Thank you, operator. Good morning, and welcome to the OTC Markets Group First Quarter 2018 Earnings Conference Call.

With me today are Cromwell Coulson, our President and Chief Executive Officer; and Bea Ordonez, our Chief Financial Officer. Today's call will be accompanied by a slide presentation.

Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and as such, may constitute forward-looking statements.

Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factors section of our 2017 annual report, which is available on our website.

For more information, please refer to the safe harbor statement on Slide 3 of the earnings presentation.

With that, I will turn the call over to Cromwell Coulson.

Thank you, Dan. Good morning, and thank you, everyone, for joining the call.

I am going to talk about the key initiatives we worked towards in the first quarter, and how our performance and milestones reflect our mission and strategy. Our mission is to create better-informed and more efficient financial markets.

We fulfill that mission by executing our strategy, which is operating world-leading securities markets. We share information widely through open networks that foster greater transparency, we connect broker-dealers, organize markets and inform investors.

We deliver elegant, reliable and cost-effective subscription-based solutions for a future that is online, data-driven and social.

Our mission, strategy and company values continue to guide us as we focus on initiatives that will improve our technology platform and data-driven products, provide value to our clients, create growth opportunities for our team and deliver long-term value for our shareholders.

For the first quarter, we delivered solid 7% growth in top line revenue and operating income, continuing the trend from 2017. Bea will cover our results in more detail in a few moments.

Our overall business performance is due to contributions from each of our 3 business lines. Broker-dealers use our OTC Link ATS platform to quote and trade over 10,000 securities.

Late in 2017, we launched our second ATS OTC Link ECN, which offers additional functionality to our broker-dealer subscribers.

Our Market Data Licensing business distributes market data to broker-dealers, compliance teams and investors through a network of market data distributors. Our Corporate Services business operates the OTCQX and OTCQB markets and offers issuers disclosure and regulatory compliance products.

Regulatory recognition for our markets and supporting small company capital formation remain top priorities in 2018.

Since our last call, we added Connecticut to our Blue Sky map. That means companies on our OTCQX market now qualify for secondary trading exemptions in 30 states.

Michigan, Oklahoma and Missouri have each announced ongoing rule proposals recognizing our OTCQX and OTCQB markets as well, which continues to move us towards our goal of national Blue Sky recognition.

As I've noted before, with each new state and each new regulatory recognition, we enhance our reputation for offering efficient public markets that work for companies, investors and brokers. We continue to expand our efforts to engage lawmakers in constructive discussions to improve transparency and market efficiency.

Just 2 weeks ago, we took C-Suite leaders from 4 OTCQX companies to Washington. D.C.

These executives represented growing public companies from community banks to biotech. They put a face [indiscernible] the lawmakers of the companies that are traded on our markets.

They spoke directly to legislators about their experience trading on OTCQX and changes they would like to see Congress focus on to support smaller public companies. Many OTCQX and OTCQB companies are prime examples of the Main Street economy that Congress and regulators should look to support.

We're thankful for the valuable time they spent with us in Washington and hope that their feedback sparks Congress to enact more meaningful reforms to reduce regulatory burdens and improve capital formation.

Now turning to specific recent accomplishments, we achieved several important milestones. We recently launched new Stock Promotion and Shell Risk flags.

In keeping with our disclosure-based philosophy, these flags provide investors with valuable transparency into areas of risk that can impact investment decisions. This initiative builds on the Stock Promotion policy we announced in November, as we continue to drive company-best practices and enhance market transparency.

In conjunction with the new disclosure flags, Market Data Licensing launched a new Stock Promotion file and enhanced Compliance Analytics product. These files provide broker-dealers, investment managers and compliance professionals with the tools they need to address market-wide challenges.

In our OTC Link business, we're pleased with the progress of OTC Link ECN. The ECN offers an anonymous matching engine and liquidity router, expanding the choices and trading strategies available to our broker-dealer subscribers.

While OTC Link ECN is still in its infancy, it continues to build connectivity and attract new subscribers as well as existing OTC Link ATS subscribers. We look forward to continuing to work with our broker-dealer community to optimize their experience across each of our platforms.

