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1. Company Snapshot

1.a. Company Description

TMX Group Limited operates exchanges, markets, and clearinghouses primarily for capital markets in Canada and internationally.The company operates through four segments: Global Solutions, Insights & Analytics; Capital Formation; Derivatives Trading and Clearing; and Equities and Fixed Income Trading & Clearing.The Global Solutions, Insights & Analytics segment delivers equities and index data, as well as integrated data sets for the proprietary and third party analytics to help clients in making trading and investment decisions; and provides solutions to European and global wholesale energy markets for price discovery, trade execution, post-trade transparency, and straight through processing.


The Capital Formation segment operates Toronto Stock Exchange, a national stock exchange for the senior equities market; TSX Venture Exchange, a national stock exchange for the public venture equity market; and TSX Trust that provides corporate trust, registrar, transfer agency, and foreign exchange services.The Derivatives Trading & Clearing segment operates Montreal Exchange, a national derivatives exchange; Canadian Derivatives Clearing Corporation, a clearinghouse for options and futures contracts; and various over-the-counter products and fixed income repurchase agreements.The Equities and Fixed Income Trading & Clearing segment engages in the trading operations of Toronto Stock Exchange, TSX Venture Exchange, and TSX Alpha Exchange; and clearing and settlement of equities and fixed income transactions, and custody of securities; and provision of fixed income inter-dealer brokerage services.


The company was formerly known as Maple Group Acquisition Corporation and changed its name to TMX Group Limited in August 2012.TMX Group Limited was incorporated in 2011 and is headquartered in Toronto, Canada.

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1.b. Last Insights on X

TMX Group Limited's recent performance was driven by robust revenue growth, with a 30% increase in Q4 2024 revenue to $393.3 million, surpassing the $301.5 million in Q4 2023. This growth was fueled by strong performances in key business areas, despite facing higher operating expenses and market challenges. The company's diluted earnings per share rose 87% year-over-year to $0.58, with a $0.16 gain per share related to net foreign exchange gains in Q4 2024. Adjusted diluted earnings per share increased 30% to $0.48. The company's commitment to innovation was evident in its post-trade modernization initiative, which introduced major upgrades to critical infrastructure, designed to better serve its global client base. Additionally, TMX Group welcomed 24 new issuers in January 2025, and 25 new issuers in February 2025, with a total of 14 exchange traded funds, 10 Canadian depository receipts, and one mining company listed. The company's dividend was increased by 5% to $0.20 per common share, reflecting a consistent commitment to shareholder value. Furthermore, Morningstar DBRS revised all credit rating trends on TMX Group to Stable from Negative, confirming the rating of AA (low) and R-1 (middle).

1.c. Company Highlights

2. TMX Group's Q3 2025: Strong Growth Across Business Units

TMX Group's financial performance in Q3 2025 was robust, with an 18% year-over-year increase in revenue to $418.6 million, driven by growth across all business units. The company achieved its fifth consecutive quarter of double-digit revenue growth, with organic growth of 16% and adjusted diluted earnings per share increasing 25% from the first 9 months of 2024. The actual EPS came out at $0.52, slightly lower than the estimated $0.53. The company reported a 14% increase in operating costs, driven by higher dispute and litigation costs, additional expenses related to new acquisitions, and higher headcount, payroll costs, and year-over-year merit increases. However, the company delivered double-digit positive operating leverage in the third quarter, driven by a robust 17% organic revenue growth, outpacing the 7% increase in comparable operating expenses.

Publication Date: Nov -05

📋 Highlights
  • Record Revenue Growth:: Revenue surged 18% YoY to $418.6M, driven by 16% organic growth and 25% rise in adjusted diluted EPS over 9 months 2024.
  • Derivatives Expansion:: Derivatives trading/clearing revenue jumped 32% YoY, with MX open interest hitting a record 33M contracts in September.
  • VettaFi Acceleration:: TMX VettaFi revenue grew 35% CAD/32% USD, boosted by asset under management growth and acquisitions.
  • Strong Balance Sheet:: Held $585M cash/marketable securities ($371M excess), with debt/EBITDA at 2.3x, within target leverage range.
  • Strategic Acquisitions:: Verity acquisition ($98M) expected to be EPS-accretive, enhancing data capabilities and diversifying revenue streams.

Business Segment Highlights

Revenue from derivatives trading and clearing increased 32% year-over-year, with MX open interest reaching an all-time high of 33 million contracts in September. Equities and fixed income trading and clearing revenue increased 11% year-over-year, with combined TSX, TSX Venture, and Alpha volumes increasing 22% year-over-year. Global Insights revenue grew 18% this quarter, reflecting double-digit increases across the 3 business segments. TMX VettaFi revenue grew 35% in Canadian dollars and 32% in US dollars this quarter, driven by strong organic growth in assets under management and recent acquisitions.

Valuation and Financial Position

With a P/E Ratio of 34.07 and an EV/EBITDA of 7.27, the market is pricing in a certain level of growth for TMX Group. The company's dividend yield is 1.57%, and the free cash flow yield is 4.32%. Analysts estimate next year's revenue growth at 7.4%. The company's strong financial position, with over $585 million in cash and marketable securities, provides it with the flexibility to pursue strategic opportunities for growth. The debt to adjusted EBITDA ratio at September 30 was 2.3x, within the target leverage range of 1.5x to 2.5x. The ROE is 2.92%, and the ROIC is 6.77%, indicating a relatively efficient use of capital.

