Operator: Ladies and gentlemen, thank you for standing by. Welcome to OTC Markets Group Second Quarter 2025 Earnings Conference Call and webcast. [Operator Instructions]. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Dan Zinn, General Counsel and Chief of Staff. Please go ahead.

Daniel Zinn:

Chief of Staff, General Counsel & Corporate Secretary: Thank you, operator. Good morning, and welcome to the OTC Markets Group Second Quarter 2025 Earnings Conference Call. With me today are Cromwell Coulson, our President and Chief Executive Officer; and Antonia Georgieva, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factors section of our 2024 annual report, which is also available on our website. For more information, please refer to the safe harbor statement on Slide 3 of the earnings presentation. With that, I'd like to turn the call over to Cromwell Coulson.

Robert Cromwell Coulson: Thank you, Dan. Good morning, everyone. Thank you for joining us today. I will discuss our second quarter 2025 results at a high level and we will review the status of our key priorities for the year. Gross revenues grew 11% and net revenues by 10% during the second quarter. Each metric was up 10% for the first 6 months of the year. I want to recognize the whole team at OTC Markets Group as each of our business lines contributed to the strong double-digit revenue growth during the quarter, 19% in OTC Link, 14% in Market Data and 3% in Corporate Services. These results highlight the value of our business model with each business line supporting the others in driving value for our clients and our shareholders. Antonia will review our financial results in greater detail in a few minutes. OTC Link's strong revenue has largely been due to increased trading volumes across each of our markets, continuing the positive trend from 2024. We cannot control overall market volumes or predict economic events. Instead, we build on our success by consistently improving the value we offer as a vendor while being open every day, earning client business by reliably serving their needs in times of increased market volatility. Market data price increases have been the primary driver of revenue growth over the first 6 months. Both the Market Data team and our OTC Link Group continues to build out the foundation of our overnight trading business, working with current and prospective subscribers around the globe. I am also pleased to report a return to revenue growth in our Corporate Services business during the quarter. The team spent substantial time this year preparing companies for the launch of the OTCID basic market. We are putting a strategic focus on strengthening issuer engagement to improve market quality and better managing retention over the long term. Throughout the first half of the year, we have also focused on our overnight trading initiative. The combination of OTC overnight and MOON ATS enables our broker-dealer subscribers to access thousands of exchange-listed and OTC securities during Asian market hours at European market open and overnight in the U.S. Overnight trading in NMS securities is a competitive market, and we expect more entrants into this space over time, including the national securities exchanges. We launched MOON in response to broker-dealer demand, and we have onboarded a number of active broker-dealer subscribers. Market data users have also taken note with firms already connecting to our data feeds in preparation for increased activity on MOON ATS over time. As with our existing daytime markets, building a critical mass of connected subscribers is paramount. The availability of MOON data to interested market participants around the world is integral to the success of this endeavor. Securities markets are shifting to 24-hour trading, and we will be there to serve our subscribers. Our approach is consistent. We will deliver elegant, reliable and cost-effective solutions that help meet the needs of our broker-dealer subscribers and serve investors. Our second high-priority initiative, the OTCID basic market came to fruition on July 1. OTCID companies need a symbol and a subscription to publish a baseline of ongoing information rather than meeting the qualitative and quantitative standards of our premium OTCQX and OTCQB markets. Investors are better informed when OTCID companies provide ongoing financial disclosure, publish a management certification and verify their company profile. Our OTCQX and OTCQB premium markets are recognized brands. ingrained in trading, regulatory and compliance processes across the industry. OTCID now expands our offering to a wider range of companies and its introduction has created increased interest in all of our markets. I want to be clear, engaged public companies committed to ongoing transparency and good governance are critical to improving market quality, which benefits broker-dealers and investors. From a client perspective, our premium markets allow investor- aligned public companies to take ownership of their U.S. symbols, support informed and efficient trading and importantly, separate themselves and their brands from PINK limited securities. The PINK limited market is for broker-dealers to publicly quote securities with limited to no issuer involvement. It plays an important role, allowing broker-dealers to provide best execution in a range of securities. These companies do not certify their compliance with established reporting standards, have limited availability of disclosure of financial information and may not support their U.S. market. The securities are identified with a yield sign to warn investors to proceed with caution. Our OTCQX, OTCQB and OTCID markets provide an efficient, cost-effective digital platform for public companies to perform the same IR disclosure and governance activities as listed companies. This helps ensure the informational, operational and compliance experience for brokers and investors is comparable to exchange-listed securities. And most importantly, these digitalized, more complete and consistent issuer information streams improve the market pricing process. Our drive for sustainable growth and continuous improvement also requires that we maintain focus on our regulatory priorities. The regulatory and legislative environment is extraordinarily active. The SEC, FINRA and lawmakers on Capitol Hill are soliciting ideas and taking action on issues ranging from capital formation to market structure to digital assets. Each of these areas can impact our markets and are engaged at every level. Key discussions have included how best to modernize rules and regulations, how to optimize small company capital formation and forward-looking discussions regarding how the financial markets will utilize innovations in digital assets and tokenization. While we focus on developments that will improve our future, we also prioritize our internal operations as well. Operational integrity, compliance and risk management go hand-in-hand with incremental improvements, new product development and identifying growth opportunities. In closing, I'm pleased to announce that on August 5, our Board of Directors declared a quarterly dividend of $0.18 per share, payable on December -- on September 18. This September dividend reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.

