Vox Royalty Corp. Q1 FY2026 earnings call

• Overall Financial Performance

  • TMX Group achieved six consecutive quarters of double-digit revenue growth; full year 2025 overall revenue rose 18% YoY, organic revenue (excluding acquisitions) rose 15% YoY, adjusted diluted earnings per share (EPS) rose 25% YoY. Q4 2025 record total revenue reached 457.8 million Canadian dollars, up 16% YoY; adjusted diluted EPS rose 22% YoY, operating income grew 14% YoY.
  • The Board approved a 9% increase in quarterly dividend to $0.24 per common share; the 12-month trailing payout ratio is 42%, within the 40-50% target range. Debt to adjusted EBITDA was 2.2x, within the 1.5-2.5x target range; net leverage after excess cash was 1.9x.
  • Excluding one-time items (CAT regulatory charge, acquisition costs, higher litigation costs), Q4 2025 operating expenses grew 6% YoY, delivering 7% positive operating leverage.

• Core Business Milestones

  • Montreal Exchange derivatives hit 80% YoY growth in ETF option volume; the 3-month CORA futures contract (launched mid-2024) surpassed legacy BACs all-time volume and open interest records in December 2025.
  • Combined TSX/TSX Venture/Alpha equity volumes rose 27% full year 2025; TSX Venture volume grew 45% YoY, the S&P/TSX Venture Composite Index rose 60% YoY outperforming global peers, and the S&P/TSX Composite Index crossed 30,000 for the first time.
  • Alpha X US (U.S. equity ATS) celebrated its first anniversary with strong volume and participant growth, winning two industry innovation awards. 239 new ETFs listed on TSX in 2025 (surpassing the prior record of 127), with $125.8 billion in net Canadian ETF inflows.
  • Mining sector market capitalization on TSX/TSX-V surpassed 1 trillion Canadian dollars in 2025, with mining financing up 53% YoY; 10 of 11 TSX Venture graduations to the senior exchange were mining companies.
  • TMX Vetify completed three acquisitions in 2025 (Credit Suites Bond Indices, ETF Stream, Nuclear Energy Indices), growing AUM and expanding geographic reach. The post-trade modernization program was successfully launched in 2025.

• Strategic Innovation Direction

  • Management follows a purpose-driven innovation approach focused on improving markets (not innovation for innovation's sake) while upholding core principles of market integrity, fairness and transparency.
  • TMX has explored blockchain use cases for 15 years; the most promising near-term opportunity is tokenized collateral management for more efficient cross-account/cross-clearing collateral movement; broad tokenization of public equities still requires clear regulatory frameworks and standardization.
  • TMX already offers extended hours derivatives trading for the Asia-Pacific market, and is assessing client demand and ecosystem impacts (including impacts on small-cap issuers) before expanding 24-hour equity trading.
  • TMX is expanding private market capabilities: TMX Corporate Solutions serves private and public companies across all growth stages, and Market Ventures (a JV with Canaccord Genuity to digitize private placements) launched in 2025 to build early relationships with future public issuers.

1. Global Insights: Q4 2025 revenue grew 16% year-over-year (YoY), contributing ~23% of total Q4 revenue. TMX DataLinks grew 18% YoY (5% organic, excluding the acquired Verity), driven by new acquisition revenue, increased subscribers/usage and higher co-location revenue. TMX Vetify grew 23% YoY in Canadian dollars (25% in USD), with 13% organic growth (excluding three 2025 acquisitions), driven by organic AUM growth (AUM reached $77 billion USD, up 49% YoY) and higher digital distribution revenue. TMX Trayport grew 11% YoY in Canadian dollars (8% in GBP), driven by 6% more licensees, annual price adjustments and incremental analytics revenue; annualized average recurring revenue was 276 million Canadian dollars, up 17% YoY. 2. Derivatives Trading and Clearing: Revenue excluding Box grew 27% YoY, contributing ~22% of total Q4 revenue. Montreal Exchange revenue grew 32%, CDCC revenue grew 17%, driven by a 10% volume increase and higher average rates per contract after sunset of market-making programs. End-of-period open interest rose 33% YoY. Box revenue grew 16% YoY driven by 17% volume growth. 3. Capital Formation: Q4 2025 revenue grew 13% YoY, contributing ~14% of total Q4 revenue. Additional listing fees grew 53% YoY from more transactions at the maximum fee threshold; sustaining/initial listing fees grew from ETF expansion. This was partially offset by a 5% revenue decrease in TMX Corporate Solutions from lower net interest income. 4. Equities and Fixed Income Trading and Clearing: Q4 2025 revenue grew 13% YoY, contributing ~30% of total Q4 revenue. Driven by 38% YoY equities volume growth (24% on TSX, 74% on TSX Venture, 35% on Alpha Exchange), combined market share of TSX/TSX-V listed issues was 61%, down 2pp YoY. Clearing revenue grew 2% YoY; fixed income trading revenue decreased YoY from lower credit and swap activity. 5. TMX DataLinks: Part of Global Insights, contributing ~14% of total Q4 revenue with 18% YoY growth.

