Earnings call transcript: Bolsa Mexicana de Valores sees 4% revenue growth in Q3 2025

Bolsa Mexicana de Valores (BMV) reported a 4% year-over-year increase in total revenues for the third quarter of 2025, reaching 1.1 billion dollars. Despite the revenue growth, net income declined by 4% to 393 million dollars. The company’s stock price rose by 2.41% following the earnings announcement, reflecting positive investor sentiment. According to InvestingPro analysis, BMV is currently undervalued, with attractive valuation metrics including a P/E ratio of 11.4x and EV/EBITDA of 7.7x.

Key Takeaways

• Total revenues increased by 4% year-over-year.
• EBITDA grew by 2%, maintaining a stable margin of 57%.
• Net income declined by 4%, despite strong revenue performance.
• Stock price increased by 2.41% post-earnings announcement.

Company Performance

Bolsa Mexicana de Valores demonstrated solid performance in Q3 2025, with a 4% increase in total revenues compared to the same period last year. The company maintained its equity market share between 78% and 80% and saw significant growth in its derivatives segment, with a 70% increase in the average daily notional value of dollar futures. The information services segment also experienced a 10% revenue increase. Despite these gains, net income fell by 4%, attributed to rising operating expenses.

Financial Highlights

• Revenue: 1.1 billion dollars, up 4% year-over-year
• EBITDA: 623 million dollars, up 2% year-over-year
• EBITDA Margin: 57%
• Net Income: 393 million dollars, down 4% year-over-year

Outlook & Guidance

Looking ahead, Bolsa Mexicana de Valores plans to increase its capital expenditures in 2026, potentially exceeding 300 million dollars. The company aims to complete its full derivatives technology deployment by the end of 2026 and expects significant revenue growth from its Central Counterparty (CCP) services, particularly in repo services starting in 2027. InvestingPro data shows the company maintains a "GOOD" Financial Health Score of 2.63, suggesting strong positioning for these future investments.

Executive Commentary

Jorge Alegria, CEO of BMV, emphasized Mexico’s appeal as an investment destination, citing its stability and proximity to the U.S. Ramon Guenes, another executive, highlighted the company’s strategy to return capital to shareholders and the importance of technology investments to boost productivity.

Risks and Challenges

• Rising operating expenses: Increased costs in marketing, technology, and personnel could pressure margins.
• Competitive pressures: Maintaining market share amid competitive fee pressures is challenging.
• Technology migration: The planned migration to a cloud-based platform involves technology risk.

Overall, Bolsa Mexicana de Valores continues to strengthen its market position through strategic initiatives, despite challenges such as rising costs and competitive pressures. The company’s focus on technology and international connectivity positions it well for future growth. BMV currently offers an attractive dividend yield of 5.95%, significantly above its 10-year average of 6%. For comprehensive analysis including Fair Value estimates and detailed financial metrics, check out the full research report available on InvestingPro.

Full transcript - Bolsa Mexicana De Valores SAB De CV (BOLSAA) Q3 2025:

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Thank you. Good morning and welcome to Bolsa Michena de Valores third quarter twenty twenty five earnings conference call. Before proceeding, I would like to provide a brief safe harbor statement. This presentation contains forward looking statements and information related to Bolsa that are based on the analysis and expectations of its management as well as assumptions made and information currently available at Palsa. Such statements reflect the current views of Palsa related to future events and are subject to risks, uncertainties and assumptions.

Many factors could cause the current results, performance or achievements of Pulsar to be somewhat different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including, among others, changes in general economic, political, governmental and business conditions, both in a global scale and in the individual countries in which Polsar does business, such as changes in monetary policies, in inflation rates, prices, business strategy and various other factors. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary considerably from those described herein as anticipated, believed, estimated, expected or targeted. Polsat does not intend and does not assume any obligation to update these forward looking statements. This call is intended for the financial community only and the floor will be open at the end to address any questions you may have. Joining us for today’s call are Jorge Alegria, Chief Executive Officer Roberto Gonzalez, Chief Post Trade Officer Gabriel Rodriguez, Cipaycap’s CEO Alfredo Bijen, Managing Director, Equity Markets Jose Miguel de Dios, Managing Director, Derivatives Markets Luis Rene Ramon, Managing Director, Business Development Hannah Rivas, FP and A and IR Director and myself, Ramon Guenes.

