Q4 2026 Dye & Durham Ltd Earnings Call

September 30, 2026

Speaker #1: Good morning. Welcome to the Dye & Durham Q4 and Q4 2026 results conference call. All lines have been placed on mute to prevent any background noise.

Operator: Good morning. Welcome to Dye & Durham Q4 and fiscal year 2026 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. With me on the call today are Todd Schulte, Dye & Durham's Interim Chief Executive Officer, and Steve Waszak, Dye & Durham's Interim Chief Financial Officer. Dye & Durham's Q4 and fiscal 2026 earnings press release, audited annual financial statements, and MD&A are available on SEDAR+. Please note that statements made during this call may include forward-looking statements and information and future-oriented financial information regarding Dye & Durham and its business. Any disclosure regarding possible future events, conditions, or results are based on information currently available to management and indicate management's current expectation of future growth, results of operations, business performance, and business prospects and opportunities.

Speaker #1: After the speaker's remarks, there will be a Q&A session. With me on the call today are Todd Schulte, Dye & Durham's Interim Chief Executive Officer, and Steve Wasak, Dye & Durham's Interim Chief Financial Officer.

Speaker #1: Dye & Durham's Q4 and Q2 2026 earnings press release, audited annual financial statements, and MD&A are available on CedarPlus. Please note that statements made during this call may include forward-looking statements and information, as well as future-oriented financial information regarding Dye & Durham and its business.

Speaker #1: Any disclosure regarding possible future events, conditions, or results is based on information currently available to management and indicates management's current expectation of future growth, results of operations, business performance, and business prospects and opportunities.

Speaker #1: Such statements are made as of the date hereof, and Dye & Durham assumes no obligation to update or revise them to reflect events, disclosures, or circumstances, except as required by applicable securities laws.

David Brown: Such statements are made as of the date hereof, and Dye & Durham assumes no obligation to update or revise them to reflect events, disclosures, or circumstances, except as required by applicable securities laws. Such statements involve significant risks and uncertainties and are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from the results discussed today. Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the Forward-Looking Statements section of our public filings, including, without limitation, our recently filed MD&A and earnings press release for additional information. In particular, for additional details regarding Dye & Durham's run rate cost saving results and expectations, please refer to the section titled "Update on Run Rate Cost Savings" in Dye & Durham's Q4 and fiscal 2026 MD&A.

Operator: Such statements are made as of the date hereof, and Dye & Durham assumes no obligation to update or revise them to reflect events, disclosures, or circumstances, except as required by applicable securities laws. Such statements involve significant risks and uncertainties and are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from the results discussed today. Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the Forward-Looking Statements section of our public filings, including, without limitation, our recently filed MD&A and earnings press release for additional information. In particular, for additional details regarding Dye & Durham's run rate cost saving results and expectations, please refer to the section titled "Update on Run Rate Cost Savings" in Dye & Durham's Q4 and fiscal 2026 MD&A.

Speaker #1: Such statements involve significant risks and uncertainties, and are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from those discussed today.

Speaker #1: Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the forward-looking statements section of our public filings, including, without limitation, our recently filed MD&A and earnings press release, for additional information.

Speaker #1: In particular, for additional details regarding Dye & Durham's run rate, cost-saving results, and expectations, please refer to the section titled "Update on Run Rate, Cost Savings, and Dye & Durham's Q4 and Q2 2026 MD&A." In addition, certain financial results discussed on this call are non-IFRS financial measures, namely adjusted EBITDA and segment adjusted EBITDA.

David Brown: In addition, certain financial results discussed on this call are non-IFRS financial measures, namely Adjusted EBITDA and segment adjusted EBITDA. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Please refer to the Non-IFRS Measures section of our public filings, including, without limitation, our recently filed MD&A and earnings press release. For additional information on the Company's use of non-IFRS measures, include the Company's definitions of Adjusted EBITDA and segment adjusted EBITDA, and applicable reconciliation of Adjusted EBITDA and segment adjusted EBITDA to their most directly comparable IFRS measure. I'll now turn the call over to Todd Schulte.

Operator: In addition, certain financial results discussed on this call are non-IFRS financial measures, namely Adjusted EBITDA and segment adjusted EBITDA. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Please refer to the Non-IFRS Measures section of our public filings, including, without limitation, our recently filed MD&A and earnings press release. For additional information on the Company's use of non-IFRS measures, include the Company's definitions of Adjusted EBITDA and segment adjusted EBITDA, and applicable reconciliation of Adjusted EBITDA and segment adjusted EBITDA to their most directly comparable IFRS measure. I'll now turn the call over to Todd Schulte.

Speaker #1: These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies.

Speaker #1: Please refer to the non-IFRS measures section of our public filings, including, without limitation, our recently filed MD&A and earnings press release. For additional information on the company's use of non-IFRS measures, including the company's definitions of adjusted EBITDA and segment adjusted EBITDA.

Speaker #1: And the applicable reconciliation of adjusted EBITDA and segment adjusted EBITDA to their most directly comparable IFRS measure. I'll now turn the call over to Todd Schulte.

Speaker #2: Hello, everyone. Thank you for taking time out of your day to join us on the Dye & Durham Q4 and Q2 2026 conference call.

Todd Schulte: Hello, everyone. Thank you for taking time out of your day and to join us on the Dye & Durham Q4 and fiscal year 2026 conference call. We appreciate your time and look forward to sharing information with you. My name is Todd Schulte, and my background is in operational leadership of large multi-product software organizations. In addition to my role as COO, I was recently named interim CEO following the conclusion of the Transformation Committee of the Board. I want to start with the Q4 because it shows the direction this business is headed. Excluding the impact of the Credus disposal, revenue returned to growth, up 4% year over year. Adjusted EBITDA increased 18% on the same basis, and our Adjusted EBITDA margin expanded to approximately 53%, from approximately 45% in the Q4 last year.

Speaker #2: We appreciate your time and look forward to sharing information with you. My name is Todd Schulte, and my background is in operational leadership of large, multi-product software organizations.

