Q3 2025 Information Services Corp Earnings Call

November 5, 2025

Call at this time, all participants earn 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 that your hand is raised

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 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 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 Hackslay, Senior Director of Investor Relations and Capital Markets. Please go ahead.

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. You will then hear an automated message advising that 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 Hackslay, Senior Director of Investor Relations and Capital Markets. Please go ahead.

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. Amber and good morning to everyone joining us today. Welcome to ISC conference call for the quarter ended, September 30th 2025,

Jonathan Hackslay: Thank you, Amber. Good morning to everyone joining us today. Welcome to ISC's conference call for the quarter ended 30 September 2025. On the call today are Shawn Peters, President and CEO, and Robert Antochow, Chief Financial Officer. This morning, Sean will take you through some of the highlights of the quarter. Bob will 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 MD&A have been filed on SEDAR+ and are available on our website. We encourage you to review those reports in their entirety.

Jonathan Hackslaw: Thank you, Amber. Good morning to everyone joining us today. Welcome to ISC's conference call for the quarter ended 30 September 2025. On the call today are Shawn Peters, President and CEO, and Robert Antochow, Chief Financial Officer. This morning, Sean will take you through some of the highlights of the quarter. Bob will 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 MD&A have been filed on SEDAR+ and are available on our website. We encourage you to review those reports in their entirety.

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 review those reports in their entirety.

Jonathan Hackslay: 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 as 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 relations section of our website. I would now like to turn the call over to Shawn.

Jonathan Hackslaw: 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 as 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 relations section of our website. I would now like to turn the call over to Shawn.

I would also like to remind you that any statements made today that an 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 described in detail in the company's C do 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 on the investor relations section of our website.

I would now like to turn the call over to Shaw.

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

Shawn Peters: Thank you, Jonathan, and good morning to everyone joining us for today's call. Our Q3 for 2025 was very much as we expected. It was yet another strong quarter for the company. Continuing strong Saskatchewan economy translated into higher volumes in all registries, with specifically higher transaction volumes and a higher average home price in the Land Registry in a somewhat supply-constrained but strong residential housing market. According to industry sources, the first 3 quarters of 2025 saw a 2% rise in residential real estate transaction volume, while the average sales price increased by 9% compared to the same period in 2024. Compared to the 10-year trend, sales are up 19% year-to-date, despite the inventory challenges being experienced. Not surprisingly, this benefited both top and bottom-line performance for the quarter.

Our third quarter for 2025 was very much. As we expected was yet another strong quarter for the company. Continuing, strong Saskatchewan economy, translated into higher volumes in all Registries with specifically higher, transaction volumes and a higher average home price in the land registry in a somewhat Supply constrained, but strong residential housing market.

According to Industry sources, the first 3 quarters of 2025 saw a 2% rise in residential real estate, transaction volume. While the average sales price increased by 9% compared to the same period in 2024

Compared to the 10-year Trend sales are up 19% year to date despite the inventory challenges being experienced.

Not surprisingly, this benefited, both top and bottom line performance for the quarter.

The same Saskatchewan economy drove increased Revenue in the personal property. Registry and corporate registry. While the predictable nature of our Ontario property tax assessment business, rounded out, a very successful quarter for our registry operations segment.

Shawn Peters: The same Saskatchewan economy drove increased revenue in the Personal Property Registry and Corporate Registry, while the predictable nature of our Ontario property tax assessment business rounded out a very successful quarter for our Registry Operations segment. At the same time, our services segment benefited from the counter-cyclical nature of our Recovery Solutions division, which experienced further growth in asset recovery assignments due to increased delinquencies in the automotive lending market. Results for the quarter were up despite headwinds in the Ontario economy in 2025, with double-digit % increases in our Adjusted EBITDA of single-digit increases in revenue. Our Regulatory Solutions division saw modest growth after a year of dealing with the impact of the unexpected ban by the government of Ontario on NOSI implemented in June 2024.

The same time, our services segment benefited from the counter cyclical, nature of our Recovery Solutions division which experienced further growth in asset, recovery assignments due to increased delinquencies in the automotive lending market results. For the quarter were up despite headwinds in the Ontario economy in 2025, with double digit percentage increases in our adjusted ibida, off single digit increases in Revenue,

And our regulatory Solutions division saw modest growth after a year of dealing with the impact of the unexpected ban by the government of Ontario and nosies implemented in June 2024.

Finally, our technology solution segment began initial development, work on the new, mecp contract in the quarter and continues to work on. Delivering registry enhancements for our Saskatchewan. Registries

Shawn Peters: Finally, our Technology Solutions segment began initial development work on the new MECP contract in the Q and continues to work on delivering registry enhancements for our Saskatchewan Registries. Revenue for the Q and year-to-date were relatively stable and are largely dependent on the timing of work on our various solution definition and implementation contracts. With that, I'll now turn the call over to Bob to discuss some of the financial highlights in more detail before providing some closing remarks.

