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RESULTS OF OPERATIONS

Non-GAAP Measures

Adjusted net income is a non-GAAP measure², and adjusted earnings per share, adjusted diluted earnings per share, and adjusted earnings per share CAGR are non-GAAP ratios³, and do not have standardized meanings prescribed by GAAP and are, therefore, unlikely to be comparable to similar measures presented by other companies.

Management uses these measures, and excludes certain items, because it believes doing so provides investors a more effective analysis of underlying operating and financial performance, including, in some cases, our ability to generate cash. Management also uses these measures to more effectively measure performance over time, and excluding these items increases comparability across periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors.

We present adjusted earnings per share, adjusted diluted earnings per share, and adjusted net income to indicate ongoing financial performance from period to period, exclusive of a number of adjustments as outlined under the headings "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for Q4/24 and Q4/23" and "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for 2024 and 2023".

We have also presented long term adjusted EPS CAGR as a financial objective which is the growth rate in adjusted diluted earnings per share over time, exclusive of adjustments that impact the comparability of adjusted EPS from period to period, including those outlined under the headings "Adjusted Earnings Per Share Reconciliation for Q4/24 and Q4/23" and "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for 2024 and 2023". The adjusted EPS CAGR is based on the assumptions outlined under the heading "Caution Regarding Forward Looking Information - Assumptions related to long term financial objectives".

Similarly, we present the dividend payout ratio based on dividends paid divided by adjusted earnings per share as a measure of TMX Group's ability to make dividend payments, exclusive of a number of adjustments as outlined under the headings "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for Q4/24 and Q4/23" and "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for 2024 and 2023".

Debt to adjusted EBITDA ratio is a non-GAAP measure defined as total long term debt and debt maturing within one year divided by adjusted EBITDA. Adjusted EBITDA is calculated as net income excluding interest expense, income tax expense, depreciation and amortization, transaction related costs, integration costs, one-time income (loss), and other significant items that are not reflective of TMX Group's underlying business operations.

Quarter ended December 31, 2024 (Q4/24) Compared with Quarter ended December 31, 2023 (Q4/23)

The information below is derived from the financial statements of TMX Group for Q4/24 compared with Q4/23.

 

Net Income attributable to equity holders of TMX Group and Earnings per Share

Net income attributable to equity holders of TMX Group in Q4/24 was $159.3 million, or $0.58 per common share on a basic and diluted basis, compared with a net income attributable to equity holders of TMX Group of $84.4 million, or $0.31 per common share on a basic and diluted basis for Q4/23. The increase in net income attributable to equity holders of TMX Group reflects net finance income of $40.0 million in Q4/24 driven by FX gain on USD-denominated intercompany loans, compared with net finance costs of $4.6 million in Q4/23, as well as an increase in Income from operations of $53.0 million from Q4/23 to Q4/24 driven by an increase in revenue of $91.8 million, partially offset by an increase in operating expenses of $38.8 million.

The increase in revenue from Q4/23 to Q4/24 is largely attributable to increases in revenue from Global Solutions, Insights and Analytics, of which $37.4 million reflects the inclusion of revenue from TMX VettaFi (fully acquired January 2, 2024) including iNDEX Research (acquired October 15, 2024), as well as increases from Derivatives Trading and Clearing, Capital Formation, and Equities and Fixed Income Trading and Clearing. Revenue for Q4/24 included $3.8 million related to Newsfile (acquired August 7, 2024).

The higher expenses reflected approximately $15.1 million of operating expenses related to TMX VettaFi (equity accounted since January 9, 2023, prior to acquisition of control on January 2, 2024), Newsfile (acquired August 7, 2024) and iNDEX Research (acquired October 15, 2024), $11.7 million related to amortization of 2024 acquired intangibles (VettaFi, Newsfile, and iNDEX Research), $0.3 million in acquisition and related costs, $1.3 million in integration costs, approximately $2.3 million increase related to our U.S. expansion initiative, $3.5 million in contingent payments related to Newsfile and iNDEX Research, and $1.3 million related to a true-up of an onerous contract provision in Q4/24. There were also higher expenses reflecting higher employee performance incentive plan costs, higher severance, increased IT operating costs, higher legal fees, and higher project spend. Somewhat offsetting these increases were lower expenses of $5.7 million related to strategic re-alignment costs, and $5.1 million related to acquisition costs in Q4/23.

Adjusted Net Income attributable to equity holders of TMX Group⁶ and Adjusted Earnings per Share⁷ Reconciliation for Q4/24 and Q4/23

The following tables present reconciliations of net income attributable to equity holders of TMX Group to adjusted net income attributable to equity holders of TMX Group and earnings per share to adjusted earnings per share. The financial results have been adjusted for the following:

1. The amortization expenses of intangible assets in Q4/23 and Q4/24 related to the 2012 Maple transaction (TSX, TSXV, MX, Alpha, Shorcan), TSX Trust, TMX Trayport (including VisoTech and Tradesignal), AST Canada, BOX, WSH, and the amortization of intangibles related to TMX VettaFi, Newsfile and iNDEX Research in Q4/24. These costs are a component of Depreciation and amortization.