Speaker #2: In addition to my role as COO, I was recently named interim CEO following the conclusion of the transformation committee of the Board. I want to start with Q4 because it shows the direction this business is heading.

Speaker #2: Excluding the impact of the CREDIS disposal, revenue returned to growth, up 4% year over year. Adjusted EBITDA increased 18% on the same basis, and our adjusted EBITDA margin expanded to approximately 53% from approximately 45% in Q4 last year.

Speaker #2: We generated $65.6 million of cash flow from operating activities in the quarter, which was up 15%. For the full year, our results reflect a company in transition.

Todd Schulte: We generated CAD 65.6 million of cash flow from operating activities in the quarter, which was up 15%. For the full year, our results reflect a company in transition. Fiscal 2026 revenue was CAD 410.7 million, and Adjusted EBITDA was CAD 198.8 million, both lower than last year. The transition is ongoing, and I want to be clear with you about how we are managing it and where we are focused. I also want to acknowledge that adjustments to our Q3 2026 results were required, and those adjustments are reflected in the results we reported on Monday, including in the section titled Q3 2026 Adjustments of our recent earnings press release. Steve will walk through them, but I want to be clear that our technical corrections do not affect our cash position, revenue, cash flows from operating activities, or Adjusted EBITDA. As a leadership team, our focus is clear.

Speaker #2: Q2 2026 revenue was $410.7 million, and adjusted EBITDA was $198.8 million, both lower than last year. The transition is ongoing, and I want to be clear with you about how we are managing it and where we are focused.

Speaker #2: I also want to acknowledge that adjustments to our Q3 2026 results were required, and those adjustments are reflected in the results we reported on Monday.

Speaker #2: Included in the section titled "Q3 2026 Adjustments" of our recent earnings press release, Steve will walk through them. I want to be clear that our technical corrections do not affect our cash position, revenue, cash flows from operating activities, or adjusted EBITDA.

Speaker #2: As a leadership team, our focus is clear. First and foremost, we are operationalizing the business—using automation and AI to make Dye & Durham more efficient, and to make our customers more efficient.

Todd Schulte: First and foremost, we are operationalizing the business, using automation and AI to make Dye & Durham more efficient and to make our customers more efficient. At the same time, we are continuing to stabilize the company for our customers, our employees, and our shareholders. Dye & Durham has a broad portfolio of products and services, and bringing automation to how we deliver them is the single largest opportunity in front of us. It is where I am spending most of my time. Internally, automation is how we are building a lasting, more efficient cost structure. We are automating the manual steps in our fulfillment and operations workflows so that high volume, repeatable work is handled by system and not by hand. We are standardizing processes across all of our regions so that when we automate a workflow once, the improvement applies everywhere.

Speaker #2: At the same time, we are continuing to stabilize the company for our customers, our employees, and our shareholders. Dye & Durham has a broad portfolio of products and services, and bringing automation to how we deliver them is the single largest opportunity in front of us.

Speaker #2: It is where I am spending most of my time. Internally, automation is how we are building a lasting, more efficient cost structure. We are automating the manual steps in our fulfillment and operations workflows, so that high-volume, repeatable work is handled by the system and not by hand.

Speaker #2: We are standardizing processes across all of our regions so that when we automate a workflow once, the improvement applies everywhere. And we are utilizing AI in multiple areas of the business—from resolving customer issues faster and more consistently to improving our internal efficiency.

Todd Schulte: We are utilizing AI in multiple areas of the business, from resolving customer issues faster and more consistently, to improving our internal efficiency. For our customers, making their jobs easier is what we sell. Our legal workflow platform and our legal due diligence and filing platform are designed to take manual effort out of how law firms, banks, and enterprises work, from intake and document automation through to embedding registry data and filing capabilities directly into our own systems and AI tools. The same discipline we apply to our operations is what we are building into our products. You can see the results of this work in our margins. Q4 Adjusted EBITDA margin was approximately 53%, up from approximately 47% in the Q3 and approximately 45% in the Q4 of last year.

Speaker #2: For our customers, making their jobs easier is what we sell. Our legal workflow platform and our legal due diligence and filing platform are designed to take manual effort out of how law firms, banks, and enterprises work.

Speaker #2: From intake and document automation through to embedding registry data and filing capabilities directly into our own systems and AI tools, the same discipline we apply to our operations is what we are building into our products.

Speaker #2: You can see the results of this work in our margins. Q4 adjusted EBITDA margin was approximately 53%, up from approximately 47% in the third quarter and approximately 45% in the fourth quarter of last year.

Speaker #2: Part of that sequential improvement is seasonal, but the year-over-year expansion reflects a more efficient operating model. Our cost basis is holding as volumes return.

Todd Schulte: Part of that sequential improvement is seasonal, but the year-over-year expansion reflects a more efficient operating model. Our cost basis is holding as volumes return. Q4 operating costs, meaning those costs comprised of direct costs, technology and operations, G&A, and sales and marketing, were essentially flat compared to the Q3 at approximately CAD 49 million, while revenue increased CAD 13 million or 14%. That is the operating leverage we are building. As revenue grows, more of each additional dollar flows through to Adjusted EBITDA. We also continue to see meaningful opportunity to remove costs from the business. In fiscal 2026, we achieved approximately CAD 20 million in annualized run rate cost savings ahead of the target we set out this year, driven by automation, process standardization, and a more efficient global operating model. We are on track to complete the remaining initiatives by the end of fiscal 2027.

Speaker #2: Q4 operating costs – meaning those costs comprised of direct cost, technology and operations, G&A, and sales and marketing – were essentially flat compared to the third quarter, at approximately $49 million, while revenue increased by $13 million, or 14%.

Speaker #2: That is the operating leverage we are building. As revenue grows, more of each additional dollar flows through to adjusted EBITDA. We also continue to see meaningful opportunities to remove costs from the business.

Speaker #2: In Q2 2026, we achieved approximately $20 million in annualized run-rate cost savings, ahead of the target we set out last year. This was driven by automation, process standardization, and a more efficient global operating model.

