OTC Markets Gr Reports Q2 2026 Results: Full Earnings Call Transcript

On Thursday, OTC Markets Gr (OTC: OTCM ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary OTC Markets Group reported a record second quarter of 2026 with a 14% increase in gross and net revenues, driven by strong growth across all business lines. OTC Link revenue surged by 27% with a notable increase in trading activity and subscriber growth, while Market Data and Corporate Services also experienced significant growth. The company is focusing on expanding digital asset capabilities through a strategic alliance with BitGo and is preparing for regulatory developments to support tokenized securities trading.

Operating expenses increased by 9%, primarily due to higher professional and consulting fees, while operating income rose by 19%. 30 per share. Management highlighted ongoing strategic initiatives, including international expansion with a new Hong Kong office and advocacy for regulatory reforms to enhance market competitiveness and capital raising efficiency. Full Transcript OPERATOR Good day and welcome to the OTC Markets Group Second Quarter 2026 Earnings Conference Call and webcast.

At this time all participants are in listen-only mode. After the speaker's presentation there will be a question-and-answer session. To ask a question you will need to press star-1-1 on your touchtone telephone. Please note this call is being recorded.

I would like to turn the call over to Dan Zinn, General Counsel and Chief of Staff. Please go ahead. Daniel Zinn, General Counsel and Chief of Staff Thank you, operator. Good morning and welcome to the OTC Markets Group second quarter 2026 earnings conference call.

With me today are Cromwell Coulson, our President and Chief Executive Officer, and Antonia Georgieva, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and as such may constitute forward-looking statements.

Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factors section of our 2025 annual report, which is also available on our website. For more information, please refer to the safe harbor statement on Slide 3 of the earnings presentation. With that, I'd like to turn the call over to Cromwell Coulson. Cromwell Coulson, President & CEO Thank you, Dan.

Good morning, everyone, and thank you for joining us. I will begin by reviewing our second quarter 2026 results at a high level and then turn to a discussion of our performance and priorities for the year. For the second quarter, gross revenues and net revenues grew 14%. This was another record quarter for OTC Markets Group with each business line showing growth that contributed to our overall strong results.

OTC Link revenue was up 27% in the second quarter and 29% for the first six months. Market data saw 7% growth in the quarter and is up 4% in the first half, and corporate services achieved 14% growth during the quarter and 17% over the first six months. OTC Link's performance continues to result from robust activity across our markets, with over 230 billion in market-wide dollar volume during the quarter and over 460 billion for the first half of the year. Increased trading volume is not the only measure of success for OTC Link.

Our team added several unique broker-dealer subscribers across our ATSs, giving us nearly 145 unique subscribers as of June 30. Our market data results were driven by growth in professional and non-professional subscribers during the quarter, combined with targeted price increases for certain products. Our ongoing success will depend on our ability to keep expanding our content and distribution network, increasing the client value of our products, and growing the number of subscribers. Results in our corporate services business reflect the higher use counts at the start of 2026 driven by our strong finish to last year.

This growth was largely due to the continued impact of the OTC ID Basic Market, which launched on July 1st of last year. Notably, we saw subscriber growth on both the OTCQX Best and OTCQB Venture markets as well as growth in the overall number of corporate clients using our services. Success in the corporate services business will come from strong solution-based sales to connect more companies coupled with our ability to drive client success and retention. We prioritize helping actively engage companies improve the quality of their public trading to close the investor and broker information experience gap with exchange-listed securities.

With respect to operating expenses, we saw a 9% increase in the second quarter. Our investment in our people remains our largest, most important expenditure. I remain extremely appreciative of the hard work and client-centered approach our OTC Markets Group team brings every day and their individual contribution to supporting our clients, improving our products, and growing the business. We continue to work to round out our senior management team with a new head of Corporate Services.

We are conducting a thorough search and review process to find a leader who can build our team, expand our offerings, and engage more companies to improve market quality. We will report on our progress in future earnings calls. Our decision last year to prioritize building out our overnight trading capability and launching the OTC ID Basic Market form the foundation on which we have achieved growth through the first half of 2026. Overnight trading on our Moon ATS has been a useful learning experience to expand our capabilities.

