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Operator: Good day, and thank you for standing by. Welcome to the OTC Markets Group Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Zinn, General Counsel. Please go ahead, sir.
Daniel Zinn: Thank you, operator. Good morning, and welcome to the OTC Markets Group Third 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 Coulson: Thank you, Dan. Good morning, everyone, and thank you for joining us. I will discuss our third quarter 2025 results at a high level and share the status of our key initiatives before turning the call over to Antonia to review our financial results in greater detail. Gross and net revenues each grew by 15% during the third quarter, and each metric was up 12% for the first 9 months of the year. Our third consecutive quarter of double-digit growth was due to strong revenue increases in all our business lines, highlighting the value of our interconnected business model. I want to thank all of my colleagues at OTC Markets for jointly delivering our market reliability and these quarterly results. Our business is a team sport. OTC Link was up 23% during the quarter, Market Data increased 15%, and Corporate Services was up 12%. Throughout 2025, OTC Link's strong revenue has been tied to increased trading volume across our markets. Market Data price increases effective January 1 of this year have been the primary driver of revenue growth in this business line. The Market Data team, in conjunction with our OTC Link Group, continues to build the foundation of our Overnight Trading business, working to onboard current and prospective subscribers, and educating the global trading community on the value of all our offerings. We were pleased to see our Corporate Services business achieve its second consecutive quarter of growth. The bulk of the growth in the third quarter resulted from increased sales of the OTCID Basic Market. Increased new sales of OTCQX and OTCQB, coupled with price increases, also contributed to the Corporate Services results this quarter. We continue to put strategic focus on client success, retention, and the reduction of churn. I would like to provide an update on our 2 primary strategic initiatives for the year, Overnight Trading and the OTCID Market. Overnight Trading 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. Momentum on MOON ATS for NMS securities continues to build. Following the recent end of South Korea's moratorium on retail investor participation in U.S. overnight markets, we've seen early signs of growth in Overnight Trading. MOON ATS has onboarded a number of active broker-dealer subscribers, many of whom have more recently begun engaging in this market. Market Data users have also taken note with firms already subscribing to our data feeds in preparation for increased activity on MOON ATS. As with our existing daytime markets, transparency is paramount. The availability of Market Data to interested overnight market participants around the world is key to the success of this endeavor. As financial markets evolve towards around-the-clock operations, we focus on ensuring our infrastructure and technology continue to meet the needs of our subscribers. Our view towards the overnight market matches our approach to the markets we have operated for many years. We will deliver elegant, reliable, and cost-effective solutions, and work with our subscribers to enable their businesses to scale and grow. Our second priority initiative this year was the OTCID Basic Market. OTCID has seen a rapid uptake since its July 1 launch, as qualifying companies use our services to publish a baseline of ongoing information. OTCID enhances our offering for corporate clients, filling a gap below our premium OTCQX and OTCQB markets. OTCID companies provide basic disclosure for investors, which separates them from securities quoted on Pink Limited that have little to no issuer involvement in their trading market. With the disclosure and management certification-driven service, OTCID connects more companies without the price, float, or financial requirements of our higher-level markets. It is a simple entry point for companies to start streaming information, gain a foothold of liquidity, or test the waters. We have designed our premium markets to provide the functionality for connected companies to stream data that will improve the quality of the market for their securities. In comparison, Pink Limited securities are identified with a yield sign to warn investors to proceed with caution. Our objective is to clearly flag the risks from Pink Limited companies. We all know investor-focused companies need to be actively connected to the market, consistently updating investors, with management teams willing to certify compliance with regulations. Otherwise, it leads to information asymmetries and discounted valuations as well as diminishes market quality. With OTCQX, OTCQB, and now OTCID, our markets provide a digital platform for public companies to take ownership of their U.S. symbols. Our most engaged corporate customers want the ability to perform the same IR disclosure and governance activities as companies listed on NYSE or NASDAQ with less complexity. These best practices, supported by our data processing and distribution capabilities, allow the informational, operational, and compliance experience for brokers and investors to be comparable to exchange-listed