Real Matters Q1 2026 Real Matters Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Real Matters Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Q1 2026 Real Matters Earnings Conference Call. 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'll need to press star 11 on your telephone. You will then hear an automated message advising 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 speaker today, Lynn Beauregard, Vice President of Investor Relations and Corporate Communication. Please go ahead.
Operator: Good day, and thank you for standing by. Welcome to the Q1 2026 Real Matters Earnings Conference Call. 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'll need to press star 11 on your telephone. You will then hear an automated message advising 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 speaker today, Lynn Beauregard, Vice President of Investor Relations and Corporate Communication. Please go ahead.
Speaker #1: presentation, there will be a question-and-answer session. To ask a question during the After the speaker's 11 on your telephone. You will then session, you'll need to press star hear an automated message advising your hand is raised.
Speaker #1: Please press star 1-1 to withdraw your question, again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lyne Beauregard, Vice President, Investor Relations and Corporate Communications.
Speaker #1: Please go ahead.
Speaker #2: Thank you, Operator,
Lyne Beauregard: Thank you, Operator, and good morning, everyone. Welcome to Real Matters' Financial Results Conference Call for the first quarter ended 31 December 2025. With me today are Real Matters Chief Executive Officer Brian Lang and Chief Financial Officer Rodrigo Pinto. This morning, before market open, we issued a news release announcing our results for the three months ended 31 December 2025. The release, accompanying slide presentation, as well as financial statements and MD&A, are posted in the financial section of our website at realmatters.com. During the call, we may make certain forward-looking statements which reflect the current expectations of management with respect to our business and the industry in which we operate. However, there are a number of risks, uncertainties, and other factors that could cause our results to differ materially from expectations.
Lyne Beauregard: Thank you, Operator, and good morning, everyone. Welcome to Real Matters' Financial Results Conference Call for the first quarter ended December 31st, 2025. With me today are Real Matters Chief Executive Officer Brian Lang and Chief Financial Officer Rodrigo Pinto. This morning, before market open, we issued a news release announcing our results for the three months ended December 31st, 2025. The release, accompanying slide presentation, as well as financial statements and MD&A, are posted in the financial section of our website at realmatters.com. During the call, we may make certain forward-looking statements which reflect the current expectations of management with respect to our business and the industry in which we operate. However, there are a number of risks, uncertainties, and other factors that could cause our results to differ materially from expectations.
Speaker #2: Matters Financial Results Conference Call for the first and good morning, everyone. Welcome to Real quarter ended December 31st, 2025. With me today are Real Matters Chief Executive Officer Brian Lang and Chief Financial Officer Rodrigo Pinto.
Speaker #2: This morning, before market open, we issued a news release announcing our results for the three months ended December 31, 2025. The release, accompanying slide presentation, as well as the financial statements and MD&A, are posted in the financial section of our website at realmatters.com.
Speaker #2: During the call, we may make certain forward-looking statements which reflect the current expectations of management with respect to our business and the industry in which we operate.
Speaker #2: However, there are a number of risks and uncertainties and other factors that could cause our results to differ materially from expectations. Please see the slide entitled Cautionary Note Regarding Forward-Looking Information in the accompanying slide presentation for more details.
Lyne Beauregard: Please see the slide entitled "Cautionary Note Regarding Forward-Looking Information" in the accompanying slide presentation for more details. You can also find additional information about these risks in the risk factors section of the company's annual information form for the year ended 30 September 2025, which is available on SEDAR+ and in the financial section of our website. As a reminder, we refer to non-GAAP measures in our slide presentation, including net revenue, net revenue margins, adjusted net income or loss, adjusted net income or loss per diluted share, adjusted EBITDA, and adjusted EBITDA margins. Non-GAAP measures are described in our MD&A for the three months ended 31 December 2025, where you will also find a reconciliation to the nearest IFRS measures. With that, I'll turn the call over to Brian.
Please see the slide entitled "Cautionary Note Regarding Forward-Looking Information" in the accompanying slide presentation for more details. You can also find additional information about these risks in the risk factors section of the company's annual information form for the year ended 30 September 2025, which is available on SEDAR+ and in the financial section of our website. As a reminder, we refer to non-GAAP measures in our slide presentation, including net revenue, net revenue margins, adjusted net income or loss, adjusted net income or loss per diluted share, adjusted EBITDA, and adjusted EBITDA margins. Non-GAAP measures are described in our MD&A for the three months ended 31 December 2025, where you will also find a reconciliation to the nearest IFRS measures. With that, I'll turn the call over to Brian.
Speaker #2: You can also find additional information about these risks and the risk factors section of the company's annual information 2025, which is available on CDR form for the year ended September 30th, Plus and in the financial section of our website.
Speaker #2: As a reminder, we refer to non-GAAP measures in our slide presentation, including net revenue, net revenue margins, adjusted net income or loss, adjusted net income or loss per diluted share, adjusted EBITDA, and adjusted EBITDA margins.
Speaker #2: Non-GAAP measures are described in our MD&A for the three months ended December 31st, 2025, where you will also find a reconciliation to the nearest IFRS measures.
Speaker #2: With that, I'll turn the call over to Brian.
Speaker #1: Thank you, Lynne. Good morning, everyone, and thank you for joining us on the call today. Fiscal 2026 is off to a good start with double-digit top-line growth headlining our performance in the first quarter.
Brian Lang: Thank you, Lynn. Good morning, everyone, and thank you for joining us on the call today. Fiscal 2026 is off to a good start, with double-digit top-line growth headlining our performance in Q1. We also launched eight new clients in Q1, including two top 100 lenders, and we added a new channel with a Tier-one lender in U.S. Title. Consolidated revenues were up 14%, and net revenue increased 19% year-over-year, reflecting gains across all three segments. The company achieved positive consolidated Adjusted EBITDA of $0.1 million for the quarter, driven by strong operating leverage in U.S. Appraisal and U.S. Title. Despite Q1 typically being seasonally slow, the successful onboarding of new clients and expansion of market share, supported by favorable conditions in the refinance market, contributed to a positive bottom line.
Brian Lang: Thank you, Lynn. Good morning, everyone, and thank you for joining us on the call today. Fiscal 2026 is off to a good start, with double-digit top-line growth headlining our performance in Q1. We also launched eight new clients in Q1, including two top 100 lenders, and we added a new channel with a Tier-one lender in U.S. Title. Consolidated revenues were up 14%, and net revenue increased 19% year-over-year, reflecting gains across all three segments. The company achieved positive consolidated Adjusted EBITDA of $0.1 million for the quarter, driven by strong operating leverage in U.S. Appraisal and U.S. Title. Despite Q1 typically being seasonally slow, the successful onboarding of new clients and expansion of market share, supported by favorable conditions in the refinance market, contributed to a positive bottom line.
Speaker #1: also launched eight new clients in the first quarter, including two top We 100 lenders and we added a new channel with a Tier 1 lender in U.S.
Speaker #1: title. Consolidated revenues were up 14% and net revenue increased 19% year-over-year, reflecting gains across all three segments. The company achieved positive consolidated adjusted EBITDA of 0.1 million dollars for the quarter driven by strong operating leverage in U.S.
Speaker #1: appraisal and U.S. title. Despite the first quarter typically being seasonally slow, the successful onboarding of new clients and expansion of market share supported by favorable conditions in the refinance market contributed to a positive bottom line.
Brian Lang: Notably, this is the first time since Q1, 2022, that profitability was achieved in the first quarter, despite current market volumes being approximately 70% lower than at that time, demonstrating the impact of our market share gains combined with improved efficiencies in the business. It also reinforces that our model can generate significant operating leverage even under these market conditions. In U.S. appraisal, we maintained leading positions on lender scorecards, which contributed to gaining additional market share sequentially with two large clients. Furthermore, the segment demonstrated strong operating leverage as reduced operating costs combined with a 7% increase in net revenue drove 36% year-over-year growth in Adjusted EBITDA. Refinance origination volumes in our U.S. title segment more than doubled as a result of new client wins, market share growth, and to a lesser extent, mortgage market tailwinds. With increased volumes, net revenue for the U.S. title segment increased by 110%.
Notably, this is the first time since Q1, 2022, that profitability was achieved in the first quarter, despite current market volumes being approximately 70% lower than at that time, demonstrating the impact of our market share gains combined with improved efficiencies in the business. It also reinforces that our model can generate significant operating leverage even under these market conditions. In U.S. appraisal, we maintained leading positions on lender scorecards, which contributed to gaining additional market share sequentially with two large clients. Furthermore, the segment demonstrated strong operating leverage as reduced operating costs combined with a 7% increase in net revenue drove 36% year-over-year growth in Adjusted EBITDA. Refinance origination volumes in our U.S. title segment more than doubled as a result of new client wins, market share growth, and to a lesser extent, mortgage market tailwinds. With increased volumes, net revenue for the U.S. title segment increased by 110%.
Speaker #1: since Q1 Notably, this is the first time 2022 that profitability was achieved in the first quarter despite current market volumes being approximately 70% lower than at that time.
Speaker #1: Demonstrating the impact of our market share gains combined with improved efficiencies in the business. It also reinforces that our model can generate significant operating leverage even under these market conditions.
