TMX Group Posts 12% YoY Growth in Q1 2020 Revenues

Net income also increased year-on-year for the exchange operator.

TMX Group, an exchange operator and owner of the Toronto Stock Exchange announced its financial results for the first quarter of 2020 this week, with the company reporting an increase across its key business metrics.

Namely, the TMX Group revealed on Monday that it posted revenue of $220.3 million during the three months ended on the 31st of March 2020. When measuring this against the first quarter of 2019, which had revenue of $197.5 million, the Group has seen a 12 per cent yearly growth in revenues.

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Net income for the first quarter of 2020 was $70.1 million, or $1.25 per common share on a basic and $1.24 on a diluted basis. This is in comparison to a net income of $61.2 million, or $1.10 per common share on a basic and $1.09 on a diluted basis for Q1 of 2019.

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According to a statement provided by the exchange operator, the increase in net income and earnings per share was driven in large part by an uptick in revenue, which was somewhat offset by an increase in operating expenses.

TMX Group benefits from COVID-19 volatility

Commenting on the results,  John McKenzie, Interim Chief Executive Officer and Chief Financial Officer of TMX Group said in the statement: “TMX achieved strong earnings growth in the first quarter of 2020 compared to the first three months of 2019, reflecting high volatility and a surge in activity as markets reacted to the COVID19 pandemic

“Turbulent market conditions, particularly during the month of March drove higher volumes in our equities and derivatives trading and clearing businesses, which contributed to a 12% increase in revenue and 14% increase in earnings per share growth year over year. Revenue and earnings growth in the quarter were partially offset by a decrease in capital formation revenue as severe volatility had a negative impact on capital raising conditions.

“As we look into the future, despite prevailing uncertainty looming in our operating environment as the business world prepares to emerge from the COVID-19 pandemic, TMX remains firmly focused on serving our clients with excellence, providing our markets with continuity, and executing against our global growth strategy.”

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