I'm always excited about our new products and services and those we are developing for the future. But at the same time, we continue to prioritize the reliability of our systems.

We added another quarter of 100% uptime of our core OTC Link ATS systems during trading hours. We publicly celebrate this achievement every quarter because it exemplifies the ongoing commitment of our entire team and our status as the operator of an ATS that is covered by the SEC's Regulation SCI.

Finally, I am pleased to announce that yesterday, our Board of Directors declared a quarterly dividend of $0.14 per share payable in June. The announcement of our 38th consecutive dividend reflects our ongoing commitment to providing superior shareholder returns.

With that, I'll turn the call over to Bea.

Thank you, Cromwell, and thank you all for joining the call. I will now spend a few minutes reviewing our results for the first quarter of 2018.

Any reference made to prior period comparatives refers to the first quarter of 2017.

I will start on Slide 7 of the earnings deck. For the first quarter of 2018, OTC Markets Group generated $14.3 million in gross revenues, up 7%.

Our Corporate Services business generated revenues of $5.8 million, up 10%. Revenue from our OTCQX market were up 8% despite a small period-over-period drop in the number of companies on the market.

Moderately stronger first quarter sales, an increase in company applications as well as accelerated revenue recognition related to companies dropping from the market all contributed to the increase.

For the OTCQX market, renewals are handled annually on a calendar-year basis. In respect of the 2018 subscription period, 30 companies elected not to renew.

This resulted in a retention rate for 2018 of 91% versus the 93% achieved for 2017.

Moving on to the OTCQB market. Strong sales in 2017 and reduced churn offset by moderately weaker sales in the current quarter contributed to an increase in the number of companies on the market, from 928 companies as of the prior period-end to 951 companies as of March 31, 2018.

This, coupled with price increases for new and renewing subscribers, drove an 11% increase in related revenue.

Market Data Licensing revenues were $5.8 million for the quarter, up 7%. Price increases related to certain [ anticipated ] pricing [ in ] data file products and effective for the first quarter, coupled with increased usage of our data file products, including our compliance suite, were the primary drivers of the 31% increase in related revenues.

This offset very marginal period-over-period declines in the number of pro and nonpro users consuming our market data.

OTC Link generated revenues of $2.7 million for the quarter, up 1%. Increased volatility and generally higher U.S.

trading volumes helped drive the period-over-period increase in the volume of messages on our platform and a 13% increase in related revenues. Our new OTC Link ECN offering contributed revenues of $28,000 in the quarter.

These increases offset reduced subscription-based revenues resulting from continued though slowing contraction in the number of active market participants on our OTC Link ATS.

In December 2017, we launched our OTC Link ECN. The services offered by our ECN are complementary to our existing offering and provide a value-add to our existing subscribers while also attracting new subscribers.

To date, we have added 6 new subscribers to the OTC Link ECN while also enabling 22 of our existing subscribers.

Turning now to Slide 8. During the first quarter, operating expenses increased 8% to $9.2 million.

The primary driver was an 11% increase in our compensation and benefit cost. Increased headcount, annual salary raises, an increase in 2017 cash bonus awards and higher sales commissions in line with increased sales all contributed.

Moving now to Slide 9. For the first quarter, income from operations was $4.6 million, up 7%.

Net income for the quarter increased 23%, a result of the 7% increase in operating income combined with a drop in the company's effective tax rate from 28% in the prior period to 18% in the current quarter. The company's effective tax rate decreased in line with the reduced rate of corporate income tax payable following enactment in late 2017 of the Tax Cuts and Jobs Act.

In addition to certain GAAP and other measures, management utilizes a non-GAAP measure, adjusted EBITDA, which excludes noncash stock-based compensation expenses. Adjusted EBITDA increased by 5% to $5.5 million or $0.46 per diluted share.

You can find the reconciliation of our GAAP to non-GAAP results in our press release, which is available on our website as well as in the appendix to the earnings presentation.

Moving to Slide 10. We continue to produce solid operating cash flows.

Cash flows from operating activities for the first quarter amounted to $1.9 million, a 10% increase over the prior period. We generated free cash flows of $1.8 million, up 11%.