securities. These connected companies represent approximately 25% of all securities traded on our platforms at the end of September 2025 and contributed 31% of the dollar volume traded during the third quarter of 2025. As more public companies connect through our Corporate Services, actively publishing ongoing information, and demonstrate global governance standards, we will improve the quality of their individual trading market and expand overall investor interest. In addition to our 2 primary initiatives this year, we have placed significant focus on enhancing the customer experience for companies that choose to trade on our markets. Our revamped customer platform, OTCIQ.com, was launched on August 28 and includes modernized functionality that has been well received by our customers. During the year, we used our EOL technology platform to integrate Canadian SEDAR data into our system, streamlining the initial and ongoing disclosure process for the many Canadian-listed trading companies on our market. We intend to integrate additional disclosure sources over time, bringing the same benefit to companies from other regulatory jurisdictions. Our focus on customer experience will extend into next year and even further as we move into the next phase of this initiative, which is better connecting companies to their trading markets and financial information networks for a future that is online and digital. We also continue to work on our regulatory priorities. As the government reopens, we will continue to engage with regulators and lawmakers on capital formation, market structure, and other key initiatives. As we look to the future, we are excited to explore the opportunities in digital assets and tokenization as emerging regulatory clarity allows market participants to legally and lawfully innovate around these new technologies. In closing, I am pleased to announce that on November 11, our Board of Directors declared a special dividend of $1.75 per share and a quarterly dividend of $0.18 per share, each payable in December. These dividends reflect our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.
Antonia Georgieva: Thank you, Cromwell. Thank you all who've joined our call today. The third quarter of 2025 marked the launch of OTCID, and I would like to start by thanking our entire OTC Markets team for making this such a success. Following is a review of our results for the quarter ended September 30, 2025. Any reference made to prior period comparatives will refer to the third quarter of 2024. Turning to Page 7 for a review of our third quarter revenues. We generated $31.6 million in gross revenues, up 15%, compared to the prior year period. Revenues, less transaction-based expenses, were up 13%. OTC Link's gross revenues increased 23%, driven by a 47% 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 50%. Additionally, OTC Link saw an increase in revenues from OTC Link ATS messages due to a higher number of messages in Quote Access Payment service revenue due to the increased volume of trading activity and in certain connectivity revenue due to growth in the number of connection licenses. Trading volumes remain highly unpredictable and could decline in the future. OTC Link finished the third quarter with 114 subscribers to OTC Link ECN, unchanged from the prior year period and 77 subscribers to OTC Link ATS, compared to 80 at the end of the prior year period. OTC Link had 138 unique subscribers across our ATSs as of September 30, 2025, compared to 139 unique subscribers as of September 30, 2024. Revenues from Market Data Licensing increased 15% quarter-over-quarter, reflecting a 23% increase in redistributor-based revenues, 12% increase in revenues from direct sold licenses and 3% increase in revenues from data and compliance solutions. Within the redistributor-based revenues, professional user revenues increased 30%, primarily due to price increases from the beginning of 2025, combined with a 2% increase in professional user count. Nonprofessional user revenues declined 7% as a result of a 16% 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 further decline in the future. Broker-dealer enterprise licenses and internal system licenses drove the growth in direct sold licenses. Broker-dealer enterprise license revenues increased due to the combined effect of price increases and subscriber growth, while internal system licenses revenues increased due to subscriber growth. Increased revenues from data services and the Blue Sky data product contributed to overall growth in data and compliance solutions revenue, partially offset by lower revenue from EDGAR Online. Corporate Services revenues increased 12% in the third quarter. The impact of annual incremental pricing adjustments effective January 1, 2025, and improved sales served to offset a lower number of OTCQX companies, resulting in a 3% increase in OTCQX revenues. OTCQB revenues increased 10% due to the same factors, combined with a higher number of companies on the OTCQB market. In the third quarter, we added 35 OTCQX companies compared to 18 in the prior year quarter and finished the period with 553 OTCQX companies, down 2%. On OTCQB, we added 77 new companies in the third quarter compared to 46 in the prior year period and finished the quarter with 1,097 OTCQB companies, up 3%. The launch of OTCID on July 1, 2025, resulted in a substantial number of Pink companies upgrading to OTCID. All