Working to launch it last year helped us engage and build our broker-dealer community and move together to offer robust around-the-clock trading for a wide range of investors. We continue to focus on the importance of engaging subscribers with our OTC Overnight market. The offering is ahead of actual demand. Providing investors convenient access to OTC securities on a continuous basis remains a key part of our vision for the future.

The OTC ID market has been a growth engine within corporate services, engaging and attracting a number of new corporate clients. We had over 1,100 companies trading on OTC ID at the end of the second quarter. Not only has OTC ID itself seen subscriber growth, we have also seen our efforts to educate the issuer community around OTC ID lead to increased sales and retention on our OTCQX and OTCQB markets. One of our key metrics is the percentage of connected companies and related dollar volume on our markets.

The connected companies trading on OTCQX, OTCQB, and OTC ID contributed roughly 26% of the dollar volume traded on our markets during the first half of 2026. Recent mega-cap additions on OTCQX, such as Siemens Energy AG, give a positive indication of our ability to serve blue-chip issuers on our markets going forward. Turning to our 2026 initiatives, we've made significant strides in preparing our platform for the introduction of tokenized and digital asset securities into our markets. Our recently announced strategic alliance with BitGo will allow us to bring digital asset trading and custody infrastructure to broker-dealers utilizing OTC Link ATS.

Enterprise-grade custody and clearing are a critical component of regulated securities markets. Currently, DTC performs that role for the industry. DTC's efforts are focused on tokenizing member firm entitlements rather than onboarding blockchain-native securities and other digital assets. By connecting OTC Link's Qualified Inter-Dealer Quotation system with BitGo as a qualified digital asset custodian, we are assembling the core components to bring legal and lawful trading of blockchain-native securities into regulated securities markets.

As regulations, rules, and guidance in this area develop further, we stand ready to support our FINRA member broker-dealers, market data customers, and other market participants as they innovate around these new technologies. You can look at our value add in two parts. First, wholesale trading on our ATSs and price transparency through our market data distribution, which supports broker-dealers in sourcing liquidity and delivering best execution for their customers—the investors we serve—broker-dealers trading in a wide range of securities based on investor demand.

Second, our premium markets provide engaged public companies with the platform to improve their investor experience, market quality, and breadth of accounts that can access their shares by distributing disclosure and demonstrating compliance with securities laws. These fundamentals are foundational to traditional securities and digital securities. They are applicable to shares held at DTC, ordinary shares custody overseas, and now shares on the blockchain. We have also begun to see the first contributions from the opening of our Hong Kong office earlier this year, another of our 2026 initiatives.

S. S. Another high-profile initiative this year has been moving forward our regulatory agenda. We have invested our energy advocating for small company capital raising, recognition of our OTCQX and OTCQB markets, and achieving greater regulatory parity between comparable qualifying companies on our markets and those on NMS exchanges.

The SEC's recent set of rule proposals, specifically their proposal on registered offering reform, marks a significant step forward on all fronts. The SEC's proposal for the first time formally recognizes OTCQX and OTCQB as qualifying public trading markets on which issuers can conduct at-the-market offerings. This recognition reflects a long period of candid conversations with the SEC staff about how to increase the benefits of being a public company and reduce the burdens. We are excited at the prospects it represents to increase tangible benefits for public reporting companies and make capital raising less burdensome.

The proposed rules also cover the potential federal preemption of certain state blue sky laws, expanding access to more investors and reducing cost and complexity for registered offerings. As the SEC moves to finalize these and other related proposals, we will discuss the potential benefits to OTCQX and OTCQB issuers, as well as their advisors, in future earnings calls and reports. At the beginning of this year, we announced a strategic determination to increase our quarterly dividend to better balance the ratio between quarterly and special dividends. We have also been opportunistically buying back shares in the public market.

30 per share, payable in September. This dividend reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia. Antonia Georgieva, Chief Financial Officer Thank you, Cromwell, and good morning to everyone joining us today.

We appreciate your continued interest in OTC Markets Gr. I would like to start by recognizing our exceptional team. Their focus and execution in the second quarter delivered meaningful momentum, thus positioning us well as we head into the second half of 2026. Let's turn to our results for the second quarter ended June 30, 2026.

