OTC Markets Group OTCMKTS: OTCM reported record second-quarter results as revenue increased across its OTC Link, market data and corporate services businesses, while operating income and earnings per share also rose.
President and Chief Executive Officer Cromwell Coulson said gross revenue and net revenue each grew 14% during the quarter. The company’s trading-focused OTC Link unit posted 27% revenue growth, market data revenue increased 7%, and corporate services revenue rose 14%.
“This was another record quarter for OTC Markets Group, with each business line showing growth that contributed to our overall strong results,” Coulson said.
Financial Results and Capital Returns
Chief Financial Officer Antonia Georgieva said second-quarter gross revenue totaled $34.8 million, up 14% from the same period a year earlier. Revenue less transaction-based expenses increased 12% to $30.6 million.
- Operating income rose 19% to $10.5 million.
- Operating margin expanded to 31.1% from 29.9% a year earlier.
- Net income increased 17% to $8.6 million.
- Diluted GAAP earnings per share rose 18% to $0.71.
- Adjusted EBITDA increased 14% to $12.7 million.
- Adjusted diluted earnings per share increased 13% to $1.04.
Operating cash flow was $11.5 million and free cash flow was $11.4 million in the quarter, compared with $11.2 million for both measures in the prior-year period. The company returned $6.6 million to shareholders during the quarter, including $3.6 million in dividends and $3 million in open-market share repurchases.
For the first six months of 2026, OTC Markets generated $11.2 million in operating cash flow and $10.7 million in free cash flow, while returning $13.4 million to shareholders. Coulson also said the board declared a quarterly dividend of $0.30 per share on Aug. 4, payable in September.
Trading Activity Drives OTC Link Growth
OTC Link revenue rose 27% in the second quarter and 29% in the first half, supported by higher activity across the company’s alternative trading systems. Market-wide dollar volume exceeded $230 billion during the quarter and $460 billion for the first six months, according to Coulson.
Georgieva said transaction-based revenue from OTC Link ECN, OTC Link NQB and MOON ATS increased 47%, while transaction-based expenses paid to liquidity providers rose 39%. Usage-based ATS revenue increased 6%, primarily due to greater trade-message volume.
Average daily transactions on OTC Link ECN and OTC Link NQB reached roughly 95,000, a 50% year-over-year increase. MOON ATS recorded approximately 69,000 average trades and 7.8 million average shares traded per session. Georgieva cautioned that trading volumes are inherently unpredictable and could decline in the future.
The company ended June with 144 unique broker-dealer subscribers across its ATS platforms, compared with 137 a year earlier. Coulson said the company continues to build participation in its overnight trading offering, though the service is ahead of current demand.
Market Data and Corporate Services Expand
Market data licensing revenue increased 7%. Redistributor-based revenue rose 8%, direct-sold license revenue increased 10%, and data and compliance solutions revenue grew 1%.
Professional-user revenue increased 6%, while non-professional-user revenue climbed 47%. The corresponding user counts increased 5% and 38%, respectively. Georgieva said growth in direct licenses reflected both price increases for certain licenses and higher subscriber counts. Data and compliance solutions benefited from growth in data services and the company’s Blue Sky Data product, partly offset by lower EDGAR Online revenue.
Asked about signs of stabilization in EDGAR cancellations, General Counsel and Chief of Staff Dan Zinn said, “Not yet.”
Corporate services revenue increased 14%, with OTCQX revenue up 9% and OTCQB revenue up 10%. The growth was supported by higher average company counts and pricing adjustments that became effective Jan. 1.
The company added 33 OTCQX companies and 63 OTCQB companies during the quarter, compared with 39 and 85, respectively, in the prior-year quarter. Quarter-end OTCQX company count reached 585, up 5%, while OTCQB company count totaled 1,101, up 3%.
Revenue from the OTCID market and Pink Limited subscribers to the Disclosure & News Service increased 32%. OTC Markets had 1,037 OTCID companies at quarter-end, compared with 1,035 at the market’s July 2025 launch. Including Pink Limited subscribers to the Disclosure & News Service and other products, the total reached 1,477 companies, up 8% from a year earlier.
Digital Assets and Regulatory Agenda
Coulson highlighted the company’s strategic alliance with BitGo, which is intended to bring digital-asset trading and custody infrastructure to broker-dealers using OTC Link ATS. He said OTC Markets is preparing its platform to support tokenized and blockchain-native securities as regulations develop.
During the question-and-answer session, Coulson said the principal hurdle for digital-asset securities remains regulatory clarity, particularly around custody arrangements for FINRA-member broker-dealers. He said he believes the Securities and Exchange Commission has the authority to advance rules for assets that are securities without waiting for congressional passage of the CLARITY Act.
The company also discussed its Hong Kong office, which opened earlier in 2026. Zinn said the office remains at an early stage and that it is premature to identify trends, though he described its initial contribution as encouraging. Georgieva added that the company had already maintained Asia-Pacific coverage through its New York-based sales force.
Coulson said the SEC’s registered offering reform proposal would formally recognize OTCQX and OTCQB as qualifying public trading markets for at-the-market offerings. He described the potential recognition and possible federal preemption of certain state blue sky laws as significant developments that could reduce the cost and complexity of registered offerings for eligible companies.
Operating expenses increased 9% during the quarter, driven primarily by a 54% rise in professional and consulting fees and an 11% increase in IT infrastructure and information-services costs. Coulson said the company continues to search for a new head of corporate services.
About OTC Markets Group (OTCMKTS:OTCM)
OTC Markets Group operates a network of electronic trading platforms that provide real-time quotes, trading, and market data for over-the-counter (OTC) securities. Through its tiered marketplaces—OTCQX for established companies, OTCQB for early-stage and developing firms, and OTC Pink for less transparent issuers—the company connects broker-dealers, institutional investors, and retail participants. Its platforms facilitate price discovery and liquidity for a wide range of securities, including foreign issuers, micro-caps, and funds.
The company’s product suite extends beyond trading venues to encompass market data services, corporate disclosure tools, and compliance solutions.
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