• TMX Trayport reaffirms its long-term target of high single-digit to low double-digit annual revenue growth, with no change to the long-term growth outlook. Management expects growth to come from expansion into new geographies (U.S., Asia) and new asset classes (currently developing refined oil products) in addition to existing core European market growth.
• The company will maintain a focus on positive full-year operating leverage in 2026 as it continues to invest in growth. Organic operating expense growth is expected to track inflation across different categories (wage inflation for compensation, technology-specific inflation for IT costs, CPI for SG&A), with AI adoption expected to improve productivity and help control costs.
• Management notes a deep IPO pipeline for 2026 across multiple sectors (including a return of technology issuers) with strong market liquidity and favorable conditions for public issuance, though timing remains dependent on individual company decisions and global market conditions.

• Foreign exchange volatility created non-cash accounting impacts: Q4 2025 reported diluted EPS was 29% lower YoY due to $0.19 per share in non-cash FX losses on U.S. dollar denominated intercompany loans, compared to FX gains in the prior year period.
• A $15.3 million one-time regulatory charge was incurred in Q4 2025 related to the impairment of the SEC-mandated Consolidated Audit Trail system for U.S. equity and options trading.
• Broad adoption of tokenized assets faces significant regulatory and standardization hurdles; unstructured tokenization of existing equities may harm price discovery, fungibility and investor clarity, presenting risks to market integrity.
• Small and medium-sized listed issuers may not benefit from 24-hour trading, as it could dilute existing liquidity without corresponding gains.
• Emerging AI disruption of data and analytics businesses presents a potential competitive risk, though management notes TMX's core proprietary network and data assets have high barriers to entry that limit disruption risk.
• Valuation volatility in the software and data sectors can impact acquisition pricing, though TMX maintains a disciplined approach to M&A targeting only scalable, high-return opportunities.

Q: How does energy price volatility impact TMX Trayport revenue growth, and what initiatives will sustain Montreal Exchange growth going forward?

A: TMX Trayport revenue is driven by subscriber counts, not direct trading activity or volatility. Volatility can indirectly drive growth as firms expand trading desks and purchase additional licenses, but quarter-to-quarter revenue is lumpy due to staggered renewals, so long-term growth is emphasized. For Montreal Exchange, future growth will come from continued new product development, expanded clearing capabilities for OTC products, and market structure reforms that remove barriers to activity in high-growth products like ETF options, with additional upside after recent market-making program sunsets.

Q: What is TMX Trayport's long-term growth algorithm, and will new growth come mostly from non-European clients? What M&A strategy will TMX Vetify follow going forward?

A: Trayport growth comes from three sources: annual CPI-linked price adjustments for all subscriptions, upselling from existing client expansion (additional seats or premium products like analytics and chat features), and expansion into new geographies and asset classes. As energy markets become more global, growth from non-European clients is expected to increase. For TMX Vetify M&A, management is disciplined and opportunistic, open to both thematic and diversified index acquisitions, prioritizing scalable opportunities with clear long-term demand that can be efficiently integrated onto the existing platform, with a focus on expanding geographic reach.

Q: How do falling valuations for data/software businesses impact TMX's M&A strategy, and how does TMX defend against AI disruption of its data businesses?

A: Lower software/valuation creates attractive acquisition opportunities for TMX, which has a strong balance sheet and will prioritize targets at valuations that deliver strong shareholder returns. TMX's core data and network assets (Trayport's closed proprietary network, Vetify's proprietary benchmarks, TMX DataLinks' proprietary market data) have very high moats that are hard for generic AI to disrupt, as the underlying data is not publicly available. TMX is also integrating AI into its own products to enhance value and improve internal productivity.

Q: How is TMX approaching equity tokenization, following U.S. regulatory and peer initiatives, and what are the opportunities and risks?

A: TMX has explored blockchain use cases for 15 years, and is encouraging Canadian regulators to pursue thoughtful, standardized adoption that preserves existing market efficiency. TMX, which controls the full exchange, clearing and depository value chain, is focused on practical use cases: the most promising near-term opportunity is tokenized collateral management enabled by upcoming Canadian stablecoin regulation, rather than announcement-driven activity. Full on-chain equity markets will require long-term integration with existing digital and legacy assets, and layered token products on existing equities raise concerns around investor clarity, fungibility and negative impacts on price discovery.