Q4 2025 Dominion Lending Centres Inc Earnings Call

March 24, 2026

Speaker #1: Good afternoon, and thank you for standing by. Welcome to Dominion Lending Centre’s fourth quarter and year-end 2025 results conference call. At this time, all participants will be in listen-only mode.

Speaker #1: A question-and-answer period will follow. To ask a question, simply press star 1 on your telephone keypad. To withdraw your question, press star 1 again. Please note this call is also accessible via webcast, and a replay of the webcast will be available on the corporation's website at www.dlcg.ca.

Speaker #1: During the call, management's remarks may contain forward-looking information that is based on certain assumptions and, therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker #1: Please refer to our forward-looking information disclosure in the MD&A for the quarter ended December 31, 2025, which can be found on Cedar Plus and on the corporation's websites.

Speaker #1: In addition, during the call, the specific non-IFRS measures. These measures are also defined in the MD&A for the quarter ended December 31, 2025. The corporation's MD&A includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures.

Operator: In addition, during the call, the corporation may refer to specific non-IFRS measures. These measures are also defined in MD&A for the quarter ended 31 December 2025. The corporation's MD&A includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial conditions and results of operations as they provide additional critical metrics of its performance. These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS, and may differ from similarly named measures reported by other issuers and accordingly may not be comparable. These measures should not be considered as a substitute for the related financial information prepared by IFRS. I would now like to turn the call over to Gary Mauris, Chairman and CEO of Dominion Lending Centres.

Speaker #1: Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operations, as they provide additional critical metrics of its performance.

Speaker #1: These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS, and may differ from similarly named measures reported by other issuers, and accordingly may not be comparable.

Speaker #1: These measures should not be considered as a substitute for the related financial information prepared by IFRS. I would now like to turn the call over to Gary Morris, Chairman and CEO of Dominion Lending Centres.

Speaker #2: Good afternoon, everyone, and thanks for joining us on today's 2025 Fiscal Earnings Conference Call. On the call with me today are Chris Kayet, our Executive Vice Chair and co-founder; Jeff Hague, our Financial Officer; Eddie Cosiolo, our President; and James Dell, Executive Vice President and CLO.

Gary Mauris: Good afternoon, everyone, and thanks for joining us on today's 2025 Fiscal Earnings Conference Call. On the call with me today are Chris Kayat, our Executive Vice Chair and Co-founder, Geoff Hague, our Financial Officer, Eddy Cocciollo, our President, and James Bell, Executive Vice President and CLO. 2025 was a record year for the DLCG Group, highlighted by a strong growth, margin expansion, and the continued expansion of our broker network. While the slowdown in activity in the Canadian housing market created some headwinds for the broader market, we benefited from strength in the mortgage renewal market and, more importantly, from continued execution of our key strategic priorities. I'm pleased to report that both funded mortgage volume and revenue grew 25% in 2025, with annual funded mortgage volume increasing to a record of CAD 84.5 billion, up from CAD 67.4 billion in 2024.

Speaker #2: 2025 was a record year for the DLCG Group, highlighted by strong growth, margin expansion, and the continued expansion of our broker network. While the slowdown in activity levels in the Canadian housing market created some headwinds for the broader market, we benefited from strength in the mortgage renewal market and, more importantly, from continued execution of our key strategic priorities.

Speaker #2: I'm pleased to report that both funded mortgage volume and revenue grew 25% in 2025, with annual funded mortgage volume increasing to a record of $84.5 billion, up from $67.4 billion in 2024.

Speaker #2: At the same time, we continue to generate strong profitability, with EBITDA margins increasing to 51% compared to 47% in 2024, driving a 36% increase in adjusted EBITDA in 2025 to $48.8 million.

Gary Mauris: At the same time, we continue to generate strong profitability with EBITDA margins increasing to 51% compared to 47% in 2024, driving a 36% increase in adjusted EBITDA in 2025 to CAD 48.8 million. Our adjusted earnings per share increased to CAD 0.41 from CAD 0.21 last year. Beyond the financial results, we also made important progress across our key strategic priorities. We expanded our broker networks over 9,000 mortgage professionals, continuing to strengthen our leadership position within the Canadian mortgage broker channel. We accelerated the adoption of our leading edge Velocity platform, reaching 85% penetration across our broker network exiting 2025. We also took a meaningful strategic step in the alternative lending market through our investment in Heartwood. Finally, we remained active in executing our capital allocation priorities.

Speaker #2: Our adjusted earnings per share increased to $0.41 from $0.21 last year. Beyond the financial results, we also made important progress across our key strategic priorities.

Speaker #2: We expanded our broker network to over 9,000 mortgage professionals, continuing to strengthen our leadership position within the Canadian mortgage broker channel. We accelerated the adoption of our leading-edge Velocity platform, reaching 85% penetration across our broker network, exiting Q4 2025.

Speaker #2: We also took a meaningful strategic step in the alternative lending market through our investment in Hartwood. And finally, we remained active in executing our capital allocation priorities.

Speaker #2: During the year, we invested in the growth of our business, increased our quarterly dividend, and repurchased approximately 1% of our common shares—all while maintaining a strong balance sheet.

Gary Mauris: During the year, we invested in the growth of our business, increased our quarterly dividend, and we purchased approximately 1% of our common shares, all while maintaining a strong balance sheet. Looking ahead, 2026 will be an exciting year for the DLCG Group as we celebrate our 20th anniversary. While we are proud of the growth and success we've achieved since our founding, our market share of overall Canadian residential mortgage originations remain modest at approximately 10%. That gives us a significant runway for long-term growth. Following the realignment of our sales team structure in Q4 of 2025, we expect to see an active recruiting environment in 2026. At the same time, we expect continued market share gains as we further leverage the strong adoption of Velocity to drive increased productivity across our network.

Speaker #2: Looking ahead, 2026 will be an exciting year for the DLCG Group as we celebrate our 20th anniversary. While we are proud of the growth and success we've achieved since our founding, our market share of overall Canadian residential mortgage originations remains modest at approximately 10%.

Speaker #2: That gives us a significant runway for long-term growth. Following the realignment of our sales team structure in the fourth quarter of 2025, we expect to see an active recruiting environment in 2026.

Speaker #2: At the same time, we expect continued market share gains as we further leverage the strong adoption of Velocity to drive increased productivity across our network.

Speaker #2: Velocity adoption reached 85%, exiting Q4 2025, and the platform is now well embedded across our broker network. This gives us a powerful opportunity to implement tools such as Goldrush to help our brokers broaden and deepen relationships with clients, improve engagement throughout the mortgage lifecycle, and ultimately grow their businesses.

Gary Mauris: Velocity adoption reached 85% exiting 2025, and the platform is now well embedded across our broker network. This gives us a powerful opportunity to implement tools such as Gold Rush to help our brokers broaden and deepen relationships with clients, improve engagement throughout the mortgage lifecycle, and ultimately grow their businesses. As a leading participant in the Canadian residential mortgage broker market, we remain committed to educating Canadian consumers on the benefits of working with a mortgage broker and increasing the overall market share of the broker channel. During 2025, we launched several new marketing initiatives, including increased investment in social media to better engage younger demographics and first-time homebuyers. We expect to build on these initiatives in 2026.

Speaker #2: As a leading participant in the Canadian residential mortgage broker market, we remain committed to educating Canadian consumers on the benefits of working with a mortgage broker, and increasing the overall market share of the broker channel.

Speaker #2: During 2025, we launched several new marketing initiatives, including increased investment in social media to better engage younger demographics and first-time home buyers. We expect to build on these initiatives in 2026.

Speaker #2: Our strong balance sheet continues to provide us with flexibility to pursue strategic acquisitions and targeted investments. And we have been busy on this front in 2025 and early 2026.