Strategic Initiatives and Outlook

The company is on track to deliver on its ambitious plan, TM 2X, which aims to double revenue to $2 billion in 5-7 years. The recent acquisition of Verity for approximately $98 million is expected to be accretive to adjusted EPS within the first year. The company continues to demonstrate financial discipline and prioritize shareholder returns, as seen in its quarterly dividend of $0.22 per common share, representing a payout ratio of 42%. With a strong financial position and diverse revenue streams, TMX Group is well-positioned for continued growth and value creation.

3. NewsRoom

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Statistiques de négociation consolidées du Groupe TMX pour novembre 2025

Dec -04

Source: feeds.newsfilecorp.com

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Horaire d'exploitation du Groupe TMX pour la période des Fêtes

Dec -03

Source: feeds.newsfilecorp.com

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Hemlo Mining Corp. (HMMC) Opens the Market

Dec -02

Source:

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Andina Copper Corporation (ANDC) Opens the Market

Nov -27

Source:

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Where the American consumer is starting to crack

Nov -24

Source:

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Is TMX Group Still a Bargain After Major Tech Upgrades and a 125% Five-Year Rally?

Nov -23

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Toronto Stock Exchange, E3 Lithium, The View from the C-Suite

Nov -20

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Toronto Stock Exchange, Tantalus Systems Holding Inc., The View from the C-Suite

Nov -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.56%)

6. Segments

Global Solutions Insights and Analytics

Expected Growth: 10.27%

TMX Group's Global Solutions Insights and Analytics segment growth of 10.27% is driven by increasing demand for data-driven insights, expansion of cloud-based analytics, and growing adoption of artificial intelligence and machine learning in the financial industry. Additionally, strategic partnerships and acquisitions have enhanced the segment's offerings, contributing to its rapid growth.

Derivatives Trading & Clearing

Expected Growth: 7.9%

TMX Group's 7.9% growth in Derivatives Trading & Clearing is driven by increased market volatility, rising trading volumes, and growing demand for risk management solutions. Additionally, the company's strategic investments in technology and infrastructure, as well as its expanding global presence, have contributed to the segment's growth.

Capital Formation

Expected Growth: 9.27%

TMX Group Limited's 9.27% capital formation growth is driven by increasing trading volumes, expansion of derivatives markets, and growth in listings and issuer services. Additionally, strategic acquisitions, cost savings initiatives, and a strong brand reputation contribute to the company's capital formation growth.

Equities and Fixed Income Trading & Clearing

Expected Growth: 5.45%

TMX Group's Equities and Fixed Income Trading & Clearing segment growth of 5.45% is driven by increased trading volumes, market share gains, and growth in derivatives trading. Additionally, the segment benefits from the acquisition of Trayport, a leading provider of energy trading solutions, and the expansion of its fixed income trading platform, Shorcan.

Other

Expected Growth: 10.27%

TMX Group's 10.27% growth is driven by increasing trading volumes, expansion of global derivatives market, and growing demand for data analytics. Additionally, strategic acquisitions, cost savings initiatives, and a strong balance sheet have contributed to the company's growth momentum.

7. Detailed Products

TSX Listings

Provides a platform for companies to list and trade their securities, offering a range of listing options and services to support their growth.

TSX Venture Exchange

A public venture capital marketplace for emerging companies, providing access to capital and liquidity.

TSX Alpha Exchange

A low-cost, high-efficiency trading platform for Canadian securities, offering advanced trading functionality and market data.

Montréal Exchange (MX)

A derivatives exchange offering a range of options and futures contracts on Canadian and international underlying assets.

Canadian Derivatives Clearing Corporation (CDCC)

A central clearinghouse for Canadian derivatives, providing risk management and settlement services.

Shorcan Brokers Limited

A fixed income and equity brokerage firm providing execution, clearing, and custody services.

TMX Datalinx

A provider of real-time and historical market data, analytics, and software solutions.

8. TMX Group Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for TMX Group Limited is moderate due to the presence of alternative trading platforms and financial institutions that offer similar services.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of TMX Group Limited's services, which makes it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers of technology and infrastructure services, which gives TMX Group Limited some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the financial services industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the financial services industry, which leads to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.88%
Debt Cost 5.86%
Equity Weight 78.12%
Equity Cost 5.86%
WACC 5.86%
Leverage 28.02%

11. Quality Control: TMX Group Limited passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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E-L Financial

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Value: 6.7

Growth: 6.8

Quality: 8.1

Yield: 10.0

Momentum: 8.0

Volatility: 7.3

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Main Street Capital

A-Score: 7.5/10

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Growth: 6.0

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Yield: 9.0

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Volatility: 9.3

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TMX

A-Score: 6.8/10

Value: 3.2

Growth: 7.0

Quality: 6.8

Yield: 5.0

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Volatility: 9.7

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Quality: 7.2

Yield: 3.0

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Morningstar

A-Score: 4.7/10

Value: 2.9

Growth: 7.7

Quality: 7.2

Yield: 1.0

Momentum: 1.0

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A-Score: 4.7/10

Value: 6.5

Growth: 4.6

Quality: 3.6

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

51.27$

Current Price

51.27$

Potential

-0.00%

Expected Cash-Flows