Greetings, and welcome to the Bolsa Mexicana de Valores, S.A.B. de C.V. third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Hannah Rivas, Investor Relations. Please go ahead.
Thank you, Melissa. Good morning, and thank you for joining today call. Yesterday, we reported our third quarter 2026 results, and we are pleased to share the key highlights from the quarter and discuss the progress we have made across the business. Joining us today are Jorge Alegría, our Chief Executive Officer, Luis René Ramón, Chief Financial Officer, Roberto González, Chief Post-Trade Officer, José Manuel Allende, Chief Capital Formation Markets and Information Services Officer, Gabriel Rodríguez, Chief SIF ICAP CEO, Alfredo Guillén, Managing Director of Equity Markets, José Miguel de Dios, Managing Director of Derivatives Markets, and myself, Hannah Rivas, Investor Relations Officer. Following the opening remarks, we will have question and answer session. Our forward-looking legal disclosure can be found in the investor relations material presented today and distributed afterwards.
This morning, we will walk you through our key operational and financial results, as well as the priorities that shape our focus and execution during the quarter. With that, I will now turn the call over to you, Jorge Alegría, our CEO.
Thank you, Hannah, and good morning, everyone. Let me begin with our performance. During the third quarter, BMV Group delivered resilient results across a mixed market backdrop. Continuous strength in our derivatives businesses helped offset softer activity in the equity market, demonstrating the benefits of our diversified business model. In capital formation, a key milestone during the quarter was the first debt issuance under the Simplified Issuer framework, marking an important step toward expanding access to Mexico's capital market. Adventus Capital completed a MXN 560 million securitization backed by a credit portfolio to refinance state-level debt. The entire process was completed in approximately one month, highlighting this framework potential to reduce time to market and make public market financing more accessible to mid-size companies. Beyond this milestone, debt market activity remained robust during the quarter, highlighted by CFE's MXN 20 billion issuance, the largest transaction of the period.
Activity in warrants also continued to gain momentum, reflecting growing investor demand for yield-enhancing investments. Our IPO pipeline remains in place with four confidential companies in process, and potential issuers remain engaged as well while continuing to monitor market conditions and evaluate the appropriate timing for a potential listing. Turning to trading, in equity markets, activity evolved differently across segments during the quarter. Local trading volumes softened compared to a strong prior year period, with global trading continued its growth trajectory. As a result, the average daily traded value reached MXN 17 billion during the quarter, representing a 1% year-over-year increase. Year to date, trading activity has remained strong, with an average daily trading volume of MXN 20 billion, up 14% versus 2025. Our equity trading market share increased to 81% during the quarter, reflecting again our strong market position and our focus on delivering value to clients.
On the clearing side, activity at the Central Counterparty for Equities remained resilient at MXN 21 billion during the quarter, consistent with the prior year period, while year to date activity increased 13% over year to MXN 24.5 billion, sorry. As for bond clearing, momentum continued to build during the quarter with now 11 financial institutions registered as clearing members and 19 additional institutions progressing through the admission process. We also cleared, and this is a very important milestone as well, the first transaction from a pension fund, making another important step in the development and adoption of the bond CCP in the Mexican market. As mentioned, the derivatives market was the strongest performing business during the last quarter, with volumes increasing 22% over year and 26% in the first nine months of the year.
This performance was primarily driven by the dollar-peso futures, whose trading volumes grew 38% year to date, supported by a higher demand for currency hedging instruments among institutional investors amid the appreciation of the Mexican peso. IPC index futures also contributed positively, posting 7% growth during the period. In the derivatives clearing segment, margin deposits rose to MXN 43 billion due to higher open interest, which, together with higher trading volumes, drove a positive quarter at Asigna. Year-to-date margin deposits reached, as mentioned, close to MXN 41 billion. In the OTC market, CI Banco have delivered a strong performance with growth across all business segments in Mexico and Chile. OTC derivatives as well continued to perform well during the quarter, benefiting from favorable market conditions in both Mexico and Chile, as well as continued client engagement.
Turning to the CSD, Indeval, it continued to deliver positive results supported by growth in assets under custody, which reached MXN 48 trillion at our quarter end, up 11% year- over- year. Growth was primarily driven by assets under custody and pension funds. The global market also maintained strong momentum, reflecting continued investor demand for international exposure and diversification opportunities. In information services, we continue to invest in the foundations that will drive future monetization opportunities. By expanding connectivity, increasing access to market information, and enhancing our data capabilities, we are positioning the business to deliver higher value products and unlock new revenue streams going forward. Overall, the quarter reflected mixed market conditions, with lower equity market activity affecting some of our businesses, while derivatives, post-trade services, and capital formation continued to show solid performance. I will now turn it over to Luis René to discuss our financial results.