Gary Mauris: Our strong balance sheet continues to provide us with flexibility to pursue strategic acquisitions and targeted investments, and we have been busy on this front in 2025 and early 2026. Our investment in Heartwood, a non-B-20 lender, had a strong first year in 2025, with loan book growth in line with our expectations and a clear path towards profitability in 2026. Since the beginning of Q4 2025, we have invested approximately CAD 17 million into several strategic investments and acquisitions. We acquired an equity stake in two of our franchise partners, including purchasing the remaining 30% of Broker Financial Group Inc. We acquired a 50% equity interest in a mortgage investment corporation, Sunrays Management Ltd, to complement our Heartwood investment.

Speaker #2: Our investment in Hartwood, a non-B20 lender, had a strong first year in 2025, with loan book growth in line with our expectations and a clear path towards profitability in 2026.

Speaker #2: Since the beginning of Q4 2025, we have invested approximately $17 million into several strategic investments and acquisitions. We acquired an equity stake in two of our franchise partners, including purchasing the remaining 30% of Broker Financial Group, Inc. We acquired a 50% equity interest in a mortgage investment corporation, Thunder Rave Management Ltd., to complement our Hartwood investment.

Speaker #2: And we revised our agreement with our independent sales consultants, which we expect will lower commission costs while supporting margin expansion and improving alignment with our long-term growth objectives.

Gary Mauris: We revised our agreement with our independent sales consultant, which we expect will lower commission costs while supporting margin expansion and improving alignment with our long-term growth objectives. With a strong foundation in place, I'm excited for the year ahead. I will now pass it over to Jeff to go over our financial results in more detail. Jeff.

Speaker #2: With a strong foundation in place, I'm excited for the year ahead. I will now pass it over to Jeff to go over our financial results in more detail.

Speaker #2: Jeff?

Speaker #3: Thanks, Gary. Good afternoon, everyone. I will provide an overview of the fourth quarter results, followed by a brief review of the full year 2025 results.

Geoff Hague: Thanks, Gary. Good afternoon, everyone. I will provide an overview of the Q4 results, followed by a brief review of the full year 2025 results. For the Q4 of 2025, revenue increased 19% year over year, driven by 20% growth in funded volumes and an increase in the adoption of Velocity to 85% compared to 76% in Q4 of 2024. Revenue from franchise and brokering of mortgages increased 18%, while Newton revenue increased 23%. Beginning in the Q2, revenue generated from a third-party supplier was reclassified from franchise revenue to Newton revenue. The Q4 impact of this was a CAD 0.3 million increase in Newton revenue and a corresponding CAD 0.3 million decrease in franchise revenue. Turning to expenses.

Speaker #3: For the fourth quarter of 2025, revenue increased 19% year over year, driven by 20% growth in funded volumes, and an increase in the adoption of Velocity to 85%, compared to 76% in Q4 of 2024.

Speaker #3: Revenue from franchise and brokering of mortgages increased 18%, while Newton revenue increased 23%. Beginning in the second quarter, revenue generated from a third-party supplier was reclassified from franchise revenue to Newton revenue.

Speaker #3: The fourth quarter impact of this was a $0.3 million increase in Newton revenue and a corresponding $0.3 million decrease in franchise revenue. Turning to expenses, general administrative expenses increased 1% compared to the same quarter last year, and this increase was primarily to hire personnel and IT-related costs.

Geoff Hague: General and administrative expenses increased 1% compared to the same quarter last year, and this increase was due primarily to higher personnel and IT related costs, largely offset by the timing of marketing events. On a percentage of revenue basis, general and administrative expenses declined to 34% from 40.1%. Direct costs decreased 8% over Q4 of 2024 from lower advertising plan expenditures and lower cost of royalty revenue. On a percentage of revenue basis, direct costs declined to 12.3% in Q4 of 2025 from 15.9% in Q4 of 2024. Adjusted EBITDA increased 36% to CAD 14 million compared to Q4 of 2024, while adjusted EBITDA margins expanded to 53%, up from 46% last year. The margin improvement was driven by strong Newton revenues, higher franchise revenue, and revenue growth outpacing expense growth.

Speaker #3: This was largely offset by the timing of marketing events. On a percentage of revenue basis, general and administrative expenses declined to 34% from 40.1%. Direct costs decreased 8% over Q4 of 2024, driven by lower advertising plan expenditures and lower costs of royalty revenue.

Speaker #3: On a percentage of revenue basis, direct costs declined to 12.3% in Q4 2025, from 15.9% in Q4 2024. Adjusted EBITDA increased 36% to $14 million compared to Q4 2024, while adjusted EBITDA margins expanded to 53%, up from 46% last year.

Speaker #3: The margin improvement was driven by strong Newton revenues, higher franchise revenue, and revenue growth outpacing expense growth. Adjusted EBITDA for Q4 2025 also included a $0.4 million loss from our equity-accounted investment in Hartwood, which began operations in the second quarter of 2025.

Geoff Hague: Adjusted EBITDA for Q4 2025 also included a CAD 0.4 million loss from our equity accounted investment in Heartwood, which began operations in Q2 2025. Consistent with our initial expectation, we do expect Heartwood to reach profitability in 2026. As Gary mentioned, during Q4, the DLC Group revised agreements with four of our independent sales consultants to simplify the corporation's compensation structure and better align recruiting incentives with our long-term growth goals. As part of this transition, certain legacy trailing commission arrangements were eliminated in exchange for one-time payments, resulting in a loss on contract settlements totaling CAD 8.7 million for the quarter, and this loss was recorded in our other expense line. These revised agreements are expected to lower future commission costs, supporting margin expansion.

Speaker #3: Consistent with our initial expectation, we do expect Hartwood to reach profitability in 2026. As Gary mentioned, during the fourth quarter, the DLC Group revised agreements with four of our independent sales consultants to simplify the corporation's compensation structure and better align recruiting incentives with our long-term growth goals.

Speaker #3: As part of this transition, certain legacy trailing commission arrangements were eliminated in exchange for one-time payments, resulting in a loss on contract settlements totaling $8.7 million for the quarter.

Speaker #3: And this loss was recorded in our other expense line. These revised agreements are expected to lower future commission costs, supporting margin expansion. Net income of $1.9 million increased from a loss of $138.8 million in Q4 of 2024.

Geoff Hague: Net income of CAD 1.9 million increased from a loss of CAD 138.8 million in Q4 of 2024. The increase was driven by decreased finance expense related to the preferred share liability and higher revenue, partly offset by the CAD 8.7 million loss on contract settlements. The prior year included a CAD 144.5 million expense related to the preferred shares that were acquired and canceled in Q4 of 2024. Adjusted diluted earnings per common share increased to CAD 0.13 in Q4 of 2025 from CAD 0.05 last year.

Speaker #3: The increase was driven by decreased finance expense related to the preferred share liability and higher revenue, partly offset by the $8.7 million loss on contract settlements.

Speaker #3: The prior year included a $144.5 million expense related to the preferred shares that were acquired and canceled in Q4 of 2024. Adjusted diluted earnings per common share increased to $0.13 in Q4 of 2025 from $0.05 last year.

Speaker #3: Cash flow from operations, adjusted for the loss in contract settlements—coupled with the full retention of free cash flow following the conclusion of preferred shareholder allocations—resulted in $11.9 million in free cash flow attributable to common shareholders, compared to $4.4 million in Q4 2024, driven by increased revenue and strong profitability.

Geoff Hague: Cash flow from operations adjusted for the loss and contract settlements, coupled with the full retention of free cash flow following the conclusion of preferred shareholder allocations, resulted in CAD 11.9 million in free cash flow attributable to common shareholders compared to CAD 4.4 million in Q4 2024, driven by increased revenue and strong profitability. At quarter-end, adjusted total debt to EBITDA on a trailing twelve-month basis was 0.73 times compared to 0.79 times at the same period last year. Moving on to annual results. The DLC Group delivered strong results for 2025. Alongside this revenue growth, our continued focus on profitability and financial discipline drove strong earnings growth, meaningful free cash flow generation, and a strong balance sheet.

