As a reminder, this conference is being recorded, May 13th, 2025. The recording will be publicly available on TASE's website. With us today on the line are Mr. Ittai Ben-Zeev, CEO, and Mr. Yehuda Ben Ezra, CFO. Before I turn the call over to Mr. Ittai Ben-Zeev, I would like to remind everyone that this conference is not a substitute for reviewing the company's annual financial statements, quarterly financial statements, and interim reports for the first quarter of 2025, in which full and precise information is presented and may contain inter alia forward-looking statements in accordance to Section 32A to Securities Law 1968. In addition to IFRS reporting, we might mention certain financial measures that do not conform to generally accepted accounting principles. Such non-GAAP measures are not intended in any manner to serve as substitutes for a financial result.
However, we believe that they provide additional insight for better understanding of our business performance. Reconciliations between these non-GAAP measures and the most comparable related GAAP measures are included in tables that can be found in our earnings press release and in the slide presentation accompanying this call. Both can be accessed on the English Maya site and the investor relations portion of our website at ir.tase.co.il/en. Mr. Ben-Zeev, would you like to begin?
Good evening, Ittai Ben-Zeev , everyone, and thank you for joining us today. I'm happy to host you in our earnings call. The report for Q1 2025 shows that the quarter ended with record results in all TASE business lines and core activities. I'm pleased to share with you that during the quarter, our revenues increased 21% from the same quarter last year. Our adjusted EBITDA increased 27%, bringing our adjusted EBITDA margin to a record of 47.2%, and our net income increased 32% compared to the same quarter last year. The results reflect the continued implementation of TASE strategic plan and the growth potential of the Israeli capital market. Yehuda Ben-Ezra, our CFO, will discuss the financial statements in detail later in this call.
For the whole of the first quarter, the TA-35 and TA-125 indices recorded a positive return of 1% and 0.8%, respectively, compared to a decline of 0.9% and 4.3% in the Dow Jones and S&P 500 indices, respectively. At the end of Q1 2025, TASE equity market cap reached ILS 1.4 trillion, the same as at year-end 2024. Equity average daily trading volumes hit an all-time high with a 35% jump and totaled ILS 2.9 billion in Q1 2025, compared to ILS 2.1 billion in the same quarter last year. A ILS 10 billion net inflow of funds invested by foreign and local investors in local indices was one of the factors responsible for this surge in trading volumes.
In addition, we have also seen significant growth in Q1 2025 in purchases of ETFs on local equity and bond indices of ILS 2.2 billion and ILS 1.3 billion, respectively, while sales of ILS 2.2 billion were recorded in ETFs on international equity indices. Moreover, purchases of mutual funds that invest in equities in Israel amounted to ILS 2.2 billion, while sales of ILS 0.4 billion were recorded in mutual funds that invest in foreign equities. Furthermore, the value of the public's holdings in foreign funds traded on TASE reached a total of ILS 15.2 billion, ILS 1.1 billion higher than the value at the end of 2024. Five new companies completed an IPO in Q1 2025 alone, the same number of IPOs that took place during the whole of 2024.
A total of ILS 3 billion was raised on the equity market, compared to ILS 2.5 billion in the same quarter last year, and a jump of 50% on the amount raised in Q4 2024. The MiILStry of Finance raised ILS 49 billion on TASE in Q1 2025, compared with ILS 52 billion in the previous quarter. During February 2025, the MiILStry of Finance also managed to raise $5 billion on international markets from a public issuance of bonds, which constitutes a further vote of confidence in the Israeli economy, even during a period of global and local challenges. In the corporate bond market, the business sector raised ILS 44.3 billion, which is 103% more than in the same quarter last year and 23% more than in Q4 2024.
As part of our continued plan to enhance liquidity in our market, I'm pleased to inform you that on May 4th, the new market-making program was launched, with an investment of several million ILS over two years. The key improvements in the program include an increase in the number of market makers, with some of these acting as market makers in equities for the first time. There will also be two market makers per share, which will open the door to more competition and provide a greater depth of trading. In relation to the TA-90 Index, market makers will operate in all the shares included in the index, with the obligation to quote being significantly improved and margins being considerably reduced. To date, 265 companies have signed on the market-making program, and we believe that we will see additional companies joining it at a later stage.
In addition, in late April, we published for the first time a tailor-made market-making program for public companies, within the framework of which we will offer companies a unique market-making program tailored to the needs of each company that chooses to join the program. I'm pleased to update that Bank Hapoalim was the first to take part in the tailor-made program, and we have already published an RFI to local and foreign market makers for the bank's dedicated program. We attach great importance to increasing liquidity and improving the marketability of the companies in accordance with our strategic plan, and especially in creating essential tools that will help companies realize their potential with foreign and local investors.
In addition, within the context of making trading more sophisticated and increasing the range of services and trading orders, we intend to launch TAL Trading At Last at the beginning of July this year, in which all trades are executed at the closing price of the closing auction. This will be a new trading phase using a premium order, which will command a higher commission than the commission on standard transactions. In the data distribution field, we have witnessed an increase in retail data consumption, which stems from the fact that one of the big banks has chosen to purchase real-time data distribution for all its customers. We are confident that we will see other TASE members following the same path in light of the constant growth pressure from the retail side to operate in the capital market.