Revenue for the quarter and year to date were relatively stable and are largely dependent on the timing of work on our various Solutions, uh, definition and implementation contracts.

With that, I'll now turn the call over to Bob to discuss some of the financial highlights in more detail before providing some closing remarks.

Thank you, Sean and good morning, everyone.

2025 year to date performance has been solid with the third quarter of 2025 continuing to deliver results in line with our expectations driven by several key factors that I will now walk you through.

Robert Antochow: Thank you, Shawn, and good morning, everyone. 2025 year-to-date performance has been solid, with Q3 2025 continuing to deliver results in line with our expectations, driven by several key factors that I will now walk you through. Revenue was CAD 65.6 million for the quarter ended 30 September 2025, an increase of 8% when compared to CAD 60.9 million in Q3 2024. Growth was driven by strong performance from the Saskatchewan Registries division of Registry Operations, particularly in the Land Registry, due to an increase in average real estate values across the Saskatchewan market, combined with higher transaction volumes and increased high-value property registrations compared to the prior year quarter as the Saskatchewan economy continues to show resiliency.

Revenue was 65.6 Million for the quarter ended. September 30th 2025 an increase of 8% when compared to 60.9 million in the third quarter of 2024.

The prior year quarter is the Saskatchewan and Conway continues to show resiliency.

Net income was 8.5 million or 46 cents per basic share and 45 cents per diluted share for the quarter ended, September 30th 2025,

An increase compared to 4.2 million or 23 cents per basic share and diluted share in the third quarter of 2024.

Robert Antochow: Net income was CAD 8.5 million or CAD 0.46 per basic share and CAD 0.45 per diluted share for Q3 ended 30 September 2025, an increase compared to CAD 4.2 million or CAD 0.23 per basic share and diluted share in Q3 2024. The increase was supported primarily by growth in Adjusted EBITDA from Registry Operations, where the Land Registry benefited from increases in average real estate values across the Saskatchewan market, combined with higher volumes and increased high-value property registrations compared to the prior year Q. Lower net finance expense as a result of lower interest rates and lower average debt outstanding also contributed to the increase.

The increase was supported primarily by growth in adjusted e, but up from registry operations, where the land registry benefited from increases in average real estate values across the Saskatchewan Market. Combined with higher volumes and increased high-value property registrations compared to the prior year quarter.

Laurette, Finance expense, as a result of lower interest rates and lower average debt outstanding also contributed to the increase.

Net cash flow provided by operating activities, was 22.6 Million for the quarter ended. September 30th 2025 an increase of 8.4 million compared to the third quarter of 2024.

Robert Antochow: Net cash flow provided by operating activities was CAD 22.6 million for Q3 ended 30 September 2025, an increase of CAD 8.4 million compared to Q3 2024. Contributing to the increase were the same items as described previously for net income, along with timing changes in non-cash working capital, largely as a result of the timing of share-based compensation payments. Adjusted net income was CAD 16 million, or CAD 0.86 per basic and CAD 0.85 per diluted share for Q3 ended 30 September 2025, compared to CAD 11 million or CAD 0.61 per basic share and CAD 0.60 per diluted share in Q3 2024. The increase reflects growth in Adjusted EBITDA in Registry Operations and lower interest expense on long-term debt, as previously discussed.

contributing to the increase where the same items as described previously, for the net income, along with timing changes in non-cash working capital largely, as a result of the timing of share-based compensation payments,

Adjusted, net income was 16 million or 86 cents per basic and 85 cents per diluted share for the quarter ended, September 30th 2025.

Compared to 11 million or 61 cents per basic. Share in 66 cents per diluted share in the third quarter of 2024.

The increase for Flex growth in adjusted ibida. In registry operations and lower interest expense on long-term debt as previously discussed.

Adjusted even up for the quarter ended, September 30th, 2025 was 27.6 million, and increased compared to 22.7 million in the third quarter of 2024.

It's driven by strength and registry operations for the same reasons described previously for net income.

Robert Antochow: Adjusted EBITDA for the quarter ended 30 September 2025 was $27.6 million, an increase compared to $22.7 million in Q3 2024, driven by strength in Registry Operations for the same reasons described previously for net income. Adjusted EBITDA was 42%, which was an increase compared to 37% in Q3 2024, primarily as a result of the strong revenue performance of the higher margin Saskatchewan Registries division. Adjusted free cash flow for the quarter ended 30 September 2025 was $19.4 million, compared to $15.9 million in Q3 2024, due primarily to the strong operating results from Registry Operations.