With that, I would like to turn the call over to Mr. Jorge Alegria, our CEO.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Yes. Hello. Hope you can hear me okay. Thank you, Ramon, and good morning, everyone. I hope you are all doing well today.

We released our earnings results yesterday evening, providing a comprehensive detail on the 2025 results. Copies of our press release and a slide deck are available at bmv.com.mx under Investor Relations. During today’s call, I will first review our ongoing initiatives and then briefly comment on our financial results. Then we will conclude with a Q and A session where we will gladly take your questions via the conference call line. Let us begin with a brief overview of the quarter’s most relevant developments starting with equity market activity.

Two new IPOs having now been confirmed in our pipeline. So Aeromexico is coming back to the market and Essentia Energy, Essentia Energy Systems is debuting. Both have announced plans to lease on BNB before year end. And additionally, two more equity transactions are under consideration. One potential IPO and one follow on offering, both currently still confidential.

These transactions reflect renewed interest from the market participants following a period of limited activity. Our bond CCB following a successful regulatory audit, the CCB has been approved to operate as a central counterparty for Mexican government bonds. Participants are now finalizing preparations and the first clear of MA bond trade is expected by mid November. This CCP launch marks a major transformation for the fixed income market in Mexico. It will enable multi lateral clearing between banks and brokers, reducing counterparty risk and limiting contagion.

Business structure also improves liquidity efficiency by netting positions across all participants, lowering them the overall cost requirements. And additionally, it supports their transition from voice based to electronic trading. As for the CCP service for repos, we are currently working on a design targeting a launch by year end 2026. Given the large size of the repo market, this service is expected to be an important source of revenues for the CCP in the future. Turning to the equity fee schedule, you may recall that in late twenty twenty four our competitor reduces and temporarily impacting our market share.

In response and to maintain our competitive position, we submitted a fee adjustment proposal to the Mexican authorities. Over time, our market share remains stable. We are within the 78, 80% range reflecting the resign the resilience of our service model and the strength of our client relationships. Our revised equity trading fee is is is now approved though we have not decided on implementation date for it. In the meantime, we remain focused on market stability, operational efficiency, and delivering value to market participants.

In the derivative market segment, the S and P IPC index future was listed on CME, Chicago Mercantile Exchange last August, making it now available on both Mexican derivatives exchange, Mexver and CME. This dual listing expands access for local and international investors. Targeted marketing and commercial efforts have positioned it as a key instrument for Mexican equity exposure. Trading activity on CME is often mirrored as we can see every day is often mirrored on Nexeo primarily through arbitrary strategies. We continue advancing on our technological evolution with a strategic agreement recently signed with Nasdaq to also migrate next to the platforms.

With this, we plan to launch a fully integrated video 2026. And then in 2027, we plan to go live with cloud based platform for CCPs and for the CSD in the valley. By modernizing its its infrastructure and embracing its scalable cloud native solutions, BMD Group is strengthening its capacity to service the local market, attracting international participants, boost transaction volumes, and unlock new revenues, particularly through data monetization, but also global connectivity. These transformations also reinforces our organization’s commitment to innovation, operational resilience, and robust security. Earlier earlier this year, we launched our data intelligence unit to lead across functional data strategy all across the organization and headed by top tier professionals.

The initial phase is now underway, focusing on mapping the data landscape across all business lines. Next steps include designing central architecture, cleansing the data, and migrating to a modernized environment. While results may take some time, the strategy will begin to show its potential in the medium term, especially as it aligns with our technology evolution project. As platforms are modernized, they will incorporate data driven capabilities such as real time analytics and customer reporting. As part of our commercial and marketing efforts and the strategy, our new unified structure enables a more efficient and client focused approach.

This quarter, we tripled our targeted campaigns and client outreach compared to the previous quarter. Our communication strategy now delivers more tailored messaging to a specific audiences, including financial but also retail clients. Client meetings are focused on two key goals, promoting adoption of the bond CCP and repositioning the SMP IPC index. We also successfully executed a media tour in New York early September to expedite Mexico’s international investment. Our Central US and that’s a dynamic emerging market.

