The head of Toronto Stock Exchange (TSX) operator TMX Group Ltd. says the company has continued to diversify its global business offerings as it leans into data services and subscription models that provide recurring revenue and stability.
TMX CEO John McKenzie told BNN Bloomberg on Friday that the exchange operator has identified three strategic measures that make up its long-term diversification strategy.
“One is around the global distribution, so we are now half of the business outside of Canada, half inside, and that’s a real nice balancing point for us,” he said.
“It gives us access to the world, access to global investors, but it doesn’t reduce the prominence and importance of what we do in the Canadian market.”
The second focus area, McKenzie said, involves its recurring revenue model, driven by the firm’s financial services that are subscription oriented. He said the company now brings in over 50 per cent of its revenue from subscriptions.
“That gives investors a lot of confidence in the stability of the long-term growth of the organization, as opposed to what can happen on a cyclical basis,” said McKenzie.
“But the last piece is around the real global insights in the data space… that’s now over 40 per cent of the franchise, and our objective is for that to be 50 per cent of the franchise, because it gives the organization way better balance.”
TMX Group’s Q3 earnings
TMX’s diversification strategy has been paying off for investors, McKenzie argued. His comments came a day after the company reported third quarter earnings that showed revenue grew by 17 per cent year-over-year.
The firm reported adjusted diluted earnings per share of $0.63, up 21 per cent from the same quarter in 2025.
“Organic revenue increased 11 per cent year-over-year, highlighted by double-digit growth in revenue from TMX VettaFi, Derivatives Trading and Clearing, and Capital Formation,” David Arnold, TMX’s chief financial officer, said in the company’s earnings release.
“In addition to impressive business performance and excellent results, we advanced our long-term growth strategy by completing the acquisitions of Cboe Australia and RAFI Indices, funded with cash and debt. Our balance sheet is strong, and we remain agile in our investment approach.”
McKenzie noted that those acquisitions led to a decrease in year-over-year net income in the quarter, but the transactions are designed to be “immediately accretive” for TMX investors.
“Every acquisition we’ve done has been designed not just to create value for the shareholders, but also to create value for the Canadian ecosystem too,” he said.
TMX has tapped debt markets in recent months to cover its acquisition costs. In September, it closed a $1.1 billion Canadian private placement debenture offering, and the company still has two acquisitions yet to close, McKenzie said.
“But even when we get all this done, our total leverage in the organization… would be kind of about 3.2 times, which is a range we’ve been in before,” he said.
“We’ve got a really good track record on pay down to get back to our target range of one and a half to two and a half (times), so it gives us the capabilities of continuing to deploy capital strategically if the right opportunity presents itself that helps to accelerate our strategy.”
Listing challenges
TMX Group’s focus on diversification comes at a time when fewer companies are being listed on Canada’s main stock exchange.
The Canadian Press reported on Tuesday that during the first nine months of this year, there were 337 new listings on the TSX and its junior venture exchange, according to TMX’s September market intelligence report.
Of those, only 101 were companies, with the others being investment products like exchange-traded funds (ETFs). During the same period five years ago, the number of total listings was comparable at 338, but 176 were companies.
Earlier this week at a conference hosted by the Alberta Securities Commission, McKenzie said he’d like to see reduced regulatory barriers and cost relief for companies looking to go public on the TSX.
The exchange has increasingly become home to “fewer, bigger companies, which in some ways is great,” he said, noting that larger firms are better able to compete globally.
“But at the same time, if we hollow out that middle of the market, it makes it more difficult for small, big-cap companies to find the capital they need to scale up to become the next Enbridge or Shopify or RBC,” McKenzie told the conference.
“We want to make sure that the ecosystem still exists.”
With files from The Canadian Press