Luis René, please.
Thank you, Jorge, and good morning to all. During the quarter, our financial performance reflected a mixed operating environment characterized by lower activity in the equity market versus the full year average, and unfavorable foreign exchange effect on our dollarized businesses. Despite these headwinds, revenues increased by MXN 59 million or 5%, supported by the strength of our diversified business portfolio. Operating expenses increased 12%, largely reflecting the strategic investments we have been making to support future growth and execute our long-term roadmap. At the same time, we remain committed to disciplined expense management, operational efficiencies, and long-term value creations. Earnings per share reached MXN 0.72, representing 2% increase compared to the third quarter of last year. Looking at the first nine months of 2026, operating income increased 3% year-over-year, or MXN 49 million. EBITDA reached MXN 2 billion or 4%, with an EBITDA margin of 56%.
On a constant currency basis, EBITDA would have been MXN 96 million higher, representing the growth of 13% versus the prior year, and highlighting the impact of a stronger peso on our reported results. Financial income was MXN 37 million lower year to date, reflecting the lower interest rate environment. Despite these headwinds, earnings per share reached MXN 2.25, increasing 2.2% year-over-year. Turning to the next slide, revenue performance during the quarter was supported by continued strength in the transaction-based businesses. Derivatives, OTC trading, and custody were the main contributors to growth, while subscription revenues remain resilient despite the impact of foreign exchange on our dollar-denominated businesses. As a result, total revenues increased 5% during the quarter and 7% year to date.
On the spend side, growth continues to reflect the execution of our Digital Evolution strategy and the investments required to support our long-term roadmap. As expected, increased spending was primarily driven by talent, technology, and the amortization of previously deployed technology investments. Compensation and benefits remained stable during the quarter, consistent with the levels that we communicated in the previous quarter. Technology expenses increased in line with our plans, reflecting the continued investments in managed services and infrastructure. Depreciation and amortization primarily was reflected by the amortization schedule of completed investments within our evergreen technology ecosystem. Professional services increased due to higher spending on specialized supports, including our audit, legal, and different governance-related activities. These were partially offset by the increase in other expenses and declined by certain costs that were recorded in previous periods, which did not recur.
With that overview on our P&L performance, let me now turn to our strategic investments and cash generation. For the first nine months of the year, operating cash flow reached MXN 1.4 billion after payments to suppliers, employees, and taxes. These resources funded MXN 1.2 billion in investment activities, MXN 345 million in financing activities, including dividends and share repurchases, while continuing to support the execution of our strategic investment plan. Capital intensity remains high as we continue to invest in the strategic initiatives that will support BMV Group's next phase of growth. Also relevant, during the first nine months of the year, we invested MXN 188 million, while an additional MXN 172 million have already been committed to existing contracts. Together, this represents an approximately of MXN 370 million of investment activity and our new best guidance for the year.
The lower spending relative to our original guidance is primarily a result of the execution efficiencies and the shift of timing of certain investments, which will be closer to implementation and launch dates. Importantly, this has not altered the scope of our strategic initiatives. In fact, the increasing adoption of technology across selected functions may optimize future capital requirements and improve our productivity. In summary, we continue to generate a strong cash flow while executing our evolution agenda and investing in long-term growth of our business. With that, I will now turn the call back to Jorge to discuss our strategic products.
Sure. Thank you very much, Luis. As we look ahead, we remain convinced that the integration of markets, technology, and data is key to unlocking the future's potential of Mexico financial markets. This vision continues to shape our actions as we strengthen market access, enhance our infrastructure, expand our data capability, as mentioned, and we create value for clients, investors, and all market participants. With this vision in mind, we continue to transform BMV Group by investing in the technologies and capabilities that are reshaping financial markets globally. Digital Evolution remains our highest strategic priority as it lays the foundation for the next stage of BMV Group's growth. At the same time, we are exploring emerging technologies, including AI, which we believe will play an increasingly important role in the future of capital markets as well.
