Q2 2025 Information Services Corp Earnings Call

July 31, 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 this session, you will need to press star one one on your telephone. You will hear an automated message advising you 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, Jonathan Hackshaw, Senior Director, Investor Relations and Capital Markets. Please go ahead.

Jonathan Hackshaw: Thank you, Michelle, and good morning to everyone joining us today. Welcome to ISC's conference call for the quarter ended 30 June 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 also 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 in the investor section of our website. With that, I would now like to turn the call over to Shawn.

Shawn Peters: Thank you, Jonathan. Good morning to everyone joining us for today's call. The Q2 of 2025 reflected a solid performance across the business, demonstrating the strength of our diversified operations and the value of our strategic approach. Registry operations performed steadily, supported by the ongoing reliability of the Saskatchewan Registries. While land registry transactions and high-value registrations were both down year-over-year, this was offset by higher average real estate values and new revenue from the Bank Act Security Registry, which commenced operations in July 2024. Our services segment was also able to deliver a steady performance, supported by continued growth in the higher-margin Recovery Solution Division. Driving this was an increase in individual asset recovery assignments from existing customers and higher delinquencies in the automotive lending market, alongside a rise in completed vehicle sales for which we earn a commission.

Shawn Peters: Finally, looking at our technology solutions segment, we were pleased with notable increases in both top and bottom-line metrics compared to the same period in the prior year. These improvements underscore the segment's move towards enhanced operational efficiency and stronger market traction, as demonstrated by our refined processes, disciplined cost management, and an expanding customer base. These trends position technology solutions for sustained future growth as we build on this momentum to capture emerging opportunities. In summary, we delivered a solid Q2 performance through our resilient business model and operational focus. Our disciplined financial strategy and ability to execute effectively continue to strengthen our business, positioning us to drive sustained value creation and pursue our long-term objectives with confidence. I'll now turn the call over to Bob to discuss some financial highlights in more detail before providing some closing remarks.

Bob Antochow: Thank you, Shawn, and good morning, everyone. As Shawn mentioned, 2025 is showing solid performance, with Q2 2025 continuing to deliver results in line with our expectations. Overall results are tracking as anticipated, driven by several key factors that I'll now walk you through. Revenue was CAD 67.3 million for the quarter ended 30 June 2025, consistent when compared to CAD 67.8 million in Q2 2024. Within registry operations, there was steady revenue from the Saskatchewan Registries division, particularly in the land registry, where an increase in average real estate values across the Saskatchewan market offset lower transaction volumes and was supplemented by new Bank Act Security Registry revenue.

Bob Antochow: Counterbalancing this was a decrease in services revenue, where the continued growth in the higher-margin recovery solutions revenue through increased assignments and subsequent sales did not fully offset a decline in the lower-margin regulatory solutions division revenue. Net income was CAD 5.9 million, or CAD 0.32 per basic share and diluted share for the quarter ended 30 June 2025, compared to CAD 10.3 million or CAD 0.57 per basic share and CAD 0.56 per diluted share in Q2 2024. Steady adjusted EBITDA results across our operating segments and lower net finance expense were offset by increased share-based compensation and professional and consulting services expenses. Net cash flow provided by operating activities was CAD 22.9 million for the quarter ended 30 June 2025, a decrease of CAD 1.3 million in Q2 2024.

Bob Antochow: Contributing to the decrease were the same items as described above for net income. Adjusted net income was CAD 15.1 million, or CAD 0.81 per basic and diluted share for Q2 ended 30 June 2025, compared to CAD 14.1 million or CAD 0.78 per basic share and CAD 0.77 per diluted share in Q2 2024. The increase reflects steady adjusted EBIT results across all operating segments and lower net finance expense. Adjusted EBITDA for Q2 ended 30 June 2025 was CAD 26.7 million, steady compared to a record CAD 27.2 million in Q2 2024.

