- TMX Group (TSX:X) beat analyst expectations as revenue rose 16 per cent year over year, driven by higher listings, strong trust revenues, a 50 per cent jump in equity trading volumes, and continued growth in Global Insights
- Operating expenses increased 5 per cent, but were largely flat on an adjusted basis as higher staffing, technology, and modernization costs were offset by lower incentive plan expenses
- TMX agreed to buy Cboe Australia and Cboe Canada for US$300 million, expanding its global footprint and strengthening Canada’s capital markets infrastructure, subject to regulatory approvals
- TMX Group Ltd. stock (TSX:X) opened trading at C$55.85
TMX Group (TSX:X) delivered a solid financial performance in the first quarter of 2026, reporting revenue and profit that exceeded analyst expectations, driven by robust trading activity, strong capital formation, and continued growth across its global data and analytics businesses.
Revenue for the quarter rose 16 per cent compared with the first quarter of 2025, underscoring momentum across several of the company’s core operating segments. When excluding the impact of recent acquisitions—including Bond Indices, ETF Stream, Verity, and nuclear sector indices—organic revenue growth remained strong at 14 per cent year over year, reflecting broad-based operational strength.
The Capital Formation segment was a key contributor, supported by an increase in additional listings and higher revenues at TSX Trust. Trading activity also strengthened materially, with MX derivatives trading volumes up 12 per cent and equity trading volumes surging 50 per cent, reflecting heightened market participation and volatility during the quarter. TMX Group’s Global Insights business continued to expand, benefiting from sustained demand for data, indices, and analytics products.
Expenses largely flat on an adjusted basis
Operating expenses increased 5 per cent compared with Q1/25, though the rise was more muted when adjusting for acquisition-related and non-recurring items. Excluding the costs associated with recent acquisitions, litigation and dispute items, amortization of acquired intangibles, integration expenses, and strategic re-alignment costs, operating expenses were largely unchanged year over year.
TMX Group cited several cost pressures during the quarter, including higher headcount and related employee costs, merit-based salary increases, severance costs, increased spending on software licenses and cloud services, and higher depreciation and amortization linked to its ongoing post-trade modernization initiatives.
These increases were partially offset by a C$10.4 million reduction in employee performance incentive plan costs, reflecting a lower share price during the first quarter of 2026. Excluding the impact of lower incentive costs, adjusted operating expenses would have increased by approximately 5 per cent year over year.
Transformational acquisition of Cboe businesses
In a significant strategic move, TMX Group announced on April 22, 2026, that it had entered into an agreement to acquire Middlebury Holdings Pty Limited (Cboe Australia) and Cboe Canada Holdings, ULC (Cboe Canada) for total consideration of US$300.0 million (approximately $409.9 million).
Management said the transaction will strengthen TMX Group’s ability to serve clients across the full capital markets ecosystem, expand its global footprint, and accelerate its long-term growth strategy. The acquisition is also expected to reduce cost and operational complexity for Canadian market participants by consolidating market infrastructure.
The purchases are subject to regulatory approvals and customary closing conditions in both Australia and Canada. TMX Group expects the two transactions—Cboe Australia and Cboe Canada—to close separately, following receipt of the necessary approvals.
Use of non-GAAP financial measures
TMX Group reported adjusted net income and adjusted earnings per share (EPS) using non-GAAP financial measures, which management emphasized provide a more effective view of underlying operating performance and cash generation.
These measures exclude a number of items, including acquisition and integration costs, amortization of acquired intangibles, litigation-related expenses, and other significant or non-operational items. Management noted that excluding these items improves period-over-period comparability and helps investors better assess the company’s core business performance. The exclusions, however, do not imply that such items are non-recurring or irrelevant to investors.
In addition to adjusted EPS, TMX Group also highlighted its long-term adjusted EPS compound annual growth rate (CAGR) as a key financial objective. This metric reflects growth in adjusted diluted earnings per share over time, based on specific forward-looking assumptions outlined by the company. The firm also uses an adjusted dividend payout ratio, calculated as dividends paid divided by adjusted EPS, to assess its capacity to maintain and grow shareholder returns.
Balance sheet and leverage
TMX Group continues to monitor leverage using a debt-to-adjusted EBITDA ratio, another non-GAAP measure that reflects total debt relative to earnings before interest, taxes, depreciation, and amortization, adjusted for significant non-operational items. Management uses this metric to evaluate financial flexibility and capital allocation capacity in support of strategic initiatives.
Outlook
With strong organic growth, disciplined cost management, and a landmark acquisition pending regulatory approval, TMX Group enters the remainder of 2026 with positive momentum. Management reiterated its focus on expanding global capabilities, enhancing market infrastructure, and delivering sustained value to shareholders through growth, dividends, and strategic investments.
Leadership commentary
“We continue to see strong momentum in our key drivers and remain focused on enabling the long-term success of clients and stakeholder communities across our interconnected capital markets ecosystem,” TMX’s CEO, John McKenzie said in a news release. “Our recently announced agreement to expand into Australia and strengthen our domestic markets to create a more competitive Canadian champion represents a clear step forward, as we work to make markets better and build our strategic presence in key international jurisdictions.”
The company also declared a dividend of $0.24 on each common share outstanding.
TMX Group stock (TSX:X) opened trading at C$55.85 and has risen 2.5 per cent since this time last year.
TMX Group Ltd. operates exchanges, markets, and clearinghouses primarily for capital markets in Canada, the United States, the United Kingdom, Germany, and internationally.
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