2. Integration costs related to integrating the VettaFi, Newsfile and iNDEX Research acquisitions in Q4/24. Q4/23 also includes integration costs for WSH. These costs are included in Compensation and benefits (VettaFi, Newsfile, iNDEX Research and WSH), Selling, general and administration (VettaFi, Newsfile and iNDEX Research), Information and trading systems (VettaFi, Newsfile and Wall Street Horizon), and Depreciation and Amortization and Net Finance Income (Costs) (VettaFi).

3. Q4/24 includes a true-up related to onerous contract provision for our AST facilities, which is included in Selling, general and administration.

4. Acquisition and related costs in Q4/24 related to Newsfile (acquired August 7, 2024), and iNDEX Research (acquired October 15, 2024). Q4/23 also includes acquisition related costs for VettaFi (equity-accounted on January 9, 2023 prior to the acquisition of control on January 2, 2024). These costs are included in Compensation and benefits (iNDEX Research), Selling, general and administration (Newsfile and VettaFi).

5. Change in fair value related to contingent considerations, reflecting a reduction in the earn-out liability in Q4/23 assumed as part of the WSH acquisition. 2024 includes a reduction related to a prior earn-out liability assumed as part of the VettaFi acquisition in Q1/24, and an increase in the accrual of the contingent payments agreed upon as part of the Newsfile and iNDEX Research acquisitions. These changes are included in Compensation and Benefits (Newsfile and iNDEX Research) and Net Finance Income (Costs) (VettaFi and WSH).

6. Net gain on translation of monetary assets and liabilities denominated in foreign currencies. These changes are included in Net Finance Income (Costs) in Q4/24.

7. Q4/23 includes strategic re-alignment expenses related to organizational changes. These costs are primarily included in Compensation and benefits.

 

Adjusted net income attributable to equity holders of TMX Group increased by 32% from $101.9 million in Q4/23 to $134.6 million in Q4/24 driven by an increase in income from operations, partially offset by higher interest expense.

 

Adjusted diluted earnings per share increased by 11 cents from $0.37 in Q4/23 to $0.48 in Q4/24 reflecting an increase in income from operations, partially offset by higher interest expense.

Revenue

 

Revenue was $393.3 million in Q4/24, up $91.8 million or 30% from $301.5 million in Q4/23 largely attributable to increases in revenue from Global Solutions, Insights and Analytics, of which $37.4 million reflects the inclusion of revenue from TMX VettaFi (fully acquired January 2, 2024) including iNDEX Research (acquired October 15, 2024), as well as increases from Derivatives Trading and Clearing, Capital Formation, and Equities and Fixed Income Trading and Clearing. Revenue for Q4/24 included $3.8 million related to Newsfile (acquired August 7, 2024). Excluding revenue from TMX VettaFi, Newsfile, and iNDEX Research, revenue was up 17% in Q4/24 compared to Q4/23.

Capital Formation¹¹

 

• Initial listing fees in Q4/24 decreased from Q4/23 reflecting lower revenue in TSX and TSXV. We recognized $1.6 million in initial listing fees received in 2023 and 2024 in Q4/24 compared with $1.9 million in initial listing fees received in 2022 and 2023 in Q4/23.

• Based on initial listing fees billed in 2024, the following amounts have been deferred to be recognized in Q1/25, Q2/25, Q3/25, and Q4/25: $1.3 million, $1.0 million, $0.6 million and $0.2 million respectively. Total initial listing fees revenue for future quarters will also depend on listing activity in those quarters.

• Additional listing fees in Q4/24 increased compared to Q4/23 reflecting an increase in both the number of financings and the total financing dollars raised on TSXV, partially offset by a decrease in both the number of financings and the total financing dollars raised on TSX. The increase in additional listing fees on TSXV reflected a 22% increase in number of transactions from Q4/23 to Q4/24. The decrease in additional listing fees on TSX reflected 5 less transactions billed at the maximum listing fee of $250,000, and an 11% decrease in the number of transactions billed below the maximum fee from Q4/23 to Q4/24, partially offset by higher average fees on transactions billed below the maximum. Additional listings revenue for Q4/24 included $10.4 million for TSX and $7.9 million for TSXV, compared with $11.2 million for TSX and $5.8 million for TSXV in Q4/23.

• Issuers listed on TSX and TSXV pay annual sustaining listing fees primarily based on their market capitalization at the end of the prior calendar year, subject to minimum and maximum fees. There was a slight increase in Sustaining listing fees on TSX and a decrease on TSXV from Q4/23 to Q4/24, largely reflecting lower TSXV issuers billed below the maximum fee, and higher client discounts and credits. The decrease was somewhat offset by pricing changes.

• Other issuer services revenue which includes TSX Trust and Newsfile, was higher in Q4/24 compared to Q4/23 reflecting higher net interest income in Q4/24 driven by higher balances, including corporate actions, the inclusion of Newsfile of $3.8 million, and higher registered and non-registered plan services and asset reunification revenue, partially offset by lower transfer agency fees in Q4/24.

Equities and Fixed Income Trading and Clearing

 

• Equities Trading revenue increased in Q4/24 compared with Q4/23 reflecting higher volumes. The overall volume of securities traded on our equities marketplaces increased by 19% (35.7 billion securities in Q4/24 versus 30.0 billion securities in Q4/23). There were increases in volumes of 15% on TSX, 30% on TSXV, and 14% on Alpha in Q4/24 compared with Q4/23.