Claudio Dignan, Technology Executive, Bolsa Mexicana de Valores (BMV): Excuse me? Jorge,

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): I think we’re losing you. Also successfully executed a media tour in New York in early September to evaluate Mexico’s and our global profile among international investors. Our central message remains clear. Mexico is a highly attractive investment destination, offering stability, proximity to The U. S.

In a dynamic emerging market. Additionally, our digital presence has grown significantly, helping to promote our products and expand financial education and awareness. Finally, on our ESG agenda, we are proud to have been recognized by HSBC as governance leaders, receiving an award that highlights top ESG strategies in the country, Being named a leading company in sustainable innovation reinforces our belief that sustainability strengthens our business. Let me now move on to our key financial highlights in the following slides. Please keep in mind that all figures are expressed in Mexican pesos.

During 2025, total revenues reached $1,100,000,000 representing a 4% increase in year over year, mainly driven by post trade segment, particularly securities custody, along with steady growth in information services and listing activities. EBITDA totaled $623,000,000 up 2% year over year, while EBITDA margin stood at 57%, showing a resilient and efficient business with robust cash generation from operations. Net income amounted to $393,000,000 a 4% decline, impacted by recent interest rate cuts by Baixico, which led to lower financial income. On a year to date basis, revenues and EBITDA showed double digit growth, reflected consistent growth across business lines. EBITDA margins stood at a solid 57%.

Net income reached $1,200,000,000 up 5%. The increase in expenses reflects our strategy, which elaborate we on later. Please turn to the next slide. In the 2025, more than 75% of total revenues came from post trade information services, equity and capital formation activities, reaching $826,000,000 showing a solid performance. For the nine months ended in September 2025, the reference segments also contributed with most revenues, reaching $2,400,000,000 reaffirming the company’s stable core business foundation.

Please turn to Slide seven to go over equity trading and clearing. In Q3 ’twenty five, cash equities trading activity remained at similar levels to Q3 ’twenty four, despite a 4% decrease in local operations. Local activity continues showing dynamism as evidenced by an increase of 7%. Regarding market share, BMD’s level covers between 7880%. On the clearing business, revenue was up by 8%, while total ATTB for the market remained flat quarter over quarter.

Revenues from the equity segment increased 6% on a year to date basis, but remained unchanged in the third quarter compared to the previous one. Let us go on to the next slide to review derivatives. Revenues from derivatives segment increased in both Q3 and on a year to date basis despite a 10% decline in Ecigna’s revenues, showing more dynamism in futures trading. The average daily notional value of dollar futures increased by 70%, while open interest doubled in amount compared to 2024 figures. Regarding margin deposits in Asigna, the year to date average balance in 2025 decreased by 7%, reaching $42,000,000,000 which continues to represent a relevant figure.

On Slide nine, OTC trading results are shown. CFI Caps OTC trading revenues decreased 6% in Q3 twenty twenty five. Both Mexico and Chile experienced lower market activity along with an appreciation of their currencies. Mexico revenue grew by 3% and Chile decreased by 10%, which contributes with 80% of the total revenues. In Mexico, M bond trading fell slightly with lower rates.

On Slide 10, we have figures for capital formation. Capital formation revenue increased by 6%, mainly explained by an 80% contribution of maintenance revenues. Listing revenues grew 38% driven by debt listings. Total outstanding long term listings increased 5% year over year, reaching five thirty one as of September 2025. Moving on to the central securities deposit on Slide 11.

In demand revenue grew 8%, driven by an increase in assets under custody in both domestic and global markets and more dynamic global market activity. In Q3, total assets under custody reached $44,000,000,000,000 a 12% increase, reflecting the contribution of this service, which accounts for nearly 50% of total revenue. The exchange rate effect reduced results by $7,000,000 reflecting peso appreciation. Finally, on Slide 12, Information Services. Information Services revenue increased by 10%.

Market data grew 10% when compared with Q3 twenty twenty four and contributed 68% of total revenue. Talmud quarterly revenues increased 11%, explained by new clients and offering new personalized services and APIs. The exchange rate effect reduced results by $7,000,000 reflecting peso appreciation. Now let’s look at our operating expenses on Slide thirteen and fourteen. Operating expenses for Q3 twenty twenty five totaled $543,000,000 reflecting an 8% increase.