Bob Antochow: Consistent adjusted EBITDA from registry operations, combined with lower cost of goods sold in the services segment as a result of lower volumes in the regulatory and corporate solutions divisions, together with higher margin in the recovery solutions division, were counterbalanced by slightly increased expenses. Adjusted EBITDA margin was 40%, which was consistent with Q2 2024. Adjusted pre-cash flow for the quarter ended 30 June 2025 was CAD 21 million, compared to CAD 15.7 million in Q2 2024, due to steady adjusted EBITDA results across our operating segments, in addition to lower interest paid on long-term debt. Expenses were CAD 54.9 million for the quarter ended 30 June 2025, an increase of CAD 7.3 million compared to the same prior year period.

Bob Antochow: The increase in the quarter was mainly due to an increase in wages and salaries of CAD 6.7 million, related to a CAD 5.7 million increase in share-based compensation expense due to increase in the share price in the current quarter, compared to a decrease in the share price during the prior year quarter, and an additional CAD 1 million investment in people to support execution on technology solutions projects, including registry enhancements for the Saskatchewan Registries division and registry operations. A CAD 2.2 million increase in professional and consulting services related to increased acquisition, integration, and other costs, including resources deployed to respond to Plantro Ltd.'s mini tender offer. Partially offsetting this was cost of goods sold, which decreased by CAD 1.5 million due to lower sales volume in the regulatory and corporate solutions divisions within services.

Bob Antochow: Sustaining capital expenditures were CAD 2.6 million for the quarter ended 30 June 2025, in line with CAD 2.7 million in the same prior year period. For the 6 months ended 30 June 2025, sustaining capital expenditures were CAD 4.5 million, compared to CAD 4.8 million in the same prior year period. After all this, as at 30 June 2025, the company held CAD 21.3 million in cash compared to CAD 21 million as at 31 December 2024. During the quarter, the company made voluntary prepayments of CAD 15 million towards the company's credit facility, which is part of the company's plan to deleverage towards a long-term net leverage target of 2 to 2.5 times.

Bob Antochow: Before I turn the call back over to Shawn, 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 October 2025 to shareholders of record as of 30 September 2025. This morning, we announced an amendment to our credit facility. The credit facility, which previously was set to become current debt on our balance sheet in September 2025, has now extended to July 2029, providing us with greater financial flexibility. The total availability under the credit facility remains at CAD 250 million. We've also increased the accordion option from CAD 100 million to CAD 150 million, allowing us to scale the credit facility up to CAD 400 million if needed.

Bob Antochow: In addition, the credit facility has been simplified by consolidating the 2 existing revolving credit tranches of CAD 150 million and CAD 100 million into a single CAD 250 million credit facility, now with improved pricing. I will now turn the call back over to Sean for some concluding remarks.

Shawn Peters: Thanks, Bob. As we close out Q2, I'm pleased with our solid performance, which was in line with our expectations, even as we navigated unexpected costs tied to addressing shareholder matters. These challenges, while demanding, did not derail our focus or execution. We remain committed to driving operational excellence, optimizing our core business, and maintaining our disciplined financial approach. This quarter truly reflects our ability to execute consistently and stay aligned with our strategic goals. Not surprisingly, we 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.

Shawn Peters: In keeping with our historical performance, we also expect to see robust free cash flow in 2025, which will support the continued deleveraging of our balance sheet to realize the long-term net leverage target of 2 to 2.5 times. As we've said before, we're well-positioned to navigate the evolving market landscape while continuing to prioritize long-term shareholder value. With a resilient foundation and clear strategy, we're confident in our ability to sustain our performance and deliver solid results in the quarters ahead. Thank you for your continued support, and we look forward to updating you next quarter. With that, I'll now turn the call back over to Jonathan.

Bob Antochow: Thanks, Shawn. Michelle, we'd now like to begin the question and answer session, please.

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

Operator: Thank you. As a reminder, to ask a question, please 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. One moment while we compile our Q&A roster. Our first question is gonna come from the line of Erin Kyle with CIBC. Your line is open. Please go ahead.

Erin Kyle: Hi. Good morning. It's Erin Kyle on for Scott Fletcher. Maybe if I could just start on the registries business, could you give us an update on what you've been seeing in the Saskatchewan housing market? I know transaction volumes are down year-over-year, and part of that's lapping a difficult comp, but maybe just an update on what you've been seeing in July so far. It looks like housing sales rebounded in June, so just wondering if you've seen that hold true for July.