Adjusted Eva was 42%, which was an increase compared to 37% in the third quarter of 2024 primarily as a result of the strong Revenue performance of the higher margins suspension, Registries to patient.

Adjusted free cash flow for the quarter ended. September 30th 2025 was 19.4 Million compared to 15.9 million in the third quarter of 2024 due primarily to to the strong operating results from registry operations.

Expenses were 50.1 million for the quarter ended, September 30th 2025 and increase of 0.4 million compared to the same period. Same prior year period.

the increase in the quarter was mainly due to

Robert Antochow: Expenses were CAD 50.1 million for the Q3 ended 30 September 2025, an increase of CAD 0.4 million compared to the same prior year period. The increase in Q3 was mainly due to an increase in wages and salaries of CAD 0.5 million related to a CAD 0.5 million increase in share-based compensation due to a greater increase in the share price in the current Q3 compared to the increase in the share price during the prior year Q3. A CAD 1 million increase in professional and consulting services related to increased acquisition integration and other costs supporting growth opportunities.

An increase in wages and salaries 0.5 million related to a 0.5 million increase in share-based compensation.

due to a greater increase in the share price and the current quarter, compared to the increase in the share price during the prior year quarter,

A 1 million increase in professional and Consulting Services related to increased acquisition integration and other costs supporting growth opportunities.

And then these items were largely offset by lower Information. Technology, Services of 1 million, primarily resulting from a combination of lower it, contractor costs and higher cost capitalization primarily within our Technology Solutions segment.

Robert Antochow: These items were largely offset by lower information technology services of CAD 1 million, primarily resulting from a combination of lower IT contractor costs and higher cost capitalization, primarily within our Technology Solutions segment in relation to system development, including registry enhancements for the Registry Operations segment. Sustaining capital expenditures were CAD 2.7 million for the quarter ended 30 September 2025, compared to CAD 1.9 million in the same prior year period. For the nine months ended 30 September 2025, sustaining capital expenditures were CAD 7.3 million, compared to CAD 6.7 million in the prior year period. In both periods, the increase primarily resulted from increased system development work across our business segments, including registry enhancements in the Saskatchewan Registries division of Registry Operations.

In in relation to system development, including registry enhancements for the Sask for the registry operation segment.

Sustaining Capital expenditures for 2.7 million for the quarter ended, September 30th, 2025 compared to 1.9 million in the same prior year period.

For the 9th ended, September 30th 2025 sustaining Capital expenditures were 7.3 million compared to 6.7 million in the prior year period.

in both periods, The increased primarily resulted from increased system development, work across our business segments, including registry enhancements in the Saskatchewan, Registries division of registry operations,

After all this at September 30th 2025, we held 17.5 million in cash, compared to 21 million as at December. 31st 2024.

Robert Antochow: After all this, at 30 September 2025, we held CAD 17.5 million in cash compared to CAD 21 million as at 31 December 2024. During the quarter, the company made voluntary prepayments of CAD 16 million towards the company's credit facility, which is a reflection of the company's focus on continuing sustainable growth and deleveraging its balance sheet towards long-term net leverage target of 2x to 2.5x. Most importantly, we remain on track to achieve this target by next year. 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 January 2026 to shareholders of record as of 31 December 2025.

Which is a reflection of the company's focus on continuing sustainable growth and deleveraging its balance sheet towards long-term net. Leverage Target of 2 to 2.5 times.

Most importantly, we remain on track to achieve this target by next year.

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, January 15th, 2026 to shareholders of record as of December 31st 2025

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

Thanks Bob as we've said, many times before our quarterly results demonstrate the strength of is these business model and the diversification we've established and reflects our disciplined execution, and the dedication of our employees.

Robert Antochow: I will now turn the call back over to Shawn for some concluding remarks.

Shawn Peters: Thanks, Bob. As we've said many times before, our quarterly results demonstrate the strength of ISC's business model and the diversification we've established and reflects our disciplined execution and the dedication of our employees. As we look to the end of the year, we remain on track to achieve our guidance, with revenue expected on the lower end of our CAD 257 to 267 million range as a result of the headwinds in Ontario, but with Adjusted EBITDA in the middle to higher end of our CAD 89 to 97 million range as a result of the diversified and counter-cyclical product mix.

As we look to the end of the year, we remain on track to achieve our Guidance. With Revenue expected on the lower end of our 257 to 267 million range as a result of the headwinds in Ontario. But with adjusted ibida in the middle to higher, end of our 89 to 97 million range as a result of the Diversified encounter cyclical product mix.

As well as Bob mentioned. We also remain on track to achieve our deleveraging Target of 2 to 2 and a half times by 2026 reinforcing. Our discipline approach to Capital Management and his Testament to the high quality of our cash flows and ability to de-lever quickly.