In conclusion, the Q1 2025 financial statements show that even in this challenging period, we are still witnessing the stability and resilience of TASE, which rests on the strong foundation of the Israeli economy. We are continuing to invest in developing and enhancing the local capital market, and we will continue to work toward achieving the goals we have set for ourselves in accordance with our strategic plan. I would like to hand over to Mr. Yehuda Ben-Ezra, who will continue with the review of the first quarter results.
Thank you, Ittai. TASE has once again posted strong financial results for the first quarter, with record results in all our business lines and core activities. These results underscore the solid foundation of the Israeli economy and reflect the continued confidence of both local and global investors in Israel's economy and capital market. Some of the main financial metrics are shown in slide number four. Our revenues displayed substantial growth of 21% for the quarter and hit a new record totaling ILS 131 million. Our adjusted EBITDA at ILS 61.8 million also set a new record, while our adjusted EBITDA margin hit a record 47.2%. Our net profit increased to a new record of ILS 35.8 million. I will continue with slide number six, which shows some of the key highlights from our results for the first quarter.
Revenues totaled ILS 131 million, compared to ILS 108.3 million in the same quarter last year, an increase of 21%, which was evident across all activities. Our revenues from non-transactional services increased to 62% of total revenues, an increase of 2%. Expenses totaled ILS 84.8 million, compared to ILS 75.3 million in the same quarter last year, an increase of 14%. The increases in expenses are due mainly to employee benefit expenses and computer and communication expenses. Adjusted EBITDA totaled ILS 61.8 million, compared to ILS 48.6 million in the same quarter last year, an increase of 27%. The increase is due mainly to the higher revenues. Adjusted net profit amounted to ILS 36.9 million, compared to ILS 27.8 million in the same quarter last year, an increase of 32%.
The increase is due mainly to an increase in revenue from services net of the increase in cost and tax expenses. Our basic EPS reached a new high of ILS 0.39, increasing by a record 40% compared to the same quarter last year. Let's now go to slide seven, where we can take a deeper look into our revenues in Q1 2025. Revenues from trading and trading commissions increased by 15% compared to the same quarter last year and totaled ILS 49.5 million. The increase is mainly due to higher trading volumes, mainly in equities and mutual fund units. This increase was partially offset by a reduction in the effective commission rate. Revenue from listing fees and annual levies increased by 12% compared to the same quarter last year and totaled ILS 24.3 million.
The increase is mainly due to higher revenues from annual levies, mainly as a result of the appreciation in the value of the listed securities. Revenues from listing fees were also higher, which is being mainly as a result of more companies applying for listings and offerings. Revenue from clearing services increased by 60% compared to the same quarter last year and totaled ILS 31.9 million. The increase is mainly due to higher revenues from clearing services to members, especially following the completion of regularization measures in relation to the office transactions. Other factors resulting in the increase were the higher custodian fees as a result of the increase in the value of the assets that are held in custodianship and updating the custodian fees price list. Revenues from distribution and connectivity services increased by 8% compared to the same quarter last year and totaled ILS 24.5 million.
The increase is mainly due to higher data distribution revenues from business and private customers in Israel. I will continue with slide 10, which shows our Q1 2025 expenses. Employee benefit expenses increased by 14% compared to the same quarter last year, totaling ILS 44.6 million. The increase is mainly due to higher salaries, increased variable compensation driven by higher profitability, and lower usage of vacation days. The available compensation has reached the maximum level set in the collective agreement. Computer and communication expenses increased by 16% and totaled ILS 12.6 million. The increase is due mainly to an increase in the maintenance cost of new computer systems and licenses, and from an increase in manpower and projects. Marketing expenses increased by 32% compared to the same quarter of last year and totaled ILS 1.8 million. Most of the increase is attributed to the timing of campaigns.
Depreciation and amortization expenses increased by 8% compared to the same quarter last year and totaled ILS 14.6 million. The increase is due mainly to new projects and to an increase in software and license. Net financial income totaled ILS 0.9 million compared to financial income of ILS 1.4 million in the same quarter last year. The decrease is due mainly to a decrease in the balance of deposits to a reduction in gains from market-based securities. I would like now to review our financial position highlights at the end of Q1 2025, as shown in slide 11. Our equity totaled ILS 505 million. Our adjusted equity includes deferred income from listing fees and accounts for 71% of the adjusted balance sheet, excluding operating derivatives position balances. We held ILS 337 million in cash in investment in financial assets.
In January 2025, despite having sufficient liquidity, we signed a two-year ILS 130 million loan with the approved terms, which was used to repay the ILS 100 million bank loan that existed at the year-end 2024. The ILS 30 million difference between the two loans increased TASE liquidity funds. The agreement also included a one-year ILS 120 million credit line. The balance of the new bank loan totaled ILS 123 million. The surplus equity, other regulatory requirements, totaled ILS 409 million compared to ILS 627 million at the end of 2024. The surplus liquidity, other regulatory requirements, totaled ILS 111 million compared to ILS 172 million at the end of 2024. The decrease in the surplus equity and liquidity is mainly due to the ILS 202.4 million used for the buyback of the company's shares in the first quarter.