Shawn Peters: Hi, Erin, it's Shawn. Thanks for the question. Yeah, we wouldn't tend to speculate too much on what we're seeing in July yet. I would say that this is typical in our seasonality, so June and July tend to be the highest months for us just based on moving and other home sales. The overall market in Saskatchewan has been pretty stable as we've reported and as you've seen in or you may see in Saskatchewan REALTORS Association reports. Down a little bit in May, but back up in June, as you noted. I think we're gonna continue to see fairly stable results in Saskatchewan, but at this point, not, we don't have enough data really to comment on July.

Erin Kyle: Okay. Thank you. That clears it up. Maybe if I just switch to the services segment then. There was a decline in the regulatory solutions revenue and the MD&A, you note that was driven in part by the NOSI ban, as well as a decline in the KYC and due diligence volumes. I believe activity in those two sectors, KYC and due diligence, has previously been fairly strong. Maybe if you could just dig into what drove the lower volumes in the quarter.

Bob Antochow: Yes. Thanks for the question, Erin. You know, part of that business, you know, is tied somewhat to economic, you know, activity that goes on. That's dependent on our customers that we provide, you know, services to. You know, speculation is that, you know, it's tied to some of the, you know, the market uncertainty that, you know, is happening with, you know, US trade announcements and other, you know, global issues. I don't know, Shawn, if anything, you know.

Shawn Peters: No. It's really, as Bob said. I mean, we don't experience a lot of seasonality per se in that business, but it really is tied to how the economy is doing at any particular time. I mean, we're seeing the strength in our recovery solutions business as a result of that being a bit countercyclical to the other businesses. I don't think there's anything too much to read into that other than it is just sort of tied to the economic cycle.

Erin Kyle: Okay. Thank you. That's fair. Maybe I'll just squeeze one more in here. On the NCIB you announced at the beginning of June. I know you haven't executed under it yet, but any near-term plans to use the NCIB?

Shawn Peters: Yeah. Again, thanks for the question. Obviously we put the NCIB in just shortly before going into blackout for Q2 here, so practically speaking, not a lot of time. You know, we're glad to have the NCIB in place. We think it's a good strategic tool for us for periodic use. I wouldn't be able to comment on whether we specifically would use it at any given time, but it's a tool there that we have to use and we're glad it's there.

Erin Kyle: Understood. Okay, I'll hop offline. Thank you.

Shawn Peters: Thanks, Erin.

Operator: Thank you. Thank you. 1 moment for our next question. Our next question's gonna come from the line of Paul Treiber with RBC Capital Markets. Your line is open. Please go ahead.

Paul Treiber: Thanks. Good morning. Just a question on the guidance for the year and revenue growth. You know, just looking at the math there, it does imply that revenue growth would pick up in the second half of the year, assuming the midpoint of guidance. What do you see as the catalysts or drivers to help pick up growth in the back half of the year?

Shawn Peters: Well, I can maybe start on that, Paul. As we just talked about, we do see that the sort of Q2 and Q3. We're getting into July, August, September for Q3. We do see that as one of our strongest. That has been historical. We could potentially see some pickup in revenue in that quarter. I think the rest is just as we continue to grow the business organically, as we're looking with new customers and new opportunities, we continue to see growth throughout the year. We will see seasonality, just to be clear. Like, you know, in Q4, we would expect our registry business will be a little lower, because that is the typical seasonality.

Shawn Peters: Back half of the year for us, we're still confident in achieving those targets.

Paul Treiber: Thanks. That was helpful to understand. Just in terms of the NCIB, how do we think about it in terms of priority versus other potential uses of capital, including M&A and deleveraging? Where would it rank, you know, among uses of capital?

Shawn Peters: Yeah, that's a bit more of a challenging question. I think, you know, we look at all of our capital allocation very strategically. You sorta listed the top 3 there for us. We've been clear that deleveraging is a priority for us and I think we've been executing on that over the last number of quarters. We continue to look for prudent opportunities in the M&A space. We'll assess that against the NCIB and against leveraging. We'll look at every opportunity, whether it's a deleveraging opportunity, an NCIB opportunity, or an M&A opportunity, and assess them against each other on their own merits. There really isn't a way to prioritize. I think all of them are sort of equally important at the right time and in the right place.