Shawn Peters: As well, as Bob mentioned, we also remain on track to achieve our deleveraging target of 2 to 2.5 times by 2026, reinforcing our disciplined approach to capital management and is testament to the high quality of our cash flows and ability to delever quickly. Finally, as many of you will have seen, on 8 September, we announced that the company was undertaking a review of strategic alternatives led by a special committee of the board. As outlined in our earnings news release yesterday, the special committee, with the support of its advisors, is advancing its work with a sense of urgency and considering a wide range of potential outcomes. Once that process is completed and the board has reached a decision, the company will provide an update to the market. With that, I'll now hand the call back over to Jonathan.

Finally, as many of you will have seen on September 8th, we announced that the company was undertaking, a review of strategic Alternatives, led by a special Committee of the board.

Is outlined in our earnings news release yesterday. The special committee with the support of its advisor is advancing its work with a sense of urgency and considering the wide range of potential outcomes.

Once that process is completed and the board has reached a decision. The company will provide an update to the market.

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

Thank you Sean. Uh amber we'd now like to begin the question and answer session, please.

Thank you.

Robert Antochow: Thank you, Shawn. Amber, we'd now like to begin the question and answer session, please.

At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1, 1 1 on your phone 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,

Operator: 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 phone 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 is from Filip Stevanovic of CIBC World Markets. Your line is open.

Our first question is from Philip Stein novik of CIBC World Markets. Your line is open.

Hi, good morning. It's Philip Stevan with Sean for Aaron Kyle.

um, maybe if I could start with a question on regular regulatory Solutions Revenue which returned to growth in the quarter,

Filip Stevanovic: Hi. Good morning. It's Filip Stevanovic on for Erin Kyle. maybe if I could start with a question on Regulatory Solutions revenue, which returned to growth in the quarter. You called out higher transaction volume and fee increases implemented during the year. I was just hoping if you could elaborate on some of the growth drivers and how we should be thinking about this dynamic heading into Q4 next year.

You called out higher transaction, volume, and fee increases implemented. During the year, I was just hoping if you could elaborate on some of the growth drivers, and how we should be thinking about this Dynamic heading into Q4 next year.

Robert Antochow: Yeah. Morning, Filip. Thanks for the question. Yeah, with the fee adjustments that were implemented at the beginning of the year, so, you know, that basically was, you know, price increases. As, you know, business occurs throughout the year, we are seeing a higher, you know, higher return in that, you know, division. From a, you know, the outlook going forward, you know, we feel there's been a somewhat of an impact because of Ontario, you know, market. However, you know, the regulations, you know, require FINTRAC regulations and so forth, you know, remain a driver of that business line and, you know, we continue to expect growth in that area. Yeah.

Yeah, morning Philip. Uh, thanks for the question. Um, yeah, with uh, the, the fee adjustments that, uh, were implemented at the beginning of the year. So, you know that basically was, uh, you know, you know, price, uh, price increases. So as uh, you know, business, uh, occurs throughout the year, we are seeing a higher, uh, you know, higher return in that, uh, you know division, um,

You know, from, uh, you know, the Outlook, uh, going forward, you know, we, we feel there's been a somewhat of an impact because of the Ontario, you know, Market, um, however, you know, the the regulations, uh, you know, require finra regulations and so forth, uh, you know, remain a, a, a driver of that, that business line and, you know, we continue to expect growth in that area. Yeah.

Thank you. That's helpful and just a follow-up regarding the fee adjustments, in know, your client. And due diligence are those normal course, CPI linked increases or do you have some pricing power there?

Um,

Filip Stevanovic: Thank you. That's helpful. Just a follow-up regarding the fee adjustments and Know Your Customer and due diligence, are those normal course CPI linked increases or do you have some pricing power there?

Robert Antochow: You know, from, we've got both contracted and non-contract customers. You know, the majority of the revenue comes from contracted customers which, in that case, the contracts are typically, you know, two to three-year contracts. When contracts do come up for renewal, then we are, you know, as part of that renewal process, look at what's gone on in the market and obviously, you know, we've got to cover our increased costs. That's when we look at price increases.

You know, from uh, we bought both contract contracted and non-contract uh, uh customers. Uh, you know, the majority of the revenue comes from contracted customers which um you know in that case the the contracts are typically, you know um you know 2 to uh 3 year contracts. So when when contracts do come up for Renewal then we are uh you know as part of U that renewal process. Uh look at what's gone on the market and obviously you know we've got to cover our increased costs. So um that that's when we look at price increases

Where we had expected for the quarter and your guidance is now calling for decline. Year-over-year, can you elaborate on the delayed advancements and implementation of third-party projects?

