Q1 2025 Information Services Corp Earnings Call

May 7, 2025

Operator: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone, and then you will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jonathan Hackshaw, Senior Director of Investor Relations and Capital Markets. Please go ahead.

Jonathan Hackshaw: Thank you, Brianna, and good morning to everyone joining us today. Welcome to ISC's Conference Call for the Quarter Ended March 31, 2025. On the call today are Shawn Peters, President and CEO, and Bob Antochow, Chief Financial Officer. This morning, Shawn will take you through some of the highlights of the quarter. Bob will then provide some comments on our financial and operating performance for the quarter before passing the call back over to Shawn for some closing remarks. Before we begin, we would like to remind everyone that we will only be summarizing results today. The company's financial statements and MD&A have been filed on SEDAR+ and are available on our website. We encourage you to review those reports in their entirety.

Jonathan Hackshaw: I would like to remind you that any statements made today that are not historical facts are considered to be forward-looking statements within the meaning of applicable securities laws. The statements may involve a number of risks and uncertainties that are described in detail in the company's SEDAR+ filings. Those risks and uncertainties may cause actual results to differ materially from those stated. Today's comments are made as of today's date and will not be updated except as required under applicable securities laws. Today's conference call is being broadcast live over the Internet and will be archived for replay shortly after the call on the investor section of our website. I would now like to turn the call over to Shawn.

Shawn Peters: Thank you, Jonathan, and good morning to everyone joining us for today's call. I'm pleased to report that our overall performance for Q1 2025 was in line with our expectations. Our registry operations, which is underpinned by the strength of the Saskatchewan Registries division, surpassed our performance in the prior year period. The main driver was increased volumes across the Saskatchewan Registries and, in particular, the Saskatchewan Land Titles Registry, which saw both increased volumes and higher residential resale prices, demonstrating the resilience of the local economy, coupled with a high demand for residential real estate and low inventory levels in Saskatchewan's two major cities. In services, as you know, the sudden ban on NOSIs by the Government of Ontario in June 2024 presented an unexpected challenge.

Shawn Peters: We've talked before that there's no direct replacement for the NOSI service in Ontario, but our team has been working diligently to grow organically through our other products and services. In particular, the counter-cyclical nature and higher margin attributes of our Recovery Solutions division continues to play a significant role in that growth. This has been further supported by Regulatory Solutions, where fee adjustments in KYC and due diligence offerings have helped balance softer activity in our collateral management solutions business. The end result was a solid performance compared to Q1 of 2024, especially when taking the loss of the NOSI business into consideration. Wrapping up with our Technology Solutions segment, progress in this business is encouraging, with respectable increases in top and bottom-line metrics compared to the same quarter in 2024.

Shawn Peters: Our focus remains on delivering double-digit growth from this segment, as indicated in our outlook provided at the beginning of the year. Before I turn the call over to Bob to discuss some of the financial highlights in more detail, I'd summarize the quarter as another strong performance. The diversification and resiliency of our business has proven in the past, and will continue to demonstrate in the future, strong results even in more uncertain macroeconomic backdrops. By remaining focused on our operations, our customers, and our organic growth, we're confident in our ability to deliver meaningful value and strong, compelling returns. I'll now turn the call over to Bob.

Bob Antochow: Thank you, Sean, and good morning, everyone. As Sean mentioned, 2025 has begun in line with our expectations, delivering strong performance across the business. Overall results are tracking as anticipated, driven by several key factors that I will now walk you through. Revenue was CAD 59.3 million for the quarter, an increase of 5% compared to Q1 2024. Growth was driven by increased volumes across the Saskatchewan Registries division of registry operations, combined with annual CPI pricing increases, and new Bank Act security registry revenue. This was partially offset by a decrease in services revenue as a result of the Government of Ontario's unexpected ban on NOSIs in June 2024, counterbalanced by strong growth in the higher-margin Recovery Solutions division.