Speaker #1: In U.S. appraisal, we maintained leading positions on lender scorecards, which contributed to gaining additional market share sequentially with two large clients. Furthermore, the segment demonstrated strong operating leverage, as reduced operating costs combined with a 7% increase in net revenue drove 36% year-over-year growth in adjusted EBITDA.
Speaker #1: Refinance origination volumes in our U.S. Title segment more than doubled as a result of new client wins, market share growth, and, to a lesser extent, mortgage market tailwinds.
Speaker #1: With increased volumes, net revenue for the U.S. Title segment increased by 110%. The vast majority of that net revenue gain contributed directly to our bottom line, bringing us closer to achieving break-even results in this segment.
Brian Lang: The vast majority of that net revenue gain contributed directly to our bottom line, bringing us closer to achieving break-even results in this segment. Even with the recent increase in our title volume run rate, we still have the capacity to almost double our volumes with the existing cost base outside of variable cost increases. In other words, a high proportion of each incremental dollar of our revenue we will generate in the title segment will continue to flow directly to EBITDA as we continue to scale up the title business. With a potential mortgage market recovery on the horizon, more lenders are turning their attention toward capacity planning, which includes ensuring they have the right partners to deliver leading performance when volumes ramp up.
The vast majority of that net revenue gain contributed directly to our bottom line, bringing us closer to achieving break-even results in this segment. Even with the recent increase in our title volume run rate, we still have the capacity to almost double our volumes with the existing cost base outside of variable cost increases. In other words, a high proportion of each incremental dollar of our revenue we will generate in the title segment will continue to flow directly to EBITDA as we continue to scale up the title business. With a potential mortgage market recovery on the horizon, more lenders are turning their attention toward capacity planning, which includes ensuring they have the right partners to deliver leading performance when volumes ramp up.
Speaker #1: Even with the recent increase in our title volume run rate, we still have the capacity to almost double our volumes with the existing cost base outside of variable cost increases.
Speaker #1: high proportion of each incremental In other words, a dollar of our revenue will generate in the title segment will continue to flow directly to EBITDA as we continue to scale up the title business.
Speaker #1: With the potential mortgage market recovery on the horizon more lenders are turning their attention toward capacity planning. Which includes ensuring they have the right partners to volumes ramp up.
Speaker #1: Our sales team is capitalizing on this trend and our network management model's ability to deliver performance at scale to drive more RFP conversations and accelerate the momentum in our U.S.
Brian Lang: Our sales team is capitalizing on this trend and our network management model's ability to deliver performance at scale to drive more RFP conversations and accelerate the momentum in our U.S. title sales pipeline. Turning to Canada, the business launched three new clients in Q1, and we delivered modest revenue and net revenue growth despite a decline in mortgage market volumes and lower insurance inspection revenues. With that, I'll hand it over to Rodrigo. Rodrigo?
Our sales team is capitalizing on this trend and our network management model's ability to deliver performance at scale to drive more RFP conversations and accelerate the momentum in our U.S. title sales pipeline. Turning to Canada, the business launched three new clients in Q1, and we delivered modest revenue and net revenue growth despite a decline in mortgage market volumes and lower insurance inspection revenues. With that, I'll hand it over to Rodrigo. Rodrigo?
Speaker #1: title sales pipeline. Turning to Canada, the business launched three new clients in the first quarter and we delivered modest revenue and net revenue growth despite a decline in mortgage market volumes and lower insurance inspection revenues.
Speaker #1: With that, I'll hand it over to Rodrigo.
Speaker #1: Rodrigo? Good.
Speaker #3: Thank you, Brian, and good morning, everyone. In fiscal Q1, the average 30-year fixed mortgage rate fell from approximately 6.43% in early October to 6.32% at the end of December.
Rodrigo Pinto: Thank you, Brian, and good morning, everyone. In fiscal Q1, the average 30-year fixed mortgage rate fell from approximately 6.43% in early October to 6.32% at the end of December, largely due to tighter spreads. From October to December, 10-year U.S. Treasury yields rose slightly from 4.1% to about 4.15%. Meanwhile, the gap between 30-year mortgage rates and 10-year Treasury yields narrowed by around 20 basis points, finishing the quarter at roughly 200 basis points. This shift indicates that risk premiums in the housing financing market are continuing to ease, showing clear progress towards the long-term historical average spread of 170 basis points. The modest decrease in rates over the quarter prompted growth in refinance market originations, although from a low base. Meanwhile, purchase market origination volume experienced a slight decline, consistent with projections from MBA and Fannie Mae.
Rodrigo Pinto: Thank you, Brian, and good morning, everyone. In fiscal Q1, the average 30-year fixed mortgage rate fell from approximately 6.43% in early October to 6.32% at the end of December, largely due to tighter spreads. From October to December, 10-year U.S. Treasury yields rose slightly from 4.1% to about 4.15%. Meanwhile, the gap between 30-year mortgage rates and 10-year Treasury yields narrowed by around 20 basis points, finishing the quarter at roughly 200 basis points. This shift indicates that risk premiums in the housing financing market are continuing to ease, showing clear progress towards the long-term historical average spread of 170 basis points. The modest decrease in rates over the quarter prompted growth in refinance market originations, although from a low base. Meanwhile, purchase market origination volume experienced a slight decline, consistent with projections from MBA and Fannie Mae.
Speaker #3: Largely due to tighter spreads. From October to December, 10-year U.S. Treasury yields rose slightly from 4.1% to about 4.15%. Meanwhile, the gap between 30-year mortgage rates and 10-year Treasury yields narrowed by around 20 basis points finishing the quarter at roughly 200 basis points.
Speaker #3: This shift indicates that risk premiums in the housing financing market are continuing to ease, showing clear progress towards the long-term historical average spread of 170 basis points.
Speaker #3: The modest decrease in rates over the quarter prompted growth in refinance market originations although from a low base. Meanwhile, purchase market origination volume experienced a slightly decline consistent with projections from MBA and Fannie Mae.
Speaker #3: We continue to be committed to managing areas within our control, such as scaling operations in response to volume changes and maintaining disciplined expense practices.
Rodrigo Pinto: We continue to be committed to managing areas within our control, such as scaling operations in response to volume changes and maintaining disciplined expenses practices. As we consistently stated, our priority is to expand our client base and market share by enhancing operating efficiency, driving leverage and margin growth, and keeping our balance sheets robust. Turning to our first quarter financial performance, I'll start with our US appraisal segment, where we recorded the revenues of $32.9 million, up 12% from the same period last year. Revenues from purchase mortgage originations declined modestly. However, revenues from refinance mortgage originations increased by 27% due to higher addressable mortgage origination volume from refinance transactions. The comparable quarter also included higher purchase and refinance volumes from a temporary reallocation of market share from one of our leading clients, which will no longer impact comparable results after this quarter.
We continue to be committed to managing areas within our control, such as scaling operations in response to volume changes and maintaining disciplined expenses practices. As we consistently stated, our priority is to expand our client base and market share by enhancing operating efficiency, driving leverage and margin growth, and keeping our balance sheets robust. Turning to our first quarter financial performance, I'll start with our US appraisal segment, where we recorded the revenues of $32.9 million, up 12% from the same period last year. Revenues from purchase mortgage originations declined modestly. However, revenues from refinance mortgage originations increased by 27% due to higher addressable mortgage origination volume from refinance transactions. The comparable quarter also included higher purchase and refinance volumes from a temporary reallocation of market share from one of our leading clients, which will no longer impact comparable results after this quarter.
Speaker #3: As we have consistently stated, our priority is to expand our client base and market share by enhancing operating efficiency, driving leverage and margin growth, and keeping our balance sheets robust.
Speaker #3: Turning to our first quarter financial performance, I'll start with our U.S. appraisal segment where we recorded the revenues of 32.9 million up 12% from the same period last year.
Speaker #3: Revenues from purchase mortgage originations declined modestly. However, revenues from refinance mortgage originations increased by 27% due to higher addressable mortgage origination volume from refinance transactions.
Speaker #3: The comparable quarter also included higher purchase and refinance volumes from a temporary reallocation of market share from one of our leading clients, which will no longer impact comparable results after this quarter.
Speaker #3: Home equity revenues were up 22% year over year and accounted for 26% of the segment's revenue. U.S. appraisal net revenue was $8.4 million for the first quarter compared with $7.8 million in Q1 '25.
Rodrigo Pinto: Home equity revenues were up 22% year-over-year and accounted for 26% of the segment's revenue. U.S. appraisal net revenue was $8.4 million for the first quarter, compared with $7.8 million in Q1 2024, and net revenue margins decreased by 110 basis points, mostly due to the distribution of transaction volumes as it relates to geographies, clients, and product mix. First quarter U.S. appraisal operating expenses decreased by 5% year-over-year to $5.1 million. We posted U.S. appraisal Adjusted EBITDA of $3.3 million, up 36% from the first quarter of fiscal 2024, and Adjusted EBITDA margins increased by 820 basis points to 39.1%, compared with the first quarter last year, as we benefited from strong operating leverage. Turning to our U.S.