This was mainly driven by costs related to marketing and promotion, technology, depreciation and personnel, which together account for slightly more than 80% of the quarter’s expenses, in line with our strategy to continue investing in new business units and technology resilience. Year expenses to reflect similar growth trends in percentage terms. In Q3 twenty twenty five, expenses were impacted by $3,000,000 due to FX appreciation. On a cumulative basis, the effect was more significant with a positive impact of slightly over $27,000,000 Total CapEx for Q3 reached $89,000,000 while year to date CapEx is totaling $189,000,000 in line with our strategy. Our plan to expand our buyback program earlier this year has not been executed as planned due to market conditions.

We became active again in early October, and we are ready to remain active through year end. Our strategy remains centered on returning capital to shareholders over holding excess cash. With this, I conclude my presentation. Thank you for connecting today and listening to our remarks. We would like to remind participants that today’s call is being recorded and a replay will be available tomorrow at Pulse’s corporate website, www.bnb.com.mx, and we’re now ready to take any questions you may have.

Conference Call Operator: Thank Our first question comes from the line of Ernesto Gabilondo with Bank of America. Please proceed with your question.

Ernesto Gabilondo, Analyst, Bank of America: Thank you. Hi, good morning Jorge, Ramon, Hannah and good morning to all your team. I have three questions from my side. The first one, we noted this quarter OpEx growth outpaced revenue growth. We have seen some investors raising some eyebrows on when the timing will be to start seeing new initiatives reflecting in revenues.

So when do you expect revenues should be able to outpace OpEx growth? For my second question, we have seen the weakness of the dollar and the potential strengthen of the peso in reaching a USMCA agreement. On the other hand, there are expectations for the interest rates to continue to go down. Some analysts are expected to be at 6% by the end of next year. So have management evaluated the possibility to implement some hedges to FX or to rate considering the expectations for the dollar and for rates?

And for my last question is if you can give us any update on the discussions for the secondary regulation for hedge funds or multi funds? Thank you.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Thank you, Ernesto. I guess for the first question on OpEx growth versus revenue growth, Ramon, I don’t know if you want me to do add some some remarks. What I can tell you is that this this is on on as planned and presented at the beginning of the of the year regarding the investments we are making especially in technology, data, security, upgrading our technology. Ramon, can you elaborate on that?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Yes. Good morning, Ernesto. Our strategy, which which we commented on, was to invest in new products and new departments, data and technology. When we’re expecting the new revenues from additional services will be when we have the new CCP for bonds and as the data products begin to mature. So we had spoken earlier that we could see we were expecting or were willing to take a drop in EBITDA margins.

It hasn’t happened because revenues were better than we had expected, especially during the first half of the year. But we would expect to see revenues begin happening in 2027. For next year, we’re still expecting to see more investment than revenue growth.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Regarding your The peso second Ernesto, definitely I mean, we are aware of the weakness of the the of the US dollar, the strength of the peso, the interest rates coming down. So we we we would like to analyze some hedging on alternatives on how to manage the treasury as well on this on this environment. I don’t know whether, Ramon, you can either elaborate on that, but definitely, we should consider something because this this is not a temporary thing as as as as it looks.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Well, yeah, just to reinforce Jorge’s comments is something The audit committee has raised the question. What would be our best strategy going forward? As you know, we have somewhat of a long position. We also have certain exposure from Chile, which affects us.

So it’s something that we are considering.

Ernesto Gabilondo, Analyst, Bank of America: Excellent. Thank you very much. And for the last question on the updates for the secular regulation.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Yeah. On the hedge funds,

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): let let me tell

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): you what I know. Jose Manuel can also add on it, but the as you know, the chairman of the Securities Commission has recently changed. The new the new chairman is quite familiar with the with these rules. The what he asked us was for a couple of months to take over all the the initiatives that he was pushing from his previous post on the on the treasury. But I I think there are very good news for the industry in general to have the the new chairman of the Skills Commission that was involved not only on the writing and and pushing in congress, etcetera, the initiatives.