OTCID companies subscribe to DNS. In addition, select Pink Limited companies also choose to use DNS and other Corporate Services offerings. The resulting growth in DNS subscribers, combined with price increases from the beginning of the year, drove a 48% increase in DNS revenues compared to the prior year period. As of September 30, 2025, 1,077 companies traded on the OTCID Basic Market, up from 1,035 companies at launch on July 1, 2025. Overall, we had a combined 1,511 OTCID companies and Pink Limited subscribers to DNS and other products at the end of the third quarter, representing a 10% increase from 1,379 companies at the end of the prior year period. Month-to-month variability in our Corporate Services subscribers is driven by new sales, offset by nonrenewals, corporate events, and compliance downgrades. Turning now to expenses on Page 8. On a quarter-over-quarter basis, operating expenses increased 8% to $17.9 million. A 6% increase in compensation and benefits expenses, 26% increase in professional and consulting fees, and 9% 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 62% of our total operating expenses during the third quarter compared to 63% 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 data center costs, reflecting increased cloud services usage as well as higher spending on information services and software licenses. Turning to Page 9. In the third quarter, income from operations increased 23% and net income increased 15%. Operating profit margin expanded to 34.6% compared to 32.4% in the prior year quarter. Our diluted earnings per share increased to $0.71 per share compared to $0.61 per share, or 16%. 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 $12.8 million in the third quarter of 2025, and our adjusted diluted earnings per share were $1.06 per share, each up 19%. Cash provided by operating activities amounted to $13.3 million compared to $5.9 million in the prior year quarter. Free cash flows for the quarter were also $13.3 million compared to $5.8 million in the prior year quarter. Turning to Page 10. During the third 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.
Operator: [Operator Instructions] Our first question comes from the line of Steve Silver with Argus Research Corporation.
Steven Silver: Congratulations on the quarter. So the operating margin in the quarter showed a nice uptick compared to the most recent quarters. I'm curious as to your thoughts about the prospects for continued margin expansion as we start to look to 2026, obviously sensitive to small moves in operating expense and investments, those types of things. Just curious on your thoughts on the operating margin profile as we start to look towards next year.
Robert Coulson: Steve, I get grumpy when it starts going below 30%. Otherwise, we get spendy above 30%. And usually, revenues come in and then you have an investment part. We're not margin-stuck, but we're also not trying to jam our margin compared to the exchange-level margins because in the long run, I believe, that creates a toxic relationship with your clients. And as an independent market operator in the wholesale markets, the broker-dealer community really wants to see us as a Costco-type business. So we want to grow our revenues. We want to be able to invest that in improving our services, improving the value of our services, launching new initiatives to help our client bases succeed. But we're not looking to max out financial engineering in the short term. At the end of the day, this quarter is a nice one because we had really big trading markets 4 years ago post-COVID. And there was a lot of profitability from trading back then. And we're now moving past that back to a higher level. And we can invest and we can grow, but we're not terribly margin concerned, except we want to be profitable.
Steven Silver: And then one more, if I may. The prepared remarks sounded like a lot is being done in terms of really scaling the overnight products, especially with the integration with the Market Data Licensing unit. So are there any really major initiatives left in terms of building the infrastructure for the overnight product? Or is it more just blocking and tackling and just onboarding more broker-dealers at this point?
Robert Coulson: So the technology infrastructure is built, the network connectivity tentacles takes forever. And you're always working on it, you're expanding things out. And what's interesting is we have an overnight conversation with a Paris-based quantitative trading arbitrage firm, and they're highly interested in participating in that. But they're also going to go, wow, your daytime market has a bunch of opportunities for us. So it's been a great learning experience. The team very quickly built out the infrastructure. Building the connectivity is -- and then expanding that over time takes work, but it also shows that it gives us for our core business, shows how hard it is to build out into all those processes.
Operator: Our next question is going to come from the line of Aashi Alpesh Shah with Sidoti & Co.
Aashi Shah: I'm here on behalf of Brendan. Congratulations on the quarter. Looking at the OTCID market platform in a bit more detail, it looks like the revenue was up about $1 million in Q3 relative to Q2 of this year. Can you give us an additional detail on how much of that is from the Pink company upgrades paying the onetime application fee?