Paul Treiber: Just one last one for me. Just could you elaborate further on the CAD 1 million additional wages and salaries expense, and what projects are these new employees focused on, and what's the mix between either internal projects or external ones?

Bob Antochow: Thanks, Paul, for the question. Yeah. You know, as we've discussed, you know, as part of the, you know, Saskatchewan MSA extension, you know, we embarked on work to enhance our Saskatchewan Registries. You know, as part of that, we've deployed, you know, increased resources to support that major project. As well, in terms of third-party projects that we have in our technology solutions segment, you know, we've announced, you know, a couple wins in that area. Again, it's resourced just to support the expansion of that business as well. Yeah.

Paul Treiber: Okay. Thanks. Any more questions?

Bob Antochow: Thanks, Paul.

Operator: Thank you. One moment as we move on to our next question. Our next question is gonna come from the line of Jesse Pytlak with Cormark Securities. Your line is open. Please go ahead.

Jesse Pytlak: Hey, good morning. Just on the OBR attrition, can you give us a sense if you're starting to see that start to taper off, or are you still seeing sort of the consistent ongoing declines there?

Bob Antochow: Yeah. You know, for us in corporate, in the corporate solutions segment, you know, we've got contract and non-contract customers. Of course, with our goal has been to, you know, expand our service offerings to maintain our customers and obviously, the contracted customers that are, you know, partners with us for a long time. You know, we've, you know, they're using a variety of our services. For the non-contract customers, of course, that's, you know, they tend to be, you know, customers that are more independent and, you know, they're not, maybe, you know, one more one-off type customers. That's where it's hard to predict their use of, you know, of our systems and services.

Shawn Peters: Yeah. I think overall, Jesse, it's been about what we expected. Bob's right. It's really the casual users that are using the OBR more directly and not going through service providers like ISC, ESC.

Jesse Pytlak: Okay. That's helpful. Then just on third party tech solutions, you called out some projects that have been extended into next year. Have there been any changes to the scope or value of these contracts?

Bob Antochow: No.

Shawn Peters: No. Not Typically, these are just delays, with jurisdictions as they're implementing the project. That's not unexpected in this line of business.

Jesse Pytlak: Okay. Got it. That's all for me.

Bob Antochow: Thanks, Jesse.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Stephen Boland with Raymond James. Your line is open. Please go ahead.

Stephen Boland: Morning, everyone. I'm just looking at the professional consulting services. You mentioned the rationale or the reason for the increase year-over-year. Should we expect that number to kind of go back to what, you know, was probably a quarterly number in 2024? I'm just curious if it's more one time there.

Shawn Peters: Yeah. Let me take that, Steve. Thanks for the question. I think that's a pretty logical assumption. Our M&A acquisition costs are generally well spread across the year, and so I think looking back at 2024 would be a good measure. These are largely one-time costs.

Stephen Boland: Okay. That's great. You did mention obviously one of the priorities, M&A, you get asked this every quarter, just wondering what you're seeing out there. Has been change in valuations or has the, you know, the tariff or the economies, has that brought more assets up for sale? I'm just curious what the cadence is.

Shawn Peters: Yeah. Good question. It hasn't from our perspective. I think it, you know, we look at a number of opportunities continually. We are very prudent in assessing those. I don't think anything has changed for us in that in terms of... It's a good question whether tariffs or other market instability would bring some different assets. For us, that hasn't happened. I think the assets and opportunities that we'd be interested in remain, you know, aligned with our strategy, and that really hasn't changed as a result of tariffs. That's a, that's an interesting question. Good question.

Stephen Boland: Thanks. That's all for me. Thanks, guys.

Shawn Peters: Thanks, Steve.

Operator: Thank you. I'm showing no further questions at this time, and I would like to hand the conference back over to Jonathan Hackshaw for any further closing remarks.

Jonathan Hackshaw: Thanks very much, Michelle. With no further questions, we'd like to once again thank all of you joining us for the call today and for your support, and we look forward to speaking with you again when we next report. Have a great day.

