On Friday, Real Matters (TSX:REAL) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Real Matters reported strong financial performance in Q2 2026 with consolidated revenues of $47.2 million, up 27% year-over-year, and consolidated net revenue increasing 35% to $13.6 million.
The company launched seven new clients, including one of the largest non-bank servicers in US title, and saw significant increases in US appraisal and title origination volumes.
Real Matters’ adjusted EBITDA improved to $0.9 million from a $1.9 million loss in the prior year, highlighting robust revenue growth and operational efficiency.
The company is approaching an inflection point in the US title business, requiring investments in capacity to onboard new clients and scale operations.
Management expressed optimism about future growth, emphasizing client growth, market share expansion, and the potential for increased refinance volumes due to the current distribution of mortgage interest rates.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to Real Matters second quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press star 1-1 again. Please be advised that today’s conference is being recorded. I’d now like to hand the conference over to Lynn Beauregard, Vice President, Investor Relations and Corporate Communications. Please go ahead.
Lynn Beauregard (Vice President, Investor Relations and Corporate Communications)
Thank you Operator and good morning everyone. Welcome to Real Matters Financial Results Conference call for the second quarter ended March 31, 2026. With me today are Chief Executive Officer Brian Lang and Chief Financial Officer Rodrigo Pinto. This morning before Market Open, we issued a news release announcing our results for the three and six months ended March 31, 2026. The release accompanying slide presentation as well as the financial statements and MD and A are posted in financial sections of our website at realmatters.com during the call we may make certain forward looking statements which reflect the current expectations of management with respect to our business and the industry in which we operate. However, there are a number of risks, uncertainties and other factors that could cause our results to differ materially from our expectations. Please see the slide titled Cautionary Note regarding Forward looking Information in the accompanying slide presentation for more details. You can also find additional information about these risks in the Risk Factors section of the Company’s Annual Information form for the year ended September 30, 2025, which is available on SEDAR+ and in the Financial section of our website. As a reminder, we refer to non-GAAP measures in our slide presentation including Net Revenue, Net Revenue Margins Adjusted Net Income or Loss Adjusted Net Income or Loss per Diluted share Adjusted EBITDA Adjusted EBITDA margins Non GAAP measures are described in your MD&A for the three and six months ended March 31, 2026, where you will also find reconciliations to the nearest IFRS measures. With that, I’ll turn the call over to Brian.
Brian Lang (Chief Executive Officer)
Thank you Lynn Good morning everyone and thank you for joining us on the call today. Our second quarter results built on the strong momentum we saw in the first quarter as we reported consolidated revenues of $47.2 million, up 27% year over year and consolidated net revenue increased 35% to $13.6 million. Real Matters delivered its strongest consolidated adjusted EBITDA results in seven quarters in Q2 generating a profit of $0.9 million, a notable improvement from a $1.9 million loss in the prior year quarter reflecting robust revenue growth and enhanced operating leverage across the U.S. appraisal and U.S. title segments. We launched seven new clients in the second quarter, including one of the largest non bank servicers in U.S. title. Our US appraisal origination transaction volumes increased by 22% year over year and our origination volumes more than tripled in U.S. Title. Our financial performance in the second quarter continued to reflect the positive effects of new client launches, increased market share and enhanced operational efficiencies. We also benefited from moderate market tailwinds in the first half of the quarter. These outcomes underscore our business model’s capacity to deliver considerable operating leverage as transaction volumes grow in U.S. appraisal. We maintain leading positions on lender scorecards and we demonstrated strong operating leverage as an 18% increase in net revenue drove 41% year over year growth in adjusted EBITDA. We also recorded significant improvements in our home equity and other revenues driven by market share gains with existing clients. U.S. title origination volumes were up 268% year over year, driven by net market share gains with existing clients, new clients and moderate refinance market tailwinds. To put this in perspective, U.S. Title refinance origination volumes for the second quarter were equivalent to the total volume we processed in each of fiscal 2023 and fiscal 2024. We posted an adjusted EBITDA loss of $400,000 in U.S. title, putting the path to profitability in this segment well within our sights. We launched four new title clients in the second quarter, including one of the largest non bank servicers. And subsequent to the end of the quarter we launched our third tier one lender and another top 100 lender. The momentum we have built in U.S. title with a growing client base that now includes three tier one lenders and one of the largest non bank servicers, positions this segment as an increasingly important growth engine for the company. With this increase in our title volume, run rate and anticipated sales pipeline momentum, we are approaching an inflection point in the title business that will require us to invest in capacity to onboard new clients and scale up. Turning to Canada, the business launched three new clients in the second quarter. We delivered modest revenue and net revenue growth despite a decline in mortgage market volumes and Canadian net revenue margins reached a record high of 19.9%. With that, I’ll hand it over to Rodrigo.
