Revenue of $345.9 million, up 16% from $299.1 million in Q1/23 Diluted earnings per share of $0.50, up 56% from $0.32 in Q1/23, including $0.21 gain per share from the acquisition of control of VettaFi in Q1/24 Adjusted diluted earnings per share1 of $0.38, up 3% from $0.37 in Q1/23 TORONTO, May 2, 2024 /CNW/ - TMX Group Limited (TSX:X) ("TMX Group") today announced results for the first quarter ended March 31, 2024. Commenting on the first quarter of 2024, John McKenzie, Chief Executive Officer of TMX Group, said: "TMX's first quarter results reflect solid performances from key components of our business, including areas of strategic global expansion, as we continue to push the evolution of TMX to meet the needs of our diverse and growing set of capital markets stakeholders. Overall revenue increased 16% compared to the first quarter of 2023, largely due to the inclusion of TMX VettaFi, our newly-acquired, U.S.-based indexing, digital distribution and analytics division, as well as year-over-year growth from TMX Trayport. Increases were partially offset by lower revenue from Capital Formation, and Equities and Fixed Income Trading due to challenging capital markets conditions. Going forward, we remain focused on serving our markets with excellence, helping to build competitive advantages for our global client base, while in constant pursuit of innovative ways to build TMX's business stronger: more resilient, more adaptive and more responsive."  Commenting on the performance in the first quarter of 2024, David Arnold, Chief Financial Officer of TMX Group, said: "TMX continues to benefit from a deep and diverse business model. We reported solid growth in the first quarter, with 3% higher organic revenue excluding TMX VettaFi, and a 3% increase in diluted earnings per share on an adjusted basis, compared to Q1 2023. Despite headwinds in financing and trading activity, income from operations grew 1% year-over-year, as a result of growth in revenue from recurring sources and continued cost management discipline. TMX Group's Board of Directors also approved an increase of the quarterly dividend by 6% to 19 cents per common share, reflecting confidence in our ability to generate cash flows and deliver on our deleveraging plan." _______________________________ 1  Adjusted diluted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". RESULTS OF OPERATIONS2 Non-GAAP Measures Adjusted net income is a non-GAAP measure3, and adjusted earnings per share, adjusted diluted earnings per share, and adjusted earnings per share CAGR are non-GAAP ratios4, and do not have standardized meanings prescribed by GAAP and are, therefore, unlikely to be comparable to similar measures presented by other companies. Management uses these measures, and excludes certain items, because it believes doing so provides investors a more effective analysis of underlying operating and financial performance, including, in some cases, our ability to generate cash. Management also uses these measures to more effectively measure performance over time, and excluding these items increases comparability across periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors. We present adjusted earnings per share, adjusted diluted earnings per share, and adjusted net income to indicate ongoing financial performance from period to period, exclusive of a number of adjustments as outlined under the heading "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for Q1/24 and Q1/23". We have also presented long term adjusted EPS CAGR as a financial objective which is the growth rate in adjusted diluted earnings per share over time, exclusive of adjustments that impact the comparability of adjusted EPS from period to period, including those outlined under the heading "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for Q1/24 and Q1/23". The adjusted EPS CAGR is based on the assumptions outlined under the heading "Caution Regarding Forward Looking Information - Assumptions related to long term financial objectives". Similarly, we present the dividend payout ratio based on dividends paid divided by adjusted earnings per share as a measure of TMX Group's ability to make dividend payments, exclusive of a number of adjustments as outlined under the heading "Adjusted Net Income attributable to equity holders of TMX Group and Adjusted Earnings Per Share Reconciliation for Q1/24 and Q1/23". Debt to adjusted EBITDA ratio is a non-GAAP measure defined as total long term debt and debt maturing within one year divided by adjusted EBITDA. Adjusted EBITDA is calculated as net income excluding interest expense, income tax expense, depreciation and amortization, transaction related costs, integration costs, one-time income (loss), and other significant items that are not reflective of TMX Group's underlying business operations. ______________________________ 2  TMX Group completed a five-for-one split of its common shares outstanding  (the Stock Split) effective at the close of business on June 13, 2023. All common share numbers and per share amounts in this release, including comparative figures, have been adjusted to reflect the Stock Split. 