Speaker #3: At quarter-end, adjusted total debt to EBITDA on a trailing 12-month basis was 0.73 times, compared to 0.79 times at the same period last year.

Speaker #3: And moving on to annual results, the DLC Group delivered strong results for 2025. Alongside this revenue growth, our continued focus on profitability and financial discipline drove strong earnings growth, meaningful free cash flow generation, and a strong balance sheet.

Speaker #3: Revenue for the year ended December 31, 2025, increased 25% to $96.3 million, and this growth was driven by a 25% increase in funded mortgage volume compared to 2024, as well as higher adoption of Velocity, which reached 83% for the full year in 2025, up from 73% in 2024.

Geoff Hague: Revenue for the year ended December 31, 2025 increased 25% to CAD 96.3 million, and this growth was driven by a 25% increase in funded mortgage volume compared to 2024, as well as higher adoption of Velocity, which reached 83% for the full year in 2025, up from 73% in 2024. General and administrative expenses increased 14% or CAD 4.4 million over 2024 levels, with the increase extending from 2 brokerage acquisitions completed in Q2 of 2024, higher personnel and IT costs, and higher advertising expense due to the timing of certain of our events. On a percentage of revenue basis, general and administrative expense declined to 37.3% from 41.1% in 2024.

Speaker #3: General and administrative expenses increased 14%, or $4.4 million, over 2024 levels, with the increase stemming from two brokerage acquisitions completed in Q2 of 2024, higher personnel and IT costs, and higher advertising expense due to the timing of certain of our events.

Speaker #3: On a percentage of revenue basis, general and administrative expense declined to 37.3% from 41.1% in 2024. Adjusted EBITDA increased 36% to $48.8 million compared to 2024, with margins expanding to 51% from 47% last year.

Geoff Hague: Adjusted EBITDA increased 36% to CAD 48.8 million compared to 2024, with margins expanding to 51% from 47% last year. Margin improvement was driven by strong Newton and franchise revenue and lower operating expenses as a percentage of revenue. Adjusted EBITDA for 2025 includes a CAD 1.4 million loss from our equity accounted investment in Heartwood, which began operations in Q2 of 2025. Net income was CAD 24.8 million compared to a loss of CAD 126.8 million in 2024. The improvement was driven by lower finance expenses following the preferred share cancellation in Q4 of 2024, higher revenue, and a gain on the sale of an equity accounted investment, partly offset by an CAD 8.7 million loss on contract settlements.

Speaker #3: Margin improvement was driven by strong Newton and franchise revenue, and lower operating expenses as a percentage of revenue. Adjusted EBITDA for 2025 includes a $1.4 million loss from our equity-accounted investment in Hartwood, which began operations in Q2 of 2025.

Speaker #3: Net income was $24.8 million, compared to a loss of $126.8 million in 2024. The improvement was driven by lower finance expenses following the preferred share cancellation in Q4 of 2024, higher revenue, and a gain on the sale of an equity-accounted investment, partly offset by an $8.7 million loss on contract, which included a $149 million expense related to the preferred share acquisition.

Geoff Hague: The prior year also included a CAD 149 million expense related to the preferred share acquisition. Adjusted net income increased to CAD 32.2 million from CAD 10.8 million in 2024, an increase of approximately 200% due to higher revenue, strong margins, and the absence of preferred shareholder-related income allocations in 2025. The strong cash flow from operations, coupled with full retention of free cash flow following the conclusion of preferred shareholder allocations, resulted in CAD 38.8 million in free cash flow attributed to common shareholders compared to CAD 14.9 million in 2024. I will now pass it back to Gary for some concluding remarks.

Speaker #3: Adjusted net income increased to 32.2 million from 10.8 million in 2024, an increase of approximately 200% due to a higher revenue due to higher revenue, strong margins, and the absence of preferred shareholder-related income allocations in 2025.

Speaker #3: The strong cash flow from operations, coupled with full retention of free cash flow following the conclusion of preferred shareholder allocations, resulted in $38.8 million in free cash flow attributed to common shareholders, compared to $14.9 million in 2024.

Speaker #3: And I will now pass it back to Gary for some concluding remarks.

Speaker #2: Thanks, Jeff. On the back of the strength of our balance sheet and strong cash flow generation, we're pleased to announce that our board of directors has increased our quarterly dividend to $0.005 per common share, up from $0.0004 previously.

Gary Mauris: Thanks, Jeff. On the back of the strength of our balance sheet and strong cash flow generations, we're pleased to announce that our board of directors has increased our quarterly dividend to CAD 0.005 per common share, up from a zero point zero four or zero point four previously, which is subject to the approval of the board of directors and expected to be effective for the June 2026 dividend payment. Before wrapping up, I want to thank our employees for their hard work and dedication, and our brokers, lending partners, and our suppliers for their continued trust and partnership. We remain very excited about the opportunities ahead as we continue building on the strong foundation we have created over the past two decades. With that, I'll turn the call over to the operator for Q&A. Operator?

Speaker #2: This is subject to the approval of the board of directors and is expected to be effective for the June 2026 dividend payment. Before wrapping up, I want to thank our employees for their hard work and dedication.

Speaker #2: And our brokers, lending partners, and our suppliers, for their continued trust and partnership. We remain very excited about the opportunities ahead as we continue building on the strong foundation we have created over the past two decades.

Speaker #2: With that, I'll turn the call over to the operator for Q&A. Operator?

Speaker #3: As a reminder, to ask a question, simply press star one on your telephone keypad. Again, that is star one to ask a question. And our first question comes from the line of Gary Ho with Discharged Capital Markets.

Operator: With a reminder, to ask a question, simply press star one on your telephone keypad. Again, that is star one to ask a question. Our first question comes from the line of Gary Ho with Desjardins Capital Markets. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Thanks. Good afternoon. I just wanted to get your thoughts on your strategic investments and acquisitions that you just highlighted, about $17 million or so. There’s a couple of them: you bought the remaining 30% interest in Broker Financial Group, the 51% in Clear Trust, the equity interest in Dynarave, and then, just lastly, the revised agreement for your independent sales consultants.

Gary Ho: Thanks. Good afternoon. Interested in your thoughts on your strategic investments and acquisitions that you just highlighted, CAD 17 million or so. Just a couple of them. You bought the remaining 30% interest in Broker Financial Group, the 51% in Clear Trust, the equity interest in Dundarave, and then just lastly, the revised agreement for your independent sales consultants. Maybe just remind us, the Clear Trust is that part of the DLC family already? And does this give you a better economics or is it additive to your funded mortgage volume? What's the strategic importance of the other acquisitions, and the one that's under Heartwood as well?

Speaker #4: So maybe just name off, just remind us that the Clear Trust is that part of the DLC family already, and this gives you, or is this—does this give you better economics, or is it additive to your funded mortgage volume?

Speaker #4: What's the strategic importance of the other acquisitions? Name and the one that's under Hartwood as well. And then just overall, what's the expected incremental EBITDA benefit we should see coming from those investments?

Gary Ho: Just overall, like what's the expected incremental EBITDA benefit we should see coming from those investments?

Speaker #2: Hey, Gary. Thanks, appreciate the question. So, yeah, I mean, we're always looking for accretive acquisitions—whether they're base hits, small tuck-ins, or whether they're more meaningful opportunities that cross our desk.

Gary Mauris: Hey, Jerry. Thanks. Appreciate the question. Yeah, I mean, we're always looking for accretive acquisitions, whether they're base hits, you know, small tuck-ins or whether they're more meaningful opportunities that cross our desk. I'll sort of walk you through maybe the four of them independently, at a very high level. Clear Trust was actually our largest franchise in the country. We've had a very deep and meaningful relationship with them. There were some partners that were looking to divest of their position, some original founding partners in that group. We really like the group. We like to meet the leadership group. You know, with a upcoming renewal, you know, a few years ahead, it made sense for us to go in there and make an equity investment.