Rodrigo Pinto (Chief Financial Officer)
Rodrigo thank you Brian and good morning everyone. The U.S. Mortgage market experienced robust momentum at the beginning of our second fiscal quarter, supported by declining interest rates and narrower mortgage spreads. The pace of activity then decelerated in March as geopolitical tensions surfaced and interest rates edged higher. The 30 year mortgage rate opened the quarter at 6.15% and reached an intra quarter low of 5.98%. However, mortgage rates reversed sharply in March, closing the quarter at 6.4% driven by upward pressure on the US 10 year treasury yield slowing origination growth. Lastly, the average 10 year yield and 30 year mortgage spread narrowed to below 200 basis points during the quarter. The modest decrease in mortgage rates mid quarter prompted growth in refinance market originations, although from a low base. Meanwhile, purchase market origination volume experienced only modest growth, consistent with industry estimates. Turning to our second quarter financial performance, I’ll start with our U.S. appraisal segment where we recorded revenues of 33.7 million, up 26% from the same period last year. Revenues from mortgage originations increased 24% year over year. Home equity revenues increased 30% year over year and accounted for 26% of the segment’s revenues, reflecting a higher addressable market for home equity transactions and net market share gains with existing and new clients. Another revenue increased 61% year over year due to continued net market share gains. U.S. appraisal net revenue was 8.6 million, up 18% from the second quarter of fiscal 2025. Net revenue margins decreased by 170 basis points year over year, primarily due to the distribution of transactions volumes as it relates to geographies, clients and product mix. Second quarter U.S. appraisal operating expenses increased 6% year over year to 5 million, driven mainly by higher salaries and benefit costs. We generated U.S. appraisal adjusted EBITDA of 3.6 million, up 41% from the prior year quarter and adjusted EBITDA margins expanded by 670 basis points to 41.1%, reflecting strong operating leverage as volumes increased. Turning to our U.S. title segment, second quarter revenues increased 127% year over year to 5% million, driven mainly by refinance origination revenues which increased 271% due to market share gains with existing and new clients as well as higher market refinance volumes. Home Equity revenues increased 54% supported by market share gains with existing clients and growth in reverse mortgage transactions with new clients. U.S. title net revenue was 3.3 million, up 176% from the second quarter last year and net revenue margins improved to 63.3% from 52.1% in the second quarter of 2025. This margin expansion was driven by higher volume serviced, which diluted our fixed costs and a higher proportion of incoming order volumes that closed. U.S. title operating expenses increased 12% year over year, primarily due to additional hires to accelerate the deployment of new title clients and to a lesser extent, salary increases and higher benefit costs. We reported an adjusted EBITDA loss of 0.4 million for the U.S. title segment, a significant improvement compared to the 2.1 million loss in the second quarter of fiscal 2025, consistent with prior periods. More than 85% of incremental net revenue generated during the quarter flowed to the bottom line, demonstrating the operating leverage inherent in business as volumes scale. In Canada, second quarter revenues were 8.4 million, consistent with the prior year as lower mortgage market volumes were largely offset by foreign exchange. Net revenue increased 5% to $1.7 million, driven by improved net revenue margins, which hit a record high of 19.9%, while adjusted EBITDA increased to 1.1 million. Adjusted EBITDA margins decreased slightly due to modestly higher operating expenses. Overall in the second quarter, consolidated revenue increased 27% year over year to 47.2 million and consolidated net revenue increased 35% to 13.6 million, primarily driven by continued strength in our U.S. appraisal and U.S. title segments. We delivered positive consolidated …
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