The two main initiatives we have seen in the last three or four years, which were the simplified listings and also the the the pension funds. What I what I know is that these big discussions are moving forward and some important news were recently published regarding securities lending by flexi license and making making the tax treatment for securities lending clearer in order in order to facilitate securities lending, and that will be a key element for the growth of the local hedge fund industry. That’s that’s what I can tell you.

Ernesto Gabilondo, Analyst, Bank of America: Excellent. No. Thank you. Thank you very much, Jorge and Ramon.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Thank you, Ernesto.

Conference Call Operator: Thank you. Our next question comes from the line of Brian Flores with Citigroup. Please proceed with your question.

Brian Flores, Analyst, Citigroup: Hi, team. Good morning. I have two questions. The first one is on margins. I wanted to ask you, you obviously are investing as you just mentioned and you also mentioned some changes in market share.

So just wanted to get your view on which one is dominating the compression in margins. Just to understand if you think this is a structural trend or do you think, as you mentioned, that they should recover in 2027? Do you mean recovering vis a vis the current levels or more depressed levels? Do they stay stable or they come back to the levels we saw, for example, in 2024? And then my second question, you mentioned your plans on the buyback program.

You said you were going to remain active to year end. And you quoted market conditions. Could you elaborate a bit on that? Do you mean the share price to make buybacks is not making a lot of sense right now? Do you mean it’s too volatile to do a decision?

Just wanted to see if you could elaborate a bit on what are you seeing in these market conditions quote? Thank you.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Thank you, Brian. First of all, when we speak about margins, we are talking about EBITDA margins. As I said, they could come down for next year. And for 2027, we would expect them to go back up to these levels, to the 57 levels or depending on market conditions, hopefully still higher. And market share, we expect it to remain around these levels.

We don’t see we don’t expect much movement there. Regarding the buyback program, what I said is we are ready to be active. We operate depending on the stock price. The stock price during the first six months of the year or seven months was higher than what we had expected. So we operated less than we had originally thought.

At current levels, we will be active again. And by that mean but it’s dependent on the stock price. I don’t know if that’s clear. Yes, it’s very clear. Thank you.

And as I said, our strategy is to return capital. We don’t mean to hold more cash than we actually need.

Brian Flores, Analyst, Citigroup: Perfect. That is very useful. Thank you very much.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Thank you.

Conference Call Operator: Thank you. Our next question comes from the line of Carlos Gomez with HSBC. Please proceed with your question. Carlos, your line is live. I’m sorry.

Our next question comes from the line of Jorge Fernandez with JPMorgan. Please proceed with your question.

Jorge Fernandez, Analyst, JPMorgan: Hi Jorge, Ramon, thank you for the opportunity for asking questions. I have one regarding your CapEx. It was higher again, and I know it’s part of your post trading transformation, all your investments. It is clear. But I remember in the past call, you mentioned $250,000,000 sorry, $250,000,000 pesos kind of guidance for this year.

And you are on track for that because you had like a very low first quarter. But if you continue the pace you had this quarter and we annualize, maybe you are slightly above, right? You could be running around $300,000,000.03 $50,000,000 So just checking the box, like, should we see maybe CapEx above the initial budget? Like, are you seeing more investments? And what should we see for 2026?

Like should this continue? Because in the end, it does impact your margin discussion, right? If you do more CapEx, it takes time for your depreciation to show up, your capitalizing expenses. So just trying to understand where your CapEx guidance contrast versus the third quarter print. And then my second question is regarding your equity price decrease.

I remember last year, the beginning of this year, that you were supposed to reduce, the trading, the price of trading, maybe MXN 100,000,000 impact for the year. How is that? Like were you able to get the approvals? You still don’t have the approvals and you don’t have like any price reductions? Does it make sense to cut the prices now?

If you can provide an update in this topic, it would be interesting. Thank you.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Judy. This is Jorge. Thank you for your question. Let me let me answer the second one. The we we haven’t touched the trading our our trading fees.

We we we haven’t increased. We are we remain with last year. We have approval from the the regulator to to to go down if we need it, but as as the moment we are because we are the same market share, we are not planning to to move the prices soon, although we are ready to do it if needed. But the the pricing structure remains the same as last year. We were not in the need of lowering because the market share although was lower a little bit on the beginning of the year, we recovered.

