Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gross revenues grew by 1% and net revenue by 2% compared to the third quarter of 2023.
- OTC Link experienced significant growth, with a 16% increase in the third quarter.
- The company announced the launch of OTC Overnight, expanding trading hours and accessibility.
- A special dividend of $1.50 and a quarterly dividend of $0.18 per share were declared, reflecting strong shareholder returns.
- The company is focusing on integrating teams and consolidating technology platforms to drive operational efficiencies.
Negative Points
- Market data revenue licensing decreased by 1%, and corporate services revenue decreased by 2%.
- The corporate services business was impacted by a reduced number of subscribers, particularly in the OTCQB market.
- Revenues from EDGAR Online decreased by 15% due to subscriber cancellations.
- Pro user and non-pro user revenues in the market data licensing business decreased by 6% and 7%, respectively.
- Operating expenses grew by approximately 1% during the first nine months of the year, with compensation and benefits being a significant cost.
Q & A Highlights
Q: Can you provide more details on the timing and infrastructure needs for the launch of OTCID in July 2025?
A: R. Cromwell Coulson, President and CEO, explained that the launch requires numerous small changes across various systems. The goal is to streamline processes for issuers to engage with the market, ensuring data-driven standards are met across all market tiers.
Q: How will the pricing for OTCID compare to the traditional Pink market and OTCQB?
A: Daniel Zinn, General Counsel and Chief of Staff, indicated that the pricing will reflect the market's position between the Pink market and OTCQB, considering the value of being on a regulated market and the resources devoted to market integrity.
Q: Are there any anticipated changes at the SEC that could impact OTC Markets Group following the recent election?
A: Daniel Zinn noted that their issues are generally non-partisan and not significantly affected by changes in administration. The focus remains on advocating for market structure reforms with long-term SEC and FINRA staff.
Q: Has the launch of OTC Overnight impacted trading volumes in the third quarter?
A: Daniel Zinn stated that the overnight offering is still in its early stages, with no significant revenue impact yet. The full effect will be seen once both OTC and NMS trading are integrated and available to broker-dealer subscribers.
Q: Can you provide an update on the subscriber trends for EDGAR Online?
A: Antonia Georgieva, CFO, reported a decline in subscribers from approximately 520 at the end of 2023 to about 480 by September 2024. The focus is on enhancing the product offering and integrating data sets to improve value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