3  As defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. 4  As defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Quarter ended March 31, 2024 (Q1/24) Compared with Quarter ended March 31, 2023 (Q1/23)5 The information below is derived from the financial statements of TMX Group for Q1/24 compared with Q1/23. (in millions of dollars, except pershare amounts) Q1/24 Q1/23 $ increase /(decrease) % increase / (decrease) Revenue $345.9 $299.1 $46.8 16 % Operating expenses 204.2 159.4 44.8 28 % Income from operations 141.7 139.7 2.0 1 % Net income attributable to equityholders of TMX Group 139.5 89.0 50.5 57 % Adjusted net income attributable toequity holders of TMX Group6 7 104.5 103.6 0.9 1 % Earnings per share attributable toequity holders of TMX Group Basic 0.50 0.32 0.18 56 % Diluted 0.50 0.32 0.18 56 % Adjusted Earnings per shareattributable to equity holders of TMXGroup8 9 Basic 0.38 0.37 0.01 3 % Diluted 0.38 0.37 0.01 3 % Cash flows from operating activities 64.6 96.6 (32.0) (33) % Net Income attributable to equity holders of TMX Group and Earnings per Share Net income attributable to equity holders of TMX Group in Q1/24 was $139.5 million, or $0.50 per common share on a basic and diluted basis, compared with $89.0 million, or $0.32 per common share on a basic and diluted basis for Q1/23. The increase in net income attributable to equity holders of TMX Group reflected a non-cash gain of $57.1 million being recognized in Q1/24 resulting from the fair value remeasurement of our previously held minority interest in VettaFi (equity-accounted January 9, 2023 prior to the acquisition of control January 2, 2024), a decrease in income tax expense of $5.4 million, and an increase in income from operations of $2.0 million. The increase in income from operations from Q1/23 to Q1/24 was driven by an increase in revenue of $46.8 million, including $37.9 million recognized for TMX VettaFi, as well as higher revenue from TMX Trayport, TMX Datalinx, BOX, and CDS revenue, somewhat offset by an increase in operating expenses of $44.8 million. The higher expenses reflected approximately $20.0 million of operating expenses related to TMX VettaFi, $11.8 million related to amortization of acquired VettaFi intangibles, $5.4 million in acquisition and related expenses,  $1.5 million in integration costs, approximately $1.3 million related to our U.S. expansion initiative. The increase in earnings per share was also partially attributable to a decrease in the number of weighted average common shares outstanding from Q1/23 to Q1/24, somewhat offset by higher net finance costs. ________________________________ 5  TMX Group completed a five-for-one split of its common shares outstanding  (the Stock Split) effective at the close of business on June 13, 2023.  All common share numbers and per share amounts in this release, including comparative figures, have been adjusted to reflect the Stock Split. 6  Adjusted net income is a non-GAAP measure, see discussion under the heading "Non-GAAP Measures". 7  Reflects an adjustment increasing the income tax effect for Q1/23 by $0.7 million. 8  Adjusted earnings per share is a non-GAAP ratio, see discussion under the heading "Non-GAAP Measures". 9  Reflects an adjustment increasing the income tax effect for Q1/23 by $0.7 million. Adjusted Net Income attributable to equity holders of TMX Group10 and Adjusted Earnings per Share11 Reconciliation for Q1/24 and Q1/2312 The following tables present reconciliations of net income attributable to equity holders of TMX Group to adjusted net income attributable to equity holders of TMX Group and earnings per share to adjusted earnings per share. The financial results have been adjusted for the following: The amortization expenses of intangible assets in Q1/23 and Q1/24 related to the 2012 Maple transaction (TSX, TSXV, MX, Alpha, Shorcan), TSX Trust, TMX Trayport (including VisoTech and Tradesignal), AST Canada, BOX, and WSH, and the amortization of intangibles related to TMX VettaFi in Q1/24. These costs are a component of Depreciation and amortization expenses. Acquisition and related costs in Q1/23 and Q1/24 related to VettaFi (equity-accounted on January 9, 2023 prior to the acquisition of control on January 2, 2024). Q1/23 also includes acquisition related costs for SigmaLogic (equity-accounted prior to the acquisition of control on February 16, 2023 and divested on April 21, 2023) and WSH (acquired November 9, 2022). These costs are included in Selling, general and administration and Net Finance Costs. Change in fair value related to contingent considerations, reflecting a reduction in the earn-out liability assumed as part of the WSH acquisition in 2023, and an increase to a prior earn-out liability assumed as part of the VettaFi acquisition in Q1/24. These changes are included in Net Finance Costs. Integration costs related to integrating the VettaFi acquisition in Q1/24.  This cost is included in