Ladies and gentlemen, thank you for standing by. The conference will begin shortly. Ladies and gentlemen, thank you for standing by. Welcome to the Tel Aviv Stock Exchange Q3 2025 results conference Call. All participants are at present in listen-only mode. Following management presentations, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 11th, 2025. The recording will be publicly available on TASE's website. With us on the line today 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 report for the third quarter of 2025, in which full and precise information is presented and may contain inter-area forward-looking statement in accordance to Section 32-A 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 a substitute for our financial results. However, we believe that they provide additional insight for better understanding of our business performance.
Reconciliations between these non-GAAP measures and the most comparably related GAAP measures are included in tables that can be found in our airing press release and in the slide presentation accompanying this call. Both can be accessed on the English Maya site and in the investor relations portion of our website at ir.tase.co.il/en. Mr. Ben-Zeev, would you like to begin?
Good evening, Israel time everyone, and thank you for joining us today. I'm happy to host you in our earning call. We concluded the third quarter of 2025 with all-time record results across all of TASE's core business lines and activities. Revenues for the quarter were ILS 147.1 million, up 35% year on year. Our Adjusted EBITDA reached ILS 79.5 million, up 76% year on year, and pushing our EBITDA margin up to a record 54.1%. TASE net profit reached ILS 50 million, up 29% year on year, and the best quarterly profit in our company's history. These quarterly results are underpinned by the continued success in execution on our strategic plan and the significant growth potential of the Israeli capital market. Yehuda Ben-Ezra, our CFO, will discuss the financial statements in detail later in this call.
Despite the ongoing conflict in Gaza, Israel continued to demonstrate both social and economic resilience throughout Q3 2025, with TASE's leading indices maintaining their upward momentum and reaching new heights. September was marked by heightened volatility driven by President Trump's 21-point framework for an agreement with Hamas on the end of the conflict. This immediately fueled investor expectation for a substantial reduction in security risk and the potential for wider regional resolution, causing the risk premium to decline and creating a fresh wave of increases in our equity indices, which delivered impressive performances and broke all-time records numerous times. The leading TASE indices stood out in terms of returns in the first nine months of 2025, with historical records being broken as the TA-35 and TA-90 indices topped the global return table with gains of 34% and 32% respectively.
For comparison, the Dow Jones and S&P 500 indices in the U.S. saw gains of about 11% and 15%. This positive and exceptional trend was also evident in the sectorial indices, particularly in the financial sector. Since the beginning of 2025, through the end of Q3, the TA Insurance Index surged by 112%, the TA Finance Index climbed by 71%, and the TA Banks Index rose by 50%. TASE's equity market cap increased to ILS 1.8 trillion at the end of Q3, representing year-on-year growth of 51%. Equity average daily trading volumes hit a new all-time high, reaching ILS 3.8 billion in Q3, up 88% year-on-year. The surge in trading volumes is partially due to the net inflows into our indices by foreign investors totaling ILS 6.4 billion during the first nine months of 2025, compared to net inflows of ILS 2.4 billion in the same period last year.
The Israeli retail segment continued to show increased interest in the domestic market this quarter, and the growth in the opening of new trading accounts continued through the end of the quarter. Net inflow into our equity market for retail investors in the first nine months of the year reached ILS 10.9 billion, a remarkable reversal compared to the net retail outflows of approximately ILS 1.1 billion in the same period last year. However, we continue to see significant potential for growth from the retail investors as this segment still accounts for only 11% of our market, which is still relatively low compared to most developed Western countries. The IPO market was active, with 17 new companies having joined TASE since the beginning of the year, raising a total of ILS 3.8 billion compared to five companies that raised ILS 0.8 billion in all of 2024.
We saw additional IPOs in October and expect to see more new companies complete IPOs until the end of the year. We saw strong activity in our bond market, with 21 new companies joining our market with ILS 5.2 billion in bond issuance. The total number of companies with TASE-listed bonds reached a decade-long peak of 100 companies by the end of the quarter, and corporate bond issuance totaled ILS 148 billion compared to ILS 87 billion in the same period last year. In our government bond segment, we saw a decline in issuance with ILS 115 billion raised by the Ministry of Finance in the first nine months of 2023, down from ILS 142 billion raised in the same period last year.
This decline results from a combination of factors, including the appreciation of the shekel, the decline in the risk premium, and an increase in tax revenues, alongside a lower rate of growth in government expenditure, partly due to the abatement of the fighting throughout most of the year. We are advancing our strategic plan at full pace, which includes initiatives to enhance the liquidity of TASE-listed companies. As of the end of Q3, there are 300 shares participating in the market-making program. On our previous earnings call, I mentioned that Bank Hapoalim had joined our tailor-made market-making program for public companies, and I'm pleased to update you that since then, Bank Leumi and Mizrahi Tefahot Bank have also joined the program. All three of the largest banks in Israel are now participating.