Operator: This concludes today's conference call. Thank you for participating. 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. You will then hear an automated message. Advising you, your hand is raised to a draw 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, Jonathan hackshaw senior director and best relations and capital markets. Please go ahead.

Thank you, Michelle. And good morning to everyone joining us today, welcome to isc's conference. Call for the quarter end of June 30th 2025

On the call today are Sean Peters, president and CEO and Bob and to Chow 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 review those reports in their entirety.

I would also 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 seat, R plus filings those risks. And uncertainties, may cause actual results to different 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 website.

That I would allow like to turn the call over to Sean.

Thank you, Jonathan. Good morning to everyone joining us for today's call.

The second quarter of 2025 reflected, a solid performance across the business demonstrating, the strength of our Diversified operations and the value of our strategic approach.

Registry operations performed steadily supported by the ongoing reliability of the Saskatchewan. Registries

well, land, registry, transactions and high-value registrations were both down year-over-year. This was offset by higher average, real estate values and new revenue, from the bank act security registry, which commenced operations in July 2024,

Our service is segment was also able to deliver a steady performance supported by continued growth. In the higher margin Recovery, Solution division,

Driving. This was an increase in individual asset, recovery assignments from existing customers and higher delinquencies in the automotive lending Market alongside a rise in completed vehicle sales for which we earn a commission.

Finally looking at our technology solution segment, we were pleased with notable increases in both top and bottom line metrics compared to the same period in the prior year.

these improvements underscore the segments, move towards enhanced operational, efficiency, and stronger Market traction, as demonstrated by our refined processes disciplined cost management, and an expanding customer base

These transposition Technology Solutions for sustained future growth as we build on this momentum to capture emerging opportunities.

In summary, we delivered a solid second quarter performance to our resilient business model, and operational Focus.

Our discipline Financial strategy and ability to execute, effectively, continue to strengthen our business positioning us to drive, sustained, value, creation, and pursue our long-term objectives of confidence.

I'll now turn the call over to Bob to discuss some financial highlights in more detail.

Or providing some closing remarks.

Thank you, Sean and good morning, everyone.

As Sean mentioned, 2025 is Sean, solid performance with the second quarter of 2025 continuing to deliver results in line with their expectations.

Overall results are tracking as anticipated driven by several key factors that I'll now walk you through.

Revenue was 67.3 Million for the quarter ended, June 30th 2025.

Consistent when compared to 67.8 million in the second quarter of 2024.

Within registry operations there was steady revenue from the Saskatchewan Registries division.

Particularly in the land. Registry, where an increase in average real estate values across the Saskatchewan Market offset, lower transaction, volumes and was supplemented by new.

Bank act security registry Revenue.

Counterbalancing this was a decrease in Services Revenue where the continued growth in the higher margin. Recovery Solutions Revenue through increased assignments. And subsequent sales, did not fully offset. A decline in the lower margin regulatory Solutions, division Revenue,

.9 million or 32 cents per basic share and diluted share for the quarter ended. June 30th 2025.

Compared to 10.3 million or for 57 cents per basic, share, and 56 cents per diluted share in the second quarter of 2024.

Steady adjusted even a result, across our operating segments and lower. Net Finance expense, were offset by increased share-based compensation, and professional and Consulting Services expenses.

Net cash flow provided by operating activities. Was 22.9. Million for the quarter ended, June 30th 2025.

A decrease of 1.3 million in the second quarter of 2024.

Contributing to the decrease where the same items as described above for net income.

Adjusted. Net income was 15.1 million or 81 cents per basic and diluted share for the quarter end of June 30th 2025.

Compared to 14.1 million or 78 cents per basic share and 77 cents per diluted share in the second quarter of 2024.

This increased reflects steady adjusted even results across all operating segments and lower. Net Finance expense.

Adjusted. Even after the quarter ended, June 30th 2025 was 26.7 Million.

Steady. Compared to a record 27.2 million in the second quarter of 2024.

Consistent adjusted e but up from registry operations combined with lower cost of goods sold in the services segment as a result of lower Bo volumes in the Regulatory and corporate Solutions divisions together with higher margins, in The Recovery Solutions division where counterbalance by slightly increased expenses.