Filip Stevanovic: Okay. Thank you. If I could just sneak one more in. On the Technology Solutions, third-party revenue was below where we had expected for the quarter, and your guidance is now calling for a decline year-over-year. Can you elaborate on the delayed advancements and implementation of third-party projects?

Robert Antochow: On, you know, Technology Solutions third party contracts, you know, we use the, you know, percentage of completion revenue recognition. As, you know, that basically two factors are, you know, is the delivery timeline, as well as then your progress on those projects throughout, you know, the reporting period. With the couple of the contracts we have going on, you know, the progress has been pushed out to the next year. Because of that then the, you know, the timing of revenue has shifted from, you know, this year, to then, you know, from this quarter to future quarters.

Uh, so on on, you know, Technology Solutions, third-party contracts. Uh, you know, we use the, uh, you know, percentage of completion, um, Revenue recognition, so as, um, you know, so that basically, uh, 2 factors are, are you know, is, uh, the delivery timeline, uh, as well as then, you know, progress on those projects throughout, uh, you know, the, the reporting period. So, um, with, uh, with with the couple, couple of the contracts we have going on the, uh,

You know, the progress has been pushed out to, uh, uh, the next next year and, uh, uh, because of that. Then, the, you know, the timing of Revenue has has shifted from, uh, you know, this year, uh, to then, um, you know, you, you know, from this quarter to Future quarters,

Shawn Peters: Well, the one thing I might add to that, as Bob sort of alluded to, is we are subject a bit to our clients as well. Sometimes the implementation, the design implementation of those contracts gets pushed out because the clients aren't ready or moving at a different pace. That's why we always sort of qualify that to say that it's based on the timing.

Well, the 1 thing that my dad to that is Bob, sort of alluded to is, we are subject a bit to our clients uh, as well. So sometimes the implementation, the design implementation of those contracts gets pushed out because the clients aren't ready or or moving at a different pace. And so that's why we, we always sort of qualify that to say that it's based on the timing

Thanks, that's helpful to understand. I'll pass my line.

Thank you. Thank you.

Our next question comes from David Pierce of Raymond James. Raymond James.

Hey guys. Good morning.

Filip Stevanovic: Thanks. That's helpful to understand. I'll pass my line.

Just uh, just 1, 1 question on its on the guidance.

Operator: Thank you.

Filip Stevanovic: Thank you.

Uh, you pointed to Eva?

Operator: Our next question comes from David Pierse of Raymond James.

Narrating the midpoint to the high end of of your your previous guidance.

David Pierse: Hey, guys. Good morning. Just.

I'm just looking at what, what we've seen here today and

Robert Antochow: Morning, David.

David Pierse: Just one question on the guidance. You pointed to EBITDA now reading the midpoint to the high end of your previous guidance. I'm just looking at what we've seen year to date, it looks a little conservative. Like if we see granted, you know, we know Q4 is a slower quarter seasonally wise, even if we see any EBITDA growth year-over-year, you're likely going to beat that target. Is there something going on that hasn't led you to revise that number slightly higher, or is this just conservatism? Thank you.

it looks a little conservative like if we see a granted you know we know Q4 is is a slower quarter seasonally wise but even if we see any ibida growth,

Year over year.

You're likely going to beat that Target. So is there something going on? That hasn't LED you to revise that number slightly higher? Or is this just conservative

Thank you.

Robert Antochow: You know, thanks for the question, David. You know, we're, you know, pleased with how the year's, you know, progressing to date. You know, why, you know, we're saying more to the mid to the high end of, you know, the range is, you know, due to the, you know, performance of the Registry Operations segment, which does have a higher margin. Also, though, in the services you'd see our year to date, Adjusted EBITDA margin in services is also tracking higher than it was last year. You know, based on that we, you know, that's why we're pointing more to the mid to the high end. I don't know, Shawn, did you wanna.

Um, you know, thanks for the question David, you know, we're, you know, pleased with how the years, uh, you know, progressing today, um, and uh, you know why, you know, we're saying more to the mid to the high end of, uh, you know, the range is, you know, do the, you know, performance of the registry operations segment, which does have a higher margin also though, in the services, you'd see our year to date uh, adjusted even emerging in Services is also tracking higher um, than it was. Uh, last

Last year. Um, and so, you know, based on that we uh, you know, that's why we're, we're pointing more to the mid to the high high end. Um,

I know Sean did you want to? Yeah, the only thing I'd add to that is

Shawn Peters: Yeah. The only thing I'd add to that is I know your question is sort of are we being a bit conservative on that? You sort of pointed to the one criteria, which is the Q3, or sorry, the Q4 is typically the slower quarter for us in particularly Saskatchewan Registry Operations. However, I mean, we expect to see the strength of the Saskatchewan economy continue through the Q3, Q4, even though it is typically just a lower quarter from a volume perspective. You know, that's why we've guided that way. You know, we always like to make sure

Robert Antochow: That we account for things that could yet happen in the market. I think that's why our guidance is landing where it is. There's still headwinds we still see in the Ontario market and, you know, we just wanna be cautious of that. We do think that the Saskatchewan economy is gonna be strong here in Q4.