Speaker #2: I'll sort of walk you through maybe the four of them independently at a very high level. Clear Trust was actually our largest franchise in the country.

Speaker #2: We've had a very deep and meaningful relationship with them. There were some partners that were looking to divest of their position—some original founding partners in that group.

Speaker #2: We really liked the group. We liked to meet the leadership group. And with an upcoming renewal, a few years ahead, it made sense for us to go in there and make an equity investment.

Gary Mauris: We think that, you know, having sort of us as their partner is going to give them a lot of horsepower, and we expect them to continue to grow. We think that'll be a very accretive acquisition for us over the coming years. If I walk through sort of the next one, Dundarave. Dundarave is a longstanding mortgage investment corp, a MIC, that operates primarily out of BC and Alberta, really, really well run. Both Chris and I know the company very well. We've both been investors, meaningful investors in that MIC. We had, you know, put our own capital in not only some syndicated mortgages, but inside the actual MIC itself over the years. We know the team really well.

Speaker #2: We think that having us as their partner is going to give them a lot of horsepower, and we expect them to continue to grow, and we think that'll be a very accretive acquisition for us over the coming years.

Speaker #2: If I walk through, sort of, the next one—Dynarave. Dynarave is a long-standing mortgage investment corp, a MIC, that operates primarily out of B.C. and Alberta.

Speaker #2: Really, really well-run. Both Chris and I know the company very well. We've both been meaningful investors in that MIC—we had put our own capital in, not only some syndicated mortgages, but inside the actual MIC itself.

Speaker #2: Over the years, we know the team really well, and we just think that it really aligns with our interests in the non-B20 market. We think that's going to continue to grow for all the reasons that we've discussed in the past.

Gary Mauris: We just think that it really aligns with, you know, our interest in the non-B20 market. We think that's gonna continue to grow for, you know, all the reasons that we've discussed in the past. Dundarave in itself does a smaller percentage in residential mortgages but does a lot of, you know, sort of small commercial mortgages. It's been very successful. Interesting fact of Dundarave, you know, in more than 15 years, it's never had a single loss in that portfolio. So really, really well run. We think it's going to be very accretive, and we think that there's gonna be a lot of people that we know that, you know, will wanna participate sort of, you know, investing in that mortgage investment corp.

Speaker #2: Dynarave in itself does a smaller percentage in residential mortgages, but does a lot of sort of small commercial mortgages. And it's been very successful.

Speaker #2: Interesting fact, Dynarave, in more than 15 years, it's never had a single loss in that portfolio. So really, really well-run. We think it's going to be very accretive, and we think that there's going to be a lot of people that we know that will want to participate, sort of investing in that mortgage investment corp.

Gary Mauris: We think strategically, it's going to be a very sound investment and work very well with how we think about the business and its alignment with Heartwood. RMA, our BFG, Broker Financial Group, was obviously that small network that we bought a couple of years ago. We had bought a 70% stake in that business. We have appointed a new president in that business. He's doing a very, very good job. Has had a fair amount of success already recruiting to it. We just bought out the remaining 30%. We had sort of a existing shareholder in that business who was looking to get out, looking for financial reasons to take his final 30% off the table. He wasn't super active in the business.

Speaker #2: So we think, strategically, it's going to be a very sound investment and work very well with how we think about the business and its alignment with Hartwood.

Speaker #2: RMA, our BFG—Broker Financial Group—was obviously that small network that we bought a couple of years ago. We had bought a 70% stake in that business.

Speaker #2: We have appointed a new president in that business. He's doing a very, very good job and has had a fair amount of success already recruiting to it.

Speaker #2: And we just bought out the remaining 30%. We had sort of an existing shareholder in that business who was looking to get out, looking for financial reasons to take his final 30% off the table.

Speaker #2: He wasn't super active in the business. It had been managed by executive leadership, so we thought that was a good use of our capital.

Gary Mauris: It had been, you know, managed by executive leadership. We thought that was a good use of our capital. The last of your question, hoping I'm not going into too much detail for you. Traditionally, our sales team has been compensated on ongoing royalties as a percentage of the remittances that all the franchises that they onboarded, you know, paid to the DLCG Group. It was a very clever and a very unique compensation program that has allowed us to keep our top people for years. As these trailer fee models started to get bigger and bigger, you know, there was an arbitrage.

Speaker #2: And then the last of your question—and I hope I'm not going into too much detail for you. Traditionally, our sales team has been compensated on ongoing royalties as a percentage of the remittances that all of the franchises that they onboarded paid to the DLCG group.

Speaker #2: It was a very clever and a very unique compensation program that has allowed us to keep our top people for years and years and years and years.

Speaker #2: And as these trailer fee models started to get bigger and bigger and bigger, there was an arbitrage. There was an arbitrage of sort of what we could buy these trailers back from them at.

Gary Mauris: There was an arbitrage of sort of what we could buy these trailers back from them at and what they would bring in in terms of increased profitability for the business going forward. You know, if you looked at 2025, to give you an example, you know, under the new sales comp model, we would save about CAD 1.5 million per year by buying back these sales guys' contracts. We've created a brand new compensation program for all these guys. They're excited about it. They've come out of the gate very fast and furious. We think, you know, it was very strategic, and we think that we found, you know, the sort of road right down the middle that makes sense for everyone.

Speaker #2: And what they would bring in, in terms of increased profitability for the business going forward. So if you looked at 2025, to give you an example, under the new sales comp model, we would save about $1.5 million per year by buying back these sales guys' contracts.

Speaker #2: So we've created a brand new compensation program for all these guys. They're excited about it. They've come out of the gate very fast and furious.

Speaker #2: So we think it was very strategic, and we think that we found the sort of roadway down the middle that makes sense for everyone.

Speaker #4: Great. No, that's—appreciate the detail there, Gary. So, if I can just sum up, then: the $17 million investment—how should we think about the EBITDA contribution for '26?

Gary Ho: Great. No, that's, I appreciate the detail there, Gary. If I can just sum up then the CAD 17 million investment, how should we think about the EBITDA contribution for 2026?

Speaker #2: Yeah, I think 2026, I think that you can confidently think that we'll see an EBITDA contribution from those most recent acquisitions. So when we just spoke of between kind of two and a half to low threes, the $3 million, and we think that those will continue to grow as time goes on.

Gary Mauris: Yeah, in 2026, you know, I think that you can confidently think that we'll see an EBITDA contribution from those most recent acquisitions that we just spoke of between kind of CAD 2.5 to low 3s to 3 million a year, beginning this year. We think that those will continue to, you know, grow as time goes on.

Speaker #4: Okay, great. I want to move on to Hartwood. It sounds like profitability has inflected and is trending towards breakeven. First, is that correct? And maybe talk about the expansion into BC—what's the mortgage under administration, and how has credit quality been?

Gary Ho: Okay, great. I wanna move on to Heartwood. Sounds like profitability has inflected and trending towards breakeven. First, is that correct? Maybe talk about the expansion into BC. What's the mortgage under administration and credit quality been? Could we see positive EBITDA contribution by mid-2026?

Speaker #4: Can we see positive EBITDA contribution by mid-’26?

Speaker #2: Yeah, I won't give really in-depth, detailed answers on some of this stuff. I will tell you that, obviously, Hartwood launched last July. We were very, very happy—RMD and A. We'll talk about sort of loans under administration as of the end of the year, last quarter.

Gary Mauris: Yeah, I won't give really, you know, in-depth detailed answers on some of this stuff. I will tell you that obviously Heartwood launched last July. We were very, very happy. Our MD&A will talk about sort of loans under administration as of the end of the year, last quarter. The credit quality is better than we expected, which is very encouraging. We are continuing to work on loan application numbers, and we're seeing that start to increase. We absolutely have a sight line for profitability in H2 2026. We're very encouraged by the organization. We have just recently launched into British Columbia. We got licensed late last year, and we have now funded multiple loans in British Columbia.