Adjusted even a margin was 40% which was consistent with the second quarter of 2024.

Adjusted precash flow for the quarter ended. June 30th 2025 was 21 million compared to 15.7 million in the second quarter of 2024, due to steady adjusted ebit of results. Across our operating segments, in addition, to lower interest paid on long-term debt.

Expenses were 54.9 million for the quarter ended. June 30th 2025.

An increase of 7.3 million compared to the same prior year period.

the increase in the quarter was mainly due to

an increase in wages and salaries of 6.7 million related to a 5.7 million increase in share-based compensation expense due to increase in the share price. In the court in the current quarter compared to a decrease in the share price during the prior year quarter and an additional 1 million investment in people to support execution on Technology Solutions projects including registry enhancements for the Saskatchewan Registries Division and registry operations.

At 2.2 million increase in professional and Consulting Services related to increased acquisition integration and other costs.

Including resources deployed to respond, to plant or limited's, many tender offer.

Partially offsetting. This was cost of goods sold which decreased by 1.5 million due to lower sales, volume in the Regulatory and corporate Solutions divisions within services.

Sustaining Capital expenditures were 2.6 million for the quarter. End of June 30th 2025 in line with 2.7 million in the same prior year period.

For the 6 months, ended June 30th, 2025 sustaining Capital expenditures were 4.5 million compared to 4.8 million in the same prior year period.

After all this, as at June 30th, 2025 the company held 21.3 million in cash, compared to 21 million as at December. 31st 2024.

During the quarter, the company made voluntary, prepayments of 15 million towards the company's credit facility, which 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, the quarterly cash dividend of 23 cents per share.

that dividend will be payable on or before October 15th, 2025 to shareholders of record as of September 30th 2025

Amendment to our credit facility.

The credit facility, which previously was set to become current debt on our balance sheet in September 2020. Um,

5 has now extended to July, 2029 providing us with greater Financial flexibility.

The total availability under the credit facility remains at 250 million. We've also increased the accordion option from 100 million to 150 million.

Allowing us to scale. The credit facility up to 400 million if needed.

In addition, the credit facility has been simplified by consolidating the 2 existing revolving Credit branches of 150 million and 100 million into a single 250 million credit facility. Now, with improved pricing,

I will now turn the call back over to Sean for some concluding remarks.

Thanks Bob.

As we close out the second quarter, I'm pleased with our solid performance which was in line with our expectations even as we navigated unexpected costs tied to addressing shareholder matters. These challenges. While demanding did not derail our Focus or execution. We remain committed to driving operational excellence, optimizing our core business and maintaining our discipline Financial approach.

This quarter, truly reflects our ability, to execute consistently and stay aligned with our strategic goals.

Not surprisingly. Then we 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.

In keeping with our historical performance. We also expect to see robust free cash flow in 2025, which will support the continued deleveraging of our balance sheet to realize the long-term net. Leverage Target of 2 to 2 and a half times.

As we've said before, we're well positioned to navigate the evolving Market landscape while continuing to prioritize long-term shareholder value with a resilient foundation and clear strategy. We're confident in our ability to sustain our performance and deliver solid results in the quarters ahead.

Thank you for your continued support and we look forward to updating you next quarter.

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

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

Thank you as a reminder, to ask a question. Please press star, 1, 1 1 on your telephone and wait for your name, to be announced to withdraw your question. Please press star 1 1 1 again, 1 moment while we compile our Q&A roster,

Our first question is going to come from the line of Aaron Kyle with CIBC your line is open. Please go ahead.

Hi. Good morning. It's Aaron Kyle on first Scott, Fletcher. Um, maybe if I could just start on the registry's business, could you give us an update on what you've been seeing in the Saskatchewan housing market? Uh, I know, transaction volumes are down year-over-year as part of that slapping a difficult comp that maybe just an update on what you've been seeing in July. So far. It looks like housing sales, rebounded in June. So just wondering if you've seen that whole true for July.