Bob Antochow: Net income was CAD 7.5 million or CAD 0.40 per basic share and diluted share for the quarter, compared to CAD 0.4 million or CAD 0.02 per basic and diluted share in Q1 2024. The increase was due to lower share-based compensation, strong adjusted EBITDA results, and lower net finance expense. These were partially offset by increased income tax expense. Net cash flow provided by operating activities was CAD 5.8 million for the quarter, a decrease of CAD 4.7 million from CAD 10.5 million in Q1 2024.

Bob Antochow: The decrease was due to strong operating results being offset by a decrease in cash from net changes in non-cash working capital, primarily due to timing differences on trade and other receivables, and accounts payable and accrued liabilities. Adjusted net income was CAD 11.4 million or CAD 0.62 per basic share and CAD 0.61 per diluted share, compared to CAD 8.5 million or CAD 0.47 per basic share and diluted share in Q1 2024. The increase reflects strong operating results across all operating segments and lower net finance expense. Adjusted EBITDA was CAD 21.8 million for the quarter, compared to CAD 19.4 million in Q1 2024. The increase was due to contributions from the registry operations and services segments, as discussed previously.

Bob Antochow: Adjusted EBITDA margin was 36.7% compared to 34.5% in Q1 2024. This growth was driven by the same reasons noted for adjusted EBITDA. Adjusted free cash flow for the quarter was CAD 15.2 million, compared to CAD 11.6 million in Q1 2024, due to stronger results in our operating segments in addition to lower net finance expense. Now turning to expenses. Expenses were down by CAD 5.3 million for the quarter compared to the same quarter last year. The decrease is largely due to decreases in wages and salaries, depreciation, amortization, and cost of goods sold because of lower revenue in the regulatory and corporate solutions divisions and services. Sustaining capital expenditures, including registry enhancement capital, was CAD 1.9 million for the quarter, consistent with Q1 2024.

Bob Antochow: After all this, as at 31 March 2025, we held CAD 16.8 million in cash compared to CAD 21 million as at 31 December 2024, which is a reflection of our deleveraging plan following voluntary prepayments of CAD 1 million that were made towards the company's credit facility during the quarter. As you know, this is part of the company's plan to deleverage towards a long-term net leverage target of 2 to 2.5 times. Before I turn the call back over to Sean, I'd like to finish by highlighting that we also announced yesterday that our board of directors approved a quarterly cash dividend of CAD 0.23 per share. That dividend will be payable on or before 15 July 2025 to shareholders of record as of 31 March 2025. I'll now turn the call back to Sean for some concluding remarks.

Shawn Peters: Thanks, Bob. With another strong quarter behind us, as we look ahead, our guidance for 2025 reflects our continued confidence in the business, while at the same time keeping a watchful eye on the current macroeconomic climate and related uncertainty. We're therefore reiterating our guidance and continue to expect revenue to be within a range of CAD 257 million to 267 million and adjusted EBITDA to be in a range of CAD 89 million to 97 million. Keeping with our historical performance, we also expect to see robust free cash flow in 2025, which will support our continued deleveraging to realize that long-term leverage target of 2 to 2.5 times. Finally, we want to acknowledge and thank our many shareholders for their continued support. We don't take that for granted.

Shawn Peters: We've had and continue to have meaningful dialogue with all stakeholders as we look forward to the future success of the company. We sift through the noise and the distractions and are attentive to constructive and impactful ways to continue to improve the business and the returns to our shareholders. We focus on what we can control. We treat our customers well, we treat our people well, and just as importantly, we run the business well. I'm excited about the opportunities ahead, and I wanna thank each of you for being on that journey with us. With that, I'll now hand the call back over to Jonathan.

Jonathan Hackshaw: Thanks, Shawn. Brianna, we'd now like to begin the question and answer session, please.

Operator: Perfect. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Scott Fletcher of CIBC. Your line is now open.

Scott Fletcher: Hi, good morning, and thanks for taking the question. Services margins very strong in the quarter, and you mentioned commissions on vehicle sales in the recovery business were a contributor there. Do those commissions flow right through to the bottom line? Can you share any color on how much that would have contributed in the quarter?