So we are not seeing any

Pablo Ordonez, Analyst, GBM: to use

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): the new equity tariffs. I don’t know, Ramon, if

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): you

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): can go deeper on the CapEx question from Yuri.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Sure. Yuri, our project, our main project, which is the technology transformation system from post trade has been we included the derivatives platforms and it has also grown in scope a bit into more data capabilities. So that has led to more CapEx investment. And for next year, it should remain that both of these projects remain the most significant one is being this NASDAQ technological transformation. So yes, we’re also expecting high CapEx in the $250,000,000 300,000,000 for next year.

Jorge Fernandez, Analyst, JPMorgan: No. Super clear. How about and after that, should we turn it to the 200,000,000 that you used to guide? Or, like, it’s it’s a $2,020.16 then 02/1927, it goes down or too early to to talk about it?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Well, once we’re done with the systems for post trade, we’re likely to begin with our cash equity trading technology. So it should be a lower investment than this, but we’re also going to have more projects there.

Jorge Fernandez, Analyst, JPMorgan: Super clear. And if I may, a third one, and sorry for asking many questions. But we saw many noises on taxation in Mexico with the budget for 2026, right? There was news on insurance companies, some news on banks. Is there anything particular for investments, exchange?

Like, is there anything changing for you, like, on the proposal or or or nothing major for for your sector? Thank you.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Nothing major. We’re not expecting a we’re having any impact currently.

Jorge Fernandez, Analyst, JPMorgan: No. Thank you, Ramon. Thank you, Jorge.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Thank you.

Conference Call Operator: Thank you. Our next question comes from the line of Edson Morguilla with Sumacap. Please proceed with your question.

Claudio Dignan, Technology Executive, Bolsa Mexicana de Valores (BMV): Hi, good morning and thank you for taking my questions. I have one specifically about the technology. And my question is, how are you going to mitigate the operation of risk? Because it’s my understanding that plan needs to be in AWS, even the cloud for 2027 and the couple of days ago we saw a sort of time even a brokerage dealer in Mexico, the recovery process was not that quick. So my question is how are going to mitigate that benefit specifically?

And the second question regarding on technology and this transformation, we have seen an increase in salaries and compensations in a couple of quarters. So because you are using AI, if I remember correctly, last quarter, the Chief Information Officer mentioned the AI Excellence Center and I’m wondering if the name is wrong. Are we expecting a headcount reduction? Thank you.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Hello, everybody. Please

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): repeat the first question.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Yes, please.

Claudio Dignan, Technology Executive, Bolsa Mexicana de Valores (BMV): My first question is how is an unmitigated technology risk using AWS in the case in some other shutdown that we saw a couple of days ago?

Edson Morguilla, Analyst, Sumacap: I can’t jump on this. This is Claudio. Claudio Dignan. Hello. Well, the problem that was presented by I understand because it’s somehow hard to have good understanding of your of your security because of the noise in the line.

But it has to do, as I understand, regarding the problem that AWS faced last Monday. And the the we have been taking a look of this condition, and this problem came from the Virginia region that is the oldest region in AWS. The remaining regions in AWS hasn’t had any problem historically. And what we are planning is to allocate our operations in the Mexico region. And this also has to do with the regulation in order to have to keep the data in the country.

So we are working and understanding this problem. First is good news is that the problem or the shortfall problem that AWO has faced has been just related with the Brazilian region, that is the oldest one. The remaining hasn’t had any problem. And second, we are taking a look in order to assure that the effective recovery condition we are planning to install already manage this problem. So far, we are pretty confident that resiliency design that we are planning to implement will also can handle this situation.

And second, a repeating of the condition of the Bulgaria region. Our infrastructure will be located in the Mexico region. That is a new one, and we expect that to have all the availability that this present in the remaining vehicles in AWS.

Claudio Dignan, Technology Executive, Bolsa Mexicana de Valores (BMV): Okay. Thank you. And regarding on the headcount reduction or the possibility because the using of AI?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): We don’t let me say, our investments in technology are aimed at making us more productive. There is no headcount reduction plan or target along with them, but with greater technology, you should be more efficient in your operation. Now, if people can be assigned to different activities or different productive activities, that will be the case. So our aim is to be more efficient and productive and not necessarily looking at a headcount reduction objective per se.