Trevor Reynolds: That's perfect. That's all I had. Thank you.

David Pierse: That's perfect. That's all I had. Thank you.

I know your, your question is sort of, Are We being a bit conservative on that and you sort of pointed to the 1 Criterion is typically, uh, the slower quarter for us in, uh, particularly Saskatchewan registry operations. Uh, however, I mean, we expect to see the strength of these Saskatchewan economy continued through the the third the fourth quarter even though it is typically just a lower quarter, from a volume perspective. Um, and so you know that's why we've guided that way. Um, you know, we all we always like to make sure that uh we account for things that that could yet happen in the market. And I think that's why our guidance is landing where it is. There there's still a headwinds we still see in the Ontario market and, you know, we just want to be uh, cautious of that. But we we do think that the Saskatchewan economy uh is going to be strong here in the fourth quarter.

Robert Antochow: Thanks.

Operator: Thank you. Our next question comes from Paul Treiber of RBC Capital Markets. Your line is now open.

That's perfect. That's all I had. Thank you.

Thank you. Thank you.

Our next question comes from Paul treiber of RBC Capital markets. Your line is now open.

Paul Treiber: Thanks so much and good morning. Just, the first question, a clarification one. Just on the strategic review, the comment in the press release about the sense of urgency, could you clarify that statement? Like, is that a greater sense of urgency than when the review started, or is it proceeding at the original pace?

Oh thanks so much and good morning. This is the first question. Just a a clarification 1 just on the Strategic review, the the comment in the press release about uh, the sense of urgency could you, could you clarify that statement like, is that is that a greater sense of urgency than than when the review started or is it is it proceeding at the the, uh, original pace?

Robert Antochow: No. Yeah, good question, Paul. It's proceeding at the original pace. We just recognized that, with the announcement in September that there would be an interest in the outcome of that review, and so wanted to assure folks that we are proceeding with an appropriate sense of urgency on it, but not any more urgent than was anticipated at the original announcement.

Okay, thanks, that's, that's helpful. Um, just secondly, just on the the, the opening up of the Ontario business registry. The the mdna, uh, indicates that. You see the impact of stabilizing can you elaborate on on why that's occurring?

Paul Treiber: Okay, thanks. That's helpful. Just secondly, just on the opening up of the Ontario Business Registry, the MD&A indicates that you see the impact as stabilizing. Can you elaborate on why that's occurring?

Robert Antochow: Yes. You know, with the further opening, you know, of the OBR, you know, what we've seen is, in our business, an impact to the, you know, non-contracted customers, you know, they're more time, you know, sort of one time users or more, I guess, infrequent. They have the opportunity now to go to the OBR, you know, directly. That's where we've seen sort of a shift as a result of the OBR opening up.

Robert Antochow: You know, the customers we've got contracted, which we sell, you know, additional services to, they see the value in our technology and, you know, the service offerings and, you know, that's where, you know, we see the stabilizing is coming down with the one-time customers, to where, you know, then we've got our contracted customers. Yep.

So, um, you know, with further opening, uh, you know, of the obr, uh, you know, what we've seen is uh, in our business and impact the the, you know, non-contracted, uh, customers uh, primarily we're, you know, they're they're more time. You know, sort of 1 time, users are more, I guess, uh, infrequent they have the opportunity now, to go to the OVR, you know. Directly. Uh, and so those, that's where we've seen sort of the shift as a result of the obr opening up. You know, the customers we've got contracted which we sell, you know, additional services to they see the value in our, our, our technology and uh, you know, the service offerings. And uh, you know, that's where uh, uh, you know, we we see the stabilizing is coming down with the the 1 time, uh, customers uh, to where uh, you know, then we've got our our contracted customers, you know.

Okay, and then just lastly, just on the, the, the nosy band, The have you pretty much locked the, uh, that the impact on a year-over-year basis, or is there still some, uh, lingering or or uh, partial quarter, uh, impacts that we should expect next quarter?

Paul Treiber: Okay. Just lastly, just on the NOSIs ban, have you pretty much lapped the impact on a year-over-year basis, or is there still some lingering or partial quarter impacts that we should expect next quarter?

