Tel Aviv Stock Exchange Posts Record Year on Surging Volumes

Tel Aviv Stock Exchange Ltd. ((IL:TASE)) has held its Q4 earnings call. Read on for the main highlights of the call.

Tel Aviv Stock Exchange Ltd. (TASE) delivered an upbeat earnings call, emphasizing record revenues, sharply higher profitability and robust activity across equity and bond markets. Management acknowledged higher spending, reduced surplus equity and persistent geopolitical risks, but portrayed these as manageable headwinds against a backdrop of strong momentum.

Record Revenues and Strong Top-Line Growth

TASE reported full-year 2025 revenues of ILS 563.5 million, up 29% year over year, with fourth-quarter revenues matching that growth rate at ILS 149.3 million. Management framed this broad-based top-line expansion as evidence that the exchange is capturing rising trading activity and demand for its services despite a challenging environment.

Substantial EBITDA and Margin Improvement

Profitability stepped up even faster than revenue, as adjusted EBITDA climbed 58% in 2025 to ILS 293.8 million and margin widened from 42.6% to 52.1%. Fourth-quarter adjusted EBITDA surged 73% to ILS 80.8 million, underscoring improved operating leverage as higher volumes flowed through TASE’s largely fixed-cost infrastructure.

Large Net Profit and EPS Gains

Net profit jumped 79% to ILS 181 million for 2025, while basic earnings per share rose 81% to ILS 1.97, reflecting both operational strength and disciplined cost control. In the fourth quarter alone, net profit more than doubled to ILS 51.6 million, signaling that the profitability ramp is not merely a one-off but appears to be gaining pace.

Equities Market Expansion and Trading Volume Surge

The exchange’s equity market capitalization reached ILS 2 trillion at year-end, a 46% increase versus 2024, helped by market performance and new listings. Average daily cash equity volume climbed 57% to ILS 3.4 billion, while derivatives average daily volume rose 14%, pointing to deeper liquidity and more active trading strategies.

Revival of IPO and Capital Raising Activity

Primary market activity rebounded, with 21 IPOs during 2025 plus five additional companies listing without raising capital, reflecting renewed issuer confidence. Total equity capital raised leapt to ILS 21 billion from ILS 8 billion in 2024, positioning TASE as a more vibrant fundraising venue for Israeli corporates.

Increased Bond Market Activity and Corporate Issuances

Debt markets were also busy, as corporate bond issuance reached ILS 187 billion in 2025 versus ILS 124 billion a year earlier, highlighting strong demand for fixed-income funding. Corporate bond trading volumes increased 9%, and government bond average daily volume held steady around ILS 3.3 billion, supporting a deeper overall fixed-income ecosystem.

Investor Base Deepening and Product Growth

Foreign investors turned net buyers, purchasing ILS 4.4 billion of equities and lifting their holdings in non-dual-listed stocks by about 70% over the first nine months of 2025. Retail engagement strengthened as roughly 200,000 new trading accounts were opened, while assets in TASE indices jumped about 49% to ILS 148 billion, aided by 10 new index launches.

Shareholder Returns Announced

The board approved total dividends of ILS 144.8 million, or ILS 1.56 per share, combining the 50% payout of 2025 profits with a special distribution. This sizable cash return underscores management’s confidence in the exchange’s cash generation, even as it continues to invest in technology and growth initiatives.

Operational Wins and Strategic Moves

TASE highlighted several strategic advances, including the shift to a Monday–Friday trading week in early 2026, which is already showing signs of higher foreign participation. The dual listing of Palo Alto Networks and broader uptake of the market-making program, including seven TA-35 constituents, are helping to further improve liquidity and global visibility.

Uncertainty Over Index Activity Sale

Management is exploring a partial or full sale of its index business alongside strategic cooperation with a major international player, potentially unlocking value and reach. However, executives stressed that there is no assurance on timing or that any binding deal will materialize, injecting a degree of strategic uncertainty into this otherwise strong story.

Decrease in Surplus Equity

Surplus equity for regulatory requirements slipped to ILS 550 million at the end of 2025 from ILS 627 million a year earlier, largely due to share buybacks and generous dividends. While the balance sheet remains solid, this shift shows that TASE is steadily deploying excess capital, reducing its cushion but enhancing shareholder returns.

Higher Investing Cash Outflows

Investing cash flow in the fourth quarter was negative ILS 38.5 million compared with negative ILS 20 million in the prior year, driven mainly by larger acquisitions of financial assets. The company framed these outflows as part of an intentional allocation strategy, but investors will watch to see how effectively these investments translate into future earnings.

Rising Certain Operating Costs and CapEx

Some cost lines are moving higher, with Q4 computer and communication expenses up 11% to ILS 11.7 million and depreciation and amortization up 6% to ILS 15.2 million. These increases stem from infrastructure upgrades and new product development, with annual capital expenditure in 2026 expected at ILS 55–60 million as TASE modernizes its platform.

Contextual Risk from Extended Conflict

Management emphasized that these results were achieved amid an extended multi-front conflict in Israel during 2025, a backdrop that could still disrupt markets. The exchange’s resilience under stress is encouraging, but geopolitical risk remains a key external factor that could affect volumes, valuations and investor sentiment going forward.

Forward-Looking Guidance and Strategic Outlook

Looking ahead, TASE plans continued cash returns via its dividend policy and is evaluating further share buybacks, subject to market conditions and capital needs. Operating guidance calls for marketing spend to remain constrained, employee compensation to track existing agreements and CapEx near ILS 55–60 million, while talks around a potential index-business deal with a global partner continue without a set timeline.

TASE’s latest earnings call paints the picture of an exchange in strong health, balancing record growth with elevated but purposeful investment. Investors will monitor how the index strategy, capital allocation and geopolitical environment evolve, yet for now the combination of surging volumes, higher profitability and disciplined shareholder returns offers a compelling narrative for the Israeli bourse.