Claudio Dignan, Technology Executive, Bolsa Mexicana de Valores (BMV): Okay. And last, if I may, regarding on the second phase of the digital transformation, specifically about derivatives, could you explain a little bit more? It’s gonna be, I don’t know, for Cigna first or first, it’s gonna be next year because it’s my understanding that you plan a full transformation. Right? Clearing Central Country Point trading also.

And and if I may, part of the question is, are you planning to to in this transformation include zero days to expiration options?

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Yep. Yes. Jose Miguel is also maybe helping on the answer, but the the answer is let me just clarify something. It’s not a second stage. Actually, we are planning to deploy all the derivatives technology ready by year end 2026.

So that will include next there, and that will will include a seat in a security house to to be running into the Nasdaq technology, provided cloud service as well, and a a lot of flexibility on the design and on implementation of new products, including, yes, short short dated options, weekly fees, etcetera, something that currently we cannot deploy, but next year we will be able to to to cope with those needs to in terms of time to market on new product implementation with substantial timing reduction in time to market. But that’s the new derivatives platforms for both trading and trading will be ready in one year time.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Okay, appreciate it. Thank you so much.

Conference Call Operator: Thank you. Our next question comes from the line of Pablo Ordonez with GBM. Please proceed with your question.

Pablo Ordonez, Analyst, GBM: Yes. Hi, good morning, Jorge and Ramon. I have a couple of questions. First, can you comment on the rollout of the business of the clearing business for debt? You received authorization back in September to start operations.

So my question is, are banks and clients participating? And also, what could be the potential revenue growth for the CCB in the coming years for from this project?

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Jamal, please let me the yes. We we we received authorization. We are in the process of the onboarding. We there was a call a couple of weeks ago on an industry led by the the Central Bank of Treasury, the Securities Commission, ourselves to announce the launching the the first day of trading, I believe, is November ’26. And I don’t have the the free front in front of me, but it’s let’s say, November to go live, We have four intermediary brokers already testing and pretty much connected and the intention is to have four to six clearing members by by that date ready and more people will be incorporating their request to join clearing for the the the city people.

We will have we have a list of interested parties. Correct me Ramon Roberto CCP is in the line that we have, like, around 14 interested broker dealers and banks to to join this first stage of of of clearing, which will be only cash bonds, cash in the bond or clearing to to be ready for 2026 rollout of the recourse, which where we expect to have a much higher participation. But I don’t know if you can do me. You can add something on the projected growth.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Yes. As we said in the call, the significant part of revenues from the CCP will come from the repo service. That is where we’re expecting to have the revenue generation. That service will go live at the 2026. So we should start seeing revenues, let’s say, 2027.

The size of the revenues or how much is still unclear. It depends on basically on the final fee schedule, but we’re not expecting anything significant for 2026.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): The current numbers, just to give you an idea of the size of the market, today, the CCP, the cash equity CCP is clearing a little bit more than $1,000,000,000 a day, let’s say $1,300,000,000 a day. The expected size of the end of the market we are targeting on the first stage is $6,000,000,000 Obviously fees are not the same. These are are are public now. It’s around one third of the equities, but the size of the market is much, much bigger, and that’s only cash. Repos, we are talking about five times those numbers eventually to be targeted in the second stage.

So that’s why we enthusiastic about the second stage. Even with the first stage, it means that it’s sizable opportunity for for us on the on the on the playing side for m b bonus, definitely the repos, and eventually to develop the electronic piece of the trading as well.

Pablo Ordonez, Analyst, GBM: That’s that’s great color. Thanks a lot for that, Jorge and and Ramon. A second question, if I may. So you mentioned so we are now expecting $250,000,000 in CapEx per year for the coming years. So what are you thinking in terms

Should this year, you decreased the payout to 70%. Do you think that with these levels of CapEx, should we continue to expect dividends around 70% work on the month?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): First of all, let me clarify. CapEx for next year should be higher than the two fifty that we had expected at the we had expected two fifty for this year. We’ll most likely end up higher, and we will most likely be higher for next year due to the expansion of the projects that we’re having. Where the dividend will be depends on the balance we have on dividend and buybacks. I think you have a very valid point.