Speaker #2: We are on track to complete the remaining initiatives by the end of Q2 2027. We plan to continue to reinvest a portion of these savings into product development, automation, and our customers, because efficiency is not only about spending less.

Todd Schulte: We plan to continue to reinvest a portion of these savings to generate into the product development, automation, and our customers, because efficiency is not only about spending less, it is about putting our resources to work where it creates the most value. Operational improvement only works on a stable foundation, and we are continuing to enhance ours. For our customers, that means consistent, reliable services and a product roadmap they can count on. In Q4, Canada revenue grew 9% year-over-year, and Canada segment adjusted EBITDA grew 13% year-over-year. We have also added resources and new performance measures so we can better track our service levels and drive continuous improvement. For our people, it means clear leadership, clear priorities, and a culture built on accountability and execution. For our shareholders, it means transparent reporting and a stronger balance sheet.

Speaker #2: It is about putting our resources to work where they create the most value. Operational improvement only works on a stable foundation, and we are continuing to enhance ours.

Speaker #2: For our customers, that means consistent, reliable services and a product roadmap they can count on. In the fourth quarter, Canada revenue grew 9% year-over-year, and Canada segment adjusted EBITDA grew 13% year-over-year.

Speaker #2: We have also added resources and new performance measures so we can better track our service levels and drive continuous improvement. For our people, it means clear leadership, clear priorities, and a culture built on accountability and execution.

Speaker #2: For our shareholders, it means transparent reporting and a stronger balance sheet. Strong cash generation remains the foundation of our financial strategy, and strengthening our balance sheet remains a priority for the company.

Todd Schulte: Strong cash generation remains the foundation of our financial strategy, and strengthening our balance sheet remains a priority for the company. We are in compliance with the financial maintenance covenants under our senior credit agreement as of 30 June 2026, and Steve will provide more detail on our capital structure. I will now turn the call over to Steve to review our Q4 and full year financial results. Steve?

Speaker #2: We are in compliance with the financial maintenance covenants under our senior credit agreement as of June 30, 2026, and Steve will provide more detail on our capital structure.

Speaker #2: I'll now turn the call over to Steve to review our Q4 and full-year financial results. Steve?

Speaker #3: Thank you, Todd, and welcome, everyone. As usual, my comparisons are to the equivalent periods in the prior year, unless otherwise noted, and all figures are in Canadian dollars.

Steve Waszak: Thank you, Todd, and welcome everyone. My comparisons to the equivalent periods in the prior year, unless otherwise noted. All figures are in CAD. For revenue for the three and 12 months ended 30 June 2026, revenue is CAD 104.2 million and CAD 410.7 million respectively. Q4 revenue decreased by CAD 1 million or 1%. Excluding the impact of Credus disposal in all periods, revenue increased by CAD 3.5 million or 4%. The increase is primarily driven by our practice management and payment infrastructure platforms in Canada. For fiscal year 2026, revenue decreased by CAD 30.1 million or 7%. Excluding the impact of the Credus disposal, revenue decreased by CAD 24.6 million or 6%. This decrease was primarily driven by the market downturn and by lower volumes in pricing in our practice management and data insights platforms, reflecting both customer losses and contract renewal terms.

Speaker #3: For revenue, for the three and twelve months ended June 30, 2026, revenue is $104.2 million and $410.7 million, respectively. Q4 revenue decreased by $1 million, or 1%. Excluding the impact of the CREDIS disposal in all periods, revenue increased by $3.5 million, or 4%.

Speaker #3: The increase is primarily driven by our practice management and payment infrastructure platforms in Canada. For Q2 2026, revenue decreased by $30.1 million, or 7%.

Speaker #3: Excluding the impact of the CREDIS disposal, revenue decreased by $24.6 million, or 6%. This decrease was primarily driven by the market downturn and by lower volumes and pricing in our practice management and data insight platforms, reflecting both customer losses and contract renewal terms.

Speaker #3: This was primarily offset by growth in banking technology, where the revenue increased by $4.8 million, or 5%, to $108.3 million, and by the LexisNexis Affinity platform.

Steve Waszak: This is primarily offset by growth in banking technology, where the revenue increased by CAD 4.8 million or 5% to CAD 108.3 million, and by the LexisNexis Affinity platform. Turning to adjusted EBITDA. Q4 adjusted EBITDA was CAD 55.1 million, an increase of 7.4% or 15%. Excluding the impact of the Credus disposal, adjusted EBITDA increased by CAD 8.5 million or 18%. Adjusted EBITDA margin was approximately 53% compared to approximately 45% in the prior year quarter. The increase reflects the revenue growth I just described and the benefit of our cost-saving initiatives that Todd has mentioned. Technology and operations, general administration, and sales and marketing expenses decreased by CAD 7.8 million or 16%, by CAD 5.4 million or 12%, excluding Credus. This is primarily due to our operational efficiencies from saving initiatives anchored during the year, partially offset by the continued reinvestment of IT infrastructure.

Speaker #3: Now, turning to adjusted EBITDA: Q4 adjusted EBITDA was $55.1 million, an increase of 7.4%, or 15%. Excluding the impact of the CREDIS disposal, adjusted EBITDA increased by $8.5 million, or 18%.

Speaker #3: Adjusted EBITDA margin was approximately 53%, compared to approximately 45% in the prior year quarter. The increase reflects the revenue growth I just described, and the benefit of our cost-saving initiatives that Todd has mentioned.

Speaker #3: Technology and operations, general administration, and sales and marketing expenses decreased by $7.8 million, or 16%, and by $5.4 million, or 12%, excluding CREDIS. This is primarily due to our operational efficiencies from savings initiatives anchored during the year.

Speaker #3: Partially offset by the continued reinvestment in IT infrastructure. For 2026, adjusted EBITDA was $198.8 million, a decrease of $34.1 million, or 15%. Excluding the impact of the CREDIS disposal, adjusted EBITDA decreased by $32.4 million, or 14%.