Antonia Georgieva: Thank you, Cromwell, and thank you all for joining our call today. I would like to start by congratulating our entire OTC Markets team on the successful launch of OTCID and by thanking them for continuing to execute on our strategic priorities and for their unwavering commitment to delivering reliable service and support to our subscribers. As I discuss our results for the quarter ended June 30, 2025, any reference made to prior period comparatives will refer to the second quarter of 2024. Turning to Page 7 for a review of our second quarter revenues. We generated $30.5 million in gross revenues, up 11% compared to the prior year period. Revenues less transaction-based expenses were up 8%. OTC Link's gross revenues increased 19%, driven by a 40% increase in transaction-based revenues from OTC Link ECN and OTC Link NQB as we benefited from a higher number of shares traded on those platforms. As an offset, transaction-based expenses increased 48%. Additionally, OTC Link saw an increase in revenues from OTC Link ATS messages due to a higher number of messages, in certain connectivity revenue due to growth in the number of connection licenses and in quote access payment service revenue due to the increased volume of trading activity. OTC Link finished the second quarter with 113 subscribers on OTC Link ECN and 78 subscribers on OTC Link ATS and had 137 unique subscribers across our ATSs. At the end of the prior year period, OTC Link had 114 and 80 subscribers on OTC Link ECN and OTC Link ATS, respectively, and 140 unique subscribers. Trading volumes remain highly unpredictable and could decline in the future. Revenues from our market data licensing business increased 14% quarter-over-quarter, reflecting a 20% increase in redistributor-based revenues and 16% increase in revenues from direct salt licenses. Revenues from Data and compliance solutions were essentially flat to the prior year period. Within redistributor-based revenues, professional user revenues increased 28%, primarily due to price increases from the beginning of 2025 and a slight 1% increase in professional user count. Nonprofessional user revenues declined 31% due to an internal policy change at one of our retail-focused broker-dealer subscribers, we saw a 21% reduction in reported nonprofessional users, which more than offset the impact of the price increases. Historically, and in the normal course of business, we have seen significant changes in the number of nonprofessional users as market volumes and retail participation on our markets fluctuate, and we may experience a decline in the future. Broker-dealer enterprise licenses and internal system licenses drove the growth in direct sold licenses. BD enterprise license revenues increased due to the combined effect of price increases and subscriber growth, while internal system license revenues increased due to subscriber growth. Data & Compliance Solutions revenue remained relatively unchanged with a decreased revenue from EDGAR Online, counterbalanced by increased revenues from data services and the Blue Sky data product. Corporate Services revenues increased 3% in the second quarter. The impact of annual incremental pricing adjustments effective January 1, 2025, served to offset a lower number of OTCQX and OTCQB companies, resulting in a 2% increase in OTCQX revenues and a 4% increase in OTCQB revenues. During the second quarter, we saw a lower number of companies on the OTCQX and OTCQB market due to a lower starting number of companies at the beginning of the year, partially offset by improved sales compared to the prior year quarter. We saw a higher number of DNS subscribers compared to the prior year period, which combined with the price increases resulted in a 13% increase in DNS revenue. In the second quarter, we added 