In the derivatives segment, our focus during the quarter shifted from the development to execution as we advanced market readiness activities for the first wave launch next year. The project has entered its final implementation phase with ongoing effort centered on regulatory engagement, coordination with market participants, and operational preparedness across all the ecosystem. End-to-end market testing is scheduled to start in November, and the implementation timeline remains on track for the first quarter 2027 launch. Once operational, the new platform will enhance trading and post-trade activities and capabilities, providing participants with greater capital efficiency, improved risk management, and a broader range of execution and clearing services. We believe this enhancement will further strengthen the competitiveness of and efficiencies of Mexico's derivatives market. Turning to the second wave, we continue to make meaningful progress on the repo CCP initiative through close collaboration with market participants and regulators.
Our engagement efforts remain centered on the value proposition of central clearing, particularly its potential to improve capital efficiency, balance sheet utilization, and netting benefits. We expect to submit the required regulatory documentations in the near term and continue to see constructive engagement across the market. These developments reinforce our confidence in the long-term adoption potential and its role in enhancing Mexico's fixed income market infrastructure. Finally, the third wave of our technology roadmap will focus on our CSD and the equity CCP platforms. This continues to progress as planned. Development and internal testing are underway, with implementation targeted for the first quarter of 2028. Before concluding, let me briefly address our approach to artificial intelligence. We see AI as a significant opportunity to enhance productivity, improve client experience, strengthen decision-making, and develop new data-driven products and services.
Our focus is on business cases with clear economic value, measurable returns, and the potential to generate efficiencies or unlock new revenue opportunities across the group. At BMV Group, we remain focused on execution, supported by solid fundamentals, a diversified business model, and a clear strategic roadmap. We believe we are well-positioned to capitalize on future opportunities and continue creating long-term value for our stakeholders. Thank you for your continued trust and all your support. With that, let me turn it back to Hannah Rivas for Q&A. Thank you very much.
Thank you, Jorge. We will now open the line for questions. Melissa, please go ahead.
Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Ernesto Gabilondo with Bank of America. Please proceed with your question.
Thank you. Good morning, Jorge, Luis René, and Hannah, and good morning to all your team. I just have a couple of questions from my side. The first one is related to what are you seeing in terms of the pipeline of new listings. The second one is in terms of your investment plan and how should we think about the evolution of the EBITDA. Especially looking into next year, I believe that you will still be updating the bank. Probably you will have some systems that will run parallel, and at some point you will shut down one of them. I just wanted to understand, how should we think about the EBITDA evolution next year? How should we think about the investment plan?
Some of these initiatives will be starting to pay off, so that's what I wanted, to have the complete picture of what should we be thinking about next year. Thank you.
Hi, Ernesto. Good morning. Regarding the pipeline, I would say that it remains in place. As we mentioned, we have four confidential IPOs in place. Hopefully, that will take place in maybe the next couple of quarters. Companies are spending and monitoring market conditionings and evaluating the timing to the potential listings. On the debt side, especially on the long-term debt market, it has been a good year. It has been growing. The pipeline on that segment still remains in place. We have continuously having around MXN 50 billion to MXN 60 billion in potential listings every month that is coming into the market.
We think that will continue into the last quarter and the beginning of the next year. We actually keep on promoting with the Cerro Bolsa program, and now as the first oferta simplificada came into the market, we're having a lot of question and attention on that matter. We are reinforcing the promotion activities in order to increase the number of companies that would eventually be interested in coming to the market.
Hello, Ernesto. To the second question about the investment plan and the impact on the EBITDA. As we mentioned during the call, the first wave and the second wave will come out next year. We have been reviewing actively contracts and talking to our providers and our suppliers. Many of our platforms will continue to be in place as these are also used with Indeval and CCV, which will be launched until early 2028. We'll keep the cost as low as possible as we release the Asigna platform, the derivative platform. Right now, we're currently in our planning process, and we're not providing any guidance for next year at this point. What I can tell you right now is that we'll continue to apply the same discipline to our capital allocation and focus on our investments.
We continue committed to keep our EBITDA margin as high as possible, keeping returns as high as possible, but also building the foundation that will drive growth in the medium term. EBITDA will probably have a small impact, but as we negotiate the contracts, as we negotiate with our suppliers, and as we launch these different platforms, which may increase the operations in bonds, the operations with new products and services and derivatives, the impact will be minimized.
No, that's great, René. That's very helpful. Just in terms of following up with this, in terms, for example, of OpEx. OpEx has been growing at a high single digit, low double digits because of this investment phase. Should we continue to have the same pace of growth next year, or should we be planning at some point because we can shut down some of these pilot systems that they will be running? At the same time, I don't know if you have these as cost efficiency strategies, you have a room to lower it a little bit from what we saw in this year.