Steve Waszak: For 2026, Adjusted EBITDA was CAD 198.8 million, a decrease of CAD 34.1 million or 15%. Excluding the impact of the Credus disposal, Adjusted EBITDA decreased by CAD 32.4 million or 14%. Adjusted EBITDA margins for the year was approximately 48%, compared to approximately 53% in fiscal 2025. The decrease reflects the revenue impacts that I described, as well as strategic reinvestments we made to stabilize the business, predominantly in the labor and IT infrastructure and lower capitalization rates in the H1 of the year, as we temporarily shifted certain expenses from capitalized projects to maintenance expenses. These were partially offset by operational efficiencies, which we realized largely in the Q3 and Q4. We excluded the fiscal 2026 portion of our cost reduction plan, and based on information available today, we have achieved the approximately CAD 20 million of annualized run rate cost savings all within the year.

Speaker #3: Adjusted EBITDA margins for the year were approximately 48%, compared to approximately 53% in Q2 2025. The decrease reflects the revenue impacts I described, as well as strategic reinvestments we've made to stabilize the business—a majority in labor and IT infrastructure—and lower capitalization rates in the first half of the year, as we temporarily shifted certain expenditures from capitalized projects to maintenance expenses.

Speaker #3: These were partially offset by operational efficiencies, which we realized largely in the third and fourth quarters. We executed the Q2 2026 portion of our cost reduction plan, and based on information available today, we have achieved approximately $20 million of annualized run-rate cost savings, all within the year.

Speaker #3: Net loss in cash flow. For the fourth quarter, net loss was $19.9 million, compared to a net loss of $29.6 million. The lower net loss primarily reflects lower amortization, depreciation, and impairment, partially offset by higher finance costs, largely from non-cash foreign exchange and fair value movements, and lower income tax recovery.

Steve Waszak: Net loss and cash flow. For the Q4, net loss was CAD 19.9 million, compared to a net loss of CAD 29.6 million. The lower net loss primarily reflects lower amortization, depreciation, and impairment, partially offset by higher finance costs, largely from non-cash foreign exchange and fair value movements and lower income tax recovery. Cash flow provided by operating activities was CAD 65.6 million, compared to CAD 56.8 million, or an increase of 15%. For fiscal year 2026, net loss was CAD 38.5 million, compared to a net loss of CAD 88 million. The lower net loss primarily reflects the CAD 81.5 million gain on the sale of Credus, lower amortization and depreciation, and lower acquisition restructuring and other costs, partially offset by higher finance costs, lower revenue, and higher stock-based compensation. As fiscal year 2025 included a large non-recurring recovery.

Speaker #3: Cash flow provided by operating activities was $65.6 million, compared to $56.8 million, an increase of 15%. For Q2 2026, net loss was $38.5 million, compared to a net loss of $88 million.

Speaker #3: The lower net loss primarily reflects the $81.5 million gained on the sale of CREDIS. Lower amortization and depreciation, and lower acquisition and restructuring and other costs, were partially offset by higher finance costs, lower revenue, and higher stock-based compensation.

Speaker #3: As Q2 2025 included a large non-recurring recovery, cash flow provided by operating activities was $153.4 million, compared to $142.8 million, an increase of 4%.

Steve Waszak: Cash flow provided by operating activities was CAD 153.4 million, compared to CAD 142.8 million, an increase of 4%. In both periods, the increase in operating cash flow was driven by higher contributions in working capital and lower taxes paid, partially offset by higher financing costs. For sequential trends, compared to the Q3, Q4 revenue increased by CAD 13 million, or 14%, and Adjusted EBITDA increased by CAD 12.2 million or 29%. As a reminder, our real estate conveyance and search product lines experience seasonality, with revenue typically peaking in the spring and summer, which fall in our Q4 and Q1 fiscal quarters. The sequential improvements in Adjusted EBITDA margin from approximately 47% to approximately 53% reflects both seasonal and cost efficiencies, as Todd described. Now turning towards the balance sheet and liquidity. We were in compliance with the financial maintenance covenants under our senior agreements as of 30 June 2026.

Speaker #3: In both periods, the increase in operating cash flow was driven by higher contributions and working capital, and lower taxes paid, partially offset by higher financing costs.

Speaker #3: For sequential trends, compared to the third quarter, Q4 revenue increased by $13 million, or 14%. Adjusted EBITDA increased by $12.2 million, or 29%.

Speaker #3: As a reminder, our real estate conveyance and search product lines experience seasonality, with revenue typically peaking in the spring and summer, which fall in our fourth and first fiscal quarters.

Speaker #3: The sequential improvements in adjusted EBITDA margin, from approximately 47% to approximately 53%, reflect both seasonal and cost efficiencies, as Todd described. Now, turning towards the balance sheet and liquidity.

Speaker #3: We were in compliance with the financial maintenance covenants under our senior agreements as of June 30, 2026. At year-end, we had $29.5 million on our revolving credit facility, or approximately 28% of the facility—well below the 35% level at which the leverage covenants are tested.

Steve Waszak: We were in compliance with the financial maintenance covenants under our senior agreements as of 30 June 2026. At year-end, we had CAD 29.5 million on our revolving credit facility, or approximately 28% of the facility, well below the 35% level at which the leverage covenant is tested. Our consolidated first lien leverage ratio, as defined in our senior credit agreement, was approximately 5.17 times, which is also below the 5.8 times maximum. Cash and cash equivalents were CAD 41.4 million. During the year, we repaid the CAD 185 million of convertible debentures that matured in March 2026 and applied CAD 129.8 million of the net proceeds from the sale of Credus to voluntarily prepay a portion of the Term Loan B, senior security notes, and revolving facility.

Steve Waszak: At year-end, we had CAD 29.5 million on our revolving credit facility, or approximately 28% of the facility, well below the 35% level at which the leverage covenant is tested. Our consolidated first lien leverage ratio, as defined in our senior credit agreement, was approximately 5.17 times, which is also below the 5.8 times maximum. Cash and cash equivalents were CAD 41.4 million. During the year, we repaid the CAD 185 million of convertible debentures that matured in March 2026 and applied CAD 129.8 million of the net proceeds from the sale of Credus to voluntarily prepay a portion of the Term Loan B, senior security notes, and revolving facility. As a result, the Term Loan B has no further scheduled principal amortization before maturity. Loans and borrowings, together with convertible debentures, decreased from approximately CAD 1.59 billion at 30 June 2025, to approximately CAD 1.28 billion as of 30 June 2026.