Bob Antochow: Yeah. Hi, Scott. Yeah, they, you know, flow through right to the bottom line. You know, they're, you know, as we've discussed, they trend higher than the average, you know, margin for the Services business. You know, we don't disclose the actual percentage there. You know, they are, you know, as we've talked, they are the higher margin within the divisions of the Services segment.

Scott Fletcher: Okay, thanks. Sticking with services, the MD&A mentioned that the fee increases on the KYC and due diligence solutions helped offset some of the volume reduction. Were those normal course fee adjustments, or do you have some additional pricing power in that business there that you're taking advantage of?

Bob Antochow: Yeah, Scott. You know, as we've sort of discussed before, we've got you know contracts with a number of customers. As those contracts you know expire, we negotiate then fee increases you know as part of normal course of business. That's what we're seeing come into play you know for this quarter. Yeah.

Scott Fletcher: All right. Well, thanks for taking the questions. Appreciate it.

Bob Antochow: Thanks, Scott.

Operator: Thank you. Our next question comes from Stephen Boland of RJ. Your line is now open.

Stephen Boland: I have to ask the awkward questions here. I mean, I know you said you just wanna talk about the operations, but some of the comments from Plantrel talk about the operations. You're not in a lawsuit here, so I'm kind of trying to figure out, you know, why you can't speak about or respond to some of the questions or the concerns that Plantrel has put out there and maybe some other shareholders at this point. Maybe you could just explain or even elaborate on some of the responses that you've put out in the public. You know, here's your opportunity to kinda talk about this a little bit more.

Shawn Peters: Hi, Stephen. It's Shawn. Thanks for the question. I'll address that in a couple of ways. First of all, as you know, we talk to shareholders, potential shareholders, investors, analysts, even people where ISC just comes up on their screen all the time. In those conversations, we're always happy to entertain any comments or commentary or constructive comments that they might have on the business. This is no different. You know, we sift through that. We'll look for things that are constructive and help, and we take those into account.

Shawn Peters: I think, you know, to sort of state the obvious, if you're trying to cast shadow on a business, then, you know, you're going to try to take data and points and manipulate those into a way that suits the narrative. I think that's what you're seeing there. We'll respond the way we always do, which is we'll run the business well. We'll talk with our shareholders and address any comments or questions that they have, and go from there. As far as the other public things, like, you know, we've got on record our public responses, and I think those stand on their own.

Stephen Boland: Okay. I know you're probably not gonna ask, or answer too much more, so I'll just leave it there. Thanks, guys.

Shawn Peters: Thanks, Stephen.

Bob Antochow: Thanks, Steve.

Operator: Thank you. Our next question comes from Jesse Pytlak of Cormark Securities. Your line is now open.

Jesse Pytlak: Hey, good morning. Just with respect to the OBR-related attrition, was there some acceleration in that this quarter? Can you just maybe speak to how much longer do you expect this to be a headwind?

Bob Antochow: You know, with, you know, we did, as you saw in our MD&A and our news release in the beginning of April, you know, we did extend our contract with the OBR. You know, and as we go forward, you know, we are adding new products, as we've mentioned before, you know, to add value to those customers that are using our services. We've expanded the service offering in our systems to retain those customers, just providing more value add to them. I don't know, Shawn, if you have anything to add there. Yeah.

Shawn Peters: The only thing I'd add to that is that, I mean, it is gonna be something that we'll probably talk about for a couple more quarters as that normalizes itself out. As Bob said, you know, we're looking at ways to help counteract that revenue and look to add the new products and services. You'll probably hear us talk about it for a couple more quarters.

Jesse Pytlak: Okay. Maybe just moving over to working capital. I know, Bob, you touched on it briefly in your comments, but was there anything particularly unusual this quarter? Is there anything special about Q1 that would contribute to such a big working capital build? As you think about the rest of the year, will there be further working capital investment or will there be some release?