Home equity revenues were up 22% year-over-year and accounted for 26% of the segment's revenue. U.S. appraisal net revenue was $8.4 million for the first quarter, compared with $7.8 million in Q1 2024, and net revenue margins decreased by 110 basis points, mostly due to the distribution of transaction volumes as it relates to geographies, clients, and product mix. First quarter U.S. appraisal operating expenses decreased by 5% year-over-year to $5.1 million. We posted U.S. appraisal Adjusted EBITDA of $3.3 million, up 36% from the first quarter of fiscal 2024, and Adjusted EBITDA margins increased by 820 basis points to 39.1%, compared with the first quarter last year, as we benefited from strong operating leverage. Turning to our U.S.
Speaker #3: And net revenue margins decreased by 110 basis points mostly due to the distribution of transactions volumes as it relates to geographies, clients, and product mix.
Speaker #3: First quarter U.S. appraisal operating expenses decreased by 5% year over year to $5.1 million. We posted U.S. appraisal adjusted EBITDA of $3.3 million up 36% from the first quarter of fiscal 2025 and adjusted EBITDA margins increased by $820 basis points to $39.1% compared with the first quarter last year as we benefited from strong operating leverage.
Speaker #3: Turning to our U.S. title segment, first quarter revenues increased 76% year over year to $4.4 million and refinance origination revenues were up 135% principally due to market share gains with existing and new clients and higher refinance mortgage origination volume.
Rodrigo Pinto: Title segment, first quarter revenues increased 76% year-over-year to $4.4 million, and refinance origination revenues were up 135%, principally due to market share gains with existing and new clients and higher refinance mortgage origination volume. U.S. title net revenue was $2.8 million, up 110% from the first quarter last year, and net revenue margins increased to 63.9% from 53.4% due to higher refinance origination volumes. Given the order flow of volumes in Q2, we currently expect net revenue margins to trend closer to the lower end of our target operating model range in the second quarter. U.S. title operating expenses were up 16% year-over-year, primarily due to additional hires to accelerate the deployment of new title clients, and we recorded an Adjusted EBITDA loss of $0.8 million for the U.S. title segment, compared with the loss of $1.8 million we posted in the first quarter of fiscal 2025.
Title segment, first quarter revenues increased 76% year-over-year to $4.4 million, and refinance origination revenues were up 135%, principally due to market share gains with existing and new clients and higher refinance mortgage origination volume. U.S. title net revenue was $2.8 million, up 110% from the first quarter last year, and net revenue margins increased to 63.9% from 53.4% due to higher refinance origination volumes. Given the order flow of volumes in Q2, we currently expect net revenue margins to trend closer to the lower end of our target operating model range in the second quarter. U.S. title operating expenses were up 16% year-over-year, primarily due to additional hires to accelerate the deployment of new title clients, and we recorded an Adjusted EBITDA loss of $0.8 million for the U.S. title segment, compared with the loss of $1.8 million we posted in the first quarter of fiscal 2025.
Speaker #3: U.S. title net revenue was $2.8 million up 110% from the first quarter last year and net revenue margins increased to 63.9% from $53.4% due to higher refinance origination volumes.
Speaker #3: Given the order flow of volumes in Q2, we currently expect net revenue margins to trend closer to the lower end of our target operating model range in the second quarter.
Speaker #3: U.S. title operating expenses were up 16% year over year primarily due to additional hires to accelerate the deployment of new title clients. And we recorded an adjusted EBITDA loss of $0.8 million for the U.S.
Speaker #3: title segment compared with the loss of $1.8 million we posted in the first quarter of fiscal 2025. If we exclude the investments we made in our title sales capabilities, approximately 85% of the incremental net revenue we recorded in the quarter would have flowed to the bottom line.
Rodrigo Pinto: If we excluded the investments we made in our title sales capabilities, approximately 85% of the incremental net revenue we recorded in the quarter would have flowed to the bottom line. In Canada, Q1 revenues increased modestly to $9.2 million from $9.1 million in the prior year due to net market share gains with new and existing clients for appraisal, which were partially offset by lower mortgage market volumes and lower insurance inspection services. Net revenue was up 3% to $1.8 million, and Adjusted EBITDA was flat at $1.1 million. In total, Q1 consolidated revenue and net revenue were up 14% and 19% year-over-year, respectively, principally driven by the growth in our U.S. appraisal and U.S. title segments. We recorded consolidated Adjusted EBITDA of $0.1 million, up from a loss of $1.7 million in Q1 2025.
If we excluded the investments we made in our title sales capabilities, approximately 85% of the incremental net revenue we recorded in the quarter would have flowed to the bottom line. In Canada, Q1 revenues increased modestly to $9.2 million from $9.1 million in the prior year due to net market share gains with new and existing clients for appraisal, which were partially offset by lower mortgage market volumes and lower insurance inspection services. Net revenue was up 3% to $1.8 million, and Adjusted EBITDA was flat at $1.1 million. In total, Q1 consolidated revenue and net revenue were up 14% and 19% year-over-year, respectively, principally driven by the growth in our U.S. appraisal and U.S. title segments. We recorded consolidated Adjusted EBITDA of $0.1 million, up from a loss of $1.7 million in Q1 2025.
Speaker #3: In Canada, first quarter revenues increased modestly to $9.2 million from $9.1 million in the prior year due to net market share gains with new and existing clients for appraisal.
Speaker #3: Which were partially offset by lower market mortgage market volumes and lower insurance inspection services. Net revenue was up 3% to $1.8 million and adjusted EBITDA was flat at $1.1 million.
Speaker #3: In total, first quarter consolidated revenue and net revenue were up 14% and 19% year over year respectively. Principally driven by the growth in our U.S.
Speaker #3: appraisal and U.S. title segments. We recorded consolidated adjusted EBITDA of $0.1 million up from a loss of $1.7 million in the first quarter of 2025.
Speaker #3: We ended the year with a very strong balance sheet with no debt and cash of $43.8 million at December 31, 2025. The increase in our cash balance from the prior quarter was mainly due to the timing of collections and changes in working capital which normalized from the fourth quarter.
Rodrigo Pinto: We ended the year with a very strong balance sheet with no debt and cash of $43.8 million at 31 December 2025. The increase in our cash balance from the prior quarter was mainly due to the timing of collections and changes in working capital, which normalized from the fourth quarter. With that, I'll turn it back over to Brian. Brian.
We ended the year with a very strong balance sheet with no debt and cash of $43.8 million at 31 December 2025. The increase in our cash balance from the prior quarter was mainly due to the timing of collections and changes in working capital, which normalized from the fourth quarter. With that, I'll turn it back over to Brian. Brian?
Speaker #3: With that, I'll turn it back over to Brian.
Speaker #3: Brian, Thank you,
Brian Lang: Thank you, Rodrigo. Our first quarter results marked a strong beginning to the fiscal year. We achieved double-digit top-line growth and demonstrated effective operating leverage, resulting in positive Adjusted EBITDA during a period that is typically a seasonal low for our business. Additionally, we successfully onboarded new clients, expanded into an additional channel, and consistently ranked highly on lender scorecards. Our performance in Q1 illustrates that our business model is well-positioned to achieve substantial operating leverage as we scale. Higher transaction volumes on our platform have the potential to meaningfully enhance both margins and profitability. Looking ahead, we remain cautiously optimistic about improving fundamentals in the US mortgage market. Today, there are 13 million mortgages with interest rates above 6%. In fact, there are now more mortgages with rates above 6% than below 3%.
Brian Lang: Thank you, Rodrigo. Our first quarter results marked a strong beginning to the fiscal year. We achieved double-digit top-line growth and demonstrated effective operating leverage, resulting in positive Adjusted EBITDA during a period that is typically a seasonal low for our business. Additionally, we successfully onboarded new clients, expanded into an additional channel, and consistently ranked highly on lender scorecards. Our performance in Q1 illustrates that our business model is well-positioned to achieve substantial operating leverage as we scale. Higher transaction volumes on our platform have the potential to meaningfully enhance both margins and profitability. Looking ahead, we remain cautiously optimistic about improving fundamentals in the US mortgage market. Today, there are 13 million mortgages with interest rates above 6%. In fact, there are now more mortgages with rates above 6% than below 3%.
Speaker #2: Rodrigo. Our first quarter results marked a strong beginning to the fiscal year. We achieved double-digit top-line growth and demonstrated effective operating leverage resulting in positive adjusted EBITDA during a period that is typically a seasonal low for our business.
Speaker #2: Additionally, we successfully onboarded new clients expanded into an additional channel and consistently ranked highly on lender scorecards. Our performance in Q1 illustrates that our business model is well positioned to achieve substantial operating leverage as we scale.
Speaker #2: Higher transaction volumes on our platform have the potential to meaningfully enhance both margins and profitability. Looking ahead, we remain cautiously optimistic about improving fundamentals in the U.S.
Speaker #2: mortgage market. Today, there are $13 million mortgages with interest rates above 6%. In fact, there are now more mortgages with rates above 6% than below 3%.
Speaker #2: That means that we are seeing a rebalancing of the interest rates on outstanding mortgage debt, which is indicative of a shift toward a more normalized distribution of the market.
Brian Lang: That means that we are seeing a rebalancing of the interest rates on outstanding mortgage debt, which is indicative of a shift toward a more normalized distribution of the market. This dynamic gives us confidence that there is a substantial pool of refinance candidates, which could become a significant tailwind for volume growth in the years ahead. Our strategy of adding clients and growing market share through better performance remains on track, positioning our business for scale and the achievement of our target operating model. With that, operator, we'd like to open it up for questions now.