• Fixed income trading revenue increased from Q4/23 to Q4/24, primarily reflecting increased activity in Government of Canada bonds driven by rate cuts by the Bank of Canada.

• CDS revenue increased by 5% from Q4/23 to Q4/24 mainly due to higher issuers event management fees and increased exchange traded volumes, partially offset by higher rebates.

• Excluding intentional crosses, for TSX and TSXV listed issues, our combined domestic equities trading market share was approximately 63% in Q4/24, unchanged from Q4/23¹². We only trade securities that are listed on TSX or TSXV.

• Excluding intentional crosses, in all listed issues in Canada, our combined domestic equities trading market share was approximately 56% in Q4/24, down 1% from approximately 57% in Q4/23.¹³

Derivatives Trading and Clearing

 

Derivatives Trading and Clearing (excl. BOX)

The increase in revenue in Derivatives Trading and Clearing (excl. BOX) was driven by a 27% and 39% increase in MX and CDCC revenue respectively. The MX revenue increase was primarily driven by an increase in volumes from Q4/23 to Q4/24 of 20% (54.5 million contracts traded in Q4/24 vs. 45.4 million contracts traded in Q4/23), and lower rebates related to the Five-Year Government of Canada Bond Futures (CGF) market making agreement. The increase in CDCC revenue reflected positive impact from pricing changes on interest rate and index derivatives and REPO clearing fees, which came into effect in January 2024, higher clearing volumes, as well as higher REPO volumes.

BOX

BOX revenue increased by $10.6 million or 34% in Q4/24 compared to Q4/23, reflecting higher rate per contract driven by a favourable product mix, and higher volumes. BOX volumes were up approximately 5% from Q4/23 to Q4/24 (211.8 million contracts traded in Q4/24 versus 200.8 million contracts traded in Q4/23), and BOX market share in equity options was 7% in Q4/24, down 1% from 8% from Q4/23.

The following table summarizes the BOX volume and the equity option market share over the last eight quarters:

 

Global Solutions, Insights and Analytics

 

The increase in Global Solutions, Insights and Analytics (GSIA) revenue in Q4/24 compared with Q4/23 reflects $37.4 million in revenue recognized for TMX VettaFi (fully acquired January 2, 2024), of which $1.7 million related to the inclusion of iNDEX Research (acquired October 15, 2024), as well as a 26% increase from TMX Trayport, and a 3% increase from TMX Datalinx including Co-location. There were also favourable FX impacts from a stronger U.S. dollar relative to the Canadian dollar on TMX Datalinx revenue and a stronger GBP on TMX Trayport revenue.

TMX Trayport

The following table summarizes the average number of licencees, connections, Annual Recurring Revenue (ARR), and average Net Revenue Retention (NRR) over the last eight quarters¹⁴:

 

Revenue from TMX Trayport increased by 26% from Q4/23 to Q4/24. In GBP, revenue from TMX Trayport was £35.3 million (based on GBP-CAD FX rate of 1.80) in Q4/24 up 19% over Q4/23. The increase in TMX Trayport revenue from Q4/23 to Q4/24 was primarily driven by a 25% increase in total licensees, annual price adjustments, higher revenue from data analytics and other trader products, and favourable FX impact of $3.2 million due to a stronger GBP compared to CAD.

Total Licencees represent the count of unique chargeable licenses of core TMX Trayport products across customer segments including Traders, Brokers and Exchanges. Total Connections represents the number of connections to the Trayport network. While not every individual connection is tied to revenue, it demonstrates the power of the overall Trayport network. The previously disclosed metric of Total Subscribers is the aggregate of Total Licencees and Total Connections.

ARR is calculated as the average recurring revenue for the quarter multiplied by four. Average NRR represents the percentage of recurring revenue generated from existing clients over a set period. Revenue from new clients is excluded in the calculation. A NRR of 100% reflects the same spend by existing clients from one period to the next.

TMX Datalinx including Co-location

Revenue from TMX Datalinx including Co-location increased by 3% from Q4/23 to Q4/24, reflecting higher revenues related to increases in data feeds, insight products, benchmark and indices, co-location, and the impact of price adjustments, partially offset by lower subscriber and usage based revenue due to a client-specific reduction in enterprise agreement renewals. There was a favourable FX impact of approximately $1.4 million from a stronger U.S. dollar relative to the Canadian dollar in Q4/24 compared with Q4/23.

• The average number of professional market data subscriptions for TSX and TSXV products was down 4% in Q4/24 from Q4/23 (94,104 professional market data subscriptions in Q4/24 compared with 97,972 in Q4/23).

• The average number of MX professional market data subscriptions was down 1% in Q4/24 compared with Q4/23 (20,952 MX professional market data subscriptions in Q4/24 compared with 21,250 in Q4/23).