Speaker #3: Our consolidated first-lien leverage ratio, as defined in our senior credit agreement, was approximately 5.17 times, which is also below the 5.8 times maximum.

Speaker #3: Cash and cash equivalents were $41.4 million. During the year, we repaid the $185 million of convertible debentures that matured in March 2026 and applied $129.8 million of the net proceeds from the sale of CREDIS to voluntarily prepay a portion of the Term Loan B.

Speaker #3: Senior security notes and revolving facility. As a result, the Term Loan B has no further scheduled principal amortizations before maturity. Loans and borrowings, together with convertible debentures, decreased from approximately $1.59 billion at June 30, 2025, to approximately $1.28 billion as of June 30, 2026.

Steve Waszak: As a result, the Term Loan B has no further scheduled principal amortization before maturity. Loans and borrowings, together with convertible debentures, decreased from approximately CAD 1.59 billion at 30 June 2025, to approximately CAD 1.28 billion as of 30 June 2026.

Speaker #3: After the Q3 2026 adjustments, as described in our 2026 MDA, our fourth quarter net loss reflects certain adjustments that were recorded in Q4 2026 but relate to Q3 2026.

Steve Waszak: Now for the Q3 2026 adjustments. As described in our 2026 MD&A, our Q4 net loss reflects certain adjustments that we recorded in Q4 2026, but relate to Q3 2026. These reduced previously reported 2026 net revenue by CAD 32.5 million, consisting of CAD 29.9 million adjusted to stock-based compensation, which is primarily the reversal of an incorrectly recorded recovery related to forfeited or expired options of former employees, and CAD 2.6 million adjusted to financing costs. These were technical corrections. They do not affect our cash position or our reported revenue, cash flows from operating activities, or Adjusted EBITDA for Q3 2026. In summary, the Q4 showed the operating leverage in this business. Revenue growth, excluding Credus, significant margin expansion, and strong cash flow generation. The full year reflects the transition we are working through.

Speaker #3: These reduced previously reported 2026 net revenue by $32.5 million, consisting of $29.9 million adjusted to stock-based compensation, which was primarily the reversal of an incorrectly recorded recovery related to forfeited or expired options of former employees, and $2.6 million adjusted to financing costs.

Speaker #3: These were technical corrections; they do not affect our cash position or our reported revenue. Cash flows from operating activities were adjusted EBITDA for Q3 2026.

Speaker #3: In summary, the fourth quarter showed the operating leverage in this business, revenue growth excluding CREDIS, significant margin expansion, and strong cash flow generation. The full year reflects the transition we are working through.

Speaker #3: As we move into fiscal 2027, we intend to remain focused on cost discipline, cash generation, and strengthening our balance sheet. With that, let me turn it back over to Todd.

Steve Waszak: As we move into fiscal 2027, we intend to remain focused on cost discipline, cash generation, and strengthening of our balance sheet. With that, let me turn it back over to Todd.

Speaker #1: Thank you, Steve. To close, I want to come back to what we are building. Dye & Durham has valuable products, deep customer relationships, and critical positions in the markets that we serve.

Todd Schulte: Thank you, Steve. To close, I want to come back to what we are building. Dye & Durham has valuable products, deep customer relationships, and critical positions in the markets that we serve. What we have not had is a single efficient way of operating that lets those strengths show up in our results. That is what our focus on operationalizing the business on a stable foundation is designed to deliver. The Q4 gives us early evidence that it's working. Revenue growth, excluding Credus, margin expansion, and strong cash flow. There is more work ahead, and the transition will continue through fiscal 2027. Our focus is clear: serve our customers well, run the business efficiently through automation and AI, and strengthen our balance sheet. I want to thank our employees around the world for their work through a demanding year, and the customers and shareholders for their continued support.

Speaker #1: What we have not had is a single, efficient way of operating that lets those strengths show up in our results. That is what our focus on operationalizing the business on a stable foundation is designed to deliver.

Speaker #1: The fourth quarter gives us early evidence that it's working: revenue growth excluding CREDIS, margin expansion, and strong cash flow. There is more work ahead in the transition; we'll continue through fiscal 2027.

Speaker #1: Our focus is clear: serve our customers well, run the business efficiently through automation and AI, and strengthen our balance sheet. I want to thank our employees around the world for their work through a demanding year, and our customers and shareholders for their continued support.

Speaker #1: With that, we'd be happy to take questions. Operator?

Todd Schulte: With that, we'd be happy to take questions. Operator?

Speaker #2: Thank you. Ladies and gentlemen, we will now begin the Q&A session. Should you have a question, please press star followed by the number 1 on your touch-tone phone.

David Brown: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from the line of Thanos Moschopoulos from BMO Capital Markets. Please go ahead.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from the line of Thanos Moschopoulos from BMO Capital Markets. Please go ahead.

Speaker #2: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2.

Speaker #2: If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Thanos Mustropoulos from BMO Capital Markets.

Speaker #2: Please go ahead.

Speaker #4: Hi, good afternoon. I think many of us were surprised to see the year-over-year revenue growth during the quarter, so if you could expand on what drove that within the Canadian business.

Steve Waszak: Hi, good afternoon. I think many of us were surprised to see the year-over-year revenue growth during the quarter. If you could expand on what drove that within the Canadian business. Can you clarify as well whether there was any contribution from one-time revenue, such as from license renewals or anything like that might have helped the quarter unusually? Thanks.

Thanos Moschopoulos: Hi, good afternoon. I think many of us were surprised to see the year-over-year revenue growth during the quarter. If you could expand on what drove that within the Canadian business. Can you clarify as well whether there was any contribution from one-time revenue, such as from license renewals or anything like that might have helped the quarter unusually? Thanks.