That means that we are seeing a rebalancing of the interest rates on outstanding mortgage debt, which is indicative of a shift toward a more normalized distribution of the market. This dynamic gives us confidence that there is a substantial pool of refinance candidates, which could become a significant tailwind for volume growth in the years ahead. Our strategy of adding clients and growing market share through better performance remains on track, positioning our business for scale and the achievement of our target operating model. With that, operator, we'd like to open it up for questions now.
Speaker #2: This dynamic gives us confidence that there is a substantial pool of refinance candidates which could become a significant tailwind for volume growth in the years ahead.
Speaker #2: Our strategy of adding clients and growing market share through better performance remains on track, positioning our business for scale and the achievement of our target operating model.
Speaker #2: With that, operator, we'd like to open it up for questions
Speaker #2: now. As a reminder, to ask
Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Stephen Machielsen with BMO Capital Markets. Your line is open.
Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Stephen Machielsen with BMO Capital Markets. Your line is open.
Speaker #1: a question, please press star, one, one, on your telephone. And wait for your name to be announced. Do we draw your question, please press star, one, one, again.
Speaker #1: Please stand by while we compile the Q&A roster. Our first question comes from Steven McCollison with BMO Capital Markets. Your line is open.
Speaker #3: Hey, thanks for taking my question. I was wondering if you could give us a bit of color into the cadence of refi activity through the quarter, just as the rates declined.
Stephen Machielsen: Hey, thanks for taking my question. I was wondering if you could give us a bit of color into the cadence of refi activity through the quarter, just as the rates declined. Did you see a lot of demand front-loaded, and how has demand progressed into Q2?
Stephen Machielsen: Hey, thanks for taking my question. I was wondering if you could give us a bit of color into the cadence of refi activity through the quarter, just as the rates declined. Did you see a lot of demand front-loaded, and how has demand progressed into Q2?
Speaker #3: Did you see a lot of demand front-loaded and how is demand progressed into
Speaker #3: Q2? Great.
Brian Lang: Great. Thanks for the question, Stephen. It's a good question. We had another, what we would call, month boomlet in September and October heading into Q1. So there was definitely a benefit that we saw. We would have actualized a chunk of the September volume on appraisal in the previous quarter, but definitely on title, we benefited because of the time lag to realizing revenue. So refi volumes were solid in the quarter, as I say, a little bit stronger in the front end than the back end, but we're definitely seeing, and if you look at the industry MBA and Fannie results, they're going to look to a decent growth in refi in the quarter. On the flip side, purchases definitely struggled. So purchases definitely have been a little bit more of a challenge in the market, but we definitely had some refi tailwinds.
Brian Lang: Great. Thanks for the question, Stephen. It's a good question. We had another, what we would call, month boomlet in September and October heading into Q1. So there was definitely a benefit that we saw. We would have actualized a chunk of the September volume on appraisal in the previous quarter, but definitely on title, we benefited because of the time lag to realizing revenue. So refi volumes were solid in the quarter, as I say, a little bit stronger in the front end than the back end, but we're definitely seeing, and if you look at the industry MBA and Fannie results, they're going to look to a decent growth in refi in the quarter. On the flip side, purchases definitely struggled. So purchases definitely have been a little bit more of a challenge in the market, but we definitely had some refi tailwinds.
Speaker #2: Thanks for the question, Steven. So it's a good question. We had another what we would call month boomlet in September and October, heading into Q1.
Speaker #2: So there was definitely a benefit that we saw. We would—the September volume on appraisal in—have actualized a chunk of the previous quarter, but definitely on Title, we benefited because of the time lag to realizing revenue.
Speaker #2: So refi volumes were solid in the quarter, as I say, a little bit stronger in the front end than the back end, but we're definitely seeing, and if you look at the industry MBA and FANI results, they're going to look to a decent growth in refi.
Speaker #2: In the quarter, on the flip side, purchases definitely struggled. So purchases have definitely been a little bit more of a challenge in the market, but we definitely had some refi tailwinds when we look at our results.
Brian Lang: When we look at our results, though, Stephen, if we take a look at the title results, two-thirds of that came from, for us, the growth. Two-thirds of that came from the tier-one launch that we had. Q1 was the first quarter that we realized the full revenue from that tier-one. And so one-third of it came from the actual market.
When we look at our results, though, Stephen, if we take a look at the title results, two-thirds of that came from, for us, the growth. Two-thirds of that came from the tier-one launch that we had. Q1 was the first quarter that we realized the full revenue from that tier-one. And so one-third of it came from the actual market.
Speaker #2: Though, Steven, if we take a look at the title results, two-thirds of that came from, for us, the growth. Two-thirds of that came from the tier one launch that we had.
Speaker #2: Q1 was the first quarter that we realized the full revenue from that tier one. And so one-third of it came from the actual market.
Speaker #3: Okay. That's some good color. Thank you. So do you expect your traditional lender tier one clients to continue being as aggressive even as it sounds like the mortgage rate spreads are coming
Speaker #3: Okay. That's some good color. Thank you. So do you expect your traditional lender tier one clients to continue being as aggressive even as it sounds like the mortgage rate spreads are coming in?
Stephen Machielsen: Okay. That's some good color. Thank you. So do you expect your traditional lender Tier-one clients to continue being as aggressive, even as it sounds like the mortgage rate spreads are coming in?
Stephen Machielsen: Okay. That's some good color. Thank you. So do you expect your traditional lender Tier-one clients to continue being as aggressive, even as it sounds like the mortgage rate spreads are coming in?
Speaker #2: Well, we're definitely seeing that to date. So I can't really comment on forward-looking, but even as we enter into this quarter, some of the big tier ones are definitely the most aggressive when it comes to setting their 30-year rates.
Brian Lang: Well, we're definitely seeing that to date. So I can't really comment on forward-looking, but even as we enter into this quarter, some of the big tier-one ones are definitely the most aggressive when it comes to setting their 30-year rates. So for us, we see that as a positive potential tailwind on the business. But as we talk about, Stephen, I mean, right now, the way our business runs, we are 50% revenue with banks and 50% revenue with non-banks. And when I take a look at, at least on the appraisal business, we mentioned that this past quarter, we were sequentially moving up market share with two of our significant customers. One of them was a bank and one of them was a non-bank. So we continue to build momentum behind both sides of it.
Brian Lang: Well, we're definitely seeing that to date. So I can't really comment on forward-looking, but even as we enter into this quarter, some of the big tier-one ones are definitely the most aggressive when it comes to setting their 30-year rates. So for us, we see that as a positive potential tailwind on the business. But as we talk about, Stephen, I mean, right now, the way our business runs, we are 50% revenue with banks and 50% revenue with non-banks. And when I take a look at, at least on the appraisal business, we mentioned that this past quarter, we were sequentially moving up market share with two of our significant customers. One of them was a bank and one of them was a non-bank. So we continue to build momentum behind both sides of it.
Speaker #2: So that's, for us, we see that as a positive potential tailwind on the business. But as we talk about, Steven, I mean, right now, the way our business runs, we are 50% revenue with banks and 50% revenue with non-banks.
Speaker #2: And when I take a look at, at least on the appraisal business, we mentioned that this past quarter we were sequentially moving up market share with two of our significant customers: one of them was a bank and one of them was a non-bank.
Speaker #2: So we continue to build momentum behind both sides of it, but to your point and to your question, definitely some of the larger banks have been stepping up as the spread has come down and been aggressive from a rate
Brian Lang: But to your point and to your question, definitely some of the larger banks have been stepping up as the spread has come down and been aggressive from a rate standpoint.
But to your point and to your question, definitely some of the larger banks have been stepping up as the spread has come down and been aggressive from a rate standpoint.
Speaker #2: standpoint. All right.
Stephen Machielsen: All right. Thanks for taking my questions. I'll pass the line.
Stephen Machielsen: All right. Thanks for taking my questions. I'll pass the line.
Speaker #3: Thanks for taking my questions. I'll pass the line.
Speaker #2: Thanks, Steven.
Brian Lang: Thanks, Steven.
Brian Lang: Thanks, Steven.
Speaker #1: Thank you. Our next question comes from Gavin Fairweather with CoreMark. Your line is open.
Operator: Thank you. Our next question comes from Gavin Fairweather with Cormark. Your line is open.
Operator: Thank you. Our next question comes from Gavin Fairweather with Cormark. Your line is open.
Speaker #4: Oh, hey, good morning. Thanks for taking my questions. An impressive level of new logos that you saw there in the first quarter. Maybe you can just discuss kind of the pipeline and how prospects in the pipe are reacting to the more recent drop in rates.
Gavin Fairweather: Oh, hey, good morning. Thanks for taking my questions. An impressive level of new logos that you saw there in the first quarter. Maybe you can just discuss kind of the pipeline and how prospects in the pipe are reacting to the more recent drop in rates. Are you seeing more urgency to find new vendors or more RFPs being issued? Any commentary there would be helpful.