TMX VettaFi

Revenue from TMX VettaFi (equity-accounted January 9, 2023 prior to the acquisition of control January 2, 2024) was $37.4 million in Q4/24 (based on USD-CAD FX rate of 1.40). Revenue was up 18% in USD compared to Q4/23. The revenue increase was driven by higher indexing revenue reflecting organic growth in assets under management (AUM), the inclusion of iNDEX Research of $1.7 million, and higher analytics revenue, partially offset by lower revenue from digital distribution.

The following table summarizes the revenue for the last eight quarters¹⁵:

 

Below is a description of TMX VettaFi's service offerings:

Indexing: End-to-end scalable indexing platform including research, development, maintenance and calculation of indices.

Digital Distribution and Analytics: Web-based sales and marketing support tools that provide engagement across financial advisors and institutional and individual investors. We also provide cloud-hosted portfolio management platform used by ETF asset managers and investor behavioral intelligence data tools based on proprietary datasets across financial advisors, institutional, and individual investors.

Events: Thought leadership and curated, high impact event hosting. The Exchange conference is hosted on an annual basis in Q1 and is the largest component of this service offering.

Operating expenses

 

Operating expenses in Q4/24 were $212.1 million, up $38.8 million or 22%, from $173.3 million in Q4/23. The increase reflected $15.1 million of operating expenses related to TMX VettaFi (equity accounted since January 9, 2023, prior to acquisition of control on January 2, 2024), Newsfile (acquired August 7, 2024), and iNDEX Research (acquired October 15, 2024), $11.7 million related to amortization of 2024 acquired intangibles (VettaFi, Newsfile, and iNDEX Research), as well as a $0.3 million related to acquisition and related expenses. There were also increases of $3.5 million in contingent payments related to Newsfile and iNDEX Research, $2.3 million increase related to our U.S. expansion initiative, $1.3 million increase in integration costs, and $1.3 million related to a true-up of an onerous contract provision in Q4/24. Somewhat offsetting these increases were lower expenses of $5.7 million related to strategic re-alignment costs, and $5.1 million of acquisition costs in Q4/23.

Excluding the above mentioned expenses for TMX VettaFi, Newsfile, iNDEX Research, acquisition and related expenses, integration costs, true-up of an onerous contract provision, the U.S. expansion initiative and strategic re-alignment costs, comparable operating expenses increased by approximately 9% in Q4/24 compared with Q4/23.

The comparable operating expense increase of 9% reflects higher expenses due to higher employee performance incentive plan costs, higher severance, increased IT operating costs, higher legal fees, and higher project spend.

Compensation and benefits

 

• The increase in Compensation and benefits expenses reflected approximately $11.1 million of operating expenses related to TMX VettaFi, Newsfile and iNDEX Research in Q4/24, $3.5 million in contingent payments related to Newsfile and iNDEX Research, $0.3 million higher acquisition costs, $0.2 million in integration costs, and $1.3 million related to our U.S. expansion initiative. In addition, there was also higher employee performance incentive plan costs of $2.0 million, and $1.5 million related to higher severance. These increases were partially offset by lower strategic re-alignment costs of $5.7 million in Q4/24 compared with Q4/23.

• There were 2,014 TMX Group full-time equivalent employees¹⁶ at December 31, 2024 (excluding BOX) versus 1,803 at December 31, 2023 reflecting a 12% increase in headcount including 116 full-time equivalent employees for TMX VettaFi (fully acquired January 2, 2024) and iNDEX Research (acquired October 15, 2024), and 51 employees for Newsfile (acquired August 7, 2024). There was also an increase in headcount attributable to investing in the various growth areas of our business.

Information and trading systems

 

• The increase in Information and trading systems expenses from Q4/23 to Q4/24 reflected approximately $2.2 million of operating expenses related to TMX VettaFi, Newsfile and iNDEX Research, $0.3 million of integration costs, and $0.8 million of expenses related to our U.S. expansion initiative. There were also higher software, license subscription, and project spend.

Selling, general and administration

 

• Selling, general and administration expenses increased by $2.5 million in Q4/24 compared with Q4/23 primarily reflecting $1.7 million of operating expenses related to TMX VettaFi, Newsfile and iNDEX Research, $0.8 million in integration costs, $1.3 million related to a true-up of an onerous contract provision in Q4/24, as well as increased legal fees, consulting fees, and higher project spend. Partially offsetting these increases was $5.1 million of acquisition related expenses for VettaFi in Q4/23.

Depreciation and amortization

 

• Depreciation and amortization expenses increased by $13.6 million from Q4/23 to Q4/24 primarily reflecting increased amortization related to TMX VettaFi, Newsfile and iNDEX Research of approximately $11.8 million, including $11.7 million related to the amortization of 2024 acquired intangibles (VettaFi, Newsfile, and iNDEX Research). There was also a $0.3 million increase related to our U.S. Expansion initiative, as well as increased amortization on new intangible assets.

• The Depreciation and amortization costs in Q4/24 of $42.0 million included $27.0 million, net of NCI, related to amortization of intangibles related to acquisitions (7 cents per basic and diluted share).

• The Depreciation and amortization costs in Q4/23 of $28.4 million included $15.1 million, net of NCI, related to amortization of intangibles related to acquisitions (3 cents per basic and diluted share).

