OTC Markets Group OTCMKTS: OTCM reported higher third-quarter revenue across all three of its businesses, with trading activity driving growth in OTC Link. Operating expenses rose faster than revenue, however, narrowing the company’s operating margin.
Gross revenue increased 7% from a year earlier to $33.8 million for the quarter ended Sept. 30, 2026, Chief Financial Officer Antonia Georgieva said on the earnings call. Revenue less transaction-based expenses rose 5% to $30.1 million.
Operating income increased 2% to $10.8 million, while operating margin declined to 32.9% from 34.6%. Net income rose 3% to $8.8 million, and diluted earnings per share increased 3% to $0.73. Adjusted EBITDA was $12.9 million, and adjusted diluted earnings per share were $1.07, up 1%.
Trading Activity Drives OTC Link Growth
OTC Link revenue increased 17%, supported by elevated trading volumes. Transaction-based revenue from OTC Link ECN, OTC Link NQB and MOON ATS rose 32%, while transaction-based expenses paid to liquidity providers increased 29%, Georgieva said.
Average daily transactions on OTC Link ECN and OTC Link NQB reached approximately 87,000, up 48% from a year earlier. MOON ATS activity declined from the first half of 2026, with approximately 25,000 average trades and 2.7 million average shares traded per session.
President and Chief Executive Officer Cromwell Coulson said trading dynamics will shift with the expected entry of national market system exchanges into the overnight market starting in December. He said the company’s experience with MOON would help it support overnight trading in OTC securities as demand expands.
Total OTC market dollar volume exceeded $670 billion through the third quarter, more than 27% above the comparable period of 2025, Coulson said. Georgieva cautioned that trading volumes are inherently unpredictable and could decline.
Market Data and Corporate Services Expand
Market data licensing revenue rose 7%, helped by growth in user counts and direct-sold licenses. Professional user counts increased 5%, while non-professional user counts rose 30%. Georgieva noted that non-professional counts can fluctuate with market activity and retail participation.
Corporate services revenue increased 2%. Revenue from the OTCQX and OTCQB premium markets rose 6% and 4%, respectively, supported by higher average company counts and pricing adjustments. The company ended the quarter with 589 OTCQX companies, up 7%, and 1,117 OTCQB companies, up 2%.
OTCID company counts fell 4% to 1,037 from a year earlier and were unchanged from the end of June. Georgieva said companies can move in and out of compliance with OTCID requirements during a quarter, making period-end counts less representative of activity throughout the period. She described renewal trends as encouraging compared with the predecessor Pink Limited subscription service, while noting that OTCID has operated for only a year.
Coulson also welcomed Meighan McGowan as executive vice president of corporate services, where she will lead global sales and client success teams.
Expenses, Dividends and Capital Allocation
Operating expenses rose 8% year over year. Professional and consulting fees increased 18%, partly reflecting higher regulatory and clearing fees tied to trading activity, while IT infrastructure and information services costs rose 16%. Compensation and benefits increased 4% and accounted for 60% of operating expenses.
Third-quarter operating cash flow and free cash flow were each $11.7 million, compared with $13.3 million for both measures a year earlier. The company returned $3.7 million to shareholders during the quarter, including $3.6 million in dividends and $152,000 in open-market share repurchases.
Coulson said the board declared a $1.75 special dividend and a $0.30 quarterly dividend on Nov. 10, both payable in December. He said the board reviews the special dividend in light of available cash and business opportunities and would not consider a particular amount mandatory if an investment could benefit shareholders.
Regulatory and Digital Asset Initiatives
Management highlighted an SEC proposal that would recognize OTCQX and OTCQB as qualifying public trading markets for at-the-market offerings. General Counsel and Chief of Staff Dan Zinn said the company sees support for the proposal but did not provide a timetable for a final rule.
Coulson said the change could expand capital-raising opportunities over time, while cautioning that any effect would not be immediate. He also pointed to a recently introduced congressional bill intended to create a pathway to margin eligibility for domestic OTC securities and American depositary receipts.
On digital assets, Coulson said OTC Markets is preparing for tokenized securities and that its alliance with BitGo provides groundwork for broker-dealers to use OTC Link ATS for tokenized stocks, along with a model for settlement and custody infrastructure.
About OTC Markets Group (OTCMKTS:OTCM)
OTC Markets Group operates marketplaces for trading over-the-counter securities and provides market data and services to broker-dealers, investors, and public companies. Its OTCQX, OTCQB, and OTC Pink markets offer different levels of issuer eligibility and disclosure standards. The company also operates OTC Link, an electronic interdealer quotation and trading system, and provides services such as issuer disclosure solutions, corporate actions processing, and market data distribution. Its platforms support trading in securities of U.S. and international companies.
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