No we basically uh lap that now uh Paul so yeah, it was implemented in, you know, June of of 20124. So there was still some trailing um,

Robert Antochow: No, we've basically lapped that now, Paul. Yeah, it was implemented in, you know, June of 2024, there was still some trailing, you know, to the end of Q2, a little bit into Q3, but just at the start. We've lapped. You know, it's immaterial, we've lapped that. You're correct. Yeah.

You know, you know, to the end of Q2 a little bit into to Q3 but just at the start but we we flopped, you know, it's immaterial. Um so we've blocked that you're correct. Yeah.

Okay. Thanks, I'll pass on.

Thank you.

Our next question comes from. Jesse pitlick at coremark. Securities. Airline is now open.

Paul Treiber: Okay, thanks. I'll pass along.

Robert Antochow: Thanks, Paul.

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

Hey, good morning, just coming back to the Strategic review. Are you able to confirm where you are in that process? Like is it is it in an initial Preparatory phase or is it kind of in full swing?

Jesse Pytlak: Hey, good morning. Just coming back to strategic review, are you able to confirm where you are in that process? Like, is it in an initial preparatory phase, or is it kind of in full swing?

Uh, so we're not really able to confirm just as much other than what we said in the press release. But as we said the, the companies undertaking the review which, you know would imply that's in full swing. So,

Robert Antochow: We're not really able to confirm, Jesse, much other than what we said in the press release. As we said, the company's undertaking the review, which, you know, would imply that it's in full swing.

Okay, um, and then just just switching over to Services business. Uh, can you maybe just give us an update on how the competitive environment looks for Recovery Solutions? Typically you've been a pretty strong, uh, competitor in that space. But, but competing in some of that's much larger than you. Do you have any sense if you're taking in or seating and you share their

Jesse Pytlak: Okay. Just switching over to the services business, can you maybe just give us an update on how the competitive environment looks for Recovery Solutions? Typically, you've been a pretty strong competitor in that space, but competing against someone that's much larger than you. Do you have any sense if you're taking or ceding any share there?

um,

you know, our our sense is, you know, that business is uh you know with our our customers is driven um

Robert Antochow: You know, our sense is, you know, that business is, you know, with our customers, is driven, you know, by their allocation to us of their business. You know, we've got performance requirements in our contracts, and, you know, we always strive to, you'll meet, obviously, but to actually exceed that performance, and that sometimes results in a greater allocation of a business. So our, you know, obviously, it's a key business line for us, a higher margin business. We're, from a performance standpoint, you know, we pay attention to that.

Uh, you know, by their allocation, to us of, of their business. Um, and um, you know, we've got performance requirements in our in our contracts. And, you know, we always strive to, uh, you know, meet obviously, but to actually exceed that performance and that's, uh, uh, sometimes results in a greater allocation of of business. And, uh, uh, so our, you know, obviously, uh, uh, it's a key business line for us, uh, higher margin business. So we're, uh, from a performance standpoint, you know? Uh, we, we pay attention to that. And, uh, um, and so, you know, the growth is not only due to, uh, you know, more cases being assigned, but also, um, you know, we feel attributed to our performance and the a higher allocation of individual customers business. Yeah.

Robert Antochow: You know, the growth is not only due to, you know, more cases being assigned, but also, you know, we feel attributed to our performance, a higher allocation of individual customers' business. Yeah.

That's all for me. Thank you.

Thank you.

Our next question is from Trevor Reynolds of a human capital. Your line is now open.

Jesse Pytlak: All right. That's all for me. Thank you.

Operator: Thank you. Our next question is from Trevor Reynolds of Acumen Capital. Your line is now open.

Trevor Reynolds: Hey, guys. most of my questions have been answered, but just, I guess just on the Regulatory Solutions side of things, you guys mentioned the fee increases have helped stabilize that a little bit. Are you guys still adding new customers in that division as well?

Hey guys uh most of my questions have been answered but just um I guess just on the regulatory Solutions uh side of things. If you guys mentioned uh the fee increases uh helped um stabilized that a little bit. Are you guys still adding new customers in uh in that division as well?

Robert Antochow: Yeah. We continue to, you'll pursue, you know, customer growth and, you know, and expand our service offerings. You know, obviously, with the Ontario economy and, you know, what's happening there, that we feel that that's had a impact on sort of regular like ongoing customers as well. You've got new customers coming on board, but then, you know, some consistent business with existing customers. It's the combination of those items, you know, has resulted in, you know, lower than expected growth in this past quarter. Yeah.

What's happening there? That, uh, uh, we, we feel that that's had a impact on sort of regular cut like, ongoing customers as well. So you've got new customers coming on board, but then, um, you know, some consistent, um, business with existing customers. So it's, uh, uh, the combination of those items, uh, you know, as resulted in, uh, you know, lower, um, lower than expected, uh, growth in this, this past quarter. Yeah.

