TMX Group: Three 2026 Acquisitions Reshape Growth Path as Recurring Revenue Mix Lags Ambitious Target
CIBC Eastern Institutional Investor Conference, September 24, 2026
TMX Group used its appearance at CIBC's 25th Annual Eastern Institutional Investor Conference to lay out how three separate acquisitions announced in 2026 fit together, while acknowledging that one of its own long-term transformation targets is proving harder to hit than expected. Executive David Arnold, speaking with CIBC analyst Scott Fletcher, was candid that recurring revenue as a share of total revenue has been stuck around 53%, well short of the company's stated goal of two-thirds, even as strong transactional activity at the Montreal Exchange and Toronto Stock Exchange has masked the shortfall. "We've actually seen a little bit of a period here where our recurring revenue in absolute dollars has grown leaps and bounds. But the percentage of the whole firm, it's kind of stayed around 53-ish percent," Arnold said, adding that he wants the mix to shift through accelerated growth everywhere rather than a slowdown in transactional business.
Leverage Set to Climb Toward 2.5x on Deal Trio
The most concrete new disclosure from the session was confirmation that TMX's leverage will move into a range of 1.5x to 2.5x, and slightly north of that, once its three pending 2026 transactions close. Arnold was explicit that this marks a departure from the company's historically conservative acquisition posture, framing the moves not as a shift in M&A strategy but as tools to accelerate an existing enterprise growth plan. He noted all three deals are expected to be accretive within the first year before synergies are even counted, a discipline he attributed partly to CEO John McKenzie's background as the company's former CFO. Investors should note Arnold's pointed remark that TMX walks away from far more deals than it announces: "I wish we could put out press releases for the things we walk away from. People would understand the disciplined approach that we have."
CBOE Australia, CBOE Canada and MEMX Carry Very Different Integration Loads
Arnold provided a useful breakdown of how differentiated the integration burden is across the three transactions, which should ease investor concerns about bandwidth strain. CBOE Australia, now rebranded TMX Australia Exchange, has already closed and is primarily a technology build onto the existing TMX stack, with the harder work being industry testing rather than system migration. CBOE Canada remains under review by the Competition Bureau and the Ontario Securities Commission, and Arnold flagged a structural revenue headwind here: ETF issuers mandated by parent companies to list on two venues will need to move to a different platform once CBOE Canada is absorbed, creating what he called a "revenue dissynergy" that TMX cannot capture. The RAFI Indices acquisition sits almost entirely within the VettaFi business unit and draws minimal shared-services support. The BOX-MEMX combination is structured as a merger of the two businesses rather than a drain on TMX directly. Arnold's own ranking of upside was direct: "I think CBOE Australia has more upside than CBOE Canada... I think there's more opportunity by far for Australia."
VettaFi and RAFI: Assets Under Index Have Tripled
Arnold offered a specific growth data point on the VettaFi platform that had not previously been highlighted: assets under index tied to the RAFI transaction now stand at three times prior levels, with the underlying organic growth engine running in double digits, ahead of the company's long-term guidance of high-single to double-digit growth. He described VettaFi's core competitive advantage as talent rather than technology, recalling that early attempts to evaluate rival index providers repeatedly left the impression there was "just a calculation engine... nothing special there" until TMX encountered VettaFi's research and media assets, including etftrends.com and etfdb.com. The RAFI acquisition, he explained, brings fundamental research-based indexing, weighted by cash flow or revenue growth rather than market capitalization, as a complement rather than a replacement to existing thematic products such as robotics or energy-sector baskets. TMX has opened a new West Coast office in Newport Beach to house the combined VettaFi-RAFI team, alongside its existing Vancouver operation.
MEMX Brings Technology Licensing and a Prediction-Market Options Product
On the options side, Arnold pointed to Members Exchange's modernized technology stack, which is itself licensed to other market participants, as the primary strategic draw behind combining it with TMX's existing BOX platform. He was direct about the ambition: "It's a case, quite frankly, of a 1 plus 1 might equal 2.5." Notably, Arnold disclosed that MEMX has already filed to launch a binary prediction-market option tied to corporate earnings announcements, allowing investors to take listed, regulated positions on whether a company will beat consensus. He flagged that this product, along with other U.S. innovations such as zero-day options, is not currently permitted in Canada and would require a separate regulatory process, underscoring a widening gap between U.S. and Canadian market structure that TMX is monitoring rather than rushing to replicate. "I'm not quite sure on some of the things that I'm hearing about in the U.S. that are very, very topical, our Canadian institutional and retail investors are not telling us they have a demand for some of those same features," he said.
Capital Formation Momentum Builds, but Corporate Solutions Is the Real Growth Lever
Capital formation remains roughly 18% of TMX's overall business, and Arnold cited an 89% year-over-year increase in Canadian financings through the first eight months of 2026, with IPO activity already exceeding all of 2025. That said, he was clear that the segment he is "most excited about" is not the cyclical listings and secondary financing business but Corporate Solutions, the trust, transfer agency and Newsfile press-release operation, which TMX aspires to grow into half of the capital formation segment over time, since it is the part of the business management can directly influence rather than wait on market cycles to deliver.