Speaker #2: The credit quality is better than we expected, which is very encouraging. We are continuing to work on loan application numbers, and we're seeing that start to increase.

Speaker #2: We absolutely have a sightline for profitability in the second half of 2026, and we're very encouraged by the organization. We have just recently launched into British Columbia.

Speaker #2: We got licensed late last year, and we have now funded multiple loans in British Columbia. We just hired some staff for British Columbia. We feel good about B.C.

Gary Mauris: We just hired some staff for British Columbia. We feel good about BC. I mean, you know, DLCG and, you know, has a large head office support in British Columbia. It's kind of home field advantage. We're looking forward to seeing, you know, what BC sort of shapes up as. We do expect that we will be in Alberta, probably Q3 of this year, maybe a little bit sooner, but our target is Q3 this year.

Speaker #2: I mean, DLCG has a large head office support in British Columbia. It's kind of a home field advantage, so we're looking forward to seeing what BC sort of shapes up as.

Speaker #2: And we do expect that we will be in Alberta probably Q3 of this year. Maybe a little bit sooner, but our target is Q3 this year.

Speaker #4: Okay, great. And then just maybe, just last one for me—a higher-level question. Housing activity has been soft to begin the year, but I know that's only a portion of the funded mortgage volume formula.

Gary Ho: Okay, great. Then just maybe last one for me, higher level question. Housing activity has been soft to begin the year, but I know that's only a portion of the funded mortgage volume, formula. I think historically you've talked about broker productivity, broker acquisition, and refi activity. So what are you seeing currently, maybe as qualitative comments? Also just remind us in more challenging housing environments that we're seeing today, is it easier to convert brokers from the bank channel or other independents into the DLC platform? How's the broker acquisition pipeline look?

Speaker #4: And I think, historically, you've talked about broker productivity, broker acquisition, and refi activity. So, what are you seeing currently? Maybe just as some qualitative comments.

Speaker #4: And also, just remind us—in more challenging housing environments that we're seeing today—is it easier to convert brokers from the bank channel or other independents into the DLC platform?

Speaker #4: How's the broker acquisition pipeline look?

Speaker #2: Yeah, thanks. A lot to unpack there, so let me kind of start here. Listen, I just think that we continue to go through challenges.

Gary Mauris: Yeah, thanks. Lots to unpack there. Let me kind of start here. Listen, I just think that, you know, we continue to go through challenges, just with geopolitical challenges, obviously the, you know, war in Ukraine now. We obviously have had the, you know, tariff noise over this last, almost last year now. You know, we've had, you know, what was going to be a, maybe a continued cut rate environment this year to, you know, sort of a wait and see environment this year, you know, because of all these factors that I just spoke of. It just really shouts from the rooftop the strength of our model. You know, we aren't, as I've said, for 20 years, wholly dependent on the Canadian housing numbers.

Speaker #2: Just with geopolitical challenges, obviously the war in Iran now. We obviously have had the tariff noise over this last—almost last year now. We've had what was going to be maybe a continued cut rate environment this year, to sort of a wait-and-see environment this year.

Speaker #2: Because of all these factors that I just spoke of. But it just really shouts from the rooftop the strength of our model. And we aren't, as I've said for 20 years, wholly dependent on the Canadian housing numbers.

Gary Mauris: There's a lot of contributing factors from equity takeouts to refinance to top ups to, you know, second properties, investment properties that, you know, really make contributions into our distribution. Super optimistic that, you know, even though we continue to go through sort of, you know, more difficult markets, certainly a slowdown in the Canadian housing market, as we're all aware of the numbers, but we continue to do, you know, really well. You know, some of the things that we use to backfill it are things like, you know, recruiting. I mean, our recruiting has, you know, for 20 years got us through any soft market. I can tell you that recruiting is going as good as it ever has been.

Speaker #2: There’s a lot of contributing factors, from equity takeouts to refinance, to top-ups, to second properties, investment properties, that really make contributions into our distribution.

Speaker #2: So, super optimistic that even though we continue to go through sort of more difficult markets—certainly a slowdown in the Canadian housing market, as we're all aware of the numbers.

Speaker #2: But we continue to do really well. Some of the things that we used to backfill it are things like recruiting. I mean, our recruiting has, for 20 years, got us through any soft market.

Speaker #2: And I can tell you that recruiting is going as well as it ever has been, so we're very excited and optimistic about what that looks like this year.

Gary Mauris: We're very, you know, excited and optimistic about what that looks like this year. We did something over the last couple of years. We understood that it was hard for, you know, sort of A type salespeople to do a really good job with databasing and staying in touch. You know, we built onto our technology a program called Gold Rush. That's having outstanding results for us. We're getting, you know, more out of our existing brokers, not having to rely on market growth, because of that. We're getting a disproportionate share or a higher share of renewals than we ever have before. You know, we're, you know, we feel like we're in a very good spot, you know, going forward.

Speaker #2: We did something over the last couple of years. We understood that it was hard for sort of A-type salespeople to do a really good job with databasing and staying in touch, and we built onto our technology a program called Gold Rush that's having outstanding results for us.

Speaker #2: We're getting more out of our existing brokers—not having to rely on market growth because of that. We're getting a disproportionate share, or a higher share, of renewals than we ever have before.

Speaker #2: So we're we feel like we're in a we feel like we're in a very, very good spot. Going forward, we think that regardless of the market, 2026 should be a fairly good year for us.

Gary Mauris: We think that regardless of the market, you know, 2026 should be, you know, a fairly good year for us. We're cautiously optimistic, as I like to say.

Speaker #2: We're cautiously optimistic, as I like to say.

Speaker #4: Okay, sounds great. I appreciate the update. Thanks, guys.

Gary Ho: Okay, sounds great. I appreciate the update. Thanks, guys.

Speaker #2: Thanks very much, Gary.

Gary Mauris: Thanks very much, Gary.

Operator: From ATB Cormark Capital Markets, you have a question from Jeff Fenwick. Please go ahead.

Speaker #3: Thanks from ATB, Coremark, and Capital Markets. You have a question from Jeff Fenwick. Please go ahead.

Speaker #4: Hi, guys. Thanks for the time. I wanted to just ask about the volumes there. Obviously, a very impressive print to the end of the year.

Jeff Fenwick: Hi, guys. Thanks for the time. I wanted to just ask about the volumes there. Obviously a very impressive print to the end of the year. I know that renewals have been pretty central as we go through the peak of that cycle. I think previously you'd said it's been as much as 30 or 40% of your volumes. Like, how should we think about how that was? I assume a similar maybe level of contribution to the quarter, and you know, how do you think about the year playing out here? I think your expectation was that we'd see this level of activity maybe peak through H1, and then I guess we begin to normalize a bit more.

Speaker #4: I know that renewals have been pretty central as we go through the peak of that cycle. I think previously you had said it had been as much as 30% or 40% of your volumes.

Speaker #4: How should we think about how that was? I assume a similar, maybe, level of contribution to the quarter, and how do you think about the year playing out here?

Speaker #4: I think your expectation was that we'd see this level of activity maybe peak through the first half of the year, and then, I guess, we begin to normalize a bit more.

Jeff Fenwick: Like, what would a normalized level of renewals be in a typical quarter as a percent of the total?

Speaker #4: What would a normalized level of renewals be in a typical quarter as a percent of the total?

Gary Mauris: Well, I'll give you a sort of, like, accurate number. You know, we measure any of our renewal numbers that are measured on gross submission numbers. Our renewal business, the application submitted for, you know, renewal transactions, ran at 49%, compared to 44% a year prior. You know, I mean, we have sort of 20%, you know, if the average mortgage in Canada historically has been a 5-year term, there's 20% of mortgages renewing every single year. You know, I mean, we certainly have benefited, I think, from increased renewal volume, and we expect to continue to see that throughout the rest of this year. You know, it sort of is the tail end of, you know, this huge waterfall that everyone's talked about for so long.