Trevor Reynolds: Okay. Just on Recovery Solutions, obviously seen some nice growth in that year-over-year, stabilize a little bit over the last two quarters. Just curious, is there a lot of seasonality in that? Is this kind of the high level on it or where do you think you guys can grow that business to?

And then just on, uh, on Recovery Solutions, um, obviously seen some nice growth and growth in that year-over-year, uh, stabilized a little bit over the last, uh, 2 quarters just curious is, um, is there a lot of seasonality in that? And then is this kind of the, the high level on it? Or or is what, where do you think you guys can grow that? That business, too?

um,

you know, from uh, uh, again it, uh, you know that business, you know, uh, you know, we know Auto delinquencies are up and that's why there's more, uh,

Robert Antochow: You know, from again, it, you know, that business, you know, we know auto delinquencies are up, and that's why there's more, you know, the, you know, seeing the growth in that business, you know, it is countercyclical. You know, when the economy is not growing, you know, that business, you know, does pick up. You know, from a seasonality, usually it's Q4 when that business is a little bit slower just because of Christmas time and, you know, lenders, you know, just because that time of the year do, you know, I guess, slow down by, you know, that sort of mid-December point until early January.

Robert Antochow: You know, that's one thing that, you know, we'll see from a revenue side. You know, again, you know, expectation going up because delinquencies are up. We continue to expect that business in the short term to continue to grow. You know, that's sort of our feeling on that. I don't know, Shawn, if you had anything.

You know, that, you know, seeing that growth in that business, you know, it is counter cyclical. Um, and uh, uh, you know, to the, when the economy is, uh, is not growing, you know, that business, uh, you know, does does pick up, um, you know, from a seasonality. Usually, it's, it's Q4 when that business is a little bit slower, just because of Christmas time and, you know, lenders, you know, you know, uh, you know, just, uh, just because that time of the year do, uh, um, uh, you know, I guess, uh, uh, slow down by, you know, that sort of mid December point until uh, early January. Um, and so then, uh, you know, that's 1 thing that, you know, we'll, we'll see from a revenue side, you know, again, uh, you know, expectation, going up because delinquencies are up. We continue to expect that business in the short term to, uh, continue to grow. Um, and, uh, um, you know, and that, that sort of our feeling of that.

General, Sean, if you had anything. Yeah, just to your to the growth question. Uh, Trevor

Shawn Peters: Yeah. Just to the growth question, Trevor. Yeah, it is just sort of the high watermark. As Bob said, there is some seasonality to it, so we do expect in Q4 we'll probably see a bit of that impact. At the same time, we are much like the Regulatory Solutions. We are adding new clients to this business. That's number 1. We're seeing some increased assignments for the reasons Bob outlined, which is number 2. We expect that's gonna continue into next year. The one thing that we're always careful on this business is the countercyclical nature. As the economy starts to pick up, we'll see the other parts of our business pick up and this go down. I don't think we're at the high watermark yet.

Uh, yeah. Is this sort of the high high water Mark? Um, as Bob said, We There is some seasonality to it. So we, we do expect in the fourth quarter, we'll probably see a bit of that impact. At the same time, we are much like the regulatory Solutions. We are adding new clients to to this business. So that's number 1, we're in see, we're seeing some increased assignments for the reasons Bob outlined, which is number 2, and we expect that's going to continue.

Uh, into next year. Um, so the, the 1 thing that we're always careful on on this business is the counter cyclical nature. So, as the economy starts to pick up, we'll see the other parts of our business, pick up, and, and this go down. I don't think we're at the high water, mark yet. I, I think we might still see further growth in this in 2020, uh, 6. But, uh, again, that's subject to how the economy is doing. And we could see a flip between this and, and our other, our Regulatory, and our corporate Solutions business,

Great. That's all for me. Thanks.

Shawn Peters: I think we might still see further growth in this in 2026. Again, that's subject to how the economy is doing, and we could see a flip between this and our other, our Regulatory Solutions and our Corporate Solutions business.

Thanks, thank you.

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

Trevor Reynolds: Great. That's all for me. Thanks.

Robert Antochow: Thanks, Trevor.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back over to Jonathan Hackslay for closing remarks.

Thank you Amber with no further questions. We'd like to once again, thank all of you for joining us on today's call and for your questions and we look forward to speaking with you. Again, when we next report, have a great day.

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

Jonathan Hackslay: Thank you, Amber. With no further questions, we'd like to once again thank all of you for joining us on today's call and for your questions. We look forward to speaking with you again when we next report. Have a great day.

Jonathan Hackslaw: Thank you, Amber. With no further questions, we'd like to once again thank all of you for joining us on today's call and for your questions. We look forward to speaking with you again when we next report. Have a great day.

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

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