Bob Antochow: Yeah. The biggest part in that accounts payable and accrued liabilities change relates to our share compensation. You know, last year, you know, at this time, we had a significant increase in the share price from December to March. This year, you know, there was a decline and, you know, with the share compensation items, they're marked to market, and so that's the biggest component in there. You know, within accounts receivable was another big area of change. You know, that relates as we complete contracts with customers. We do, you know, we're invoicing. Really what you're seeing there is, you know, an increase primarily related to the Technology Solutions business.

Bob Antochow: Really, one, you know, on the share-based comp, it's a mark to market, so that a non-cash, you know, mark to market. Really, the accounts receivable is just, you know, as business operates and we continue to progress on our business. Yeah.

Jesse Pytlak: All right. Got it. Maybe just one last question. On the registry enhancement CapEx, can you just speak to maybe how far along you are in the process? When can this maybe start to tail off a little bit?

Shawn Peters: Yeah. Thanks for the question. I think we've always said that these projects are, you know, sort of 18 to 24 to 36 months, and, you know, I think we'd be about sort of halfway through that now. But depending on. There's lots of factors that go into that because we are, of course, working with Saskatchewan as a jurisdiction and legislation and some of that. That's sort of a rough estimate of where we'd be.

Jesse Pytlak: Okay, that's helpful. That's all for me. I'll pass the line. Thank you.

Jonathan Hackshaw: Thanks, Jesse.

Shawn Peters: Thanks, Jesse.

Operator: Thank you. One moment, please. Again, as a reminder, to ask a question, you'll need to put star one one on your telephone. I'm showing no further questions at this time. I would now like to turn it back to Jonathan Hackshaw for closing remarks.

Jonathan Hackshaw: Thanks very much, Brianna. With that, we'd like to thank everybody for joining us on the call today, and we look forward to speaking with you again when we report our Q2. Thanks very much, and have a great day.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session, you will need to press star 1, 1 on your telephone and then you will hear an automated message advising. Your hand is raised

To withdraw your question. Please press star 1 1 again.

Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first Speaker today. Jonathan hackshaw senior director of investor relations and capital markets. Please go ahead.

Thank you Brianna and good morning to everyone joining us today. Welcome to isc's conference call for the quarter ended March, 31st 2025

On the call today are Sean Peters president and CEO and Bob antich Chief Financial Officer.

This morning, Sean will take you through some of the highlights of the quarter. Bob will then provide some comments on our financial and operating performance for the quarter before. Passing the call back over to Sean for some closing remarks.

Before we begin, we would like to remind everyone that we will only be summarizing results today, the company's financial statements and mdna have been filed on Cedar, plus, and are available on our website. We encourage you to view review. Those reports in their entirety. I would like to remind you that any statements made today that are not historical facts. Are considered to be forward-looking statements within the meaning of applicable, Securities laws.

The statements may involve a number of risks and uncertainties that are described in detail in the company's Cedar, plus filings those risks and uncertainties, may cause actual results to differ materially from those stated, today's comments are made, as of today's date, and will not be updated. Except as required under applicable Securities laws, today's conference call is being broadcast live over the internet and will be archived for replay shortly after the call and the investor section of our of our website. I would now like to turn the call over to Sean.

Thank you, Johnathan, and good morning to everyone joining us for today's call.

I'm pleased to report that our overall performance for the first quarter of 2025 was in line with our expectations.

Our registry operations, which is underpinned by the strength of the Saskatchewan. Registries division surpassed our performance in the prior year period.

The main driver was increased volumes across the Saskatchewan Registries. And in particular, the Saskatchewan Land Titles Registries which saw both increased volumes and higher residential resale prices, demonstrating the resilience of the local economy coupled with a high demand for residential. Real estate and low inventory levels in Saskatchewan's 2 major cities.

In Services. As, you know, the sudden ban on nosies by the government. Ontario, in June of 2024 presented an unexpected challenge.