Speaker #2: Well, I'll give you sort of accurate numbers. So, when we measure any of our renewal numbers, they're measured on gross submission numbers. But our renewal business—the applications submitted for renewal transactions—ran at 49% compared to 44% a year prior.

Speaker #2: I mean, we have sort of 20—so there's a 20%. If the average mortgage in Canada historically has been a five-year term, there's 20% of mortgages renewing every single year.

Speaker #2: But, I mean, we certainly have benefited, I think, from the increased renewal volume. And we expect to continue to see that throughout the rest of this year.

Speaker #2: It sort of is the tail end of this huge waterfall that everyone has talked about for so long. But we're getting a much higher percentage of opportunity to activate on these renewals and early renewals for a couple of reasons.

Gary Mauris: We're getting a much higher percentage of opportunity to activate, you know, on these renewals and early renewals, for a couple reasons. Number one, you know, more consumers are using mortgage brokers than ever before. CMHC just, you know, pegged it at 50%, the highest it's been in terms of numbers. Number two, quite frankly, us along with our mortgage professionals, are doing a much better job, you know, using tools like Gold Rush to get in front of those renewals earlier. I don't think, Jeff, that we think we're gonna have any massive fall off, like next year, you know, should be anything we are too concerned about, you know, because we've been riding this huge renewal wave. Certainly, it's like a low rate, you know, environment.

Speaker #2: Number one, more consumers are using mortgage brokers than ever before, seeing—may see—just paying today at 50%, the highest it's been in terms of numbers.

Speaker #2: And number two, quite frankly, we, along with our mortgage professionals, are doing a much better job using tools like Gold Rush to get in front of those renewals earlier.

Speaker #2: So I don't think, Jeff, that we think we're going to have any massive falloff. Next year shouldn't be anything we are too concerned about.

Speaker #2: Because we've been riding this huge renewal wave, certainly. It's like a low-rate environment; there's tailwinds. But it's not the only piece of our business.

Gary Mauris: There's tailwinds, but it's not, you know, the only piece of our business. You know, I think this year is going to continue to be a decent year despite the headwinds. I think we're gonna continue to get, you know, high activity and, you know, opportunities around renewal. I think it, you know, will drop off somewhat, you know, in the years going forward, but still a meaningful piece.

Speaker #2: So, I think this year is going to continue to be a decent year, despite the headwinds. I think we're going to continue to get high activity in opportunities around renewal.

Speaker #2: But I think it will drop off somewhat in the years going forward, but still a meaningful piece.

Speaker #4: Yeah, okay. Thanks for that. And then I did note that your revolver was upsized to $40 million from $25 million. You've been making some of these strategic investments we were talking about.

Jeff Fenwick: Yeah. Okay. Thanks for that. I did note that your revolver was upsized to CAD 40 million from CAD 25 million. You've been making some of these strategic investments we were talking about. I mean, are you seeing maybe some more meaningful opportunities out there over the course of this year to do things like maybe there are a few larger broker networks or maybe some transactions that kinda you seem to be moving along the value chain a little bit in the space, I guess, too. Like, how should we think about what that pipeline looks like for this year?

Speaker #4: I mean, are you seeing maybe some more meaningful opportunities out there over the course of this year to do things like—maybe there are a few larger broker networks or maybe some transactions that kind of, you know, seem to be moving along the value chain a little bit in the space, I guess, too?

Speaker #4: How should we think about what that pipeline looks like for this year?

Speaker #2: Yeah, it's a good question. Listen, we'll continue to make acquisitions that we think we can manage well, that are easy to integrate, and that are accretive. There's—we're looking at now existing sort of opportunities.

Gary Mauris: Yeah, it's a good question. You know, listen, we'll continue to make acquisitions that we think we can manage well, that are easy to integrate and that are accretive. You know, there's... You know, we're looking at now, you know, existing sort of opportunities, you know, various sizes. Nothing is imminent, obviously, going forward. Listen, I can assure anyone who's listening on this call, if there is something that makes sense for us and we think that we can manage its integration and, you know, it's accretive, we're gonna continue to look for those opportunities. We're not sitting on our hands at all. We're on high alert.

Speaker #2: Various sizes. Nothing is imminent, obviously, going forward. But listen, I can assure anyone who's listening on this call: if there is something that makes sense for us, and we think that we can manage its integration and it's accretive, we're going to continue to look for those opportunities.

Speaker #2: We're not sitting on our hands at all. We're on high alert, and we understand that we have a company that scales well, provided that it's something in our space, and we're eyes-wide open to any of those opportunities.

Gary Mauris: you know, we understand that, you know, we have a company that scales well, provided that it's something that, you know, is in our space, and we're, you know, sort of eyes wide open to any of those opportunities.

Jeff Fenwick: Mm-hmm. I guess one thing I noticed, related to that or I took note of was with the Dundarave investment there. I mean, they're a servicer. I mean, you guys are obviously very strong on the technology front, and, you know, it strikes me that maybe you could expand the capabilities from a technology standpoint to step into something more like servicing.

Speaker #4: And I guess one thing I noticed related to that, or I took note of, was with the Thunder Rave investment there. I mean, they're a servicer. I mean, you guys are obviously very strong on the technology front, and it strikes me that maybe you could expand the capabilities from a technology standpoint to step into something more like servicing. Would that be—

Gary Mauris: Yeah.

Jeff Fenwick: Would that be?

Speaker #2: Yeah, Jeff, you're very—you're very sound in your comment, and you're a very bright guy. It's interesting. Servicing, just in general, for smaller lenders, smaller mortgage finance companies, is quite challenging today.

Gary Mauris: Jeff, you know, you're a very bright guy. It's a very sound comment. You know, it's interesting, servicing just in general for, you know, smaller lenders, smaller mortgage finance companies, is quite challenging today. There's not a lot of providers out there that, you know, that are available or that do a good job. You know, those are all the things that, you know, we look at through the value chain, you know, and things that we start thinking about that we could, you know, easily integrate because we have, you know, technology such as Velocity.

Speaker #2: There aren't a lot of providers out there that are available or that do a good job. So those are all the things that we look at through the value chain.

Speaker #2: And things that we start thinking about that we could easily integrate because we have technology such as Velocity.

Speaker #4: Okay, okay. That's all I had for now. Thank you. Over to you.

Jeff Fenwick: Okay, that's all I have for now. Thank you. Over to you.

Speaker #2: Thanks. Thanks very much, Jeff.

Gary Mauris: Thanks. Thanks very much, Jeff.

Operator: From Canaccord Genuity, you have a question from Matthew Lee. Please go ahead.

Speaker #3: I'm from Canacorp Continuity. You have a question from Matthew Lee. Please go ahead.

Operator: From Canaccord Genuity, you have a question from Matthew Lee. Please go ahead.

Speaker #4: Hi, guys. Thanks for taking the questions, Matt and the Canacorp Continuity. You did a really good job with new adoption, and it feels like maybe we're getting a bit close to the upper limit there in terms of adoption growth.

Matthew Lee: Hi, guys. Thanks for taking the questions. Matthew Lee, Canaccord Genuity. You did a really good job with Newton adoption. It feels like maybe we're getting a bit close to the upper limit there, in terms of adoption growth. You know, is there another way to grow that business in a revenue perspective? I mean, I recall us talking a little bit about white labeling.

Speaker #4: But is there another way to grow that business from a revenue perspective? I mean, I recall us talking a little bit about white labeling, but could you find other ways to maybe squeeze more juice out of your current users, or maybe the bank partners you work with?

Gary Mauris: Mm-hmm.

Matthew Lee: Could you find other ways to maybe squeeze more juice out of your current users or maybe the bank partners you work with? You know, they're probably getting more value out of it now than when it first launched. Just thinking about the revenue growth in that business.

Speaker #4: They're probably getting more value out of it now than when it first launched. So, just thinking about the revenue growth in that business.