Speaker #4: And can you clarify as well whether there was any contribution from one-time revenue, such as from license renewals or anything like that, that might have helped the quarter unusually?

Speaker #4: Thanks.

Speaker #1: Yeah, I'll take that. Thanks for your question. The biggest thing we've seen around that is somewhat just the market, and a little bit of the seasonality.

Todd Schulte: Yeah, I will take that. Thanks for your question. The biggest thing we have seen around that is somewhat of just the market and a little bit of the seasonality. We did have some revenue recognition that was a little stronger in Q4 than in previous times because of how we were recognizing some things. Excluding Credus, year over year, we were up CAD 3.5 million or about 4%. We were happy with that, and really shows things turning around a little bit.

Speaker #1: We did have some revenue recognition that was a little stronger in Q4 than in previous times because of how we were recognizing some things.

Speaker #1: But excluding CREDIS, year over year, we were up $3.5 million, or about 4%. So, we were happy with that and it really shows things are turning around a little bit.

Speaker #4: Is this the case in.

Speaker #1: Steve, anything to add to that?

Speaker #4: I'm sorry.

Speaker #1: Go ahead, go ahead. You were asking another follow-up question?

Thanos Moschopoulos: Is the implication then-

Thanos Moschopoulos: Steve, anything to add to that?

Todd Schulte: Steve, anything to add to that?

Thanos Moschopoulos: I am sorry.

Thanos Moschopoulos: Go ahead.

Thanos Moschopoulos: Go ahead. Go ahead. You were asking another follow-up question?

Speaker #4: No, sorry. Yeah, sorry—I interrupted. I was going to say, is the implication then that within the Canadian practice management business, for example, some of the prior churn has subsided and is stabilizing?

Todd Schulte: Go ahead. You were asking another follow-up question?

Thanos Moschopoulos: No, sorry. Yeah, sorry to interrupt. I was going to say, is the implication then that within the Canadian practice management business, for example, that some of the prior churn is subsiding and stabilizing?

Speaker #1: Yes, definitely. We're seeing quite a bit of—I won't necessarily call it—we're seeing the churn decrease, but we're seeing transaction volumes stabilize to what they were showing before.

Todd Schulte: Yes, definitely. We are seeing quite a bit of, I will not necessarily call it, we are seeing the churn decrease, but we are seeing transaction volumes stabilize to what they were showing before.

Speaker #4: And given that Q1 is, I guess, pretty well over, any directional commentary you might want to provide in terms of what we should expect for Q1 revenue?

Thanos Moschopoulos: Given that Q1 is, I guess, pretty well over, any directional commentary?

Thanos Moschopoulos: Given that Q1 is, I guess, pretty well over, any directional commentary? You might want to provide in terms of what we should expect for Q1 revenue?

Todd Schulte: Yeah

Thanos Moschopoulos: You might want to provide in terms of what we should expect for Q1 revenue?

Speaker #1: Yeah, this is Steve. Let me comment on that. Right now, we're not talking towards the future, so we're going to hold on that for now. We'll look forward to communicating that to you as available, from that perspective.

Steve Waszak: Yeah, this is Steve. Let me comment on that. We are right now not talking towards future. We are going to hold on that for now, and we will look forward to communicating that to you as available from that perspective. I would just comment that Todd talked about his operational background, and one of the things that the team is doing very well is monitoring daily, weekly, the churns, the new customers, things like that. There is a lot of attention by the team, a very rigorous attention towards how the business is running, in a way that we monitor this very closely. I will just leave those comments to say that, I think from an operational perspective, we are in control of what the future lies, but we are not prepared yet or able to yet talk to the future.

Speaker #1: But I would just comment that Todd talked about his operational background. And one of the things that the team is doing very, very well is monitoring daily and weekly—the churn, the new customers, things like that.

Speaker #1: So there's a lot of attention by the team. We're very rigorous; attention towards how the business is running, in a way that we monitor this very, very closely.

Speaker #1: So I'll just leave those comments to say that I think, from an operational perspective, we are in control of what the future holds, but we are not prepared yet, or able yet, to talk to the future.

Speaker #4: Last one for me—just some general terms. I mean, you alluded to the opportunities for increased automation and cost efficiency in the business. Is there, on the revenue side, more opportunity as well that you'd call out, or is the focus more on cost optimization while maintaining, I guess, revenue stability from where you are?

Thanos Moschopoulos: Last one from me, maybe just in general terms. You alluded to the opportunities for increased automation and cost efficiency in the business.

Thanos Moschopoulos: Last one from me, maybe just in general terms. You alluded to the opportunities for increased automation and cost efficiency in the business. On the revenue side, is there more opportunity as well that you would call out, or is the focus more on cost optimization, on maintaining, I guess, revenue stability from where you are?

Thanos Moschopoulos: On the revenue side, is there more opportunity as well that you would call out, or is the focus more on cost optimization, on maintaining, I guess, revenue stability from where you are?

Speaker #1: I would say, traditionally, over the last few months, we've been focused more on the cost side. One of the things we've been doing lately is really looking more into some new revenue streams—what those might be.

Todd Schulte: I would say traditionally, over the last few months, we have been focused more on the cost side. One of the things that we have been doing lately is really looking more into some new revenue streams, what those might be. It is too early to really comment on those, but focus is not just on the cost side, but also how we grow revenue and grow this company.

Speaker #1: It's too early to really comment on those, but the focus is not just on the cost side, but also on how we grow revenue and grow this company.

Speaker #4: All right, I'll pass the line. Thank you.

Speaker #1: Thank you.

Speaker #2: Your next question comes from the line of Stephen Boland from Raymond James. Please go ahead.

Thanos Moschopoulos: All right. I will pass along. Thank you.

Todd Schulte: Thank you.

David Brown: Your next question comes from the line of Stephen Boland from Raymond James. Please go ahead.

Operator: Your next question comes from the line of Stephen Boland from Raymond James. Please go ahead.

Speaker #5: Good evening. I apologize, I'm kind of jumping back and forth on the call. You may have mentioned this, but regarding the strategic review, can you just provide an update? Was the delay due to the change in management or the change in board that delayed this process?