Hi Erin. It's Sean. Thanks for the question. Uh, you know, we we wouldn't tend to speculate too much on on what we're seeing in July yet. I would say that this is typical in our seasonality. So June and July tend to be the highest, uh, months for us just based on uh, moving and and and other home sales. So the, the overall Market in Saskatchewan has been pretty stable as as we've reported and as you've seen in uh or or you may see in Saskatchewan realy uh realtors association reports down a little bit in May, but back up in June as you noted. And I think we're going to continue to see uh, fairly stable results in Saskatchewan, but at this point, uh, not, uh, we don't have an update or really to comment on July.

Okay, thank you that that, that clears that up. Um, maybe if I just switched to the services segment, then um, there was a decline in the regulatory Solutions revenue and and the mdna you note, that was just in part by the NOC band, as well as a decline in the kyc, and due diligence volume. I believe activity in those in those 2 sectors, the kyc, and due diligence was previously been fairly strong, so maybe if you could just dig into what the lower volume, what drove? The lower volumes in the quarter.

Yes, thanks for the question Aaron. Um,

Uncertainty that, uh, you know, is, is happening with, uh, you know, us trade, uh, uh, an announcements and other, um, you know, global global issues. I know Sean, if anything, you know, to know it's it's really. Uh, as Bob said, I mean, we don't experience a lot of seasonality per se in that business, but it really is tied to how the economy is doing and uh at any particular time. And so uh I mean we're seeing the strength in our Recovery Solutions business as a result of that being a bit counter cyclical to the to the other businesses. So I I don't think there's anything too much to read into that other than it is just sort of tied to the the economic cycle.

There and and maybe I'll just squeeze 1 more in here. Um, on the ncib you announced at the beginning of June, um, I know you have an executed under it yet, but any any near-term plans to use the ncib?

Uh, so again, uh, thanks for the question. Obviously, we put the ncib in just shortly before going into blackout, uh, for for Q2 here. So, practically speaking, not a lot of time, you know, uh, we're glad to have the ncib in place. We think it's a good strategic tool for us, uh, for for periodic use, I wouldn't be able to comment on whether we specifically would would use it at any given time, but it's a tool there that we have to use and, and we're glad it's there.

Understood. Okay, I'll pass the line. Thank you.

Thank you. Thank you. Thank you. And 1 moment for our next question.

Our next question is going to come from the line of Paul treiber with RBC Capital markets. Your line is open, please go ahead.

I think good morning, just a quick question on the, the the, the guidance for the year and, and and revenue growth. Um, you know, just looking at the math there, it does imply that Revenue growth, uh, would pick up in the second half of the year, uh, assuming, uh, that the midpoint of guidance. What do you see as the as the Catalyst or drivers, uh, to help, uh, uh, pick up, uh, growth in the back, half of the year?

Well, I I can maybe start on that Paul. Uh, as, as you just talked about, uh, we do see that the sort of second, uh, and third quarter. So that we're getting into July August, September for third quarter. We do see that as 1 of our strongest, that's has been historical. So, we, we could potentially see some pickup, uh, in Revenue in, in that quarter. I think the rest is just as we continue to grow the business organically as we're, we're looking with new customers and and New Opportunities. Uh, we continue to see growth throughout the year. We will see seasonality just to be clear like, uh, you know, in Q4 we would expect our registry business will, uh, be a little lower because that is the typical seasonality, but back half of the year for us. We're still confident in achieving those targets.

Okay. So it's helpful to understand the um just in terms of the ncib. Uh, how do we think about it in terms of a priority um, versus other potential uses of capital um including um um, m&a and deleveraging and where would it rank, you know, among uses of capital?

Yeah, that that's a a bit more of a challenging question. I think you know we look at all of our uh Capital allocation very strategically. You you sort of listed the top 3 therefore we've been clear that deleveraging is a priority for us and uh and I think we've been executing on that uh over the last number of quarters, we continue to look for prudent opportunities in the m&a space, but we'll assess that against the ncib and against leveraging. So we'll look at every opportunity, whether it's a deleveraging opportunity and ncib opportunity or an m&a opportunity and assess them against each other on their own merits. So, there there really isn't a way to prioritize. I think all of them are sort of equally important at the right time and the right place.

