TMX Group CEO touts push to two-thirds recurring revenue, highlights Trayport and VettaFi growth at UBS event

Core Insights - TMX Group aims to achieve two-thirds of its revenue from recurring sources, with current recurring revenue at approximately 52%, down from the previous year due to strong performance in trading-related businesses [2][6] - The company reported strong growth in recurring revenue lines, particularly in Trayport and Datalinx, while also experiencing significant growth in derivatives and equity trading [1][3] Business Mix and Growth Strategy - About half of TMX's business is now outside Canada, with more than half of its revenue being recurring and data-driven [2][3] - TMX is focusing on repositioning its business mix towards recurring, data-driven revenue while maintaining growth in core trading and post-trade operations [3] - The company is targeting 50% of its revenue from the Global Insights segment, currently at around 44% [6][7] Key Growth Drivers - Trayport is identified as a key growth engine, with growth characterized as high-single to low-double-digit annually since 2017, and expansion into the U.S., Japan, and oil markets [5][6] - VettaFi has seen its assets under management grow from approximately CAD 32 billion to over CAD 80 billion, achieving roughly 25% year-over-year growth through organic development and acquisitions [5][12] AI and Technology Adoption - TMX is leveraging AI to enhance developer productivity and monetize proprietary data, with over 90% internal adoption of AI tools [4][14] - The company is shifting data pricing models towards enterprise usage, moving away from traditional seat-based approaches [13] Derivatives and Capital Formation - Despite a 5-6% year-over-year decline in January volumes, open interest in derivatives increased by about 20%, indicating continued product adoption [15] - Financing activity strengthened in the latter half of the year, with total financing up 60% year-over-year, including significant growth in both senior and junior markets [16] Expense Management and M&A Strategy - TMX is implementing a disciplined expense philosophy, targeting around 5% year-over-year expense growth while identifying CAD 10 million to CAD 20 million in annual savings opportunities [17] - Acquisitions are viewed as an accelerator for growth, particularly in Global Insights, capital formation, and trading and clearing [18]