TMX Group (X) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached CAD 353.8 million, up 23% year-over-year, driven by organic growth and acquisitions, notably TMX VettaFi, Newsfile, and INDEX Research.

• Adjusted diluted EPS increased 17% to $0.41, while reported diluted EPS declined 3% to $0.30 due to higher net finance costs.

• The business model remains diversified, with strong performances in analytics, derivatives, and trading, partially offset by lower capital formation activity.

• Strategic acquisitions of Indxx, Newsfile, and INDEX Research expanded capabilities in index management, news dissemination, and regulatory filings, supporting international growth.

• Nine-month revenue rose 20% to $1,066.8 million, with net income up 19% to $322.2 million.

Financial highlights

• Q3 operating income increased 24% to $155.5 million; adjusted net income rose 18% to $114.1 million.

• Operating expenses rose 22% year-over-year, mainly from acquisition-related costs and higher compensation.

• Net finance costs surged to $29.1 million in Q3 2024, mainly due to higher debt from the VettaFi acquisition and FX losses.

• Pro forma debt-to-adjusted EBITDA ratio was 3.0x, with net leverage at 2.6x after excess cash.

• Quarterly dividend of CAD 0.19 per share approved, representing a 46% payout ratio.

Outlook and guidance

• Targeting low single-digit core expense growth for 2025, aligned with inflation, with further clarity expected in Q4.

• Both Newsfile and Indxx expected to be accretive to Adjusted EPS in 2025.

• Continued focus on deleveraging to reach a 1.5–2.5x leverage range by end of 2025.

• Ongoing investments in trading and clearing modernization and US equity trading initiative, both set for 2025 launch.

• Long-term objectives include growing recurring revenue, expanding outside Canada, and maintaining disciplined expense management.