Yeah. The two main expense lines that we have is personnel, so compensation and benefits and technology. The first part, the compensation and benefits, we have reached a level where we have a team that will support all this evolution.
We don't expect the main item on our expenses, which is personnel, to grow at the same level that we have grown over the last few years. This should be closer to inflation. As to the second point, the technology, this number should be in the low double-digit number. We continue releasing all our platforms. We'll continue having softwares and managed services. Having said that, our hardware, we're doing a right sizing. We are evaluating every single infrastructure that we have to keep this to the level that we'll require once we go with Nasdaq technology.
Perfect. Thank you very much.
Thank you. Our next question comes from the line of Arnon Shirazi with Citigroup. Please proceed with your question.
Hi, y'all. Good morning. Thanks for taking my question. I remember in the past conference call, it was mentioned that CapEx for this year should accelerate in the second half of this year. I remember mentioning MXN 500 million for the full year being MXN 250 million committed for the second semester of this year. So far, we have been seeing that CapEx year to date has been around MXN 200 million, which is far below the MXN 500 million that was mentioned. Should we expect a huge pickup in the fourth Q or plans have been postponed? What to expect in terms of CapEx also for 2027? From what I remember, it was expected to decrease compared to 2026. But given that it sounds to be postponed a bit, should I expect a level kind of similar to 2026? Thank you.
Thank you. Thank you for the question. Yes, our initial CapEx estimate was MXN 500 million. Our new best guidance is in the range between MXN 340 million, MXN 370 million. The difference versus the original budget is primarily the result of discipline rather than execution issues. Throughout the year, we have continued prioritizing our projects based on value and readiness, and as a result, some of those have phased out differently and some may move into the next year. Having said that, we have also looked for efficiencies with new technology. I'll give you an example. Rather than having a huge team of testers, now we can use technology to perform those tasks. It's a mix of both. It's important that I mention that it's not a reflection of delays. The projects are the most relevant to our Digital Evolution.
As I said, for this year, we expect MXN 340-MXN 370. That's our new best guidance. Part of that will definitely move to next year, but also we're finding efficiencies.
Clear. Thank you.
Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Carlos Gomez-Lopez with HSBC. Please proceed with your question.
Hello, good morning, and thank you for taking my question. I would like to also look into 2027, but on the revenue side. What is your best guess about how revenues can grow next year, assuming that there are no changes in the currency that we know can affect your business? In particular, I was looking at Indeval. Although you have had a significant increase in assets, 11%, the revenues have not quite caught up with that. Should we expect that also in 2027? Thank you.
Hello, Carlos, could you please repeat the second part of the question, please?
Yeah, the second part refers, it's just amplifying on the revenue side, what do you expect for Indeval? And the fact that, as I said, you have had, if I read correctly, an 11% increase in revenues at Indeval, but I think that the Sorry, 11% increase in AUC under assets under custody at Indeval, but I think the revenues do not quite follow in the same proportion, right?
Okay. Let me start with the second part of your question about Indeval and how the growth in the assets under custody may not reflect exactly the growth in Indeval. Within our central depository, it's true that custody is the main product, which represents roughly 50% of the CSD. Another important part, which has been growing since we changed the business model back in 2017, is the SIC, the global business. As the global business grows, as we bring more stock and we have shadow listings in Mexico, which are traded. As this inventory grows, of course, the amount of entries or exits changes throughout time. What happened in this quarter is the assets under custody continue growing double digits, but this conversion or these international transactions dropped in line with the value traded that you saw in the equity market.
As for the first part of your question, 2027 revenues. We don't provide a guidance, but what I can tell you is, after COVID, that we had a three or four year where top line was roughly growing 1%. For the last few years, we have seen momentum building up. Two years ago, 5%. This year, we are a bit above that number, and that trend should continue into 2027. Without giving you any guidance, it could be in the high single digit number.
High single digit. Okay. Thank you so much.
You are welcome.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I will turn the floor back to Mr. Alegría for final comments.
Sure. Thank you very much. We appreciate your time, your interest. Before saying goodbye, just letting you know that we remain focused on the execution. As explained during the call, we will have the delivery next year of important milestones in terms of the technology that we are going to be putting in the market. We should start seeing the results, especially on the derivatives segment and on the debt CCP with the repo segment put in place. Talk to you early next year. Thank you very much for your time again.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.