Additional Information

Share of income (loss) from equity-accounted investments

 

• In Q4/24, we recognized $0.2 million share of loss from equity-accounted investments, compared with a $1.3 million share of income from equity accounted investments in Q4/23. Our share from equity-accounted investments includes Ventriks and other equity accounted investments, for both Q4/24 and Q4/23. Our share from equity-accounted investments also includes VettaFi in Q4/23.

Net finance (income) costs

 

• In Q4/24, we recognized net finance income of $40.0 million, compared with $4.6 million of net finance costs in Q4/23. For Q4/24, we recognized a net foreign exchange gain of $52.6 million reflecting FX gains on USD-denominated intercompany loans. This gain was partially offset by increased interest expense due to higher debt levels following the VettaFi acquisition.

Income tax expense and effective tax rate

 

The effective tax rate excluding below adjustments would have been approximately 27% for Q4/24 and Q4/23.

Q4/24

• In Q4/24, there was an adjustment for FX gains on account of capital that are taxable at a 50% inclusion rate, which decreased our effective tax rate by approximately 3%.

• In Q4/24, there was an acquisition-related adjustment that resulted in a tax loss, which decreased our effective tax rate by approximately 1%.

Q4/23

• In Q4/23, Massachusetts enacted a change in their corporate tax effective 2025. This change resulted in a decrease in net deferred income tax liabilities and a corresponding decrease in income tax expense on intangibles related to acquisitions, which decreased our effective tax rate by approximately 1%.

• In Q4/23, there was a decrease in income tax expense due to a prior year tax adjustment related to TMX Trayport which decreased our effective tax rate by approximately 1%.

• In Q4/23, there were acquisition costs primarily related to VettaFi that are non-deductible for tax purposes which increased our effective tax rate by approximately 1%.

• In Q4/23, we wrote-down deferred tax assets relating to non-capital losses related to TMX Investor Solutions resulting in an increase in income tax expense, which increased our effective tax rate by approximately 1%.

Net income attributable to non-controlling interests

 

• The increase in net income attributable to non-controlling interests (NCI) for Q4/24 compared to Q4/23 is primarily due to higher net income in BOX driven by higher revenue and lower operating expenses.

Summary of Cash Flows

Q4/24 compared with Q4/23

 

• In Q4/24, Cash flows from operating activities increased compared with Q4/23 reflecting higher income from operations (excluding depreciation and amortization) and $40.0 million of finance income in Q4/24 relating to a FX gain on USD-denominated intercompany loan. These increases were somewhat offset by net finance costs of $5.7 million in Q4/23, decreases in cash flows related to other assets and liabilities, higher income taxes paid, trade and other receivables, and prepaid expenses, trade and other payables.

• In Q4/24, Cash flows used in financing activities decreased to $237.0 million compared with $93.2 million in Q4/23. This decrease in cash flow was driven by a $124.8 million increase in the issuance of Commercial Paper, a decrease in shares repurchased under our normal course issuer bid program of $39.4 million in Q4/24 compared with Q4/23, and a decrease in net credit and liquidity facilities drawn of $12.6 million. These decreases in cash flows used were partially offset by higher repayment of debentures which included $300.0 million related to Series D debentures that matured on December 11, 2024, compared with $250.0 million related to the Series B debentures that matured on October 3, 2023.

• In Q4/24, Cash flows used in investing activities increased compared with Q4/23, reflecting $17.5 of net cash used in the acquisition of iNDEX Research in Q4/24, an increase in cash flows used for the net purchase of marketable securities, as well as an increase in cash flows used in additions to premises and equipment and intangible assets.

Year ended December 31, 2024 (2024) Compared with the year ended December 31, 2023 (2023)¹⁸

The information below reflects the financial statements of TMX Group for 2024 compared with 2023.

 

Net Income attributable to equity holders of TMX Group and Earnings per Share

Net income attributable to equity holders of TMX Group in 2024 was $481.5 million, or $1.74 per common share on a basic and $1.73 on a diluted basis, compared with $356.0 million, or $1.28 per common share on a basic and diluted basis for 2023. The increase in net income attributable to equity holders of TMX Group reflected an increase in income from operations of $102.3 million, a non-cash gain of $57.1 million being recognized in 2024 resulting from the fair value remeasurement of our previously held minority interest in VettaFi (equity-accounted January 9, 2023 prior to the acquisition of control January 2, 2024), and higher net finance costs of $4.4 million mainly reflecting higher interest expense of $52.1 million driven by increased debt levels following the VettaFi acquisition, partially offset by a net foreign exchange gain of $41.2 million on USD-denominated intercompany loans. The increase in income from operations from 2023 to 2024 was driven by an increase in revenue of $266.0 million, reflecting $136.7 million related to the inclusion of revenue from TMX VettaFi (fully acquired January 2024), $5.5 million related to Newsfile (acquired August 7, 2024) and $1.7 million related iNDEX Research (acquired October 15, 2024), as well as higher revenue from Derivatives Trading and Clearing, TMX Trayport, Equities and Fixed Income Trading and Clearing, and Capital Formation revenue.

