pillars.

Excellent color. We'll dig in a little bit on Trayport, right? So Trayport continues to be a major growth engine. It's got a great track record since you bought it. And we think about kind of the pathway forward those opportunities. And I think one you identified, I think, in your earlier comment was the Japanese power market, this attractive opportunity. Can you give us a bit of an update there?

Yes. So what made the Japanese power market interesting is we'd already -- in markets that had already opened up and deregulated, that's where Trayport has been really strong. Because once you build a tradable market, multiple traders in there. Trayport is valuable when a market is disaggregated and you need that single vehicle to put all that pricing in one screen so that a trader can see the whole market, they can execute, they can get best impact for their own strategies.

And that's what we do there. We're doing that all throughout Europe. We are building that in the U.S. as well. We've got partners in the U.S. that are helping us build it out, particularly in gas and Northeast Power. And Japan is interesting because now you've got a major global market that had just recently deregulated the power market. The size of the power market in Japan is as big as France and Germany combined.

This is a massive market. And so what we've been trying to do is make sure we're very early there in terms of working with the brokers and the traders that are getting that market going to understand to use Trayport solutions as part of it. Now there's not enough market for us to aggregate today. But as it's developed, we're trying to make sure we're the solution of choice to do that with.

And it will develop over time. You need to have more traders get involved, build liquidity, build open interest in positions. And as more participants come in, Trayport could be the solution to aggregate that market onto a single screen. But the nice thing is it's actually not the only market going down that path.

We see that same kind of opportunity in other parts of the Asian region where that time zone region, we're seeing that potential potentially in Australia, potentially in New Zealand. We're seeing it potentially in South America. So this model can be replicated, but we don't lead the market development. We're there to facilitate as the market actually modernizes.

Okay. If we think about closer to home then, what do you think about catalysts to accelerate Trayport's growth in the North American market? And what's kind of the time line investors should think about for that to be a more material revenue driver as well?

I keep thinking it is getting more material, but the whole business is growing so fast anyway. It's not getting material enough. We're doing, I think, about GBP 7 million ARR in the U.S. market now. We keep adding new clients to it, but it's still in the early stage in terms of we're not in that place where kind of liquidity will beget liquidity.

And so it's still very much a sales strategy of getting more players on, more players connected, and we'll keep adding resources to the team to do that. And we're going to get there, it's going to take time. The challenge in any new market when we're doing is what we're doing is moving kind of an over-the-counter market onto a screen.

It's not like we're trying to displace another screen or another competitor, but we are trying to change the way people do business. And that change sometimes has resistance or it moves slower. But as more firms get on, then more firms want to be there because that's where the trading happens, that's where the visibility is.

So that is moving well. We're keeping investing in the U.S. market. We're actually opening our new site in the U.S. later this -- back half of this year. So we will actually finally have a proper TMX U.S. flag planted in Lower Manhattan that services all of our businesses, Trayport, Datalinx, VettaFi, and gives us more opportunity to interact with our U.S. folks as well because it's one of our biggest growth areas. So that's a big piece.

The other big piece is around different asset classes. And one of the biggest asset classes that would have both U.S. exposure and global exposure candidly, is refined oil. So if you're a trader trading oil, you're trading West Texas Intermediate, you're trading at an ICE or CME. But if you're trading anything else on the oil chain of a refined product, you're trading it over the counter and you're probably doing it by phone.

And so that's an area where we can absolutely use the Trayport screen to modernize that to bring it into the electronic world like we've done with other OTC markets. So we're working with multiple brokers and other traders on what would be the model to help bring them on. And then we're working with some of the technology providers on how do we actually do some of the automation around that because oil trades differently.

So we to bring new tools to the market as well. So those are the 2 big initiatives we've got to try to build this out. And in each case, you think of the size of the opportunity, I always think about the size of kind of the total trading community. You've got 5,000, 6,000 traders in Europe that we work with today, there's 5,000 traders in the U.S. that are doing energy. There's 5,000, 6,000 traders that are doing global oil, and that would be U.S., Canada, Europe. So these are big step changes, and it goes back to that kind of 2x theme of taking Trayport to the next kind of doubling of size.

Right. If we think about the expansion of Global Insights platform as a whole, how do you think that's going to impact margins? And what degree of operating leverage could that bring to TMX? Or what could you generate from that?

Yes, it's a good question. I mean, so today, Global Insights is about 44% of the whole TMX franchise. And that's been a substantial step up. And our objective is 50-plus. We want to have most of the business being in information-related services, and 67% of the business being in recurring revenues.

And it is higher margin. So just naturally, as we continue to grow the portion of the business that's in this higher-margin data business, that will bring up the whole average. But candidly, we're not actually trying to expand margins in that -- those businesses themselves. Both Trayport, VettaFi, these are high-growth platforms that are growing at double digits organically.

So we are reinvesting in there to continue that growth in terms of adding developers, product developers, technology, sales resources to keep doing it. We've doubled the size of the Trayport team over the time, we've doubled the business. So our view is more reinvest the margin back, hold the margins kind of steady there so we can continue to drive that double-digit growth rate.