Gavin Fairweather: Oh, hey, good morning. Thanks for taking my questions. An impressive level of new logos that you saw there in the first quarter. Maybe you can just discuss kind of the pipeline and how prospects in the pipe are reacting to the more recent drop in rates. Are you seeing more urgency to find new vendors or more RFPs being issued? Any commentary there would be helpful.
Speaker #4: Are you seeing more urgency to find new vendors or more RFPs being issued? Any commentary there would be
Speaker #4: Helpful. Great, great, great question, Gavin.
Brian Lang: Great, great, great question, Gavin. And the short answer would be yes. Yes, that we are seeing customers definitely moving on the RFP side of things. I would say I would specifically point to title simply because there has been a significant amount of movement there. As we mentioned last year, we had invested in the sales capabilities on the title side of the business. And I think we're seeing a lot of that being actualized now with more RFPs. And I think, Gavin, to your comment, it's a reaction to the bump that we saw, the little sort of monthly boomlet we saw last year, last September, October 2024, 2025. And then again, it's been reemphasized with the bump we saw this last quarter, September, October, where all of a sudden there's a good chunk more volume.
Brian Lang: Great, great, great question, Gavin. And the short answer would be yes. Yes, that we are seeing customers definitely moving on the RFP side of things. I would say I would specifically point to title simply because there has been a significant amount of movement there. As we mentioned last year, we had invested in the sales capabilities on the title side of the business. And I think we're seeing a lot of that being actualized now with more RFPs. And I think, Gavin, to your comment, it's a reaction to the bump that we saw, the little sort of monthly boomlet we saw last year, last September, October 2024, 2025. And then again, it's been reemphasized with the bump we saw this last quarter, September, October, where all of a sudden there's a good chunk more volume.
Speaker #2: And the short answer would be yes. Yes, that we are seeing customers definitely moving on the RFP side of things. I would say I would specifically point to title.
Speaker #2: Simply because there has been a significant amount of movement there. As we mentioned last year, we had invested in the sales capabilities on the title side of the business.
Speaker #2: And I think we're seeing a lot of that being actualized now with more RFPs. And I think, Gavin, to your comment, it's a reaction to the bump that we saw, the little sort of monthly boomlet we saw last year.
Speaker #2: Last September, October, 24, 25, and then again, it's been re-emphasized with the bump we saw this last quarter, September, October, where all of a sudden there's a good chunk more volume.
Speaker #2: I think it's definitely got a lot of lenders thinking about making sure that they've got the capacity to manage that. So from a pipeline standpoint, we mentioned eight new clients this quarter.
Brian Lang: I think it's definitely got a lot of lenders thinking about making sure that they've got the capacity to manage that. So from a pipeline standpoint, we mentioned 8 new clients this quarter. Again, I think that's very positive. And not only that, 2 of them are top 100 customers. So not only bringing on customers, but the right type of customers, one in title, one in appraisal. And as we look forward, Gavin, I'm very ambitious about the pipeline. As I say, I think the sales investments we've made are really starting to pay off. So we hope that we'll continue to be announcing some good wins over the upcoming quarters. I'm going to anticipate your question about tier ones. So we do have 2 tier ones on the platform now.
I think it's definitely got a lot of lenders thinking about making sure that they've got the capacity to manage that. So from a pipeline standpoint, we mentioned 8 new clients this quarter. Again, I think that's very positive. And not only that, 2 of them are top 100 customers. So not only bringing on customers, but the right type of customers, one in title, one in appraisal. And as we look forward, Gavin, I'm very ambitious about the pipeline. As I say, I think the sales investments we've made are really starting to pay off. So we hope that we'll continue to be announcing some good wins over the upcoming quarters. I'm going to anticipate your question about tier ones. So we do have 2 tier ones on the platform now.
Speaker #2: Again, I think that's very positive. And not only that, two of them are top 100 customers. So not only are we bringing on customers, but the right type of customers, one in title and one in appraisal.
Speaker #2: And as we look forward, Gavin, I'm very ambitious about the pipeline. As I say, I think the sales investments we've made are really starting to pay off.
Speaker #2: So we hope that we'll continue to be announcing some good wins over the upcoming quarters. I'm going to anticipate your question about tier ones.
Speaker #2: So we do have two tier ones on the platform now. Again, good news from the last quarter is that we're now in a second channel with the tier one that we just brought on.
Brian Lang: Again, good news from the last quarter is that we're now in a second channel with the Tier-one that we just brought on. So we've now sort of diversified with them. And the third Tier-one, our expectation is that we will launch that this year. So we're, again, progress on that has gone very well. And now it's just a matter, frankly, of implementation.
Again, good news from the last quarter is that we're now in a second channel with the Tier-one that we just brought on. So we've now sort of diversified with them. And the third Tier-one, our expectation is that we will launch that this year. So we're, again, progress on that has gone very well. And now it's just a matter, frankly, of implementation.
Speaker #2: So we've now sort of diversified with them. And the third tier one, our expectation is that we will launch that this year. So, again, progress on that has gone very well.
Speaker #2: And now, it's just a matter, frankly, of
Speaker #2: implementation.
Speaker #4: Great to
Gavin Fairweather: Great to hear. So just to clarify, the new channel with the tier-one in title, that was with the more recent tier-one. And maybe you can just, is that a big opportunity, that channel? Maybe any further color there would be helpful.
Gavin Fairweather: Great to hear. So just to clarify, the new channel with the tier-one in title, that was with the more recent tier-one. And maybe you can just, is that a big opportunity, that channel? Maybe any further color there would be helpful.
Speaker #4: hear. So just to clarify, the new channel with the tier one in title, that was with the more recent tier one? And maybe you can just is that a big opportunity that channel?
Speaker #4: Maybe any further color there would be
Speaker #4: helpful. Sure.
Brian Lang: Sure. It is that. It is the same one that we launched, Gavin. And of course, it's because I think we launched incredibly well and our performance clicked up quite quickly with them from a performance standpoint. So we launched in the origination channel and now we've moved into the home equity channel. That's always a decent channel to be in, Gavin. And so we'll have to see how the home equity market performs over the remainder of the year. But we're happy to be in two different channels with them.
Brian Lang: Sure. It is that. It is the same one that we launched, Gavin. And of course, it's because I think we launched incredibly well and our performance clicked up quite quickly with them from a performance standpoint. So we launched in the origination channel and now we've moved into the home equity channel. That's always a decent channel to be in, Gavin. And so we'll have to see how the home equity market performs over the remainder of the year. But we're happy to be in two different channels with them.
Speaker #2: It is the same one that we launched, Gavin. And of course, it's because I think we launched incredibly well and our performance clicked up quite quickly with them, from a performance standpoint.
Speaker #2: So we launched in the origination channel, and now we've moved into the home equity channel. That's always a decent channel to be in, Gavin.
Speaker #2: And so we'll have to see how the home equity market performs over the remainder of the year. But we're happy to be in two different channels with
Speaker #2: them. Great.
Gavin Fairweather: Great. And then just lastly for me, maybe a longer-term question. We saw the profitability that Real Matters posted in 2020 and 2021 in a busier market. So as we start to think about the volume ramping back up, maybe not to those levels, how do you expect the business to perform versus the last cycle from a profitability perspective? Do you think that you've found additional efficiencies in the business that could drive more profitability? Are there any mitigating factors we should be aware of? Any thoughts there would be great.
Gavin Fairweather: Great. And then just lastly for me, maybe a longer-term question. We saw the profitability that Real Matters posted in 2020 and 2021 in a busier market. So as we start to think about the volume ramping back up, maybe not to those levels, how do you expect the business to perform versus the last cycle from a profitability perspective? Do you think that you've found additional efficiencies in the business that could drive more profitability? Are there any mitigating factors we should be aware of? Any thoughts there would be great.
Speaker #4: And then just lastly, maybe a longer-term question. We saw the profitability that Real Matters posted in 2020 and 2021 in a busier market. So as we start to think about the volume ramping back up, maybe not to those levels, how do you expect the business to perform versus the last cycle from a profitability perspective?
Speaker #4: Do you think that you've found additional efficiencies in the business that could drive more profitability? Are there any mitigating factors we should be aware of?
Speaker #4: Any thoughts there would be great.
Speaker #2: Sure, Gavin. I'll take this one. Yeah. For sure. And that's why we set up the target operating model. Last year. And we see with volumes and scaling the business that we are still very confident that we can achieve the numbers that we have in our target operating model.
Brian Lang: Sure, Gavin. I'll take this one. Yeah, for sure. And that's why we set up the target operating model last year. And we see with volumes and scaling the business that we are still very confident that we can achieve the numbers that we have in our target operating model. So seeing similar volumes, as the target operating model demonstrates, seeing similar volumes that we saw 2020, 2021, we should do better. We are talking about Adjusted EBITDA close to $100 million, which is higher than what we saw before. And that's a consequence of all the operating efficiencies that we put in the system over the last 5, 6 years.
Brian Lang: Sure, Gavin. I'll take this one. Yeah, for sure. And that's why we set up the target operating model last year. And we see with volumes and scaling the business that we are still very confident that we can achieve the numbers that we have in our target operating model. So seeing similar volumes, as the target operating model demonstrates, seeing similar volumes that we saw 2020, 2021, we should do better. We are talking about Adjusted EBITDA close to $100 million, which is higher than what we saw before. And that's a consequence of all the operating efficiencies that we put in the system over the last 5, 6 years.