39 OTCQX companies compared to 22 in the prior year quarter and finished the period with 556 OTCQX companies, down 2%. On OTCQB, we added 85 new companies in the second quarter compared to 47 in the prior year period and had 1,073 OTCQB companies at the end of the quarter, down 1%. During the second quarter and leading up to the July 1 launch of OTCID, we saw an increase in the number of DNS subscriptions as DNS is the primary tool companies used to qualify for OTCID. At the same time, we completed the process of phasing out our OTCIQ basic product with a portion of its subscribers upgrading to other services. The net result was a 5% reduction in the number of unique PINK companies subscribing to the entire range of corporate services products at the end of the second quarter to 1,362 companies. These engaged PINK companies, which have a relationship with OTC Markets Group through our corporate services offerings represented approximately 13% of all PINK securities traded on our platforms at the end of June 2025 compared to approximately 14% at the end of the prior year period. As of July 1, 2025, there were 1,035 companies and 1,237 securities quoted on the OTCID basic market. Month-to-month variability in our corporate services subscribers is driven by new sales, offset by non-renewals, corporate events and compliance downgrades. Turning now to expenses on Page 8. On a quarter-over-quarter basis, operating expenses increased 8% to $18.4 million. A 6% increase in compensation and benefits expenses, 21% increase in professional and consulting fees and 12% increase in IT infrastructure and information services costs were the primary contributors. The increase in compensation and benefits reflects higher base salaries and cash-based incentive compensation as well as higher commissions related to increased sales and the updated commission plan in effect from January 1, 2025. Compensation and benefits comprised 63% of our total operating expenses during the second quarter compared to 64% in the prior year period. Professional and consulting fees increased due to increased use of third-party consulting services related to our compliance efforts. Additionally, we saw higher regulatory and clearing costs related to OTC Link ECN and OTC Link NQB due to the increased trading activity. IT infrastructure and information services costs increased due to higher spending on information services and software licenses as well as higher data center costs due to increased cloud services usage. Turning to Page 9. In the second quarter, income from operations and net income each increased 8%. Operating profit margin contracted slightly to 29.9% compared to 30.4% in the prior year quarter. Our diluted earnings per share increased to $0.60 per share compared to $0.56 per share or 7%. In addition to certain GAAP and other measures, management utilizes adjusted EBITDA, a non-GAAP measure, which excludes noncash stock-based compensation expense. Our adjusted EBITDA was $11.1 million in the second quarter of 2025, and our adjusted diluted earnings per share were $0.92, each up 8%. Cash provided by operating activities amounted to $11.2 million compared to $6.2 million in the prior year quarter. Free cash flows for the quarter were also $11.2 million compared to $5.5 million in the prior year quarter. Turning to Page 10. During the second quarter of 2025, we returned a total of $2.2 million to investors in the form of dividends, unchanged from the prior year quarter. We remain focused on growing our business, operating as prudent stewards of shareholder capital and delivering long-term value to our stockholders. With that, I would like to thank everyone for your time and pass it back to the operator for questions. And the first question comes from Steve Silver with Argus Research.