We've talked before that, there's no direct replacement for the nosy service in Ontario, but our team has been working diligently to grow organically through our other products and services.

In particular, the counter cyclical nature and higher margin attributes of our Recovery Solutions division continues to play a significant role in that growth. This has been further supported by regulatory Solutions, where fee adjustments in kyc and due diligence offerings have helped balance software activity in our collateral Management Solutions business. The end result was a solid performance compared to q1 of 2022 2024, especially when taking the loss of the nosy business into consideration.

Wrapping up with our technology Solutions. Segment progress in this business is encouraging with respect to line metrics compared to the same quarter in 2024.

Our Focus remains on delivering double-digit growth from this segment as indicated in our Outlook provided at the beginning of the year.

Before I turn the call over to Bob to discuss some of the financial highlights in more detail. I'd summarize the quarter as another strong performance, the diversification, and resiliency of our business has proven in the past and will continue to demonstrate in the future strong results. Even in more uncertain, macroeconomic backdrops,

By remaining focused on our operations. Our customers, and our organic growth. We're confident in our ability to deliver meaningful value and strong compelling returns.

I'll now turn the call over to Bob.

Thank you, Sean and good morning, everyone.

As Sean mentioned, 2025 has begun in line with their expectations, delivering strong performance across the business.

Overall results are tracking us. Anticipated driven by several key factors that I will now walk you through.

Revenue was 59.3 Million for the quarter, an increase of 5% compared to the first quarter of 2024.

Registry Revenue.

This was partially offset by decrease in Services Revenue as a result of the government of Ontario's unexpected ban on nosies. In June 2024 counterbalanced by strong growth in the higher margin Recovery Solutions division,

Net income was 7.5, million or 40 cents per basic share and diluted share for the quarter compared to 0.4 million or 2 cents per basic and diluted share in the first quarter of 2024.

The increase was due to lower share based compensation.

Strong adjusted debit or results and lower. Net Finance expense.

These were partially offset by increased income tax expense.

Net cash flow provided by operating activities was 5.8 million for the quarter.

a decrease of 4.7 million from 10.5 million in the first quarter of 2024,

the decrease was due to strong operating results, being offset by a decrease in cash from net changes in non-cash working capital primarily due to timing differences on trade and other receivables and accounts payable in a crude liabilities

Adjusted. Net income was 11.4 million or 62 cents per basic share and 61 cents per diluted share compared to 8.5 million, or 47 cents per basic share and diluted share in the first quarter of 2024.

The increase reflects strong operating results across all operating segments and lower, net Finance expense.

Adjusted e, but I was 21.8 million for the quarter compared to 19.4% of 2024.

Increase was due to contributions from the registry operations and services segments as discussed previously.

Adjusted, even a margin was 36.7% compared to 34.5% in the first quarter of 2024.

This growth was driven by the same reasons.

noted for adjusted e, but up

Adjusted free cash flow for the quarter was 15.2 million compared to 11.6 million in the first quarter of 2024 due to Stronger results in our operating segments, in addition to lower net Finance expense.

Now, turning to expenses.

Expenses were down by 5.3 million for the quarter, compared to the same quarter last year.

The decrease is largely due to decreases in wages and salaries depreciation amortization and cost of goods, sold because of lower revenue and the Regulatory and corporate Solutions divisions and services.

Sustaining Capital expenditures including registry enhancement. Capital was 1.9 million for the quarter consistent with the first quarter of 2024.

After all this as that March. 31st 2025 we held 16.8 million in cash, compared to 21 million as at December. 31st 2024.

Which is a reflection of our deleveraging plan following voluntary, prepayments of 1 million that were made towards the company's credit facility during the quarter.

As you know, this is part of the company's plan to de-lever towards a long-term net leverage Target of 2 to 2.5 times.

Before I turn the call back over to Sean, I'd like to finish by highlighting that. We also announced yesterday that our board of directors approved a quarterly cash dividend of 23 cents per share.

that dividend will be payable on or before July 15th, 2025 to shareholders of record as of

March 31st 2025, I'll now turn the call back over to Sean, for some concluding remarks.