Antonia Georgieva: Aashi, thank you for the question. The application fee is generally amortized over the service period, which is typically 1 year, in some cases, shorter. So it doesn't impact disproportionately any given period or any given quarter. The overall uptick in OTCID revenue this quarter is what we explained last quarter was due to a number of OTCID companies choosing July 1 as the beginning of their service term. So even though our sales of the new OTCID markets were happening throughout the first half of the year and continued in the third quarter, the revenue recognition for a number of those new customers began on July 1, and you see that impact of the revenue being recognized in the third quarter, which was not the case, to a large extent, in the previous 2 quarters. But in terms of the application fee, again, that follows the annual fee in terms of how it is recognized.
Aashi Shah: And then of the roughly 430 Pink companies subscribing to DNS, do you foresee perhaps all of them upgrading to OTCID or will some not qualify?
Robert Coulson: I'll say some won't qualify and some will be getting services after they've been moved down. The ID process is incredibly automated. There's no cure periods. It's either you're in or you're out. So you're going to see over time, because these companies were DNS subscribers before, but as ID becomes its own entity and the companies settle in, we will -- there's always going to be a DNS where you've got access to put information there, but you may not be where you need to be. And there's a few companies that just want to publish once a year that may not be able to get up to a higher level. So that's still going to be there as part of it. But of course, if a company is doing the work to create public disclosure, they might as well stream it into the market where their stock is trading.
Aashi Shah: And lastly, I have one question on the recent blogpost on blockchain and tokenization of securities. I'm curious to hear your thoughts on equity securities eventually being tokenized and whether OTC Markets has made any capital expenditure investment in that initiative or explored integrating some of these technologies into the business at this point?
Robert Coulson: We've spent a lot of human capital thinking about it and talking to regulators about it and talking to our clients about it and talking to other players in the space about it. But let's be straightforward, tokenized securities, and I mean real tokenized securities, which your ownership interest can move around on one of the blockchains, are not legal to issue or lawful for broker-dealers to trade yet. We did a blog post, which I suggest you read, is -- and on the ways we see these types of securities coming into the market. And we believe that there is going to be a lot of excitement and energy and some new technology to use. But we also, because we serve the broker-dealer community, we need to be able to bring these securities in and have there be a level of compliance that broker-dealers are comfortable trading these. And the regulations are going to move rather quickly over the next 3 years. And when that happens, we want to be ready. And I think it was over 2 years ago, we got a license on one of our ATSs to be able to trade digital asset securities. And that was a preparation move. We made changes to our system back then. And we are making other changes to be ready to serve our broker-dealers as they bring parts of this technology and securities issued this way into the TradFi infrastructure.
Operator: Our next question comes from the line of Jonathan Isaac with Quilt Investment Management.
Unknown Analyst: Can you hear me okay?
Robert Coulson: Yes. How's your dad, Jonathan?
Unknown Analyst: Great.
Robert Coulson: Good. Send him my best.
Unknown Analyst: I will. Yes, thanks for taking my somewhat meandering but hopefully insightful question and many congrats on the quarter. From what I understand, OTC Markets gained thousands of securities from the fall of the OTC Bulletin Board, going back to the late 1990s. You were a default option or a natural home to many of these securities, if they were no longer on the OTC Bulletin Board, and they flowed in your direction. I wonder if a similar situation is on deck with digital asset securities. 2.5 years ago, Cass Sanford from your firm wrote, "If certain digital assets are, in fact, securities, they would be classified as over-the-counter equity securities, subject to Rule 15c2-11." If I look at CoinMarketCap.com, there appears to be a few thousand crypto assets with a market cap over $1 million. Presumably, stock exchanges or other exchanges might lay claim to some of the larger crypto assets, once we know which are securities. But for smaller crypto assets, what we might even eventually call OTC crypto assets, is OTC Markets positioned yet again to be a default option or a natural home for these securities like you were for OTC Bulletin Board securities years ago by virtue of your regulatory position and accumulated industry economic goodwill? If so, could we see a crypto version of OTC Markets emerge, with crypto assets intermingled in your Market Data, Corporate Services, and OTC Link segments, adding even more business momentum to your corporate flywheel?
Robert Coulson: So Jonathan, first, I have to correct your version of history.
Unknown Analyst: Okay.