6 million. Our OTC Link business delivered another quarter of strong growth with revenue increasing 27%. Edge trading activity across our ATSs remained robust with Moon ATS continuing to ramp up. Transaction-based revenue generated by OTC Link ECN, OTC Link NQB and Moon ATS increased 47%, while transaction-based expenses paid to liquidity providers increased 39%.

Usage-based revenues from OTC Link ATS increased 6%, largely driven by a higher volume of trade messages during the quarter. 8 million average shares traded per session. While trading volumes have been strong year to date, they remain inherently unpredictable and could decline in the future. In terms of broker-dealer subscriber numbers, we ended the quarter with 144 unique subscribers across our ATSs, up from 137 a year ago.

The subscriber engagement with our multi-ATS model reflects the value our open platform offers in support of the diverse business, operational and compliance requirements of our broker-dealer subscribers. Our Market Data Licensing revenues increased 7%, comprised of an 8% increase in redistributor-based revenue, a 10% increase in revenue from direct-sold licenses and a 1% increase in revenue from Data and Compliance Solutions. Redistributor-based revenues increased across both the professional user segment, which grew 6%, and the non-professional user segment, which increased 47%.

In each case, the revenue increases were the result of growth in user counts, with professional users increasing 5% and non-professional users increasing 38%. The number of non-professional users continues to fluctuate period to period with market activity and varying retail participation in the market and may continue to fluctuate in the future. Revenues from direct-sold licenses increased primarily due to price increases for certain licenses and growth in subscribers. Data and Compliance Solutions revenues benefited from growth in Data services and our Blue Sky data product, partially offset by lower revenue from EDGAR Online.

Our Corporate Services business delivered 14% revenue growth in the second quarter with contribution from all of our markets. OTCQX revenues increased 9% while OTCQB revenues grew 10%, supported by both higher average company counts and pricing adjustments effective January 1, 2026. In terms of new sales, we added 33 OTCQX companies and 63 OTCQB companies in the second quarter compared to 39 and 85, respectively, in the prior year. Quarter-end OTCQX companies reached 585, up 5%, while quarter-end OTCQB counts were 1,101, up 3%.

Revenues from our OTC ID market and from Pink Limited subscribers to the Disclosure and News service increased 32%, reflecting the continued impact of the OTC ID Basic market launch in July 2025. At quarter end we had 1,037 OTC ID companies compared to 1,035 at launch. Combined with the Pink Limited subscribers to DNS and other products, these companies reached a total of 1,477, up 8% from 1,362 a year ago. Month-to-month variability in our Corporate Services subscribers is driven by new sales offset by non-renewals, corporate events and compliance downgrades.

Turning to Page 8, operating expenses increased 9% year over year. The primary drivers were professional and consulting fees, which increased 54%, and IT infrastructure and information services costs, which grew 11%. Professional and consulting fees reflect increased regulatory and clearing fees related to the higher trading activity as well as certain accruals for regulatory matters. Compensation and benefits comprised 58% of our total operating expenses in the second quarter compared to 63% in the prior-year period.

9% in the prior-year period. 18%. In addition to certain GAAP and other measures, management utilizes adjusted EBITDA, a non-GAAP measure which excludes non-cash stock-based compensation expenses. 04, up 13%.

2 million for both measures in the prior-year quarter. 6 million in dividends and $3 million in open market share repurchases. Compared to the prior-year period, this represented a threefold increase. 3 million in cash returned to shareholders, respectively, in the same prior-year period.

Overall, the second quarter reflected continued momentum from the start of 2026, with robust revenue growth in each business line, expanding margins and continued progress on our strategic initiatives. We remain focused on disciplined execution, investing selectively to support growth, and returning capital to shareholders while maintaining financial flexibility. With that, I'll turn the call back to the operator to open the line for questions. OPERATOR Thank you.

As a reminder, to ask a question, please press star-1-1. If your question has been answered and you'd like to remove yourself from the queue, please press star-1-1 again. Our first question comes from Steve Silver with Argus Research Corporation. Your line is open.