Thanks Bob with another strong quarter behind us. As we look ahead, our guidance for 2025, reflects our continued confidence in the business. While at the same time, keeping a watchful eye on the current macroeconomic climate and related uncertainty.

We're therefore reiterating our guidance and continue to expect Revenue to be within a range of 257 million to 267 million and adjusted ibida to be in a range of 89 million to 97 million.

Keeping with our historical performance. We also expect to see robust free cash flow in 2025, which will support. Our continued deleveraging to realize that long-term leverage Target of 2 to 2 and a half times. Finally, we want to acknowledge and thank our many shareholders for their continued support. We don't take that for granted.

We've had and continue to have meaningful dialogue with all stakeholders as we look forward to the future success of the company.

To constructive and impactful ways to continue to improve the business, and the returns to our shareholders.

We focus on what we can control. We treat our customers. Well, we treat our people. Well, and just as importantly, we run the business. Well,

I'm excited about the opportunities ahead and I want to thank each of you for being on that Journey with us.

With that. I'll now hand the call back over to Jonathan.

Thanks. Sean. Uh Brianna we'd now to now like to begin the question and answer session please.

Thank you.

At this time, we will conduct the question answer session. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced.

To withdraw your question. Please press star, 1 1 1, again please, stand by while we compile the Q&A roster,

Our first question comes from Scott Fletcher of CIBC your line is now open.

Hi. Uh, good morning and thanks for taking the question. Um, Services margins. Very strong in the quarter and you mentioned commissions on vehicle sales in the recovery business for a contributor there. Uh, to those commissions flow right through the bottom line. And then, can you share any color on? How much that would have contributed in the quarter?

Yeah, hi Scott. Yeah, the, uh, you know, they flow through right to the the bottom line and, uh, you know, they're, uh, you know, as we've discussed they're they, they Trend higher than the, the, the average, you know, margin for the services business. Um, and, uh, you know, we don't, we don't disclose the, the actual, uh, percentage there. But, uh, you know, they are, uh, you know, as we've talked, they are the higher margin of the, uh, uh, you know, within the, uh, divisions of the services segment.

Okay, thanks and then speaking with Services um the mdna mentioned that the fee increases on the kyc and due diligence in Solutions helped offset some of the the noisy. Ban reduction, were those normal course fee adjustments, or does do you have some additional pricing power in that business there that you're taking advantage of?

Yeah. Scott uh you once we've sort of discussed before we've got, you know, contracts with a number of customers. And as those contracts, you know, you know, um, you know, expire, we then uh, you know, uh, we negotiate then fee fee increases, um, uh, you know, as part of normal normal course of business and so then that's what we've, you know, we're we're seeing uh, come into play, uh you know, for for this uh, this quarter. Yeah.

All right. Well, thanks for taking the questions. Appreciate it.

Thanks Scott.

Thank you.

Our next question comes from Stephen Boland of RJ. Your line is now open.

So I I, I have to ask the awkward questions here. I mean, I know you. You said, you just want to talk about the operations, but some of the comments from Plants, you'll talk about the operations. Um, you're not in a lawsuit here. So I'm I'm kind of trying to figure out, you know, why you can't speak about or respond to some of the, the questions or the concerns of that plant roles, put out there and maybe some other shareholders at this point. Uh, maybe you could just explain or even elaborate on some of the the responses that you put out, uh, in the public. Um, you know, here's your opportunity to kind of talk about this a little bit more.

