In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Gross and net revenues increased by 10% during the first quarter, driven by a 22% growth in OTC link revenues and a 15% increase in market data licensing.
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The company has launched new initiatives such as overnight trading and the OTCID basic market, which are expected to expand their market offerings and provide additional value to subscribers.
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OTC Markets Group Inc (OTCM) declared a quarterly dividend of $0.18 per share, reflecting their commitment to providing superior shareholder returns.
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The company has seen strong user retention in their market data business, attributed to effective communication of value to subscribers.
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OTC Markets Group Inc (OTCM) has been proactive in engaging with regulators and legislators, focusing on small company capital formation and regulatory recognitions, which could benefit their market positioning.
Negative Points
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Corporate services revenues saw a 1% decrease during the quarter, largely due to sales and retention results from 2024.
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Trading volumes remain highly unpredictable, which could impact future revenues.
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Operating expenses increased by 6% quarter over quarter, driven by higher compensation, professional fees, and general administrative costs.
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The company experienced a slight decline in pro-user counts for market data licensing, which could indicate challenges in maintaining user growth.
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Free cash flows for the quarter were negative, indicating potential cash flow management challenges.
Q & A Highlights
Q: Cromwell, you mentioned that corporate services sales have begun to trend upward. Can you provide more details on what is driving this growth? A: Cromwell Coulson, CEO: The growth is largely attributed to our OTCID changes. We've developed a system to track companies' ongoing information availability, which has been enhanced by regulatory requirements. This has clarified our market structure and incentivized companies to provide more information to investors, thus driving sales.
Q: Are you seeing new sales or subscribers coming from specific markets, such as Pink Limited or others? A: Cromwell Coulson, CEO: We are seeing transitions from Pink Current and interest from Pink Limited companies. Additionally, some companies from OTCQB and OTCQX are moving to OTCID. Our premium markets provide a home for companies that can no longer meet higher standards, and OTCID offers a baseline for those wanting to engage with the US market.