There was also an increase in operating expenses of $163.7 million, of which approximately $60.6 million of operating expenses related to TMX VettaFi (equity accounted since January 9, 2023, prior to acquisition of control on January 2, 2024), Newsfile (acquired August 7, 2024) and iNDEX Research (acquired October 15, 2024), $47.2 million related to amortization of 2024 acquired intangibles (VettaFi, Newsfile, and iNDEX Research), as well as a $2.3 million increase in acquisition and related expenses. There were also increases of $7.9 million in integration costs, approximately $7.0 million related to our U.S. expansion initiative, and $4.4 million in contingent payments related to Newsfile and iNDEX Research, and $1.3 million relating to a true-up of an onerous contract provision. Partially offsetting these increases in operating expenses were lower expenses of $5.7 million related to strategic re-alignment costs, a one-time write off of receivables of approximately $2.2 million, and $1.0 million related to SigmaLogic recorded in 2023.

Adjusted Net Income²² attributable to equity holders of TMX Group and Adjusted Earnings per Share²³ Reconciliation for 2024 and 2023

The following tables present reconciliations of net income attributable to equity holders of TMX Group to adjusted net income attributable to equity holders of TMX Group and earnings per share to adjusted earnings per share. The financial results have been adjusted for the following:

1. The amortization expenses of intangible assets in 2023 and 2024 related to the 2012 Maple transaction (TSX, TSXV, MX, Alpha, Shorcan), TSX Trust, TMX Trayport (including VisoTech and Tradesignal), AST Canada, BOX, and Wall Street Horizon (WSH), and the amortization of intangibles related to TMX VettaFi, Newsfile and iNDEX Research in 2024. These costs are a component of Depreciation and amortization.

2. Acquisition and related costs in 2023 and 2024 related to VettaFi (equity-accounted on January 9, 2023 prior to the acquisition of control on January 2, 2024). 2024 also includes acquisition related costs for Newsfile (acquired August 7, 2024) and iNDEX Research (acquired October 15, 2024). 2023 includes acquisition related costs for SigmaLogic (equity-accounted prior to the acquisition of control on February 16, 2023 and divested on April 21, 2023) and WSH (acquired November 9, 2022). These costs are included in Compensation and benefits (iNDEX Research), Selling, general and administration (VettaFi, Newsfile and iNDEX Research) and Net Finance Costs (VettaFi).

3. Integration costs related to integrating the VettaFi, Newsfile and iNDEX Research acquisitions in 2024. 2023 also includes integration costs for WSH. These costs are included in Compensation and benefits (VettaFi, Newsfile, iNDEX Research and WSH), Selling, general and administration (VettaFi, Newsfile and iNDEX Research), Information and trading systems (VettaFi, Newsfile and WSH), and Depreciation and Amortization and Net Finance Income (Costs) (VettaFi).

4. 2024 includes a true-up related to a onerous contract provision for our AST facilities, which is included in Selling, general and administration.

5. Change in fair value related to contingent considerations, reflecting a reduction in the earn-out liability in 2023 assumed as part of the WSH acquisition. 2024 includes a reduction related to a prior earn-out liability assumed as part of the VettaFi acquisition, and an increase in the accrual of the contingent payments agreed upon as part of the Newsfile and iNDEX Research acquisitions. These changes are included in Compensation and benefits (Newsfile and iNDEX Research), and Net Finance Income (Costs) (VettaFi and WSH).

6. Net gain on foreign exchange (FX) forwards and translation of monetary assets and liabilities denominated in foreign currencies, including USD-denominated debt raised to facilitate the VettaFi acquisition in 2024. These changes are included in Net Finance Income (Costs).

7. Gain on VettaFi resulting from the remeasurement of our previously held minority interest in VettaFi (fully acquired January 2, 2024), included in Other income in 2024.

8. 2023 includes strategic re-alignment expenses related to organizational changes. These costs are primarily included in Compensation and benefits.

9. Gain resulting from the sale of 100% of our interest in SigmaLogic to VettaFi (effective April 21, 2023), net of divestiture costs. This gain is included in Other Income while the costs are included in Selling, general and administration.

 

Adjusted net income attributable to equity holders of TMX Group increased by 16% from $407.8 million in 2023 to $473.0 million in 2024 driven by an increase in income from operations, partially offset by higher net finance costs.

 

Adjusted diluted earnings per share increased by 24 cents from $1.46 in 2023 to $1.70 in 2024 primarily reflecting an increase in income from operations from 2023 to 2024, partially offset by higher net finance costs.

FINANCIAL STATEMENTS GOVERNANCE PRACTICE

The Finance & Audit Committee of the Board of Directors of TMX Group (Board) reviewed this press release as well as the 2024 audited annual consolidated financial statements and related Management's Discussion and Analysis (MD&A) and recommended they be approved by the Board of Directors. Following review by the full Board, the 2024 audited annual consolidated financial statements, MD&A and the contents of this press release were approved.

CONSOLIDATED FINANCIAL STATEMENTS

Our 2024 audited annual consolidated financial statements are prepared in accordance with IFRS Accounting Standards and IFRS Interpretations Committee ("IFRIC") interpretations, as issued by the International Accounting Standards Board (IASB), unless otherwise specified. Financial measures contained in the MD&A and this press release are based on these, unless otherwise specified. All amounts are in Canadian dollars unless otherwise indicated.