Operator: [Operator Instructions]. And the first question comes from Steve Silver with Argus research.

Steven Silver: My first question, I noticed the strong uptick in international issuers joining OTCQX and OTCQB in the quarter. It looks like it was about 60% year-over-year growth there. Just curious as to what some of those factors might have been driving that result, whether it was just a result of the realignment of the sales team or just anything in terms of timing between just the market dynamics?

Robert Cromwell Coulson: Thank you, Steve. I would say the primary driver was OTCID and really making clear to investors which companies are connected into the market and which ones are not. A secondary driver is we removed the sponsor requirement for companies to join. And that really recognizes post 15c2-11, our team on the compliance side was really the most efficient processor of applications. And the regulatory change that took place in the background of 15c2-11 of creating what is a qualified interdealer quotation system for -- that operates as an ATS with FINRA oversight. -- has made it so we can be much more effective in onboarding companies to our premium markets while still keeping the qualitative requirements that are needed.

Steven Silver: Great. And then one more, if I may. It looks like the subscription base for EDGAR continues to drift a little lower. And I know you've spoken in the past repeatedly about this being a multiyear process just in terms of the integration into the licensing and data platform. Just curious if there was any update there as to maybe any expectations for finding that baseline to use as a springboard for future growth there.

Robert Cromwell Coulson: So for what I would put in our bucket of nonreal-time data products, -- and there, we've been working on 2 parts of product development. One part was pulling in SEDAR filings. So for Canadian issuers who are on OTCQX, OTCD, OTCQB and OTCID, their corporate disclosure is automatically fed into our systems. And that's a great time saver and improver of the timeliness of information for these issuers. And we then use the EDGAR Online stack to create structured data that can feed into our compliance processes and importantly, broker-dealer compliance processes. So that's one part where we've been using them to improve our other business line experiences. The second part is we've been going through looking for products to create from our combined data set. And there, we've been creating some products, and we're now in the fall, going to add some sales and client support resources to start going out to that customer base and pushing new ideas and cross-selling. So I think we're in a much better spot. Our teams across the business, one of my goals has been the one team, one platform, and it takes a while. And -- but now different groups are interacting with both the EDGAR Online data stacks and EDGAR Online is interacting with our data stacks, and we're meshing that together. So we will see what data opportunity sets show up.

Operator: And the next question will come from Brendan McCarthy with Sidoti & Company.

Unidentified Analyst: This is Alex on for Brendan. Maybe we could come -- so just coming back to OTCID, could you talk a little bit about the customer reception and how some of that initial customer feedback has been?

Robert Cromwell Coulson: Well, I look at OTCID as there's one part is we didn't have just a basic product. We focused so much on trying to provide a product for the companies that wanted to distinguish themselves. We didn't have that first floor, I have a symbol. I want to make sure there's information available. That's all I'm going to do. There's no requirement that there will be market maker proprietary quotes. And that change is also important for when companies no longer qualify for a higher market, but they just want to provide disclosure. It's also important because there may be a company with a really small float. They've got shares that are becoming publicly tradable and they want to start acting like a public company, putting out those consistent information streams. There is having introduced OTCID, we have some very large companies who are using OTCID because they want to keep -- they want to put their information in so investors have it, so our compliance engines have it, so the broker-dealer compliance engines have it. But they want to keep the focus back on their home market listing. Our goal with those companies is actually to get them to move up to the highest market they qualify for because there's substantial blue sky benefits. There's other recognitions for companies that go on OTCQX. But it's -- the reception is always at first, people are a little dismissive and then they start to see who's in the market and who are their peers there. And our goal is really to drive companies to provide the highest level of information that they can for their situation in a manner that is efficient and shows up on investor screens and in broker-dealer machines.

Unidentified Analyst: And one follow-up there. Can you just talk a little bit about the OTCID revenue contribution to the Corporate Services segment and how that might trend?

Antonia Georgieva: Certainly, Alex, it would be helpful to understand the dynamics of the new product launch and how customers have opted into it. Subscribers that have had in the past existing relationship with us, about 2/3 of them chose to subscribe to DNS during the 6 months in anticipation of the July 1 deadline and begin preparing to become OTCID issuers on July 1. Another subset of customers, about 1/3, a little over 1/3, also chose to subscribe to OTCID but decided to elect a July 1 effective date for their service period. So the first category of customers were onboarded during the 6 months and the revenue generated from those subscriptions began to be recognized during the first 6 months, while the second group of customers with the July 1 deadline will begin revenue recognition commensurate with their service period from July 1 onwards. And their numbers in terms of the subscriptions, the number of companies on the OTCID basic market will reflect that second group from July 1 onwards. We plan on adding those metrics to our key metrics statistics that we have been publishing consistently, and you will see those numbers at the end of the third quarter, the complete number of OTCID. What you do see in the -- at the end of the second quarter is the uptick in DNS subscription, reflecting that first group, about 2/3 of the new sales that came in and became active customers in the first half.

Unidentified Analyst: Great context. And then just one more from us. I'm sorry if I missed this, but do you have data on the conversion rate from PINK and sort of the sunsetting of that after the OTCID launch?