And then just 1 last 1 for me. Just could you elaborate further on the the million dollars uh additional wages and salaries expense. You know what projects are these new employees focused on and what's the mix between either internal projects or external ones?

Thanks Paul for the question. Yeah. So, uh, you know, as as as we've uh, discussed, uh, you know, as part of the, you know, Saskatchewan MSA extension, you know, we embarked on, uh, worked to enhance our, uh, Saskatchewan registries.

And so, uh, you know, as part of part of that we've uh deployed, you know, increased uh, resources to support that, that major project and as well. Uh in terms of third-party projects that we have in our Technology Solutions segment. You know, we've announced uh

Resources to, uh, support the support that expansion of that business as well. Yeah.

Great, thanks for the questions.

Thanks Paul.

Thank you and 1 moment as we move on to our next question.

Our next question is going to come from the line of Jesse.

Black with core Mark Securities. Your line is open, please go ahead.

Hey, good morning, just on the obr attrition. Can you give us a sense that you're starting to see that start to paper off? Or are you still seeing further? Uh, on consistent ongoing declines there

yeah, you know the uh,

You know, for us in corporate, uh, in the corporate Solutions segment, uh, you know, we've got contract and non-contract, uh, customers and, uh, of course, with our, our, our goal has been to, you know, expand our service offerings, to maintain our our customers and obviously, on the contracted customers that are, you know, um, partners with us for a long time. Um, you know, we've uh, you know they're using a variety of our services for the non-contract customers of, of course. That's uh, um, uh, you know, they tend to be, uh, uh, you know, customers that are more independent and, uh, you know, they're not uh, maybe you know, what more 1-off type customers. So that's where, uh, it's hard to predict their use of uh, you know, of our our systems and services. Yeah, I think overall just

It's been about what we expected and, and Bob's, right. It's really the Casual users that are are uh, using the obr more directly and and not going through service providers like uh, like I see, I see.

Okay, that's helpful. And then just on, uh, third-party Tech Solutions. Uh, you called out some projects that have been extended into next year. Have there been any changes to the scope or value of, uh, these contracts?

No.

No not not to typically these are just delays uh with with jurisdictions as they're implementing the projects so that's not unexpected in in this line of business.

Okay, got it. That's all for me.

Thanks Jesse. Thank you. And 1 moment for our next question.

Our next question comes from the line of Stephen. Bowen with Raymond James, your line is open. Please go ahead.

Morning everyone. Um, I'm just looking at the, the professional Consulting Services. Uh, you mentioned the, the rationale of the reason for the increase year-over-year. Um should we expect that number to to kind of go back to what? You know, was probably a quarterly number. And in 2024 I'm just curious if it's more 1 time there.

Yeah, I mean, I think that's the thanks for the question. I think that's a, a pretty logical assumption. Our, our m&a acquisition costs are generally, uh, well, spread across the year, and so, I think looking back at 2024 would be a good measure. These are largely 1-time costs.

Okay, that's great. Um, and then uh you did mention obviously, 1 of the priorities m&a. You get asked this every every quarter just wondering what you're seeing out there has been changing valuations or has the you know, tariff for the economy? Is that brought more assets up for sale. I'm just curious what the the Cadence is

Yeah, good question, uh, that it hasn't from our perspective. I think it it, you know, we look at a number of opportunities, to continually, we are very prudent in assessing those. I don't think anything has changed for us, uh, in that. In terms of its a good question, whether tariffs are or other Market instability, would bring some different assets, uh, for us that hasn't happened. I think the assets and opportunities that we'd be interested in remain, you know, aligned with our strategy, and that really hasn't changed as a result of terrorists, but that's a, that's an interesting question. Good question.

Thanks. Uh, that's all for me. Thanks guys.

Hi, Steve. Thank you. And I'm showing no further questions at this time and I would like to hand the conference back over to Jonathan hackshaw for any further. Closing remarks.

Thank you very much, Michelle, uh, with no further questions. We'd like, to once again, thank all of you joining us for, uh, the call today and for your support. And we look forward to speaking with you. Again, when we next report, have a great day.

Just concludes today's conference call. Thank you for participating. You may now disconnect

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