Robert Coulson: We didn't just benefit from the OTC Bulletin Board. We competed it out of existence. We better serve the broker-dealer communities, and they had a choice where they could quote and trade, and we brought better technology, better customer service, and we kept innovating forward. So that's how we got it. And the OTC Bulletin Board had a more established brand, but we compete on functionality. And that is always going to be -- if we can offer either broker-dealers or public companies all the core and critical functionality they need without any of the frills or fluff, we'll be fine. So now the hard part is -- and the previous regime at the SEC, we thought was going to bring crypto into the regulated world. And we thought securities law was applicable, but it needed to be fit in. And they were not willing to remove the parts where it doesn't work. Crypto doesn't have a balance sheet, can't file a 10-K. But bringing it in of the regulation of issuers, intermediaries, and insiders, we thought it was a great structure to work with. We were completely wrong because what happened was they use regulation by enforcement and the majority of those coins you see on CoinMarketCap are going to be CFTC regulated, their currencies and their commodities, which is a bummer because we would have loved to help make those issuers more compliant is because those are core skills we have. Now there is a chunk, which is going to be securities, which is using the technology. And that, like any emerging technology or business, there are a lot of people predicting the future and saying this is how it's going to happen. This is fantastic technology. Everything should be atomic settlement. Everyone is going to want to have their own wallet for their crypto. And there are people in TradFi saying, huh, what's the big thing? Our technology is better, and at scale, it's cheaper. And guess what? Both things are going to happen in different ways, and we're going to have more use cases, we're going to have more tools for financial markets, we're going to have more technology, more transparency. And we want to be part of that conversation with regulated broker-dealers. And we believe the core tools of what we do is provide a trading platform for regulated broker-dealers as a wholesale market, distribute the data out to the world, so there's transparency so everybody can see what's happening on the playing field, and engaging issuers to stream information and demonstrate good governance and compliance. Those core skills are still going to exist. And we don't really care whether it's atomic settlement, T+1, T+0, whatever it is, we will be part of it as the regulations move along because we see that overall, the core functionality we do is going to apply to the tokens that are securities.
Unknown Analyst: Yes. I have one more question.
Robert Coulson: Sure.
Unknown Analyst: Yes. Your market integrity initiatives and the growth of Corporate Services are, we could say, aligned. As companies choose to display their compliance standards, fees are paid for providing the stamp of OTCQX, OTCQB, or OTCID. But a vast territory of your markets remains unmonetized and sometimes barely transparent. What is the path forward for monetizing these unengaged firms who, one could say, are free-riding on your market infrastructure and aspects of your compliance systems without paying a fee to Corporate Services? Could you, for instance, charge an annual access fee for the services you provide, much like a municipality might assess a homeowner for removing roots from underneath the public sidewalk, or a public utility might build constituents within their franchise territory to recoup expenses, which have benefited all, but only been borne by some. How do you think about the continued subsidization of the unmonetized portion of your markets and also the limits of their potential monetization?
Robert Coulson: Well, that's a nice dream. And since your dad and I both came from the same bible of fundamental value investing that Ben Graham wrote. The classic world was the old pink sheets, investors had to dig around for information. What kind of companies did you find there? Well, you found disconnected companies from their public market. Why were they disconnected? Some of the businesses were distressed. Some of the businesses were declining. Some of the businesses, the management team was dismissive of shareholder needs. Some companies, international companies, are fearful of litigation for any distribution of their information to the market. But what connected all those companies is they trade at a discount. And our job is to have the imperfections in Pink Limited be the responsibility and blame of the issuers. They're not the ones -- and the managers as fiduciaries. I have a belief that managements of public companies have a duty to disclose and inform their investors in a consistent manner wherever they are. But we are not God. And we are something else that is really important. We serve our broker-dealer clients in trading whatever security they need to deliver best execution in, whether the issuer is willing or not, we are the wholesale marketplace for best execution for them to run their businesses efficiently using whatever trading model they believe best serves their clients base and their technology stack, and their business model. And we want to help them be successful. And I often meet people who have that view. These companies are free riding. I actually think it's fantastic because we can suck in all these companies to be trading, and we do seem to make a little bit of money from trading services, and we have a nice business around selling Market Data. So it's not the end of the world. That said, the more companies that engage, the harder for the easy wins of the old-school value investors, who used to dig around for the information, because companies that are connected will improve their market quality. And we want to focus -- people hear a lot of our market integrity issues because we're dealing with problems. But really, the companies we want to serve and what we've built OTCQX for was the companies that want to do the right thing, all the same IR, compliance and governance, and shareholder relations activities as a company that is listed on the New York Stock Exchange or the NASDAQ Stock Market is, however, they want it with less complexity. And they want to do it in a digital manner. And that's what we do. So very simply, but we are not going to force that Pink companies are -- have to pay us something, but we are going to make it very clear to investors of what type of company they are.