Stephen Boland: Good evening. I apologize, I am kind of jumping back and forth on the call. You may have mentioned this, but the strategic review, can you just provide an update there in terms of what the delay, was it the change in management, change in board that delayed this process? What is your expectation in terms of coming to a decision?

Speaker #5: And what's your expectation in terms of coming to a decision?

Speaker #1: Yeah, the strategic review has been delayed by some of the management changes, probably more than anything else. I think we're close. I haven't seen an exact date for when that is to be completed, but I do believe it's coming to an end.

Todd Schulte: Yeah. The strategic review has been delayed by some of the management changes, probably more than anything else. I think we are close. I have not seen an exact date on when that is to be completed, but I do believe it is coming to an end. But definitely the delay was changes we have had throughout the company, mostly in the management level.

Speaker #1: But definitely, the delay was due to changes we've had throughout the company, mostly at the management level.

Speaker #5: Okay. That's great. Second question is going to Thanos's questions about just churn and attrition. I mean, I think we've all had a chance to talk to a bunch of law firms that I think got pressured into their old contracts, especially on the monthly minimums.

Stephen Boland: Okay. That is great. Second question is, going to Vanessa's questions about this churn and attrition. I think we have all had a chance to talk to a bunch of law firms that I think got pressured into their old contracts, especially on the monthly minimums, and did not hit that hurdle rate. So I guess what concessions are you doing to retain the customers? Because obviously there has been a lot of churn within the employees as well.

Speaker #5: It didn't hit that hurdle rate. So I guess, what concessions are you making to retain the customers? Because obviously, there's been a lot of churn within the employees as well.

Speaker #1: Yeah, I would say we really moved away from part of what we've done, as we listen to the customers. And really, John Dawson, who's our VP of Global Sales, really listens to our customers and is trying to address what their concerns are.

Todd Schulte: Yeah, I would say that we have really moved away from part of what we have done as we listen to the customers and John Dawson, who is our VP of Global Sales, really listen to our customers in trying to address what their concerns are. We have gone away a lot from the minimums, and the renewal process in trying to adjust pricing to be more market-based and I would say more value-based in terms of where they are going. So you may see this, too, in some of the law firms you are talking to. We have seen some positive interactions as we go forward relative to how we are renewing contracts without the minimums, without the blanks and things of that nature.

Steve Waszak: Yeah, I would say that we have really moved away from part of what we have done as we listen to the customers and John Dawson, who is our VP of Global Sales, really listen to our customers in trying to address what their concerns are. We have gone away a lot from the minimums, and the renewal process in trying to adjust pricing to be more market-based and I would say more value-based in terms of where they are going. So you may see this, too, in some of the law firms you are talking to. We have seen some positive interactions as we go forward relative to how we are renewing contracts without the minimums, without the blanks and things of that nature.

Speaker #1: We've moved away significantly from the minimums. The renewal process, and our efforts to adjust pricing to be more market-based—and I would say, more value-based.

Speaker #1: In terms of what they're where they're going. So we're seeing the you may see this too in some of the law firms you're talking to.

Speaker #1: We have seen some positive interactions as we go forward, relative to how we're renewing contracts—without the minimums, without the blanks, and things of that nature.

Speaker #5: And so.

Speaker #1: Also, I was just going to add on to that a little bit. A lot of this comes down to listening to the customers, too. And we've had a lot of customers want to move away from some of those minimums.

Stephen Boland: And so when you read this-

Todd Schulte: Also, I'll-

Todd Schulte: Oh, go ahead.

Todd Schulte: I was just going to add on that a little bit. A lot of this comes down to listening to the customers, too. We've had a lot of customers want to move away from some of those minimums, and some of the things in the contract. So we've listened to the customers and adjusted our business practices.

Speaker #1: And some of the things in the contract. So we've listened to the customers and adjusted our business practices.

Speaker #5: Okay, so just to follow up on that, in terms of moving away from the minimums, has there been a price reduction on the transactions? I mean, it was $199, $299.

Stephen Boland: Okay. Just to follow up to that, in terms of away from the minimums, has there been a price reduction on the transactions? I mean, it was 199, 299. Has that come down as well? I'm just trying to get an idea what the margin looks like going forward.

Speaker #5: Has that come down as well? So I'm just trying to get an idea of what the margin looks like going forward.

Speaker #1: Yeah, no, we really haven’t adjusted the pricing much—maybe on some unique or specific instances, based on volumes and who the customer is with us, their lifespan, and all that.

Todd Schulte: Yeah, we really haven't adjusted the pricing much. Maybe on some unique or specific instances based on volumes and where the customer is with us in the lifespan and all that. We really haven't adjusted pricing. It's really more looking perspectively to say, "If you reach these volumes, have these levels," there are some perspective price adjustments from that perspective. We've really changed that concept as we've gone forward.

Steve Waszak: Yeah, we really haven't adjusted the pricing much. Maybe on some unique or specific instances based on volumes and where the customer is with us in the lifespan and all that. We really haven't adjusted pricing. It's really more looking perspectively to say, "If you reach these volumes, have these levels," there are some perspective price adjustments from that perspective. We've really changed that concept as we've gone forward.

Speaker #1: So, we really haven't adjusted pricing. It's more about looking prospectively to say, if you reach these volumes and have these levels, there are some prospective price adjustments.

Speaker #1: From that perspective, we've really changed that concept as we've gone forward.

Speaker #5: Okay, I'll read to you. Thanks.

Stephen Boland: Okay. I'll recue. Thanks.

Speaker #2: I said reminder.

Speaker #1: Yeah, I would just go ahead. I was going to follow up on the margin piece real quick to say, on the margin piece, one thing this company has is very, very strong margins.

David Brown: As a reminder, if you wish to ask a-

Operator: As a reminder, if you wish to ask a-

Todd Schulte: Yeah, I would just. Go ahead.

Todd Schulte: Go ahead.