Speaker #2: So seeing similar volumes as the target operating model demonstrates, seeing similar volumes that we saw 2020, 2021, we should do better we are talking about adjusted EBITDA close to 100 million dollars.
Speaker #2: Which is higher than what we saw before. And that's a consequence of all the operating efficiencies that we put in the system over the last five, six
Speaker #2: years. Thanks so much for passing
Gavin Fairweather: Thanks for that. I'll pass the line.
Gavin Fairweather: Thanks for that. I'll pass the line.
Speaker #2: Thanks, Gavin. Thanks, on. Gavin.
Brian Lang: Thanks, Gavin.
Brian Lang: Thanks, Gavin.
Stephen Machielsen: Thanks, Gavin.
Stephen Machielsen: Thanks, Gavin.
Speaker #1: Thank you. Our next question comes from John Xiao with TDCowen. Your line is open.
Operator: Thank you. Our next question comes from John Shao with TD Cowen. Your line is open.
Operator: Thank you. Our next question comes from John Shao with TD Cowen. Your line is open.
Speaker #5: Yes, good morning. Thanks for taking my question. I just wanted to revisit your keyword cautiously optimistic in your prepared remarks. So my question is, where does that caution come from?
John Shao: Yes, good morning. Thanks for taking my question. I just wanted to revisit your keyword, cautiously optimistic, in your prepared remarks. So my question is, where does that caution come from? Is it just based on yesterday's Fed rate decision or just based on the overall recovery timeline?
[Analyst] (TD Cowen): Yes, good morning. Thanks for taking my question. I just wanted to revisit your keyword, cautiously optimistic, in your prepared remarks. So my question is, where does that caution come from? Is it just based on yesterday's Fed rate decision or just based on the overall recovery timeline?
Speaker #5: Is it just based on yesterday's Fed rate decision or just based on the overall recovery
Speaker #5: timeline? Yeah, good question,
Brian Lang: Yeah, good question, John. And listen, it's the overall recovery timeline. So again, if we take a look at what the industry is looking at for Q2, they're looking, both MBA and Fannie, they're looking at the market coming down 10% in Q2. So the cautiously optimistic is sort of more comment on Q2. But if you look at the predictions for the year, you're talking more about 50+% growth in the market. So that's really the only caution we have. We're, as I say, quite ambitious around the growth of the business in title. We're now onboarding customers. We're going to start realizing full quarter revenue from, again, the customers we just brought on. And we're looking forward to the pipeline of customers that we think we're going to be able to announce over the next couple of quarters.
Brian Lang: Yeah, good question, John. And listen, it's the overall recovery timeline. So again, if we take a look at what the industry is looking at for Q2, they're looking, both MBA and Fannie, they're looking at the market coming down 10% in Q2. So the cautiously optimistic is sort of more comment on Q2. But if you look at the predictions for the year, you're talking more about 50+% growth in the market. So that's really the only caution we have. We're, as I say, quite ambitious around the growth of the business in title. We're now onboarding customers. We're going to start realizing full quarter revenue from, again, the customers we just brought on. And we're looking forward to the pipeline of customers that we think we're going to be able to announce over the next couple of quarters.
Speaker #2: John. And listen, it's the overall recovery timeline. So again, if we take a look at what the industry is looking at for Q2, they're looking both MBA and SANY, they're looking at the market coming down 10% in Q2.
Speaker #2: So the cautiously optimistic is sort of more a comment on Q2. But if you look out at the predictions for the year, you're talking more about 50-plus percent growth in the market.
Speaker #2: So that's really the only caution we have. We're, as I say, quite ambitious around the growth of the business in title. We're now onboarding customers.
Speaker #2: We're going to start realizing full quarter revenue from, again, the customers we just brought on. And we're looking forward to the pipeline of customers that we think we're going to be able to announce over the next couple of quarters.
Speaker #2: So, quarters. So I think that really, there's lots of positives in the business. The comment around 'cautious' is simply the market, and the seasonality sort of clicks in Q2.
Brian Lang: So, I think that's really. There's lots of positive in the business. The comment around cautious is simply the market and the seasonality sort of kick in Q2. Q3 and Q4, we're thinking the market's going to be in solid shape.
So, I think that's really. There's lots of positive in the business. The comment around cautious is simply the market and the seasonality sort of kick in Q2. Q3 and Q4, we're thinking the market's going to be in solid shape.
Speaker #2: Q3 and Q4, we're thinking the market's going to be in solid
Speaker #2: shape. I appreciate the
John Shao: I appreciate the color. In terms of the gaining more market share with some of the top lenders, could you maybe remind us the pace of that market share gain? Does that happen at the same time with the market recovery, or is it going to be independent?
[Analyst] (TD Cowen): I appreciate the color. In terms of the gaining more market share with some of the top lenders, could you maybe remind us the pace of that market share gain? Does that happen at the same time with the market recovery, or is it going to be independent?
Speaker #5: color. And in terms of the SANY more market share with some of the top lenders, could you maybe remind us the pace of that market share gain?
Speaker #5: Does that happen at the same time with the market recovery, or is it going to be an independent?
Speaker #2: Well, that's actually a really good question, John. So if we look very broadly at how we win market share, it's how much we outperform our other competitors.
Brian Lang: Well, that's actually a really good question, John. So if we look very broadly at how we win market share, it's how much we outperform our other competitors. So when the volume is very low, the gap of competition and performance between first and second is tighter than it is when there's significant volume in the business. And we saw that through 2020 and 2021, where we could really distance ourselves from the second-place competitor when it came to performance. So that's why I think this last quarter, we were happy to talk about moving the market share needle forward sequentially with two of our larger players in appraisal. It's been somewhat of a challenge the last year or two to be able to really move that again, just because of the differential in performance.
Brian Lang: Well, that's actually a really good question, John. So if we look very broadly at how we win market share, it's how much we outperform our other competitors. So when the volume is very low, the gap of competition and performance between first and second is tighter than it is when there's significant volume in the business. And we saw that through 2020 and 2021, where we could really distance ourselves from the second-place competitor when it came to performance. So that's why I think this last quarter, we were happy to talk about moving the market share needle forward sequentially with two of our larger players in appraisal. It's been somewhat of a challenge the last year or two to be able to really move that again, just because of the differential in performance.
Speaker #2: So, when the volume is very low, the gap in competition and performance between first and second is tighter than it is when there's significant volume in the business.
Speaker #2: And we saw that through '20 and '21, where we could really distance ourselves from the second place competitor when it came to performance. So that's why I think this last quarter we were happy to talk about moving the market share needle forward sequentially with two of our larger players in appraisal.
Speaker #2: It's been somewhat of a challenge the last year or two to be able to really move that, again, just because of the differential in performance.
Speaker #2: So, as the business scales, we always talk about that being a significant driver of supporting the increase in market share gains. So that's really on the appraisal side because, of course, we've been at that business with those tier ones for quite some time.
Brian Lang: So as the business scales, we always talk about that being a significant driver of supporting the increase in market share gains. So that's really on the appraisal side because, of course, we've been at that business with those tier ones for quite some time. What we're seeing on the title side is that our performance is very strong, especially with the tier one that we just brought on, because I think we're a new player now amongst that competitive set. So the feedback we got, we actually had our quarterly review yesterday, if you can believe it, and the feedback was incredibly strong. And I think the fact that they've now launched us into the second channel is very supportive of that strength and performance. So I think with the new tier one that we've brought on, we'll continue to build share.
So as the business scales, we always talk about that being a significant driver of supporting the increase in market share gains. So that's really on the appraisal side because, of course, we've been at that business with those tier ones for quite some time. What we're seeing on the title side is that our performance is very strong, especially with the tier one that we just brought on, because I think we're a new player now amongst that competitive set. So the feedback we got, we actually had our quarterly review yesterday, if you can believe it, and the feedback was incredibly strong. And I think the fact that they've now launched us into the second channel is very supportive of that strength and performance. So I think with the new tier one that we've brought on, we'll continue to build share.
Speaker #2: What we're seeing on the title side is that our performance is very strong, especially with the tier one that we just brought on. Because I think we're a new player now amongst that competitive set.
Speaker #2: So, the feedback we got—we actually had our quarterly review yesterday, if you can believe it. And the feedback was incredibly strong. I think the fact that they've now launched us into the second channel is very supportive of that strength in performance.
Speaker #2: So I think with the new tier one that we've brought on, we'll continue to build share. We've got a small amount of share now, which is always the case.
Brian Lang: We've got a small amount of share now, which is always the case. And as we've always talked about, in the first year, we try and march forward to 5 to 10% by the end of the year. I think we'll be in a much better place than that with this player by the end of the year.
We've got a small amount of share now, which is always the case. And as we've always talked about, in the first year, we try and march forward to 5 to 10% by the end of the year. I think we'll be in a much better place than that with this player by the end of the year.
Speaker #2: And as we've always talked about, in the first year, we try and march forward to 5 to 10 percent by the end of the year.
Speaker #2: I think we'll be in a much better place than that with this player by the end of the.
Speaker #2: year. Thank you so much.