Hi, Steve. It's it's Sean. Thanks for thanks for the question. Uh, so I'll address that in a couple of ways. Uh, first of all, as you know, we talked to shareholders, uh, potential shareholders investors analysts, uh, even people where I see just comes up on on their screen all the time. Uh, and in those conversations, we're always happy to entertain any, any comments or commentary, or constructive comments that they might have on the business? Uh, and this is no different, you know, we, We Sip through that. We'll look for things that are constructive and, and help, uh, and, and we take those into account, I think, uh, you know, to, to sort of State, the obvious

If you're trying to cast Shadow on a business then you know you're going to try to take data and and points and manipulate those, uh, into a way that suits The Narrative and and I think that's uh, what you're seeing there. And so we'll respond the way we always do which is, we'll run the business. Well, we'll talk with our shareholders and address any comments or questions that they have uh, and go from there. Uh as far as the other public things like, you know, we we've got on record our public responses and I think those stand on their own

Okay, I know you're probably not going to ask or answer too much more, so I'll just leave it there. Thanks guys.

Thanks. Thanks Steve.

Thank you.

Line is now open.

Hey, good morning just with respect to the obr related attrition. Was there some acceleration in that this quarter? And can you just maybe speak to how much longer do you expect this to be a headwind?

Um, you know, with, uh, you know, the we did as, as you saw in the, uh, our mdna and our news release and beginning of April. You know, we did extend our our contract with the uh, the the obr. Um, you know, with uh, uh, you know, and as we go forward, you know, we are adding new products as we've mentioned that before, you know, to to add value to those customers that are using our services, we've, uh, expanded it, you know, expanded the the service offering in our, you know, in our, uh, systems to retain those customers, uh, just providing, you know, more value. Add to them. I know Sean. If you had anything to add there. Yeah, the only thing I I'd add to that is that, uh, I mean, it is going to be, uh, something that we'll probably talk about for a couple more quarters is that normalizes itself out. Uh, but as Bob said, you know, we're, we're looking at ways to help, uh, counteract that that revenue and and look to add the new products and services. So, but

You'll probably hear us talk about it for a couple more quarters.

Okay. Um and then maybe just moving over to working capital. I know Bob you touched on it briefly and your your comments. But was there anything particularly unusual with this quarter? Is there anything special about the first quarter that would uh contribute to such a big working capital build? And as you think about the rest of the year, will it be further? Working capital investment or or will the will there be some release?

Yeah. Uh, the biggest part in that uh uh accounts payable accounts liability change it, you know, relates to our shared compensation and you know, last year, you know, at this uh, uh, time we had a significant increase in the, in the share price from uh, you know, December to March this year. Uh, you know, there was a decline and, you know, with the, uh, shared compensation items that are marked to Market. And so that's the biggest, uh, you know, component um, in their, uh, you know, within accounts receivable, uh, you know, uh, with another big area of change. And, you know, that relates, as we complete contracts with customers. We do, you know, we're, we're invoicing, and, uh, really what you what you're seeing there is, uh, you know, an increase primarily related to the, you know, Technology Solutions business.

So really 1, you know the uh on the share-based comp it's a mark-to-market so that a non-cash uh uh you know, Mark to Market. And uh and really the the accounts receivable is just the uh, you know, as as business uh operates and we continue to progress on our um, our business.

Yeah. All right. Got it. And then maybe just 1 last question. Um,

On the registry enhancement capex. Can you just speak to maybe how far along you are in the process? Um, when can this maybe start to tail off a little bit?

Yeah, so thanks for the question. Uh, I think we're, we've always said that these projects are, you know, sort of 18 to 24 to 36 months. And, you know, I think we'd be both sort of halfway through that now. Um, but depending on there's lots of factors that go into that because we are of course, working with Saskatchewan as a jurisdiction and and legislation and some of that. Uh, but that's, that's sort of a rough estimate of where we'd be.

Okay, that's helpful. That's all for me. I'll pass the line. Thank you.

Thanks Jesse. Thank you.

1 moment, please.

Again, as a reminder to ask a question, you will need to put star 1 1 on your telephone.

I'm showing no further questions at this time. I would now like to turn it back to Jonathan hackshaw for closing remarks.

Thanks very much Brianna, uh, with that. We'd like to thank everybody for joining us on the call today and we look forward to uh, speaking with you again, when we report our second quarter, thanks very much and have a great day.

Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect

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