Speaker #2: Yeah, also a really good question. Yeah, you're 100% right. We have the large sort of position in our networks—you see the number somewhere around 85%.

Gary Mauris: Yeah, also a really good question. Yeah, you're 100% right. You know, we have the large, you know, sort of, position in our networks. You know, you see the number somewhere around 85%. We'll never get to a pure 100% 'cause there's just off market, off system lenders such as commercial that don't go through, you know, our platform. You know, obviously there's providing our network to strategic partnerships, other, you know, small competitors who, you know, want our technology. We've done some of those small deals. We'll continue to do some of those small deals, you know, ones that we think make sense. You know, where the real opportunity that we're looking at right now is around, you know, data and what we can do with the data.

Speaker #2: We'll never get to a pure 100%, because there are just off-market, off-system lenders, such as commercial, that don't go through our platform. Obviously, there's providing our network to strategic partnerships, other small competitors who want our technology.

Speaker #2: We've done some of those small deals. We'll continue to do some of those small deals—ones that we think make sense. But where the real opportunity that we're looking at right now is around data and what we can do with the data.

Gary Mauris: You know, the predictability of, you know, some of that data to get in front of new mortgage transactions. There's a lot of data around sharing, market share numbers to numbers, postal code to postal code, that is of high value to lenders. You know, like we're early stages. I mean, we're really pleased with obviously Newton, but it's early days, and I think we're just growing up as a company and starting to really understand and recognize where some of those opportunities lie. You know, there's continued partnerships in any bolt-ons, any cross-sell opportunities that people want access to our brokers that need to do it through our distribution pipe, use that technology. There's some pulls that, you know, we think we'll be seeing more of sort of going forward.

Speaker #2: And the predictability of some of that data to get in front of new mortgage transactions. There's a lot of data around sharing market share numbers, numbers to numbers, postal code to postal code, that is of high value to lenders.

Speaker #2: So we're really—we're early stages. I mean, we're really pleased with, obviously, Newton. But it's early days, and I think we're just growing up as a company and starting to really understand and recognize where some of those opportunities lie.

Speaker #2: There's continued partnerships in any bolt-ons, any cross-sell opportunities that people want—access to our brokers that need to do it through our distribution pipe, use that technology.

Speaker #2: So, there are some tolls that we think we'll be seeing more of going forward. But yeah, it's early days. But we agree with you 100%.

Gary Mauris: Yeah, we're early days, but we agree with you 100%. We think that there's, you know, more juice to squeeze out of that orange.

Speaker #2: We think that there's more juice to squeeze out of that orange.

Speaker #4: Right, that's fair enough. And then you mentioned in your MD&A, F26 is supposed to be, or going to be, a recruitment-heavy year. Can you maybe frame that in terms of capital deployed, brokers added?

Matthew Lee: Right. That's fair enough. You mentioned in your MD&A, 2026 is supposed to be or going to be a recruitment-heavy year. Can you maybe frame that in terms of capital deployed, brokers added? Like, what would success look like for you on that front in 2026?

Speaker #4: What would success look like for you on that front in 2026?

Speaker #2: Yeah. I mean, every year is that broker, sort of, heavy year for recruiting. It's really the foundation of our business. I think if we could add, sort of, $5 to $10 billion in brokers recruited over a calendar year, it would be extraordinary.

Gary Mauris: Yeah, I mean, every year is that broker, you know, sort of heavy year for recruiting. It's really the foundation of our business. You know, I think if we could add, you know, sort of CAD 5 to 10 billion in, you know, in brokers recruited, over a calendar year, it would be extraordinary. It would be a very good year. You know, whenever we get sort of headwind in the market, whenever the market starts to slow down, whenever it gets harder, like, you know, we're seeing a lot of brokers and a lot of bankers coming to our space right now. We're seeing a lot of people join our company because quite frankly, we're very hard to compete with, right? Just our tools, our technology, our leadership, our engagement, our training.

Speaker #2: It would be a very good year. Whenever we get sort of headwinds in the market, whenever the market starts to slow down, whenever it gets harder—like we're seeing a lot of brokers and a lot of bankers coming to our space right now.

Speaker #2: And we're seeing a lot of people join our company because, quite frankly, we're very hard to compete with, right? Just our tools, our technology, our leadership, our engagement, our training.

Gary Mauris: You know, I've been running a training program this year that I sort of took on myself. It's called the Goal Getter Series, and it was a fee for service. It was CAD 1,000 per broker because we understand that if brokers don't have skin in the game, they just don't take, you know, any of that training seriously. So we had 600 brokers, many from our networks, but many from other networks that don't belong to us. It has been the absolute best training in the Canadian finance space. People are raving about it. We expect to see meaningful increases in the vast majority of those brokers' own personal volume.

Speaker #2: I've been running a training program this year that I sort of took on myself. It's called the Goal Getters Series, and it was a fee-for-service.

Speaker #2: It was $1,000 per broker because we understand that if brokers don't have skin in the game, they just don't take any of that training seriously.

Speaker #2: So we had 600 brokers, many from our networks, but many from other networks that don't belong to us. And it has been the absolute best training in the Canadian finance space.

Speaker #2: People are raving about it. We expect to see meaningful increases in the vast majority of those brokers' own personal volume. But what it's done for us is it's created an amazing buzz around the mortgage space of just really defining what really defines our company, DLCG, and what we do better than anybody else.

Gary Mauris: What it's done for us is it's created an amazing buzz around the mortgage space of just really defining what really defines our company, DLCG, and what we do better than anybody else. Listen, when you can help teams become better and more profitable and create enterprise value and hire better, it's very compelling. You know, I look at for us how that translates into recruiting, and I think it's going to be a very powerful tool for us going forward. We expect to, you know, continue to really double down and really, you know, deploy more capital. I mean, listen, the best thing that we can spend our money on is organically recruiting, you know, brokers, right? The second best thing that we can do is large acquisitions. That's exactly what we're focused on.

Speaker #2: And listen, when you can help teams become better and more profitable and create enterprise value and hire better, it's very compelling. So I look at, for us, how that translates into recruiting, and I think it's going to be a very powerful tool for us going forward.

Speaker #2: So we expect to continue to really double down and really deploy more capital. I mean, listen, the best thing that we can spend our money on is organically recruiting brokers.

Speaker #2: Right? The second best thing that we can do is large acquisitions. And that's exactly what we're focused on.

Speaker #4: Okay, that's a thorough answer. I appreciate the time.

Matthew Lee: Okay. That's a thorough answer. I appreciate the time.

Speaker #2: Thank you. My pleasure.

Gary Mauris: Thank you. My pleasure.

Speaker #3: Sure. Final question comes from the line of Steven Bowland with Raymond James. Please go ahead.

Operator: Our final question comes from the line of Stephen Boland with Raymond James. Please go ahead.

Gary Mauris: Hey, Stephen.

Speaker #2: Hey, Steven. Thanks very much for taking my questions. Yeah, my pleasure. Just the first is the dunder rate. You bought the management or equity interest—50% of the management timeframe.

Stephen Boland: Thanks very much for taking my questions.

Gary Mauris: Yeah, my pleasure.

Stephen Boland: Just on the Dundarave. The first is the Dundarave rate. You bought the management or equity interest or 50% of the management company. I'm just wondering if that management company has any ownership in the MIC itself. I'm just trying to get a gauge of what the revenue that will be flowing up to the parent company. Is it just a management and admin fee, or is there anything else?

Speaker #2: I'm just wondering if that management company has any ownership in the MIC itself? I'm just trying to get a gauge of what the revenue that will be flowing up to the parent company.

Speaker #2: Is it just a management and admin fee, or is there anything else?

Speaker #4: Yeah. It's the management.

Gary Mauris: Yeah. It's a management com-

Speaker #2: Yeah, sure. Go ahead, James. Yeah, and I'll add on to it. Sure.

Gary Mauris: You want me to take that one, James?