Unknown Analyst: And just a final follow-up. If one day you were acquired or you merged into a larger company, do you think an acquirer would charge an access fee or might harness some of this latent pricing power?
Robert Coulson: I would no longer be CEO. So that decision would be above my pay grade.
Operator: [Operator Instructions] And our next question comes from the line of Walter Hopkins with 18th Square.
Unknown Analyst: Congrats on a great quarter, and thanks for these fulsome answers.
Robert Coulson: Thank you, Walter. Another fellow value investor. So I'm incredibly happy when the value investors start asking questions.
Unknown Analyst: Oh great. We'll keep digging around. Right now, roughly what percentage of OTC Markets expenses are fixed versus variable? And also, to the extent possible, could you give some color on the driving factors of each going forward, both the fixed and variable size of the expense base?
Antonia Georgieva: Walter, certainly, we do not have -- we have not shared publicly that specific percentages, but I'm happy to walk you through the elements that comprise various variable and fixed items. Starting with the distribution fees and rebates that you can find as a contra revenue leading to our net revenues on the P&L. Those are variable to -- and usually paid to the redistributors of our Market Data. They are linked to the users that generate the professional user and nonprofessional user revenues. Next item -- and variables, I said. Next item is transaction-based expenses. Those vary with the transaction-based revenue. Those are the fees we paid to the providers of liquidity on our ECN and NQB markets. Within comp and benefits, the variable component is the commissions that we called out this year -- this quarter as a key driver of the increase in compensation and benefits. The additional change there to commissions was a change we introduced to the commission plan, meaning increasing the level of commissions from the beginning of this year, but a meaningful component of the variability in commissions comes from the number of sales. Within IT and information services, we have a variable component related to trading activity. Within professional and consulting, the variable components are the regulatory and clearing fees, which we now, per GAAP, call out explicitly in the segment reporting, which you can find in the notes to the financial statements. And the rest of the expenses are largely fixed.
Unknown Analyst: And if you have time for just one more. I recently been studying some of the financial data providers like LSEG, FactSet, S&P Global, and so forth. And one of the big takeaways seems to be that these companies tend to have 3 forms of data: proprietary data, like index data, real-time feeds, credit ratings; semi-proprietary data that's hard or impractical to replicate, risk intelligence data, scrubbed financial data; and then there's a commodity data portion, which is comprised of like raw regulatory filings, end-of-day prices, basic news. Could you discuss OTC Markets' Market Data Licensing products in the context of those 3 categories? And maybe broadly speaking, how much falls into each bucket?
