Continued progress in OTCQB Venture Market
In Q215 Otc Markets Group (OTC:OTCM) reaped the rewards from its development of OTCQB Venture Market. Subscriptions surged in the quarter and were mainly responsible for a 21% rise in gross revenue y-o-y and 8% q-o-q. With Q215 expenses unchanged on the previous quarter, Q215 net income rose 29% q-o-q and 48% y-o-y. The Q215 dividend was increased to $0.14 per share from $0.1 in the previous quarter. The company has cash in its balance sheet, an increasing dividend, yields 3.5% and is trading below our DCF valuation.
OTCQB Venture Market success
OTCQB Venture Market continued its successful expansion in Q2 and at the end of the quarter consisted of 955 companies, almost as many as the much longer-established AIM market in London. The increased number of companies joining the OTCQB Venture Market, which was only launched a year ago, together with those paying the full subscription price, were the driving forces behind a 33% q-o-q rise in corporate services revenue. Given the large number of companies in the US that could qualify, there is potential for it to grow even larger.
Strong profit growth in Q215
OTC Link ATS revenue fell 4% q-o-q due to lower transaction activity and market data licensing (42% total) was flat q-o-q after a period of strong growth. With Q2 expenses at the Q1 level, Q215 net income rose 48% y-o-y and 29% q-o-q.
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