We cannot have high CapEx, high dividend and high buybacks all at the same time because we’re going to run out of cash. So that’s something that we will the dividend will be a balance between the buyback and the dividend. Our strategy will be to give back as much cash as we can and not keep cash that we do not need and keep that number as high as possible, whether it be through a dividend or buybacks.

Pablo Ordonez, Analyst, GBM: Okay. Thank you, Ramon. And when you say higher than MXN $250,000,000, the CapEx for next year, are you thinking MXN 300,000,000 or even higher than that amount?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): We’re working on the numbers, but it could be higher than 300. Okay. Perfect. Thank you very much for your answers. Thank you for the question.

And I think we have Carlos Gomez now.

Conference Call Operator: Yes. Our next question comes from the line of Carlos Gomez with HSBC. Please proceed with your question.

Carlos Gomez, Analyst, HSBC: Hello and thank you for taking the call. Again, my apologies for my technical problem before. So two questions. One is going back to the investment plans. Again, to recall, we have more than €300,000,000 next year.

Probably, again, from what we understand, similar amount the following year, I guess, that is fair to say. This is all CapEx, right, so it is capitalized. Can you remind us what amortization period you are using and when we will start to see amortization charges hit the income statement more heavily? Is it going to be in 2026 or 2027 and beyond? Second, I wanted to ask about the impact of the foreign exchange.

You have this very useful table, thank you for that, on Page eight in which you show how on inflation on ForEx adjusted terms, EBITDA revenues and expenses all grow by 7%. That’s actually an acceleration from the 5% that you have from the fourth quarter of last year. Would you say that your business is actually picking up and will be a realistic ForEx adjusted expectation for 2026?

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Thank you.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Carlos, regarding the first question, amortization period is somewhere between seven and ten years. It depends on the specific project. For the Nasdaq technology, we’ll be using ten years.

Carlos Gomez, Analyst, HSBC: Is this linear, by the way?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Yes. It’s it’s it’s linear. Mhmm.

Carlos Gomez, Analyst, HSBC: Linear. Thank you. Mhmm.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): CapEx should be higher in 2026. It it it should decrease a bit by by 2027. It it But also, we could have new projects there, but nothing as large as what we’re having right now. And could you repeat the your second question, please?

Carlos Gomez, Analyst, HSBC: Yes. So again, I’m going to look at your business on a Forex adjusted basis and you show us those numbers on Page eight of your press release. You were growing at 5% last year for the full year. You have been growing 7% in the first nine months of the year. So should we understand that your business is accelerating and should we expect a higher rate of growth into next year or this 7% is a realistic one for 2026?

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): Well, that really depends on what happens to the FX. We have an, let’s say, a rule of thumb, you could say that 1 peso movement in the exchange rate equals 50,000,000 to 60,000,000 pesos in EBITDA. So if the peso depreciates by 1 peso, we’re going to have around MXN 50,000,000 or MXN 60,000,000 more EBITDA. If the peso appreciates by MXN one, we’re going to have MXN 50,000,000 to 60,000,000 less.

Carlos Gomez, Analyst, HSBC: Okay. So that is the sensitivity to ForEx. And I guess my question is the underlying growth of the business. If the 7% that we see adjusted for ForEx is a realistic expectation for 2026 or you aim higher or lower than that? Thank you.

Ramon Guenes, Unspecified Moderator/Presenter, Bolsa Mexicana de Valores (BMV): It should be around there.

Carlos Gomez, Analyst, HSBC: Thank you.

Conference Call Operator: Are no questions at this time. I’ll turn the floor back to management for any final comments.

Jorge Alegria, Chief Executive Officer, Bolsa Mexicana de Valores (BMV): Well, thank you very much again. We are very grateful for your time and excited to share our numbers and our plans that are developing as planned and looking for an active and exciting fourth quarter as well as a very productive 2026. So thank you very much to all. And if anything, you can you can you can check on on our website for a replay of the call or reach out to Ramon or Hannah for any any questions. But above all, thank you

Jorge Fernandez, Analyst, JPMorgan: very much for your time.

Conference Call Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.

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