James Bell: You want me to take that one, James?

Gary Mauris: Yeah, sure. Go ahead, James. Yeah, and I'll add on to it. Sure.

Speaker #4: Yeah, sure. So, DMIC is the MIC, and what we bought is a 50% interest in the management company. So, the management company does not own the MIC.

James Bell: Yeah, sure. Dundarave MIC is the MIC, and what we bought is a 50% interest in the management company. The management company does not own the MIC. It just provides management for fee services. It gets a percentage of assets under management, and it also charges to arrange loans for the Mortgage Investment Corporation.

Speaker #4: It just provides management for fee services, so it gets a percentage of assets under management. And it also charges to arrange loans for the mortgage investment corporation.

Speaker #2: Okay, that was a simple one. Just maybe a further question on the sales team, the consulting agreements. And again, if you're recruiting, certainly we can have a conversation after that for the four salespeople that are getting that money.

Stephen Boland: Okay. That was a simple one. Just maybe a further question on the sales team, the consulting agreements. Again, if you're recruiting, you know, certainly we can have a conversation after that for the four salespeople that are getting that money. I'm just curious, is there more of your sales team that have that trailer commission incentive, you know, basically incentive system in place? Like, should we expect more of these buyouts?

Speaker #2: I'm just curious, is there more of your sales team that have that trailer commission incentive, based on the incentive system in place? Should we expect more of these buyouts?

Speaker #4: Yeah. No. All four of these guys—it was great strategy for us. I mean, they've been with us 20 years, right? Early days of disagreement.

Gary Mauris: Yeah, no. You know, all 4 of these guys, it was great strategy for us. I mean, they've been with us 20 years, right? Early days of this agreement. You know, there were sacrifices they made in the early days too, because they earned less money while they were building their sort of trailing fees and revenue streams. Over the last kind of 5 years, anyone that we've hired, you know, the company's gotten more sophisticated, right? You know, there's more sort of tech at head office that's making the recruiting easier, so less dependent on, you know, on similar individuals. No, we bought these 4 guys out, and 4 or 5, James? 1, 2, 3-

Speaker #4: And there were sacrifices they made in the early days too, because they earned less money while they were building their sort of trailer fees and revenue streams.

Speaker #4: Over the last kind of five years, anyone that we've hired at the company's gotten more sophisticated, right? There's more sort of tech at head office that's making recruiting easier.

Speaker #4: So, less dependent on similar individuals. But, no, we brought in these four guys out. And four or five teams. One, two, three, four. Right.

James Bell: 4.

Gary Mauris: 4. Right. There's 4. Okay.

Speaker #4: It's four. Okay.

James Bell: 4, and then we had 1. Yeah.

Speaker #2: Four. And then we had one, yeah. Yeah.

Speaker #4: Yeah, so four. But the rest of the sales team now is paid on this new sales compensation. We just sort of transferred that, tweaked it a little bit for our long-term guys.

Gary Mauris: The rest of the other sales team now is, you know, paid on this new sales compensation. We just sort of transferred that, tweaked it a little bit for our long-term guys. I'll tell you, the long-term guys are super excited. Our long-term guys, they've been with us 20 years as well. You know, I mean, you know, there's a couple of them that, you know, have their sort of 8 or 10 years, and there's a couple of them that have, you know, a much shorter horizon. This was very timely, you know, for us to do this. You know, quite frankly, it would make very good accretive sense to us.

Speaker #4: And I'll tell you, our long-term guys are super excited. But our long-term guys, they've been with us 20 years as well. So, I mean, there's a couple of them that have.

Speaker #4: Sort of eight or ten years. And there's a couple of them that have a much shorter horizon. So this was very timely for us to do this.

Speaker #4: And, quite frankly, it would make very good accretive sense to us.

Stephen Boland: Okay. Last one for me is just on Heartwood. You know, obviously growing now. I guess I'm trying to understand how or what mortgages go there in terms of one of your brokers, you know, goes out and gets bids. Are they just winning on price? Are they winning on service, versus your traditional lenders?

Speaker #2: Okay, and last one for me is just on Hartwood. Obviously, growing now. I guess I'm trying to understand how, or what mortgages go there in terms of one of your brokers goes out, gets bids.

Speaker #2: Are they just winning on price? Are they winning on service? Versus your traditional lenders?

Gary Mauris: Yeah. I mean, you know, typically it really solves a problem, and often it's path of least resistance. It's, you know, business for self. It's people that, you know, have sort of, you know, different forms of compensation that, you know, doesn't show up on a typical, you know, employee T4. So Heartwood really, it's, it falls right into that fastest growing segment of the Canadian finance space, which is that non-B-20 space. You know, just loans that typically, you know, the Schedule I lenders, banks, can't do. So some are business for self. You know, sometimes there's, you know, some credit situations. Sometimes it's, you know, you know, just not a traditional loan, right? Where a person would qualify with, you know, all the standard documentation that is typically, required.

Speaker #4: Yeah. I mean, typically, MICs really solve a problem. And often, it's path of least resistance. It's business for self. It's people that have sort of different forms of compensation that don't show up on a typical employee T4.

Speaker #4: So Hartwood really falls right into that fastest-growing segment of the Canadian finance space, which is that non-B-20 space. So just loans that typically the Schedule I lenders—banks—can't do.

Speaker #4: So, some are business-for-self. Sometimes, there are some credit situations. Sometimes, it's just a lot of traditional loans, right, where a person would qualify with all the standard documentation that is typically required.

Gary Mauris: Heartwood would fall below a private lender and maybe an Equitable or a Home Trust. You know, there are rates, you know, sort of starting at 5.95%, you know, up to high 9s, depending on a whole bunch of factors. You know, Beacon, lending area, loan-to-value, those types of parameters.

Speaker #4: And we would—Hartwood would fall below a private lender, and maybe an Equitable or a Home Trust. But there's rates sort of starting at 5.95%, up to high 9s, depending on a whole bunch of factors.

Speaker #4: Beacon, lending area, loan-to-value—those types of parameters.

Stephen Boland: Okay. That's helpful. That was kind of my exactly my question about where it falls in the food chain of the, you know, the Home Trust and First National and things. So I appreciate that. Thanks very much.

Speaker #2: Okay, that's helpful. That was kind of exactly my question about where it falls in the food chain of the Home Trusts and First Nationals and things.

Speaker #2: So, I appreciate that. Thanks very much.

Gary Mauris: Yeah. Thank you very much.

Speaker #4: Yeah, yeah. Thank you very much.

Gary Mauris: Yeah. Thank you very much.

Operator: I have no further questions in the queue. I will now hand the call back over to Gary Mauris for closing remarks.

Speaker #3: I'm with no further questions. And Clue? Q, I will now have a call back over to Gary Morris for closing remarks.

Gary Mauris: Yeah. I will. I'll close with just saying thank you to everyone. Thank you to the analyst guys for the great questions. I hope I was, you know, descriptive enough to satisfy you guys. If you have any questions outside of that, please feel free to reach out. To all of our investors and our partners who have invested in DLCG, thank you again, guys. We, you know, are really appreciative of your belief in and trust in us as an organization. We'll continue to be good operators and good stewards of the business. To my head office team and our lending partners that make this all happen, again, you know, can't thank you guys enough. With that, guys, I appreciate your time today.

Speaker #2: Yeah, I'll close with just saying thank you to everyone. Thank you to the analyst guys for the great questions. I hope I was descriptive enough to satisfy you guys.

Speaker #2: If you have any questions outside of that, please feel free to reach out to all of our investors and our partners who have invested in DLCG.

Speaker #2: Thank you again, guys. We really appreciate your belief and trust in us as an organization. We'll continue to be good operators and good stewards of the business.

Speaker #2: And to my head office team, and our lending partners that make this all happen, again, can't thank you guys enough. So with that, guys, I appreciate your time today.

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Q4 2025 Dominion Lending Centres Inc Earnings Call

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