But we bring the whole franchise up. The other way the margins come up throughout the full firm is because we have other businesses in the organization that are historically lower margin because they were at a different scale in their development. Post Trade is one of them and Corporate Solutions where we serve the issuers is another, the trust and transfer agency.

Now that we're growing those both faster, they have operating leverage themselves. So those are 2 ways to drive operating leverage is keep growing the portion that's in the higher-margin data businesses and improve the leverage that's in the lower-margin businesses of the franchise like post-trade and trust.

Okay. If I stick with the technology and innovation theme, I guess it's going to lead me to digital assets. And what are the biggest opportunities for TMX related to digital assets?

Well, digital assets are interesting because there's so many different ways to tackle that. Digital assets in terms of things like Blockchain and ledger technology, we spent a lot of time looking at that for core infrastructure, and it really wasn't fit for purpose. It actually isn't anywhere nearly fast enough to deal with modern marketplaces.

So we really see it more in terms of how do digital assets potentially help unlock things like private companies and create liquidity events for them. There's not any value in terms of tokenizing or digitizing a security. In fact, anything that's a security today is fully digital all through the chain.

I mean, I shouldn't use the word chain because that has a different connotation. But any public company that goes public today, their book is 100% digital. All the trading is digital, all the workflow is digital. It's just not in a token. There's been some advent of kind of tokenization of securities that there's a watch out on that because actually, that's a regulatory arbitrage. So you're actually losing some of the market protections.

There's no actual holding back to the actual issuer themselves. There's no investor protections on it. So I think this is a place where regulators are going to step in to say security is security, whereas tokenized are not. Now what we've done is to make sure that we are essentially token ready.

And so we've done initial work that we can actually -- we were testing this through things like crypto. We could put crypto tokens or other tokens on exchange directly. We could actually essentially trade them so that it could go into the infrastructure of the banks and the dealer community. We could bring them to the clearinghouse essentially clear where we would actually hold the wallet on behalf of the industry.

So we've basically built a model to do it. We haven't seen the demand for it yet, but we want to make sure we're ready. And then our other folks that are in the Post Trade side, are working on strategies and where we can use the clearinghouse capability for how do you solve for private companies. And that could be tokenized or otherwise, you could actually do it on a straight ledger itself. So it's about almost being agnostic in terms of what the market wants to trade, we can trade it through the infrastructure.

All right. I'll shift gears back and maybe get in the trading business. So derivatives, I think, consistently been identified as a core growth vertical. I mean what do you see as the primary initiatives to really support the derivatives growth momentum over the next 24, 36 months?

Yes. And the nice thing is, I mean, the first set of primary initiatives we already launched, so it's always helpful when they're already out the door. We relaunched the core future that moved from the backs. We've launched 2, 5 and 30-year futures. They are still in their growth phases. So there's a lot of opportunity for those products to build. And there are some of those products that are also in what I'll call the early market-making phases.

So when we bring a new product to market, we put a really heavy revenue sharing regime around it to help build liquidity, get liquidity from the OTC market on exchange. And as those regimes roll off, the revenue per contract goes up substantially. And so we've got ones that are still under regime, like the CORRA is rolling off in terms of the regime. We've got the 2-year that still has that. So there's -- so we're going to see continued growth in actual transaction activity, which has been really strong double-digit growth.

And then the revenue growth is higher because the revenue per trade is going to move even faster. So you're seeing more maturation in those areas. We're also seeing maturation in the global trading, which is only about 6% after hours today. There's upside potential for that. And then what we work on going forward is a product road map to continue to build on it. And so we're looking for next year an early launch of credit futures, again, to solve some of the investment challenges for the industry to work alongside.

We are thinking about options as well to give more functionality in that trading curve, the yield curve. And then we're thinking about some OTC programs as well. So on an OTC standpoint, we already clear repo. We've got strategies around how do we actually expand that so we can bring more of the OTC repo on the cleared market and bring capital efficiency to the industry.

When we can provide capital efficiency, we can reduce the cost for the banks and the dealers, and they can then trade more as well. We've got a collateral management solution that we've launched to do exactly that to help bring down their collateral costs. And we're looking at some additional markets as well, like things like total return swaps.

Again, things that are in the over-the-counter market where if we bring them on exchange, we can reduce costs, improve liquidity and get broader trading outcomes for everybody. And so that's the road map going forward. This is going to continue to be one of our high-growth businesses. And again, iterate high growth from a transaction standpoint and even higher growth from a revenue standpoint.

Excellent. You recently launched post-trade modernization and also alternate trading system into the U.S. So can you just give us a quick update, Mike, how has the reception been? And what have been some of the key learnings from that?

Yes. I mean I couldn't be prouder of the team for the U.S. ATS launch. Again, I mentioned this went from an idea to an execution in 18 months, including a de novo new technology build, multiple regulatory approval processes, client engagement and client sign-ups. And the reception on a new and the new ATS has been really, really strong.