In addition, in mid-October, Bezeq, Israel's largest telecommunications company, announced it is joining the program, and we anticipate more companies will follow soon. On August 10th, we implemented the new trading phase, Trading At Last, TAL, aligning us with global exchanges. I'm pleased to report that TAL has successfully penetrated the capital market, with data showing a significant adoption in trading by foreign investors and domestic institutional investors across shares, bonds, and treasury bills. We also continue to innovate in our index segment with 11 new indices launched since the beginning of 2023 to date. In addition, as mentioned in our previous call, TASE's Board of Directors has authorized us to examine strategic initiatives in relation to our index activity, including a partial or full sale of the operation or a collaboration with a leading international entity, for which the leading investment bank, Jefferies, was selected to advise us.
I can now update you that we have received inquiries from a number of international entities expressing interest. We are continuing at full speed towards the transition to Monday to Friday trading. After successful tests with both local and international TASE members over the past month, the move will officially take effect on January 5, 2026. In conclusion, the Q3 financial statements reflect TASE's growth across all its core operations. Recent positive security developments and optimism regarding a broader regional resolution could mean that the Israeli capital market is poised for continued growth. We tend to persist in our efforts to develop the market and achieve the goals set out in our strategic plan. I would like to hand over to Mr. Yehuda Ben-Ezra, who will continue with the review of the third quarter results.
Thank you, Ittai. While TASE has delivered strong results in recent years in all of its business lines and core activities, our record-breaking performance in Q3 and in the first nine months of 2023 stands out. It's a testament to the solid foundation of the Israeli economy and reflects the continued confidence of both domestic and global investors in the Israeli economy and capital market. Some of the main financial metrics are shown in slide number six. Our revenues displayed substantial growth of 35% for the quarter and hit a new record totaling ILS 147.1 million. Our Adjusted EBITDA at ILS 79.5 million also set a record, bringing our Adjusted EBITDA margin to a record 54.1%. Our adjusted net profit increased to an all-time high of ILS 50.7 million and an 86% increase over the same quarter last year.
I will continue with slide 12, which shows some of the key highlights from our results for the first nine months of 2025. Our total revenues amounted to ILS 414.2 million, a 28% increase compared to the same period last year. Our Adjusted EBITDA totaled ILS 212 million, representing a 53% increase over the same period last year. Our Adjusted EBITDA margin significantly improved to 51.4% compared to 43.3% in the same period last year. Our adjusted net profit totaled ILS 132 million compared to ILS 80.7 million in the same period last year, a significant 64% increase. I will continue with slide seven, which shows some of the key highlights from our results in Q3 2025. Revenues totaled ILS 147.1 million compared to ILS 109 million in the same quarter last year, an increase of 35%, with growth evident across all activities.
Our revenues for non-transactional services were up 1%, to reach 63% of total revenues. Expenses totaled ILS 84.5 million compared to ILS 79.1 million in the same quarter last year, an increase of 7%. The increase in expenses due mainly to higher computer and communication expenses, operating expenses, and depreciation and amortization expenses. Adjusted EBITDA totaled ILS 79.5 million compared to ILS 45.1 million in the same quarter last year, an increase of 76%. The increase is due mainly to the higher revenues net of increase in expenses. Net profit amounted to ILS 50 million compared to ILS 26 million in the same quarter last year, an increase of 92%. The increase is due mainly to the increase in revenue from services, net of the increase in cost and tax expenses.
Basic EPS reached a new high of ILS 0.547, increasing by a record 94% compared to the same quarter last year. I will continue with slide nine, where we can take a deeper look into our revenues in Q3 2025. Revenues from trading and clearing commission increased by 29% compared to the same quarter last year and totaled ILS 53.9 million. The increase is due mainly to the higher trading volumes, mainly in shares, corporate bonds, and mutual fund units. This increase was partially offset by a reduction of three trading days and a reduction in the effective commission rate, mainly in shares. Revenues from listing fees and annual levies increased by 14% compared to the same quarter last year and totaled ILS 25.5 million.
The increase is due mainly to revenues from annual levies as a result of the increase in the number of companies and funds that pay an annual levy. In addition, revenues from listing fees and examination fees were also higher due to the increase in the volume raised. Revenue from clearing house services increased by 85% compared to the same quarter last year and totaled ILS 39.4 million. The increase is mainly due to the completion of regulation measures relating to the OTC transaction. 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 the custodianship and the updating of the custodian fees price list. Revenues from data distribution and connectivity services increased by 21% compared to the same quarter last year and totaled ILS 27.7 million.