ACCESS TO MATERIALS

TMX Group has filed its 2024 audited annual consolidated financial statements and MD&A with Canadian securities regulators. This press release should be read together with our 2024 audited annual consolidated financial statements and MD&A. These documents may be accessed through www.sedarplus.ca, or on the TMX Group website at www.tmx.com. We are not incorporating information contained on the website in this press release. In addition, copies of these documents will be available upon request, at no cost, by contacting TMX Group Investor Relations by phone at +1 888 873-8392 or by e-mail at TMXshareholder@tmx.com.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This press release of TMX Group contains "forward-looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, assumptions, estimates, projections and other factors that management believes to be relevant as of the date of this press release. Often, but not always, such forward-looking information can be identified by the use of forward-looking words such as "plans," "expects," "is expected," "budget," "scheduled," "targeted," "estimates," "forecasts," "intends," "anticipates," "believes," or variations or the negatives of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will" be taken, occur or be achieved or not be taken, occur or be achieved. Forward-looking information, by its nature, requires us to make assumptions and is subject to significant risks and uncertainties which may give rise to the possibility that our expectations or conclusions will not prove to be accurate and that our assumptions may not be correct.

Examples of forward-looking information in this Press Release include, but are not limited to, our long-term revenue growth CAGR and adjusted EPS CAGR objectives; our target dividend payout ratio; our target debt to adjusted EBITDA ratio; our objectives regarding growing recurring revenue, revenue outside Canada and the percentage of GSIA revenue as a percentage of total TMX Group revenue; our objectives related to the acquisition of VettaFi; our objectives related to the acquisition of Newsfile; our objectives related to the acquisition of iNDEX Research; the modernization of clearing platforms, including the expected cash expenditures related to the modernization of our clearing platforms and the timing of the implementation of the modernization project; the timing on the cessation of market-making programs and the subsequent impact on rate per contract; the impact of the market capitalization of TSX and TSXV issuers overall (from 2023 to 2024); future changes to TMX Group's anticipated statutory income tax rate for 2025; factors relating to stock, and derivatives exchanges and clearing houses and the business, strategic goals and priorities, market conditions, pricing, proposed technology and other business initiatives and the timing and implementation thereof, financial results or financial condition, operations and prospects of TMX Group which are subject to significant risks and uncertainties.

These risks include, but are not limited to: competition from other exchanges or marketplaces, including alternative trading systems and new technologies and alternative sources of financing, on a national and international basis; dependence on the economy of Canada; adverse effects on our results caused by global economic conditions (including geopolitical events, interest rate movements, threat of recession) or uncertainties including changes in business cycles that impact our sector; failure to retain and attract qualified personnel; geopolitical and other factors which could cause business interruption; dependence on information technology; significant delays in the post trade modernization project resulting from the industry implementation of T+1 settlement or for other reasons, which could lead to increased implementation costs and could negatively impact our operating results; vulnerability of our networks and third party service providers to security risks, including cyber-attacks; failure to properly identify or implement our strategies; regulatory constraints; constraints imposed by our level of indebtedness, risks of litigation or other proceedings; dependence on adequate numbers of customers; failure to develop, market or gain acceptance of new products; failure to close and effectively integrate acquisitions to achieve planned economics, including TMX VettaFi, or divest underperforming businesses; currency risk; adverse effect of new business activities; adverse effects from business divestitures; not being able to meet cash requirements because of our holding company structure and restrictions on paying inter-corporate dividends; dependence on third-party suppliers and service providers; dependence of trading operations on a small number of clients; risks associated with our clearing operations; challenges related to international expansion; restrictions on ownership of TMX Group common shares; inability to protect our intellectual property; adverse effect of a systemic market event on certain of our businesses; risks associated with the credit of customers; cost structures being largely fixed; the failure to realize cost reductions in the amount or the time frame anticipated; dependence on market activity that cannot be controlled; the regulatory constraints that apply to the business of TMX Group and its regulated subsidiaries, costs of on exchange clearing and depository services, trading volumes (which could be higher or lower than estimated) and the resulting impact on revenues; future levels of revenues being lower than expected or costs being higher than expected.

Forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions in connection with the ability of TMX Group to successfully compete against global and regional marketplaces and other venues; business and economic conditions generally; exchange rates (including estimates of exchange rates from Canadian dollars to the U.S. dollar or GBP), commodities prices, the level of trading and activity on markets, and particularly the level of trading in TMX Group's key products; business development and marketing and sales activity; the continued availability of financing on appropriate terms for future projects; changes to interest rates and the timing thereof; productivity at TMX Group, as well as that of TMX Group's competitors; market competition; research and development activities; the successful introduction and client acceptance of new products and services; successful introduction of various technology assets and capabilities; the impact on TMX Group and its customers of various regulations; TMX Group's ongoing relations with its employees; and the extent of any labour, equipment or other disruptions at any of its operations of any significance other than any planned maintenance or similar shutdowns.