Robert Coulson: I'll give you a high-level overview, and then I'll pass to Antonia. I look at the data world is there's core data, which you're the unique source. There's competitive data where others offer it, but there's uniqueness in your data quality level, your depth of data, what's included in the set, your licensing agreements. So there's places where things go up and down. Bloomberg can charge a premium for a market data terminal versus someone else. And then there's commodity data. All of those datas are great to sell if you can make a margin. And is -- and core data is -- if you read the book the 7 Powers, it's a cornered resource. It's really hard to get those, though. So you have to be -- there's lots of real-time market data where it is -- where you're not the price-setting market. And those players will have a rent-seeking fee is, we are the price-setting market in OTC securities, and we focus a lot on being -- collecting in that data. And I think the model of operating in OTC equity securities, 3 different ATS models, really opens up for whatever type broker-dealer wants to be doing business with us. And that's a great product is the -- what we don't have, there's exchanges in the U.S. [ for SIP ] has the vendor display rule, which is really a monopoly of the government. Broker-dealers can choose to turn on and off. There's a negotiation we have. That's why we have per user licenses for real-time market data. We have enterprise licenses. And with our per-user licenses, we try to be just comparable to what other markets charge. Our enterprise licenses are because they go to broker-dealers. We want to still be in our Costco pricing model. And that's a part. All of these 2 types of real-time data, we want to fill in with as much different types of content as possible to widen the viewership. And some of those -- and as many different types of securities to have that, but that's hard because there's lots of other electronic platforms that want to trade these things. And then we've got our nonreal-time data products, which our EDGAR Online fundamental data set of SEC filings is could be commodity, could be competitive, depending on where we are in the quality, what we add in extra. There's other ones like our compliance files where I put in the competitive world because we're taking unique information -- we're creating unique information which is from us taking different data sets and applying our internal expertise so it can be easier for broker-dealers. And we're adding some unique pieces. But at the end of the day, it's very complicated, and every piece of it as you create it, when you've got the problem with a core data is you have to got an edge key in the world they want to buy it. And if you've got something unique, you're educating an unwilling buyer until they understand the uniqueness and the value it can add to their process. So that's a high level. And I will let Antonia give a little bit of color on it, but just you can take that look and go through and read our product descriptions and make your own choices and come back and say, hey, that's really -- hey, Cromwell, you really could add this in and then you'd have a much more competitive data set or you'd have a core data, which you could turn into a cornered resources in the 7 Powers framework.
Antonia Georgieva: Once again, Walter, that detailed mix of type of Market Data revenue is not something we have consistently disclosed in the past, but I'll give you a directional sense. Majority of our Market Data revenue is generated from the real-time proprietary data that Cromwell described, whether on a per-user basis. That's why we tend to talk about professional user, nonprofessional user contribution as that is a meaningful component. Also, broker-dealer licenses is the same data, only delivered as a fixed enterprise license as opposed to a per user. And we have additional products for -- that incorporate that real-time data into broker machines directly or on a delayed basis or certain derived data that all comprise that proprietary data component. That is, by far, the majority of our Market Data revenue. In terms of the competitive data, again, data services, Blue Sky data, we call those out as meaningful contributors to Market Data revenue as well. They are a minority of the Market Data revenue, but a meaningful piece. And the commodity data is predominantly our retail portal-based EDGAR Online piece. That would be the most commoditized part because you have large data vendors such as FactSet, Capital IQ within S&P 500 and others delivering similar data. Some of the EDGAR Online enterprise contracts deliver unique data as well. That's why I'm distinguishing specifically what we call EDGAR Pro as being the most commoditized of pieces, and it's a really small part of the total.
Robert Coulson: And Walter, I also though often have to correct externally and internally because we look at all these companies. There's a lot of companies in the financial markets, you'll look at an exchange group, which has core data. But you have FactSet who's built a fantastic business with competitive and commodity data. And people have a belief that, oh, we only want to focus on where we've got a monopoly, but your real secret sauce is serving your customers. And I'm a believer in our resources-wise of how we get the structure going forward of that, in the 9 months, say there's about $7.5 million in revenue -- $7.6 billion in revenue of what I call the nonreal time data, which has compliance and EDGAR Online and other things. I believe that client base, who is a superb client base in the broker-dealer, bank clearing, and data distributor world, there's real opportunities for us to grow those revenue streams with quite boring data sets that are not a captured resource.
Unknown Analyst: Have you seen any demand from AI-focused startups that are trying to suck in data? That was something that came up a lot when I was researching this area.
Robert Coulson: Yes, there's going to be a robot that comes and drills into our brains and sucks it all out. It's a real concern for everyone. And the stack for AI has been building the chips, the data centers, the AI software, as it's showing up into the applications that we use, will take a bit of time. But yes, I'm a believer that AI will make data more valuable, but we have to be careful in how we license it. And that's going to be the challenge for every business. You're going to have AI capital versus human capital and what walks out the door, and how do you keep moving forward your value quotient to participants in the market. And just a quick piece is, machine-learning is not a new idea to all the electronic trading firms, which we have been so lucky to be able to serve in the analog-to-digital transformation of financial markets.
Operator: Thank you. And I am showing no further questions at this time. And I would like to hand the conference back over to Cromwell Coulson for closing remarks.
Robert 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 third 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 the competitiveness of the public markets.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.