The increase is due to an increase in revenue from authorization to use the TASE indices mainly as a result of the increase in the value and the use of TASE indices and from higher data distribution revenues from businesses and private customers in Israel and abroad. I will continue with slide 12, which shows some of our Q3 2025 expenses. Employee benefit expenses increased by 1% compared to the same quarter last year, totaling ILS 42 million. The increase is mainly due to higher salaries and an increase in variable compensation, which has reached the maximum level set in the collective agreement. Computer and communication expenses increased by 17% and totaled ILS 13.1 million. The increase results mainly from an increase in the maintenance cost of new computer systems and licenses and from an increase in manpower and projects.
Marketing expenses decreased by 54% compared to the same quarter last year and totaled ILS 0.8 million. Most of the decrease is mainly due to the timing of campaigns. Other operation expenses increased by 200% and totaled ILS 2.5 million. Most of the increase is due to expenses related to the market-making program. Depreciation and amortization expenses increased by 11% compared to the same quarter last year and totaled ILS 15.5 million. The increase is due mainly to new projects and to new investment in software and licenses. Net financing income totaled ILS 2.6 million compared to the financing income of ILS 4 million in the same quarter last year. The decrease is due mainly to a decrease in the balance of deposits and to a decrease in gain from marketable securities.
Let's go now to slide 19, where we can review our financial position at the end of Q3 2025. Our equity totaled ILS 599.4 million. Our adjusted equity includes deferred income from listing fees and represents 76% of the adjusted balance sheet, excluding corporate derivatives, position balances. We held ILS 429.9 million in cash and investment financial assets. The balance of the bank loan totaled ILS 101.4 million. The surplus equity, other regulatory requirements, totaled ILS 500 million compared to ILS 627 million at the end of 2024. The decrease in the surplus equity is mainly due to the ILS 202.4 million used for the buyback of the company's shares in the first quarter. The surplus liquidity, other regulatory requirements, totaled ILS 225 million compared to ILS 172 million at the end of 2024.
The increase in surplus liquidity is mainly due to the increase in the EBITDA and investment in TASE technological infrastructure. I will continue with slide 20, where we can review our Q3 cash flow highlights. Cash flows from investing activities resulted in negative cash flows of ILS 12.9 million compared to negative cash flows of ILS 13.7 million in the same quarter last year. The change is due mainly to a decrease in investment in property and equipment. Cash flows from financing activities resulted in negative cash flow of ILS 13.1 million compared to a negative cash flow of ILS 14.8 million in the same quarter last year. The change is due to the ongoing repayment of a bank loan. TASE's free cash flows increased by ILS 32 million compared to the same quarter last year and totaled ILS 61.9 million.
The increase was due mainly to the increase in the EBITDA. In summary, TASE's record-breaking performance this quarter is a clear indication of our strong foundation and our commitment to continue to growth. With that, I will return the 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. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. I repeat, if you have a question, please press star one.
Ilah, we got a message from Jeffries from the research analyst that he wants to ask questions. Do you see him in the queue?
I don't see him in the queue, and I don't see him on the line.
He is on the line. He just texted us that. We see him on the line.
Hey, Hector, are you dialed in?
Yeah. Ben? Hello?
Are you dialed in, Ben? I know. I'm on the call. I'm listening.
Ben, can you hear me?
Can you hear? I'm here. Are you guys there?
Yes, we are here. I don't know what happened, but.
All right.
Yeah, good morning.
Good morning. Okay, cool. Yeah, yeah. Good evening to you. I guess just to start, Ittai, if you could just expand upon.
Ben?
Within the index and ETFs. That would be helpful.
Sorry, but there was a pause, so I didn't hear the first couple of sentences. If you can please just repeat the question.
Oh, sorry about that. Just on the new issuance activity, both from the corporate side in terms of new listings plus within ETFs as well as indexes, just wanted to talk about just the pipeline of what's happening and how to think about where things sit today and also going into next year.
What we've been seeing in our market, there are some companies, especially from the real estate sector, that they start with issuing bonds, which is a way to get to know these institutions and to start understanding some about disclosure and how it's happening. After a time, when they issue bonds, then they float the equity. It does not mean necessarily that they will do so, but we did see in the past couple of years some companies that started with the bonds and then switched to equity. On top of it, I think that more and more companies understand the full value proposition we bring to them in terms of getting loans through the capital markets, and it is a relatively easy process.