Assumptions related to long term financial objectives

In addition to the assumptions outlined above, forward looking information related to long term revenue cumulative average annual growth rate (CAGR) objectives, and long term adjusted earnings per share CAGR objectives are based on assumptions that include, but not limited to:

• TMX Group's success in achieving growth initiatives and business objectives;

• continued investment in growth businesses and in transformation initiatives including next generation technology and systems;

• no significant changes to our effective tax rate, and number of shares outstanding;

• organic and inorganic growth in recurring revenue;

• moderate levels of market volatility over the long term;

• level of listings, trading, and clearing consistent with historical activity;

• economic growth consistent with historical activity;

• no significant changes in regulations;

• continued disciplined expense management across our business;

• continued re-prioritization of investment towards enterprise solutions and new capabilities;

• free cash flow generation consistent with historical run rate; and

• a limited impact from inflation, rising interest rates and supply chain constraints on our plans to grow our business over the long term including on the ability of our listed issuers to raise capital.

While we anticipate that subsequent events and developments may cause our views to change, we have no intention to update this forward-looking information, except as required by applicable securities law. This forward-looking information should not be relied upon as representing our views as of any date subsequent to the date of this press release. We have attempted to identify important factors that could cause actual actions, events or results to differ materially from those current expectations described in forward-looking information. However, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended and that could cause actual actions, events or results to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. A description of the above-mentioned items is contained in the section "Enterprise Risk Management" of our 2024 annual MD&A.

About TMX Group (TSX: X)

TMX Group operates global markets, and builds digital communities and analytic solutions that facilitate the funding, growth and success of businesses, traders and investors. TMX Group's key operations include Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange, The Canadian Depository for Securities, Montréal Exchange, Canadian Derivatives Clearing Corporation, TSX Trust, TMX Trayport and TMX VettaFi which provide listing markets, trading markets, clearing facilities, depository services, technology solutions, data products and other services to the global financial community. TMX Group is headquartered in Toronto and operates offices across North America (Montréal, Calgary, Vancouver and New York), as well as in key international markets including London, Singapore, and Vienna. For more information about TMX Group, visit www.tmx.com. Follow TMX Group on X: @TMXGroup.

Teleconference / Audio Webcast

TMX Group will host a teleconference / audio webcast to discuss the financial results for Q4/24.

Time: 8:00 a.m. - 9:00 a.m. ET on Tuesday, February 4th, 2025

To teleconference participants: Please call the following number at least 15 minutes prior to the start of the event.

The audio webcast of the conference call will also be available on TMX Group's website at www.tmx.com, under Investor Relations.

Teleconference Number: 437-900-0527 or 1-888-510-2154

Audio Replay: 289-819-1450 or 1-888-660-6345

The pass code for the replay is 53456.

For more information please contact:

Catherine Kee
Head of Media Relations
TMX Group
416-671-1704
catherine.kee@tmx.com

Amin Mousavian
VP, Investor Relations and Treasury
TMX Group
416-732-3460
amin.mousavian@tmx.com

TMX GROUP LIMITED
Consolidated Balance Sheets

 

TMX GROUP LIMITED
Consolidated Income Statements

 

TMX GROUP LIMITED
Consolidated Statements of Comprehensive Income

 

TMX GROUP LIMITED
Consolidated Statements of Changes in Equity

 

TMX GROUP LIMITED
Consolidated Statements of Changes in Equity

 

TMX GROUP LIMITED, Consolidated Statements of Cash Flows

 

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¹ Adjusted diluted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures".
² As defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure.
³ As defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure.
⁴ Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures".
⁵ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures".
⁶ Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures".
⁷ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures".
⁸ Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". The reconciliation for Adjusted net income in Q4/24 is presented without rounding adjustments for better accuracy.
⁹ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". "Integration costs", and "True-up of onerous contract provision" are not presented in the reconciliation due to the size of the adjustment being less than a penny.
¹⁰ The reconciliation for Basic and Diluted adjusted earnings per share in Q4/24 is presented without rounding adjustments for better accuracy.
¹¹ The "Capital Formation" section contains certain forward-looking statements. Please refer to "Caution Regarding Forward Looking Information" for a discussion of risks and uncertainties related to such statements.
¹² Source: CIRO.
¹³ Source: CIRO.
¹⁴ Prior quarters have been restated to be consistent with current quarter methodology.
¹⁵ Prior quarters have been restated to be consistent with current quarter methodology.
¹⁶ A measure that normalizes the number of full-time and part-time employees into equivalent full-time units based on actual hours of paid work.
¹⁷ Effective Tax Rate is based on Income tax expense divided by Income before income tax expense less Non-controlling interests. Effective tax rate, including NCI, calculated from total Income before Income Tax Expense was 21% in Q4/24 and Q4/23.
¹⁸ TMX Group completed a five-for-one split of its common shares outstanding (the Stock Split) effective at the close of business on June 13, 2023. All common share numbers and per share amounts in this release, including comparative figures, have been adjusted to reflect the Stock Split.
¹⁹ Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures".
²⁰ 2023 has been restated to be consistent with current quarter methodology.
²¹ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures".
²² Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures".
²³ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures".
²⁴ Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures".
²⁵ The reconciliation for adjusted net income in 2024 is presented without a rounding adjustment for better accuracy.
²⁶ 2023 has been restated to be consistent with current quarter methodology.
²⁷ Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". "Gain on sale of SigmaLogic, net of divestiture costs" and "True-up related to onerous contract provision" are not presented in the reconciliation due to the size of the adjustment being less than a penny.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/239224