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• Annual Revenue: Over $111 million, marking a 1% increase from 2023.

• Q4 Gross Revenue: $28.5 million, up 3% year-over-year.

• OTC Link Revenue Growth: Increased 33% in Q4, driven by a 56% rise in OTC Link ECN and NQB revenues.

• Transaction-Based Expenses: Increased 62% in Q4.

• Market Data Licensing Revenue: Flat year-over-year, with a 5% increase in direct sold licenses.

• Corporate Services Revenue: Decreased 6% in Q4.

• Operating Expenses: Increased 1% in Q4, with compensation and benefits rising 7%.

• Net Income and EPS: Both increased 3% in Q4.

• Operating Profit Margin: Contracted to 31.6% in Q4 from 32.8% in the prior year period.

• Full Year Adjusted EBITDA: $41.3 million, up 1% from the previous year.

• Free Cash Flow: $31.6 million for 2024, slightly up from $31.5 million in 2023.

• Dividends and Stock Buyback: Returned $29.5 million to investors in 2024, a 1% decrease from the prior year.

• Warning! GuruFocus has detected 2 Warning Sign with OTCM.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OTC Markets Group Inc (OTCM) achieved over $111 million in annual revenues for the first time in its history, highlighting the resilience of its business model.

• The OTC Link business experienced strong growth, driven by increased trading volume and an expanded subscriber base.

• The company is launching two high-profile projects: OTC Overnight and MOON ATS, which aim to enhance trading opportunities during Asian market hours and European market open.

• OTC Markets Group Inc (OTCM) is developing the OTCID basic reporting market to improve financial disclosure and compliance for US investors.

• The company declared a quarterly dividend of $0.18 per share, reflecting its commitment to providing superior shareholder returns.

Negative Points

• Corporate services revenue decreased due to a reduced number of subscribers, impacting OTCQX and OTCQB markets.

• Operating expenses grew slightly by approximately 1%, which may impact profit margins.

• Market data licensing business saw flat revenue growth, indicating potential challenges in expanding this segment.

• The company faces unpredictability in trading volumes, which could decline in the future, affecting revenue from OTC Link.

• There was a decline in revenues from EDGAR Online due to subscriber cancellations, impacting the data and compliance solutions segment.

Q & A Highlights

Q: Can you provide insights into the future IT spending plans following recent technology investments? A: R. Cromwell Coulson, President and CEO, explained that IT spending is primarily focused on human capital and incremental improvements to technology platforms. Antonia Georgieva, CFO, added that capital expenditures have been consistent, ranging between $1 million and $1.5 million annually, necessary for maintaining trading system reliability. Future investments will continue to focus on IT infrastructure and human capital, reflected in operating expenses rather than capital expenditures.