And a lot of people will say, why do we need another marketplace because there's so many different marketplaces in North America. But we saw an opportunity because we had built some really interesting advanced trading functionality in Canada, improved execution quality. So really targeted around buy side, how do you improve your execution, lower your execution cost of doing large blocks in a lit market, not just dark markets.

So we built it in Canada and the approach we took was to take the best parts of our Canadian market and build a new market for the U.S. So we used our code base from our derivatives platform. We used our IP from the equity markets, our new order types we created. We built it in a new platform on a cloud delivery and again, all within 12 months in terms of that technology build.

And we had clients day 1. So we had clients building initial liquidity. We launched early in January, Trump inauguration day, we launched, not the best day to launch a new market because the volatility was a bit more robust than we might have had otherwise. But that was a quick learning experience because there was things that we triaged and fixed along the way and kept pushing ahead. Second quarter, we're up over 300% in terms of what we did in the first quarter.

We're up again in July. There's the public data on our volume again. We're up substantially again in July. We expect August will be up as well. And what that's meant is that the initial clients that help build have showed so much success that we've had another tranche of new clients that are signing on, including now most of the Canadian banks that work in the U.S. as well have signed on to the platform as well.

So it's one of the things that we thought was going to be unique to us in terms of building new platforms. We have deep client relations here that understand that we can build markets that have worked with us. So from what we can see, this is actually one of the fastest growth of the new U.S. ATS. And it's still early days in terms of actually being much of a revenue generator, but the momentum is there where we want it to be. And with that, it's going to give us the confidence to keep building more on top of it, which is what we wanted.

Excellent. And listen, M&A, I think, has played a role in accelerating TMX strategy. So how do you feel about the current M&A environment? And again, what type of businesses and capabilities do you have the strongest appetite for right now?

I mean when you started when you said strategy in there. So everything we're doing around M&A is around accelerating the strategy. And so it's not about trying to get into a new business line. It's about kind of accelerating those 3 core fundamentals we have, Global Insights, Global Markets and Trading and Capital formation, corporate solutions.

So we're constantly looking for is there good data things that we can roll in that would accelerate our long-term growth and we can accelerate theirs. And that's really key. It's got to be the ability for us to accelerate or why would we be the best buyer to it. And what's unique about us in terms of owning that. Trayport, one of the things that made us a unique owner is our strength in energy markets.

So we are now a great player to actually drive that business ahead. VettaFi, our ability to infuse it with unique data and our depth in ETF markets, made us the best owner for VettaFi in terms of getting the iNDEX side. I think people don't -- a lot of people don't know that the Canadian ETF market in terms of what we list is actually the most robust ETF market in the world.

Most new ETF types are invented here, including the original ETF that was invented on the Toronto Stock Exchange. Crypto ETFs were here 3 years before they ever got to the U.S. The new leverage product was done here first. So this is a real incubator market. We have almost 1,200 ETFs now listed in Canada. And I think the whole U.S. market is -- it's a few thousand, but it's a market 10x the size.

So we're way developed here. It's -- we have a right to be in this space. We have a right to provide more services to it. And candidly, the momentum in that space is not slowing down, in fact, it's actually accelerating. We've actually brought more new ETFs to market so far this year than all of 24 combined and 24 was the previous record. And it's across multiple asset classes, multiple providers, existing providers and new providers.

So it's a place we're going to do more. So we're looking at M&A to how do we keep accelerating that. So that can be through tuck-ins where we've done a number of tuck-ins already where we bought indices to help get new capabilities or distribution tools or we'll look at things that are large scale like VettaFi itself to expand more in terms of the geographies or products we can get into.

And now that our leverage is back down under 2.5, we're back in our target range. I think we're there 6 months before we told you. We've got the balance sheet to do more.

Excellent. We've got the red light almost flashing. So maybe in terms of kind of closing thoughts here. I mean, TMX has closed what's historically been a fairly wide valuation discount relative to its peers. I mean what key highlights or thoughts would you have to investors, quite frankly, pondering the argument on why TMX should trade at a premium to that group?

Well, we're not done yet. I always recognize when we traded at a discount, we had to prove to the market that we were going to deliver on what we were going to say we were delivering. And if you look at us and you compare us to the peer group, don't compare us to the peer median or the peer average.

Look at what are some of those exchange groups that look more like us in terms of the breadth of their business, their mix of geographies, the sustained revenue components. And actually, we trade a lot in line with those. We trade at a premium to the ones that are more single functionality or they don't have as strong a business model as we do. And then I'd say also compare us again to the revenue growth profile.

So we have one of the higher mixes of recurring revenue, and we have one of the highest organic sustainable growth. So when you think about more kind of a value to growth, I'd say we're actually still at a discount of where we can be. And so as long as our organization keeps delivering on the promise we've given around the growth in the different components, we should be a premium to the broad exchange market because we're going to outdeliver the rest of those peers.

Excellent. Well, John, great conversation. On behalf of Scotiabank Global Banking and Markets, I'd like to thank you personally, John, for taking the time and the TMX organization for your continued support.

It's a pleasure.

Thanks, John.