As people expect that at some time, hopefully soon, interest rates will start going down in Israel as well, we've been seeing activity in our ETF bond segment as well, even though we've seen much more money coming in in the past year into our equity ETF, which, as I stated before, also because of the performances of the leading indices, clearly it was a positive factor.
Understood. That's helpful. Just in terms of you gave some stats in your release and on the call around foreign inflows as well as retail inflows in terms of the increase you're seeing. Can you talk about where you think you are in the, I don't know, opportunity set for that and what you're doing to increase those contributions as you think about that opportunity going forward?
Right. As you know, years ago, we did a bunch of changes in order to facilitate and build the right infrastructure to support the future growth. I think what happened, especially in the past year, is that in terms of global investors that have a lot of money to invest outside of the U.S. and they compare Israel to many other countries, they see the strong fundamentals of our economy. They see the way we performed and the resilience that we've demonstrated, and they see the performance of our leading indices. I think that both from the international and, of course, the retail, we restarted very low. Even though we grew substantially in the past year, every benchmark that we are doing to other Western markets, we still see a very significant growth potential.
There's still a huge amount of money that's just sitting in the cash accounts of the banks. By the way, the banks are also now paying more and more attention to retail participation, and they're doing more marketing and PR in terms of getting retail to invest through them and not through the brokers who are the non-banks. We actually see, I think for the first time in Israel, a real competition, which is clearly something that we've been waiting for. The way I see it, we still have a very long way before we are a mature market, both from the domestic and from the global.
I would say that part of what we are trying to get a better sense with respect to our index business is how we can get a better global distribution because still a lot of the leading U.S. brokers are not digitally open to invest in TASE equities. We know, because we conduct also some Q&A with American investors, and we know that there is a growing demand for getting more exposure to our leading companies. We are constantly looking for ways to get better distribution for public companies. Honestly, I think it will take a few years on both aspects before we can be like what you call a mature market. I hope and believe that the transition to Monday to Friday will also be very positive in terms of how global investors are looking to invest in our market.
Great. That's super helpful. I wanted to get a little bit of an update on the market-making program that you've announced. You said on your prepared remarks, another bank joining. Is there a way to discuss what the tangible impacts to velocity or volume or turnover in the context of what's happened subsequent to this program being instituted and how to maybe even think about that going forward?
Yes. In Israel, part of the story to build the market and get the pie much bigger is an educational process with some of the Israeli public companies about the importance of liquidity and to take the best elements from other global exchanges. It was not easy, but eventually, we got to 300 companies that are part of this program, which is very, very important for building IR and how this whole thing is working. On top of it, we managed in the past few months to get four big companies, three of them, the three largest banks, and now Bezeq to actually pay more money to market makers.
The fact that it's been successful and why we believe that it's just a question of time before more and more companies will join because the stats show that it brings more trading to the company and it narrows the spreads. I can tell you that even though we've been only a few months running this program, it's already a big success. We invest a few million shekel in supporting this program, and we are very happy from the outcome. We also did the AI in terms of the English translation of our biggest public companies. We believe that over time, liquidity will become better in our market, more English reports, and it will help to get more and more international investors. Overall, we are very happy from the results so far that we see.
We analyze each company so we know on a daily basis, weekly basis, monthly basis, what's the percentage of the market maker out of the total trading of the company.
Got it. Okay. Another just follow-up here around expenses and margins. Clearly, the margin profile continues to improve. I think you've said publicly before that you think you can, over time, get to some of the global peers. We've seen a really nice step up this year so far. As you think about normalization of, I don't know, things like marketing or maybe areas where you're underinvesting that might need to pick up and might maybe stall or slow down that rate of margin expansion, if that is true?
I don't see anything that should, which is underinvested in the company. We do anything we can, we believe it's crucial to foster and support this growth. As I stated in the past, there is no fundamental reason why this company should not continue to grow over time. As I mentioned before, even though we are focused on the double-digit growth, we always remain very focused on the expense side. I think that we've been growing in the past few years on the non-transactional items. Clearly, this year has been very successful in terms of trading volumes. Because of the nature of the business, you see the results.
Because the penetration of the retail and also global investors is not as high as we expect, and because we still have some services and products that have not been deployed fully yet, I believe that we will continue to grow in the next few years. Nothing that should hold up with that respect.
Great. Thanks for taking all my questions.
Thank you very much, Ben.
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 pull for your questions. There are no further questions at this time. Thank you. This concludes the Tel Aviv Stock Exchange Q3 2025 results conference call. Thank you for your participation. You may go ahead and.