OTC Markets Group (OTCM) Q2 2024 earnings summary

Executive summary

• Q2 2024 gross revenues reached $27.6 million, up 1% year-over-year, while net income declined 3% to $6.7 million and operating margin fell to 30.4% from 31.4%.

• OTC Link led business line growth with a 12% increase, while corporate services declined 3% and market data licensing rose 1%.

• Strategic priorities include expanding global trading, launching OTC Overnight, enhancing data-driven markets, and increasing regulatory compliance.

• ADRs and non-U.S. shares now make up over 84% of dollar volume, reflecting global market expansion.

• Board declared a quarterly dividend of $0.18 per share for Q3 2024, payable in September.

Financial highlights

• Q2 2024 gross revenues were $27.6 million, up 1% year-over-year; net income was $6.7 million, down 3%.

• OTC Link revenues increased 12%, representing 20% of total gross revenues; market data licensing rose 1% and contributed 39%.

• Blue Sky data products revenue increased 35%; internal system licenses and other data services up 10%.

• Corporate services revenues, 41% of gross revenues, decreased 3% year-over-year.

• Adjusted EBITDA was $10.3 million, down 1% year-over-year; adjusted diluted EPS was $0.85, down 1%.

Segment performance

• OTC Link ECN and NQB revenues rose 19% due to higher share volume; ATS message revenues up 15% from fee increases.

• Market data saw growth in Blue Sky and internal licenses, offset by a 13% decline in non-pro user revenues and a 22% drop in EDGAR Online revenue.

• OTCQX revenues increased 2% from pricing adjustments, despite a 3% decline in company count and 93% retention rate.

• OTCQB and DNS revenues fell 6% and 7%, respectively, due to fewer subscribing companies.

• Average daily trades increased to approximately 35,000 from 32,000 year-over-year.