Daniel Zinn:

Chief of Staff, General Counsel & Corporate Secretary: Alex, this is Dan. I mean you'll see it track in the numbers that we report, right, how many Pink current companies there were versus OTCID and then the number of those that went to PIN Limited. So it's not a straight -- a conversion rate, I don't think would tell the appropriate story because there are companies at different stages that used to be classified as Pink current or PINK Limited. So it's going to be easier to track from an initial standpoint, just look at current versus OTCID and then look at the growth in limited. And then over time, it will be much easier to see how companies are trending on to OTCID.

Robert Cromwell Coulson: And Alex, I think it's important that our goal is to have more engaged companies, which should show up in Engage securities and which should show up in Engage dollar volume, the dollar volume of those securities. Those are metrics as we get past this, we will be publishing out for people. It does not mean that we want to abandon the PINK limited market. The PINK limited market has a glorious history, which I was part of where every Ben Gramseient investor would find orphan securities, the cigar butts, the neglectful management teams. And that is a really important part of capital markets. However, those securities should and mostly would always trade at a discount because management is not supporting the public market. And however, I look at what we're doing on our premium markets is really opening the steps into capital markets, both for smaller U.S. public companies and global companies to -- as they're on their journey as a public company, they can work their way up our markets. And that is an incredibly important tool -- and is because engaged companies improve market quality, close the investor and broker informational and operational and compliance experience with companies listed on exchanges, and that will drive market quality.

Operator: [Operator Instructions]. And the next question comes from Walter Hopkins with 18 Square.

Unidentified Analyst: This is Walter Hopkins with 18 Square. I've got more of a high-level question. Looking back about 10 years, OTC Markets had a 35% operating margin in each year during 2015 to 2018. It's been a great journey since then with revenues more than doubling. But the operating margin has been around 32% in recent years. As a long-term shareholder, I love that OTC Markets is playing the long game, investing for the future, much of which runs through the income statement and perhaps has depressed the operating margin, relatively speaking. let's say that revenues double again over some time frame. Following this period of investment, how should we think about the incremental margins of, say, the second $100 million of revenue versus the margins on the first $100 million? Would you say that the pieces are in place for OTC markets margins to drift upwards towards exchange-like operating margins, maybe in the 45% plus range?

Robert Cromwell Coulson: Walter, thanks for calling in. Why not go for 90%? I actually -- the exchanges have a model which I think is probably best exemplified by Larry Ellison at Oracle. And whenever Oracle buys a technology we use, we plan on how are we getting rid of it in the next 3 years. Then you've got other businesses like Costco, and they provide consistently competitive prices. We need a margin because we need to be open every day. We need to be growing. We need to be able to survive through thick and thin markets. We're mission- critical infrastructure. We have an obligation to the markets. We also want to be a vendor to the broker-dealer community that they look and says provides compelling value, and we can go find other problems to solve for them. I am not margin obsessed. I am margin of safety obsessed. So when things have generally gone up, our margin has gone up, it's because we've had a good run, and then we have to grind back in. And the other part was we've had a run of regulatory obligations being thrown at broker-dealers. So some of those years you looked at, we were catching up because regulators were putting obligations, whether it is Reg SCI or where there are customer-driven obligations. So our goal is to be the kind of company that Charlie Munger would want to own. that creates consistent cash flow, invest in the franchise and gives its customers a fair deal. So they want to use us as a vendor tomorrow and next year. And while still being aligned with because I'm the biggest shareholder, long-term growth of value. Does that answer your question?

Unidentified Analyst: Yes, I think so. Yes, certainly.

Robert Cromwell Coulson: We would like to have our clients come to us with ideas. They're not always going to work. Some of them, it's going to be early. And -- but we want to be when they look at us and they go, and I know there's a very toxic relationship that Oracle has with their clients is -- and we would like to have a real partnership going forward. while still being capitalist. Thanks for the question.

Operator: I am showing no further questions at this time. I would now like to turn the call back over to Cromwell for closing remarks.

Robert Cromwell Coulson: Thank you, operator. I want to thank each of you for joining us today. I would encourage you to read our full quarterly report for the second quarter of 2025 and the earnings press release for more information. Links to both are available on the Investor Relations page of our website. On behalf of the entire team, we look forward to updating you on our key initiatives that will continue to shape the integrity and competitiveness of the public markets.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.