John Shao: Thank you so much. I'll pass the line.
[Analyst] (TD Cowen): Thank you so much. I'll pass the line.
Speaker #5: I'll pass
Speaker #5: the line. Thank
Brian Lang: Thank you.
Brian Lang: Thank you.
Speaker #2: you. Thank
Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Martin Toner with ATB Capital Markets. Your line is open.
Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Martin Toner with ATB Capital Markets. Your line is open.
Speaker #1: you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11. To ask a question. Our next question comes from Martin Toner with ATB Capital Markets.
Speaker #1: Your line is open.
Speaker #6: Thank you for taking my question. My only question is with respect to the potential of change in regulatory environment. Do you guys—or the market as a whole—feel you got a nice shot in the arm with the billion bond buying? Spreads came in nicely, very quickly.
Martin Toner: Thank you for taking my question. My only question is with respect to the potential change in regulatory environment. Do you guys got. The market as a whole got a nice shot in the arm with the billion bond buying. Spreads came in nicely very quickly. Obviously, affordability is going to be a key election issue in the midterms. As you guys look at what might happen this year and beyond, just any thoughts if there's further tailwinds for Real Matters in terms of regulatory gains?
Martin Toner: Thank you for taking my question. My only question is with respect to the potential change in regulatory environment. Do you guys got. The market as a whole got a nice shot in the arm with the billion bond buying. Spreads came in nicely very quickly. Obviously, affordability is going to be a key election issue in the midterms. As you guys look at what might happen this year and beyond, just any thoughts if there's further tailwinds for Real Matters in terms of regulatory gains?
Speaker #6: Obviously, affordability is going to be a key election issue in the midterms. As you guys look at what might happen this year and beyond, just any thoughts to if there's further tailwinds or real methods in terms of regulatory
Speaker #6: change? Sure.
Brian Lang: Sure. So Martin, you were a little bit light there. So I'll just reiterate the question for folks so they can hear it. It was around regulatory either support or challenge as we look forward with the business, specifically, I think, in the US. So I think to your question, I think there's a couple of elements. Again, I won't get into the political side of it, but just if I look at how the administration is looking at affordability, I think clearly they have a couple of mandates, which are, number one, how do we address home affordability? So you're hearing lots of conversations around portable mortgages, around 50-year mortgages. And as you mentioned, Martin, very recently, the direction to the GSEs around purchasing MBS, $200 billion worth of MBS. I think all of those are very positive signs that the administration is very supportive of going after affordability.
Brian Lang: Sure. So Martin, you were a little bit light there. So I'll just reiterate the question for folks so they can hear it. It was around regulatory either support or challenge as we look forward with the business, specifically, I think, in the US. So I think to your question, I think there's a couple of elements. Again, I won't get into the political side of it, but just if I look at how the administration is looking at affordability, I think clearly they have a couple of mandates, which are, number one, how do we address home affordability? So you're hearing lots of conversations around portable mortgages, around 50-year mortgages. And as you mentioned, Martin, very recently, the direction to the GSEs around purchasing MBS, $200 billion worth of MBS. I think all of those are very positive signs that the administration is very supportive of going after affordability.
Speaker #2: So Martin, you were a little bit light there. So I'll just reiterate the question for folks so they can hear it. It was around regulatory either support or challenge as we look forward with the business, specifically, I think, in the US.
Speaker #2: So I think to your question, I think there's a couple of elements. Again, I won't get into the political side of it, but just if I look at how the administration is looking at affordability, I think clearly they have a couple of mandates which are number one, how do we address home affordability?
Speaker #2: So you're hearing lots of conversations around portable mortgages, around 50-year mortgages, and as you mentioned, Martin, very recently, the direction to the GSEs around purchasing MBS—$200 billion worth of MBS. I think all of those are very positive signs that the administration is very supportive of going after affordability.
Speaker #2: On another vector, of course, they've been working hard on trying to drop the interest rates. So again, we'll have to see, Martin, how that eventually evolves over time.
Brian Lang: On another vector, of course, they've been working hard on trying to drop the interest rates. So again, we'll have to see, Martin, how that eventually evolves over time. We've got midterm elections in November. So I'm assuming over the next quarter or 2, there's probably going to be an awful lot of effort from the administration to do their best to bring down affordability and to bring down interest rates.
On another vector, of course, they've been working hard on trying to drop the interest rates. So again, we'll have to see, Martin, how that eventually evolves over time. We've got midterm elections in November. So I'm assuming over the next quarter or 2, there's probably going to be an awful lot of effort from the administration to do their best to bring down affordability and to bring down interest rates.
Speaker #2: We've got midterm elections in November, so I'm assuming over the next quarter or two, there's probably going to be an awful lot of effort from the administration to do their best to bring down affordability and to bring down interest
Speaker #2: rates. That's great.
Martin Toner: That's great. Thank you, Brian. That's all for me.
Martin Toner: That's great. Thank you, Brian. That's all for me.
Speaker #6: Thank you, Brian. That's all for
Speaker #6: me. Thanks,
Brian Lang: Thanks, Martin.
Brian Lang: Thanks, Martin.
Speaker #1: Thank Martin. you. Our next question comes from Richard C with National Bank Capital Markets. Your line is
Operator: Thank you. Our next question comes from Richard Tse with National Bank Capital Markets. Your line is open.
Operator: Thank you. Our next question comes from Richard Tse with National Bank Capital Markets. Your line is open.
Speaker #1: open. Yes.
Lyne Beauregard: Yes, thank you. As we sort of look out for the rest of this year, when you sort of pull together your internal forecast, what sort of the base case you use for your kind of market volumes for mortgages, both purchase and refi? I'm sort of just asking because I'm just sort of curious how conservative you are in that. Do you kind of really just take the sort of the MBA data forecast and kind of use that as a base case, or do you make your kind of own adjustments here?
Richard Tse: Yes, thank you. As we sort of look out for the rest of this year, when you sort of pull together your internal forecast, what sort of the base case you use for your kind of market volumes for mortgages, both purchase and refi? I'm sort of just asking because I'm just sort of curious how conservative you are in that. Do you kind of really just take the sort of the MBA data forecast and kind of use that as a base case, or do you make your kind of own adjustments here?
Speaker #7: Thank you. As we sort of look out for the rest of this year, when you sort of pull together your internal forecast, what's sort of the base case you use for your kind of market volumes for mortgages, both purchase and refi, and I'm sort of just asking because I'm just sort of curious how conservative you are in that.
Speaker #7: Do you kind of really just take the sort of the MBA data forecast and kind of use that as a base case, or do you make your kind of own
Speaker #7: adjustments here? Yeah.
Brian Lang: Yeah, it's Richard. So we do look a lot at MBA and Fannie Mae. Of course, we use our judgment as well on top of this. But based on everything we are seeing right now, it seems to be reasonable that their estimates for the year, right? They have a single-digit increase for purchases for our fiscal 2026. If you average MBA, Fannie Mae, they are around 50% increases in refinance. As you probably have seen out there for this quarter, Q2, they're not very optimistic about volumes. They have a decrease of close to 10%. So what it implies is that there's a substantial increase coming up Q3, Q4, which, again, seasonality also helps the market during that time of the year. So not calling rates here, but just stating what we are seeing from MBA, Fannie, and others in the industry.
Brian Lang: Yeah, it's Richard. So we do look a lot at MBA and Fannie Mae. Of course, we use our judgment as well on top of this. But based on everything we are seeing right now, it seems to be reasonable that their estimates for the year, right? They have a single-digit increase for purchases for our fiscal 2026. If you average MBA, Fannie Mae, they are around 50% increases in refinance. As you probably have seen out there for this quarter, Q2, they're not very optimistic about volumes. They have a decrease of close to 10%. So what it implies is that there's a substantial increase coming up Q3, Q4, which, again, seasonality also helps the market during that time of the year. So not calling rates here, but just stating what we are seeing from MBA, Fannie, and others in the industry.
Speaker #2: It's Richard. So we do look a lot at MBA and Fannie Mae of course, we use our judgment as well on top of this.
Speaker #2: But based on everything we are seeing right now, it seems to be reasonable that their estimates for the year, right? They have a single-digit increase for purchases for fiscal our fiscal 2026.
Speaker #2: If you average MBA, Fannie Mae, they are around 50% increases in refinance, as you probably have seen out there, for this next quarter, Q2.
Speaker #2: They're not very optimistic about volumes. They have a decrease of close to 10%. So what it implies is that that there's a substantial increase coming up Q3, Q4.
Speaker #2: Which, again, seasonality also helps the market during that time of the year. So, not calling rates here, but just stating what we are seeing from MBA, Fannie, and others in the industry that's based on a 30-year mortgage rate hovering around 6%.
Brian Lang: That's based on a 30-year mortgage rate hovering around 6%. No one is predicting rates going to close to 5%. That's what we are using for our estimates as well.
That's based on a 30-year mortgage rate hovering around 6%. No one is predicting rates going to close to 5%. That's what we are using for our estimates as well.
Speaker #2: No one is predicting rates going to close to 5%. And that's what we are using for our estimates as well.