We ended the quarter with $23 million of cash on hand and a strong balance sheet with no debt.

We continue to operate an investor-focused capital allocation policy, which returns cash to investors in the form of dividends and through our stock-buyback program. During the first quarter, we returned $2.7 million, down $300,000 from the prior year quarter, primarily the result of the decrease in the amount of stock repurchased versus the prior period.

We were pleased to announce our 38th consecutive quarterly dividend.

In closing, we will continue to strategically deploy our capital and resources to invest and enhance our product suite, grow our subscriber base and better serve our clients, while focusing on building on our track record of providing strong returns for our shareholders.

With that, I would like to thank everyone for their time and pass it back to the operator to open up the line for questions.

I've just a couple quick questions. One, on the OTC Link revenue, obviously, good quarter, you have seen growth there.

I guess, could you expect that to, kind of, trend in a similar manner, given if the volatility keeps up, and also, I guess, more customers coming in or more clients coming in for the ECN, because that's -- is that achievable to keep to that growth rate?

Thank you, Chris, that's a good question. And it's a hard answer.

I mean, anybody who's watched VIRTUE's stock performance will see that last quarter was -- and the end of the year was quite good for the market-making business. So we don't -- in general, we're subscription based, so we don't have that kind of transactional volatility.

OTC Link ECN is going to be building in some transactional-type revenues over time, but it's very early stages. And the numbers, you have to look at where the network effect takes place.

With OTC Link ECN is, it's getting connectivity into firms in the firm's order management systems. And we're at the initial stages and -- in the trading side.

As we get more breadth out there, it's a great process for our team to learn how to provide order book functionality, different types of orders. But as I go back, something that's very important to understand is our OTC Link ATS, the network -- the distributed network model is going to be the 800-pound gorilla of our business, which is subscription based.

And that's -- I think that resonates very importantly when I watched -- the SEC had a roundtable on liquidity in smaller NMF securities. And the discussions they had was all about the importance of market makers, such as VIRTUE, satisfying retail brokers, and then the importance of markets that have a market system that has a dealer quote shown and where dealers build reputational capital, and that structure is what we built with OTC Link ATS.

And then jumping to another question. It's on the Blue Sky recognition.

Are you starting to see -- now with 30 states, are you starting to see maybe increased, say, demand from companies now that you're recognized at 30? And if you have seen that process grow with that [indiscernible]?

Could you maybe give a little bit of color behind that?

Chris, it's hard to draw a direct link between the regulatory recognition and increased demand. I think what we've seen certainly historically over the last 12 to 15 months is an uptake both in index -- in company interest, a strong pipeline and sort of moderately increased sales in QX and much stronger sales in QB.

So there could be many factors at play there. I think regulatory recognition certainly plays a part in that, in building the brand, in building our position in the market, but other things play a part too, a strong and aggressive sales force that is out there, enhancements to the product that make it a real value-add to that issuer community.

So I think it's -- we look at it as an overall value proposition and an overall -- as the overall picture in terms of attracting that new -- those new issuers to the market.

Great. And then one just last quick question.

Just with the number of graduates up pretty significant year-over-year. Can you just talk about how you view that?

Is that an opportunity for you and promoting the company? Can you just walk through the pretty big increase from last year?

I know the market dynamics are a little different but...

I mean, I think we see that as a long-term opportunity to change. Part of it is graduates who -- we want to produce strong graduates, but we don't want companies graduating too early.

And as we get more Blue Sky recognition, as our market works better and is lower -- and is cost- and time-effective for public companies, that's a metric that we want to be producing successful graduates, but we want them staying longer on our markets. And to be straightforward, we believe that there are many companies that are on the national exchanges who are not well served from -- by being on a national exchange, especially the ones that are not a significant part of a major index.

And we're seeing that in the community bank space. So that's -- our goal over time is to take what we've seen in the community bank space of offering an attractive product, that is -- that for management teams is not a giant time resource, and for public companies is not hugely expensive is -- and build on that.

Thank you, everyone, for calling in. If you have any further other questions, feel free to reach out to me.

It is -- it was a nice quarter we delivered, and we look forward to keeping working hard for our shareholders over many years to come.