Let's now go to slide 12, where we can review our cash flow highlights in Q1. Cash flows from investing activities resulted in a negative cash flow of ILS 20 million compared to a negative cash flow of ILS 12.5 million in the same quarter last year. The increase is due mainly to an increase in investment in property and equipment. Cash flow from financing activities resulted in a negative cash flow of ILS 232.7 million, compared to a negative cash flow of ILS 45.1 million in the same quarter last year. The change is due mainly to the buyback of the company shares in an amount of ILS 202.4 million and a dividend payment in an amount of ILS 50.7 million. TASE free cash flows increased by ILS 9 million compared to the same quarter last year and totaled ILS 35.6 million.
The increase was mainly due to the increase in the EBITDA. With that, I will return this call to our moderator to conduct the Q&A.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Please stand by while we poll for your questions. The first question is from Dan Fannon of Jefferies. Please go ahead.
Yeah. Good evening, gentlemen. This is actually Rick going on for Dan today. In light of the positive update that you gave on IPOs with five and a quarter more or equaling the amount of 2024, could you comment on how the pipeline looks going forward?
Yeah. Hi, Rick. Clearly, we see this year a much better pipeline than the previous two years. I think that a key issue is actually the valuation itself because looking at the Israeli market, as you know, we have a lot of businesses that the founders are at a certain age that they are thinking, "What is the best way to basically pass it to the next generation?" Being public is a very good solution for them. Sometimes, because of the valuation itself, people rather stay and wait and try to get a better timing of the markets. I think that if the global uncertainty after this week's Trump visit in Saudi Arabia and United Arab Emirates, if things will look better worldwide, it will give a positive push for getting more IPOs later on this year.
All right. Thank you. That's helpful. If you could remind us about the previously described pricing changes that are going to occur or that have been occurring in clearing-house and in index as well, and how those might impact the remainder of this year based on more current clearing-house and AUM balances?
We do not have any pricing changes into the index. We had in 2022 and 2023. In terms of the custody, as we announced last year, this year, 2025, was the first stage. What happened is the AUM that we had this year was significantly higher than what we had at the middle of last year. That was part of the positive impact in terms of our revenues. We will have two additional price increases at the beginning of 2026 and in the beginning of 2027 with regards to our custody fee.
Understood. With the clearing-house, when that was initially announced, you had given revenue guidance for those price increases, but those, I believe, were based on older asset levels. Are you able to provide any update to those revenue guidance numbers?
When we made the release, it was based on the AUM that we had at the end of June 30, 2024. I don't know on top of my head what is the positive delta.
It's 20% higher than the numbers that we gave.
Around 20% higher.
Good. Good.
Yes. You're assuming it's around 20% higher at the moment. Of course, it may change according to the future AUM that we'll have.
Understood. That's actually extremely helpful. Just on that topic and the general strength with clearing-house in the quarter, do you have any comments you could provide on the general sustainability of balances and the clearing-house segment in general with maybe additional services or just where balances are trending, as you just commented on?
I think that we made a lot of effort in the past few years to bring more services and more products. I think that right now our clearing-house is working on a global standard. We supply the Israeli market all of the necessary services. Part of the reason that we've had a conflict in the region and a lot of volatile market, and as everybody saw, all of our clearing went smoothly, it's a vote of the high operational efficiency that we have. I think also that if we look back a few years ago, right now we pretty much have a much better value proposition in what we give all of the custodian members. I feel very confident that we will continue to operate at the same level and in the right measures.
Got it. Maybe for my last question, if you could comment on your marketing expense outlook and maybe expenses more broadly for 2025, and I appreciate that you commented that the variable bonus cap has been hit in the quarter, but just on marketing and the overall expense outlook.
Yeah. In marketing, as we stated in the previous call, the marketing budget will not be higher than what we've had in 2024. It will be up to the amount that we invested in 2024. In terms of the variable compensation, as you noted, we actually right now are at the top in terms of our profitability and the impact on the variable compensation, meaning that as long as we will generate additional profit, it will not be reflected in additional variable compensation with regards to the employees.
Understood. If you could comment on the overall expense budget for the year.
Yeah. I think that as we noted, we also had more ex-files in the first quarter given the vast amount of activity that we had. Also, what is very typical for the first quarter, a lot of employees did not take any days off. This is another factor that gave more cost. I will put it this way. Looking ahead, my belief and estimate is that we will have a lower rate of expense rate than what we had in the first quarter.
That you're speaking to year-over-year growth?
Yes. Yes.
Okay. That wraps up my questions. I appreciate the time tonight, gentlemen, and wish you the best.
Thank you. Thank you very much. Take care.
Thank you.
If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for your questions. There are no further questions at this time. This concludes the Tel Aviv Stock Exchange Q1 2025 results conference call. Thank you for your participation. You may go ahead and disconnect.