Speaker #7: Okay. And then I think you sort of briefly touched on the competitive environment, but if you kind of look broadly this year versus the same time last year, have there been any sort of moves among that competitive market that have kind of been notable that we should be aware of in terms of what you're
Operator: Okay. And then I think you sort of briefly touched on a competitive environment, but if you kind of look broadly this year versus the same time last year, have there been any sort of moves among that competitive market that have kind of been notable that we should be aware of in terms of what you're seeing?
Richard Tse: Okay. And then I think you sort of briefly touched on a competitive environment, but if you kind of look broadly this year versus the same time last year, have there been any sort of moves among that competitive market that have kind of been notable that we should be aware of in terms of what you're seeing?
Speaker #7: seeing? No, I'd
Brian Lang: No, I'd say, Gavin, it's actually been quite a quiet year, I would say, year-over-year. We did have quite a bit of movement the year before where we had sort of one of our bigger competitors that was in both title and valuation sold their valuation business. So they exited that business. So we've seen a little bit of that. But beyond that, we had one other player that was purchased from a different company. So there's been a little bit of that sort of movement from one private equity to another. But beyond that, Richard, no, we've seen very little changes really on the competitive front. The only thing I think I would add to Rodrigo's commentary just on where the market's going, just remember when we're talking about the -10%, we're talking about quarter-over-quarter.
Brian Lang: No, I'd say, Gavin, it's actually been quite a quiet year, I would say, year-over-year. We did have quite a bit of movement the year before where we had sort of one of our bigger competitors that was in both title and valuation sold their valuation business. So they exited that business. So we've seen a little bit of that. But beyond that, we had one other player that was purchased from a different company. So there's been a little bit of that sort of movement from one private equity to another. But beyond that, Richard, no, we've seen very little changes really on the competitive front. The only thing I think I would add to Rodrigo's commentary just on where the market's going, just remember when we're talking about the -10%, we're talking about quarter-over-quarter.
Speaker #2: say, Gavin, it's actually been quite Richard, it's been quite a quiet year, I would say, year over year. We did have quite a bit of movement the year before.
Speaker #2: Where we had sort of one of our bigger competitors that was in both title and valuation sold their valuation business. So they exited that business.
Speaker #2: So we've seen a little bit of that, but beyond that, we had one other player that was purchased from a different company. So there's been a little bit of that sort of movement from one private equity to another.
Speaker #2: But beyond that, Richard, no, we've seen very little changes really on the competitive front. The only thing I think I would add to Rodrigo's commentary, just on where the market's going, just remember when we're talking about the minus 10%, we're talking about quarter over quarter.
Speaker #2: So I mean, if you scan back a little bit, year over year, the market, I think, is growing in the right direction. And frankly, as we sort of hopefully outline today, I mean, our big focus has been on bringing on new customers and continue to perform and drive market share.
Brian Lang: So I mean, if you scan back a little bit, year-over-year, the market, I think, is growing in the right direction. And frankly, as we sort of hopefully outlined today, I mean, our big focus has been on bringing on new customers and continuing to perform and drive market share. So the fortune we have, I think, right now in title is that because that business is really starting to scale now, the way we're looking at the year is a lot of the growth; we're not looking at the market to enhance the growth. We hope it helps. But as I mentioned in this past quarter that we just came out of, 2/3 of our growth in the title business came from our customer, right? From growing our customers, 1/3 came from the market.
So I mean, if you scan back a little bit, year-over-year, the market, I think, is growing in the right direction. And frankly, as we sort of hopefully outlined today, I mean, our big focus has been on bringing on new customers and continuing to perform and drive market share. So the fortune we have, I think, right now in title is that because that business is really starting to scale now, the way we're looking at the year is a lot of the growth; we're not looking at the market to enhance the growth. We hope it helps. But as I mentioned in this past quarter that we just came out of, 2/3 of our growth in the title business came from our customer, right? From growing our customers, 1/3 came from the market.
Speaker #2: So the fortune we have, I think, right now in title is that because that business is really starting to scale now, the way we're looking at the year is a lot of the growth, we're not looking at the market to enhance the growth.
Speaker #2: We hope it helps. But as I mentioned in this past quarter that we just came out of, two-thirds of our growth in the title business came from our customer, right, from growing our customers a third came from the market.
Speaker #2: So that's our focus is less right now on the rates just because, as you guys all know, we can't control them. We'd like them to come down.
Brian Lang: So our focus is less right now on the rates just because, as you guys all know, we can't control them. We'd like them to come down. But the focus is really just on continuing to double down on the core business and drive the volume, whether the rates move significantly or not.
So our focus is less right now on the rates just because, as you guys all know, we can't control them. We'd like them to come down. But the focus is really just on continuing to double down on the core business and drive the volume, whether the rates move significantly or not.
Speaker #2: But the focus is really just on continuing to double down on the core business and drive the volume whether the rates move significantly or not.
Speaker #7: Okay. And then sort of going back to the question on competition, it was more around the other question is sort of in terms of UAD readiness, the fact that you have and UAD 3.6 this platform, I would imagine that gives you a little bit of edge relative to the competitors and does sort of UAD require you to invest more or the fact that you do have this technology platform, you can sort of make those modifications on a very cost-effective basis?
Operator: Okay. And then, sort of going back to the question on competition, it was more around the other question, is sort of in terms of UAD and UAD 3.6 readiness, the fact that you have this platform, I would imagine that gives you a little bit of edge relative to the competitors. And does sort of UAD require you to invest more, or the fact that you do have this technology platform, you can sort of make those modifications on a very cost-effective basis?
Richard Tse: Okay. And then, sort of going back to the question on competition, it was more around the other question, is sort of in terms of UAD and UAD 3.6 readiness, the fact that you have this platform, I would imagine that gives you a little bit of edge relative to the competitors. And does sort of UAD require you to invest more, or the fact that you do have this technology platform, you can sort of make those modifications on a very cost-effective basis?
Speaker #2: Richard, I love the industry knowledge of that question. So I'm not sure how many other folks are following the rollout of UAD, which is the new forms that are coming out, which may sound like a small endeavor, but is probably the biggest, I would say, sort of governance change in the industry in the past decade.
Brian Lang: Richard, I love the industry knowledge of that question. So I'm not sure how many other folks are following the rollout of UAD, which is the new forms that are coming out, which may sound like a small endeavor, but is probably the biggest, I would say, sort of governance change in the industry in the past decade. So it's a really good question, actually, Richard. So I guess I'm happy to announce that we've actually done our first UAD transaction. We did that in the last quarter. So we are the first, frankly, out of the box to do that. And that's because one of our biggest customers is a forerunner in getting prepared for UAD. So it's interesting you say that, Richard. A lot of our competitors are struggling, of course, right now. We put this front and center. We did make the investment.
Brian Lang: Richard, I love the industry knowledge of that question. So I'm not sure how many other folks are following the rollout of UAD, which is the new forms that are coming out, which may sound like a small endeavor, but is probably the biggest, I would say, sort of governance change in the industry in the past decade. So it's a really good question, actually, Richard. So I guess I'm happy to announce that we've actually done our first UAD transaction. We did that in the last quarter. So we are the first, frankly, out of the box to do that. And that's because one of our biggest customers is a forerunner in getting prepared for UAD. So it's interesting you say that, Richard. A lot of our competitors are struggling, of course, right now. We put this front and center. We did make the investment.
Speaker #2: So it's a really good question, actually, Richard. So I guess I'm happy to announce that we've actually done our first UAD transaction. We did that in the last quarter.
Speaker #2: So we are the first, frankly, out of the box to do that. And that's because one of our biggest customers is a forerunner in getting prepared for UAD.
Speaker #2: So it's interesting you say that, Richard. A lot of our competitors are struggling, of course, right now. We put this front and center. We did make the investment.
Speaker #2: So we've got a couple of million dollars invested in this. We will continue to invest good news some of that investment comes off this year.
Brian Lang: So we've got $2 million invested in this. We will continue to invest. Good news, some of that investment comes off this year. So we can redeploy, and we will redeploy investments into other areas of our platform just to continue to make sure we're doing the things we need to to future-proof the platform. But your point around UAD, it is a differentiator for us. We'll see what happens over the next little while. We have had customers call and ask us, "We probably need to start talking to you because you guys are UAD compliant, and we're struggling with whoever might be servicing them.
So we've got $2 million invested in this. We will continue to invest. Good news, some of that investment comes off this year. So we can redeploy, and we will redeploy investments into other areas of our platform just to continue to make sure we're doing the things we need to to future-proof the platform. But your point around UAD, it is a differentiator for us. We'll see what happens over the next little while. We have had customers call and ask us, "We probably need to start talking to you because you guys are UAD compliant, and we're struggling with whoever might be servicing them.
Speaker #2: So we can redeploy and we will redeploy investments into other areas of our platform just to continue to make sure we're doing the things we need to to future-proof the platform.
Speaker #2: But your point around UAD, it is a differentiator for us. We'll see what happens over the next little while. We have had customers call and ask us.
Speaker #2: We probably need to start talking to you because you guys are UAD compliant. And we're struggling with whoever might be servicing them.
Speaker #7: Okay. Great. Thank
Operator: Okay. Great. Thank you. Thank you. There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.
Richard Tse: Okay. Great. Thank you.
Speaker #7: you. Thank you.
Operator: Thank you. There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.