Todd Schulte: I was going to follow up on the margin piece real quick. Just to say on the margin piece, one thing this company has is very strong margins. The margin piece should. We don't see any, in terms of Q4, in that we haven't seen any impact on the margins. We've actually seen some increases in the margins because of the leverage of the cost structure in the company.

Speaker #1: So, on the margin piece, we don't see any impact in terms of Q4 or anything like that. We haven't seen any impact on the margins. We've actually seen some increases in the margins because of the leverage of the cost structure in the company.

Speaker #2: As a reminder, if you wish to ask a question or if you have any follow-up, please press star one. Our next question comes from the line of Erin Kyle from CIBC.

David Brown: As a reminder, if you wish to ask a question or if you have any follow-up, please press star one. Our next question comes from the line of Erin Kyle from CIBC. Please go ahead.

Operator: As a reminder, if you wish to ask a question or if you have any follow-up, please press star one. Our next question comes from the line of Erin Kyle from CIBC. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Hi, good evening. Thanks for taking the questions. Maybe just to follow up on one of the earlier questions there, could you just provide us with an update on the search for a permanent CEO?

Erin Kyle: Hi. Good evening. Thanks for taking the questions. Maybe just to follow up on one of the earlier questions there. Could you just provide us an update on the search for a permanent CEO, and are there any further expected leadership changes expected at this point?

Speaker #6: And are there any further expected leadership changes at this point?

Speaker #1: Yeah, I'll take that one. Both myself and Steve have interim titles, so we are in the search from a long-term perspective on who those people are going to be.

Todd Schulte: Yeah, I'll take that one. Both myself and Steve have interim titles. We are in the search from a long-term perspective on who those people are going to be. We don't have really any updates on when that will be done or anything like that. We're always looking at talent and what we have, but no real big plans for significant shakeups.

Speaker #1: But we don't really have any updates on when that will be done, or anything like that. And we're always looking at talent and what we have.

Speaker #1: But no real big plans for significant shake-ups.

Speaker #6: Okay, so no further expected delays, then, on the strategic review process.

Erin Kyle: Okay. So no further expected delays on the strategic review process.

Speaker #1: That's correct.

Speaker #6: Okay, thank you. And then, maybe just another question regarding the liquidity. Could you provide an update on your outlook for the balance of the calendar year here?

Todd Schulte: That's correct.

Erin Kyle: Okay. Thank you. Maybe just another question regarding liquidity. Could you just provide an update on your outlook for the balance of the calendar year here? There was a disclosure in your MD&A that the additional draw on the new revolving facility will be held in cash as of 30 September, if I read that correctly.

Speaker #6: There was a disclosure in your MD&A that the additional draw on the new revolving facility will be held in cash as of September 30.

Speaker #6: I read that correctly?

Speaker #1: You do have that. This is Steve. You do have that, correct? We were just being conservative to make sure we've fully funded the interest payment coming up—things like that.

Steve Waszak: You do have that. This is Steve. You do have that correct. We were just being conservative to make sure we have fully funded, the interest payment coming up, things like that. We just want to make sure that is fully funded with no disruption from that perspective. Yes, you are correct on that.

Speaker #1: So, we just want to make sure that we're fully funded with no disruption from that perspective. So yes, you're correct on that.

Speaker #6: Okay. And is de-leveraging still a priority for the business at this point in time?

Erin Kyle: Okay. De-leveraging, that is still a priority for the business at this point in time?

Speaker #1: Oh, 100%. 100%. So that's part of the cost reductions, part of the aspects in terms of how we run the business, and putting a priority on generating the right cash flow to start to continue to deliver.

Steve Waszak: Oh, 100%. That is part of the cost reductions, part of the aspects in terms of how we are running the business and putting a priority on generating the right cash flow to continue to de-leverage. It is 100% a priority.

Speaker #1: So it's 100% a priority.

Speaker #6: Okay, and then maybe last question from me, just on the revenue growth side. On the financial technology segment, revenue was fairly flat year-over-year there.

Erin Kyle: Okay. Maybe last question from me, just on the revenue growth side. On the financial technology segment, your revenue was fairly flat year-over-year there. Can you just elaborate a bit on the drivers of that year-over-year growth or flat growth in the quarter?

Speaker #6: Can you elaborate a bit on the drivers of that year-over-year growth or flat growth in the quarter?

Speaker #1: Which segment? Are you referring to the starting state again?

Speaker #6: The banking segment, the financial technology segment.

Steve Waszak: Which segment are you referring to? Sorry, say it again.

Speaker #1: Okay. Todd, if you want to address that.

Erin Kyle: The banking segment, the financial technology segment.

Speaker #3: Yeah, in general, the business was flat. I'm not quite sure how to answer that particular one. We saw our volume and our work just stay about the same.

Steve Waszak: Todd, if you want to address that.

Todd Schulte: Well, in general, just the business was flat. I am not quite sure how to answer that particular one. We saw our volume and our work just stay about the same.

Speaker #3: So okay.

Speaker #6: I'll pass the line.

Speaker #1: Thank you.

Erin Kyle: Okay, I will pass the line.

Speaker #2: There are no further questions at this time. I will now turn the call over to Todd Schulte. Please continue, sir.

Todd Schulte: Thank you.

David Brown: There are no further questions at this time. I will now turn the call over to Todd Schulte. Please continue, sir.

Operator: There are no further questions at this time. I will now turn the call over to Todd Schulte. Please continue, sir.

Speaker #1: Yeah, I just wanted to thank everyone for taking time out of their day to join us here. We were happy with our results, but we know there's a lot of work to do.

Todd Schulte: I just wanted to thank everyone for taking time out of their day to join us here. We are happy with our results, but we know there is a lot of work to do. So we are going to continue working hard to continue reshaping this business. So appreciate all your support and appreciate all the employees and their hard work that they have been putting in to really turn this around. So thank you very much for your time.

Speaker #1: So we're going to continue working hard to continue reshaping this business. I appreciate all your support and appreciate all the employees and their hard work that they've been putting into really turning this around.

Speaker #1: So, thank you very much for your time.

David Brown: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.